Profits, Pirates and Externalities

18 May, 2009

The government in Somalia blames payment of ransom for the explosion in piracy there, according to the BBC. Although this is obviously ignoring the root of the problem, it raises the interesting question of whether outlawing payment could eliminate the threat in the future.

Clearly, if it was in the interests of shipping firms to do so, they would already have agreed to it privately. That’s all that matters, if they’re the only victims. Recent developments have shifted the balance in this debate, as there is a question over whether these pirates are financing Al-Shabaab, the Islamic group that opposes the Somalian government. The importance of this question has intensified as more lives are lost.

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The Economics of Blasphemy

2 May, 2009

Following Minister for Justice, Dermot Ahern‘s public statement, it is pretty clear now that the Irish Government is introducing the new legislation to appease the constitution, and that a referendum will eventually amend it subject to overwhelming public opposition to the curtailment. However, what follows is (purely hypothetical) consideration of the best way of protecting society from blasphemy.

First of all, imposing an externality charge on an individual when an act has negative repercussion for another individual in society makes no value judgement. It doesn’t indicate any hierarchy of rights, or preference for one over the other. Rather, it’s just a recognition that there is harm caused. In this case, religious groups have been offended.

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The Democratic Will of God

30 April, 2009

There is no single definition of harm, and rights can be traded off to ensure the most efficient outcome. If there exists enough political support for the blasphemy law, it does not represent anything more than protection against offense and a value judgement over the importance of unmitigated freedom of speech. Think of it like an externality charge.

The Irish Government is currently considering the introduction of a new law which would make blasphemy a crime, subject to a fine of up to €100,000 (which could be reduced to €1,000 if a revision is successful). While it would unfortunately be included as an amendment to the Defamation Bill, arguments against the introduction on grounds that it is a ‘victimless crime’ are superficial.

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29 April, 2009

It’s unclear whether the proposed ‘Fat Tax’ from Ryanair could ever be properly realised. It could be explained away as a publicity stunt by the notorious airline. More likely, it will not gain ground as the practical costs and difficulty of instituting such a levy become clearer. However, most consumers would benefit from such a move.

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