Sunday, 28 December 2014

The Economic Theory of killing Eric Garner.

Eric Garner was a 44 year old African American man suspected of selling untaxed cigarettes. He was unlawfully killed by a member or members of the New York Police.

Prof. Steven Landsburg, impelled no doubt by the spirit of Hanukkah, has a marvelous Christmas present for Eric Garner's family. He says that Econ theory proves that Garner couldn't have been hurt more than a tiny bit by Police harassment.

'Suppose you are a typical street vendor of an illegal product, such as, oh, say, untaxed cigarettes.

Suppose the police make a habit of harassing such vendors, by confiscating their products, smacking them around, hauling them off to jail, and perhaps occasionally killing a few.

I have good news: The police can’t hurt you.

Here’s why: Street vending can never be substantially more rewarding than, say, carwashing. If it were, car washers would become street vendors, driving down profits until the rewards are equalized. If car washers were happier than street vendors, we’d see the same process in reverse. (The key observation here is that it’s very easy to move back and forth between street vending and other occupations that require little in the way of special training or special skills.)

Because police harassment of street vendors has no effect on the happiness of car washers, and because street vendors are always just as happy as car washers, it follows that police harassment has no effect on the happiness of street vendors.

So if you’re a street vendor, the police can’t hurt you. On the other hand, when the police go around putting people in deadly chokeholds, they’re clearly hurting someone. So the question is: Who?

Answer: Not the vendors, but their customers. Fewer vendors means higher prices. That hurts consumers, and the sum total of that harm adds up to the harm that we see in the viral videos.

Landsburg himself has corrected himself in a subsequent post. He now says- 'I  stand by the claim that individual workers are hurt insignificantly by harassment. But I’m backing off the claim that the total harm to all workers is insignificant. Consumers in the harassed industry do bear a large burden — and perhaps even more than the entire social burden, because their losses are partly offset by gains to consumers elsewhere. But my simple accounting of yesterday (“the burden on the workers is effectively zero, so the social burden falls entirely on consumers”) was far too simple.'

Does Economic Theory endorse Landsburg's claims?
No. Harassment and Unlawful Killing, like Rape, may appear to give rise to Utility for some agent but have such a large negative external effect (by definition, this is received outside the market) that such Utility becomes Socially repugnant and worthy of punishment. Where pleasure is seen to derive from a crime, that pleasure is denounced as vicious. When the State unlawfully takes life, even if it is so as to protect its own Revenue, it loses legitimacy. Its actions become repugnant. Resources are not wasted in combating a repugnancy market. Indeed, it is compliance with the Excise Man which now carries a dead weight loss for Society. 


Anonymous said...

the first thing you learn, in a first-aid course module on the Heimlich maneuver to aid people choking to death, is - if the guy can talk, his airway is not blocked. Eric Garner did not die of a chokehold; he was not choked to death. He was talking when he collapsed. He died of a pree-existing medical condition which was (perhaps, and ONLY perhaps) triggered by his violent struggle to resist arrest.

Now, if you want to say that people who break laws against street-vending of of un-taxed cigarettes should NOT be arrested..... at least have the balls to say so.

windwheel said...

Good point. Sometimes, being arrested enables a person to get emergency medical care they may not otherwise be aware they require. There is a compelling 'broken windows' type argument for zero tolerance even of 'petty' crime on the streets.