Don't Hold Your Breath

Usama bin Laden or a Colombian drugs baron?

On theoretical grounds alone, I would have said Usama bin Laden, who, we are told, wishes to foist Islamism on you, and, if you do not want his product, he, or his followers, will, given the chance, attempt to kill you. A Colombian drugs baron, on the other hand, is merely engaged in the innocent pursuit of trying to make money by selling you things. If you don't want his product, and don't interfere with his attempts to sell things to people who do, he will leave you alone.

(It is, of course, unfortunate that due to states' attempts to stamp out the trade in narcotics, the means of protecting the production and supply of drugs is more unstable than that for legal goods, and, therefore, the drugs market is much more violent than, say, the chocolate market. However, that problem has an obvious and easy solution. Go and read David Friedman on the economics of drugs and violence.)

Many people like to sneer at theoretical arguments. If you're one of them, then there is also some empirical evidence:

Usama bin Laden tried to buy a massive amount of cocaine, spike it with poison and sell it in the United States, hoping to kill thousands of Americans one year after the Sept. 11 attacks, The Post has learned.

The evil plot failed when the Colombian drug lords bin Laden approached decided it would be bad for their business — and, possibly, for their own health, according to law-enforcement sources familiar with the Drug Enforcement Administration's probe of the aborted transaction.

Like Jacob Lyles, I was also going to remark at how interesting it is that a private business will attempt to control the quality of its product, despite the fact that there is no quality control whatsoever required by the state, indeed, when the state is doing everything it can to prevent a high quality product from reaching its customers. However, it's not quite so clear whether this story provides compelling evidence for this point of view:

Although the drug lords would have reaped millions of dollars in profits by selling the cocaine to bin Laden, they knew that if his plan succeeded it might effectively destroy the market for their coke in America for years, sources said.

But that was only one reason they declined bin Laden's offer.

The other was their fear of retaliation from the U.S. government once its citizens started to die from the drugs, according to sources.

So, it appears that the U.S. goverment might try to control the quality of cocaine after all, or, at least, the drugs barons seem to think they might.

Another thing, just how effective would bin Laden's strategy "to kill thousands of Americans" have been? I think it's pretty unlikely that he could have ensured that the spiked coke would have reached its users simultaneously. Once the first victims had died and the news was out, the next batch of potential victims would be aware of the danger and in a position to take precautions. Could thousands of people really have been caught out by this plan?

Via Catallarchy and Enlightened Liberty.

Thanks to the visionary leadership of Fraser Thomson, head of environmental services for Fife Council, the good folk of ye Kyngdome of Fyfe are now protected from the menace of binmen wearing shorts, or binmen are protected from the menace of the odd scratch or two. Or something like that.

We've been crying out for this for years. "If only", we would say to each other, "we could stop binmen from wearing shorts. It's the one thing that is stopping Fife from becoming the thrilling utopia that is rightfully ours." And now, thanks to the should-be-knighted-for-this Fraser Thomson, Fife has become the thrilling utopia that we've all been pining for. We are now going about congratulating ourselves for the thrilling utopia we have created.

Come to Fife. It's a thrilling utopia. Not a shorts-wearing binman in sight.

(What the Hell has Simon Jenkins been moaning about? Doesn't he realise that we're living in a thrilling utopia?)

Like Mark Holland, I have very little to say about the London bombings that is neither trite nor banal. So, to get the trite and banal commentary out of the way, I shall tell you that, not having access to a TV, the Web or decent radio reception on Thursday morning, I had to deduce that there had been a terrorist outrage from three pieces of evidence: a rather odd text message from my brother at eleven a.m. asking, "Are you in London?"; my inability to reply, "No, I'm in Cambridge", or use my phone at all for that matter and the electronic information signs on the A14 that said, "Avoid London. Area closed." The whole of London? Closed? When I stopped at Peterborough, my phone was working again, so I called my mother, who confirmed my suspicions.

I'm not sure why, but for the next hour or so I was shaking with rage - not a good state of mind to be in when you're driving a car. Perhaps it's because, having passed through King's Cross twice on Wednesday evening, I was about eleven hours away from being caught up in the mayhem. Or if, as I occasionally do, I had decided to spend Wednesday night in London, I would have stayed at my friend's house in Maida Vale, which would have meant passing through Edgeware Road station on the tube to get to King's Cross on Thursday morning, uncomfortably close to one of the bombings. (Not nearly as close as this brave man, though.) Eight hours later, I drove past the scene of what could have been a second outrage, but, fortunately, was only a false alarm.

That, in a nutshell, is my experience of terrorism. And now for something less banal.

The Trading Standards Institute, the British Hospitality Association, Grant Hearn, CEO of hotel chain Travelodge and others are wrong to condemn hoteliers who have been cashing in on the bomb attacks. It appears to be a feature of disasters like this that many people will express outrage at those businesses who raise their prices in response to the sudden increase in demand for their services. The counter arguments are worth repeating. Click here to read Don Bodreaux's argument that allowing prices to rise is the best way of ensuring that scarce resources are allocated to those people who need them most.

Another point he could have made is that the supply of any good or service is not a fixed quantity. The way to satisfy the sudden surge in demand for, say, beds for the night, as a result of an unpredictable event like this one, is to maintain a stockpile. So, for example, hotels, churches, pubs, even private homes, might store some collapsible camp beds and, in the event of London's transport stopping, they would set them up on spare floor space for the use by stranded commuters.

Now, if this stockpile is to be large enough to satisfy the demand during the emergency, then, during normal times, much of it will be stored away, being used for nothing. This imposes opportunity costs that must be paid for. Larger buildings have to be rented to store the stockpile, or alternative uses of the storage space will have to be abandoned, and there is also the lost interest that the business would have earned had it not maintained the stockpile and invested the money in the bank instead.

If businesses can only charge normal prices during an emergency, then they will be unable to cover the costs of maintaining an adequate stockpile. Imposing price controls on them, thus removes their incentive to keep a stockpile. The consequence of this is that there will be a shortage during the emergency, and many people will needlessly be deprived of a good, or service, that they are quite able and willing to pay for. I fail to see how this is a preferable situation to a temporary rise in prices, but where people's demands are met.

Predictably, most of the comments below the BBC's news story express outrage and disgust at the price rises. Many thousands were inconvenienced by the bombs. Those people who wish to ostracise or criminalise businesses who raise prices in an emergency are advocating a position that will make that inconvenience worse. Unfortunately, the handful of comments that support the price rises appear to amount to "That's capitalism. Get over it.", which, although the conclusion is correct, is devoid of any argument that should change anyone's mind.