What are these externalities that are effecting people OUTSIDE of the restaurant that are greater in scale and larger in scope than the smoke coming out of the door? The angst of those who want a smoke-free world? Are we counting people’s wishes here?

I think he should also cease to post anonymously. EapyTheapy is such an absurd name, it has to be made up.

And while we’re on the subject, how about some non-anonymous posts?

What do you actually want? Are you contending there is some psycho-histrionic new science that can crunch all this hyper-local data into a consistent externality-solving algorithm?

Even if this were physically possible, this is not how such decisions are made. Every piece of policy that comes out the pipeline is solely for the benefit of those who have won the lobbying auction in this particular election cycle, or as populist coupon giveouts for vote pandering.

I dispute it’s possible that government can ever accurately correct externalities cost effectively. Furthermore, public good is never the motivation of bureaucratic output. Politicians at every level are self interested human beings who work for whoever can offer the best trade at the moment.

Also, in the face of a claimed negative externality, the burden is on the claimant to establish that harm has taken place, and as for handling the remuneration, well, markets can work well for that too, provided the judicial system is robust.

You argue for government involvement of a specific type, amount and purview. You have not satisfactorily demonstrated that this government involvement is either necessary or effective. Although I feel like I know your family pretty well at this point.

I think your concept of “local” is static whereas mine is dynamic. I know this is a far cry from the context of this discussion but I might note that there is some interesting conceptual work by Jayan Nayar on the global/local dichotomy that is very relevant. As long as you’re telling me to read Hayek I think I should suggest you read Nayar.

Long answer: I understand the concept of limited information well enough to know that I can’t possibly speak with authority on the state of liquor merchants in the Columbia, MO area. I recommend you read that Hayek article I linked earlier again: I’m sure it was required for at least one of your classes but it’s so relevant here it’s worth noting.

“these are people who aggregate hyper-local information and make policy recommendations specifically related to that information. ”

Yes, that is their job, but I have no way of knowing how good they are at it and I maintain that it is unlikely to the point of nigh-impossibility for a regulator to understand what consumers want more than. . . well, the consumers themselves. Businesses that don’t give people what they want go out of business, and there are whole classes of people who make a living taking risks in determining what new businesses should open in different places. Venture capitalists, investors and entrepreneurs must weigh what consumers want with what is available to bring to them. The meddling of government draws a veil over their already difficult work of foreseeing the commercially feasible.

In conclusion, I can not speak with specificity and local authority for the same reasons that I believe no one can. Your very request is faulty.

My dad also has a medical license, and that allowed me access to a lot of relevant data and empirics on how these things function.

Where you’re randomly spouting stuff linked from wikipedia I’m presenting work that represents actual knowledge that I’ve gained from thousands of hours of engaging this kind of material.

I challenge you to answer me with specificity and not the generality of your theory.

So what you’re saying is, we have regulation now and it’s not working well enough to allow you to get peace and quiet? Let’s not assume that all regulation is bad. Let’s just say that in this one instance, we *might* be better off without it. A pigouvian tax on opening a bar in the form of a (frought with implicit bureaucratic costs!) lengthy and expensive licensing process is unlikely to produce economically efficient results for the same reason that all other pigouvian tax scenarios are. The correct amount of the tax is not obvious to the legislator and those harmed are unlikely to be compensated appropriately by a government agency which will likely lack proper accountability. “Markets fail. Use markets.”

“There is no market mechanism to separate the quacks from the real practioners (especially because they’re not always the same people at the same time).”

Are you similarly appalled that we don’t allow a food board to tell us what foods are most delicious? Or that we lack a clothing board to tell us what clothes are most comfortable and fashionable? We let consumers meet with producers on a level playing field when it “matters least” and people get what they want at a price they are willing to pay. Sorting happens as a matter of spontaneous order. If the market gets these unimportant things so right, how can we possibly think that people will not act with the same or even more care in choosing a doctor? This sort of sorting is a fundamental feature of any market. People use limited information to make the best decision they can about how to expend their limited resources to obtain the most of what they want. These are fundamentals of economics that I would expect an economics student to understand implicitly.

I think your “central planners bad” argument means more when you make the distinction that these central planners seem to be unable to make the distinction between hookah, cigarettes, and cigars.

However, consider the flip side. Barriers to entry also serve as a selection mechanism. Imagine a world where anyone could get a medical license. There is no market mechanism to separate the quacks from the real practioners (especially because they’re not always the same people at the same time). A barrier to entry requires a non-negligible investment to overcome, and we can look at it as “anyone who is willing and capable of making this investment is also someone who will act with integrity in the market”.

These are all very real, local costs. It’s easy to make extrapolations from your theory that says all regulations are bad because they decrease competition and I think you very much come off as someone who is simply convinced by your theory. I don’t think you understand the risks that alcohol sales bring by their very existence; I argue that there should be some way to mediate the property rights concerns of everyone who doesn’t patronize these businesses with the rights of those who do. Licensing is an effective way to do that.

I agree that licensing shouldn’t become another tool in the monopoly toolbox, but that’s a problem that stems from the interactions that businesses have with politics, not from the licensing mechanism itself. Your concerns are with the political economy of licensing but you conflate them with everything else.

More to the point, when government is granted this sort of arbitrary regulatory power, bureaucratic whim and special interest lobbying can easily recreate Boston’s particularly draconian license laws.

Restaurateurs generally support liquor licensing for the same reasons that any professional supports occupational licensure in their field — it’s an easily captured form of protectionism that keeps competitors at bay.

I should clarify that I used to manage a restaurant here in Columbia (Trattoria Strada Nova, I worked there a little over 2 years) and that I also worked as the sommelier at Hemingway’s Wine & Bistro (year and 4 months) and then selling wine at Top Ten Wines. I also have a business interest in a local bar that was badly hit by Columbia’s idiotic smoking ban. Prior to working in Columbia I bussed tables at Dierdorf & Hart’s in Westport, St. Louis, and waited tables at Patrick’s (which is now Pujol’s 5).

So Eric’s wrong in assuming I have no perspective or knowledge relevant to this argument, and doesn’t know enough about how these businesses actually operate to understand that I’m making an intelligent argument.

I think there are legitimate property rights issues that smoking bans infringe on, but the other option, to let anyone smoke anywhere, equally implicates the property rights of non-smokers. That’s why I think selling smoking licenses the way we sell liquor licenses is the allocatively efficient solution. My introduction to auction theory in Dr. Ron Harstad’s courses here at MU give me the intuition that an auction mechanism is probably the best way of pricing these licenses.