I do think you, if anything, understate what proportion of the harm is done by that top 1%, it's really the vast majority. That 1% also tends to be poor and dysfunctional, which is why alcohol taxes are so good. Specifically, we want a tax *per unit* of alcohol, to discourage the very heavy drinkers.
This concentration of damages in the most dysfunctional members of society also, therefore, overstates how much social influence anyone reading this piece is likely to have. The local drunks in the park do not give a damn about my values or my example, because I'm not in their reference set.
This is importantly different than the example of meat, where
1) Each incremental meat purchase is clearly harmful
2) There are meat eaters in my social circle who are influenced by my example
3) The vast majority of meat eaters eat meat from factory farms (so are in the 'problematic' category that only a small minority of drinkers are in).
I don’t think it’s quite as simple as that; your cultural impact isn’t quite as straightforward and direct as you seem to be imagining.
The idea isn’t that drunks in the park are going to see you happily sober and put down the can, but that over years and decades, fewer and fewer people drinking will lead to fewer and fewer people drinking, and 50 years from now there will be significantly fewer drunks in the park in the first place (this is also a vast oversimplification, but adds back in enough detail to illustrate a more plausible mechanism).
I think you’re ignoring or dismissive of the benefits of alcohol, which may be quite large.
In personal relationships, alcohol does a great deal to relax people and lower boundaries. This is often very positive, leading to friendship, romance, and generally having a good time. You could argue that we should be able to get by without that liquid encouragement, but it is baked into our culture and there is no ready replacement.
At work, drinking similarly lowers inhibitions and allows coworkers and bosses to open up in a way that they simply would not otherwise. Again, ideally we would not need this, but in practice the best way to get the real scoop on what people at your company think is to share a few drinks and spill some tea together.
I do agree that raising the taxes on alcohol substantially would probably be a good idea. The first two drinks have a lot of utility that the next six probably don’t.
The social benefits typically occur out of the house. You could get a lot of mileage out of taxing liquor stores at a far higher rate than bars to discourage day drinking and drinking on your own I suspect. That could move us toward a happier medium.
Also a very good point. Although, a lot of alcohol bought at liquor stores is consumed in good company too. I'm certainly down for focusing higher alcohol taxes on liquor stores - maybe you could get some mileage out taxing the bottom shelf stuff the most, on top of that. Probably don't need to make a $50 bottle of scotch more expensive, but that $15 handle of "brandy" is probably not societally good.
Scotland, for one example, imposes a minimum per unit price, so the nicer and more expensive stuff is unaffected because it’s already over that price. It just raises the price of things that were previously the most price-efficient ways to get drunk.
Its introduction was a bit of an apocalypse for me and my friends as students at the time, but it is a simpler way of achieving the effect of your ‘tax the bottom shelf’ idea, with fewer logistical difficulties.
I think a flat per unit tax is an easy to administer solution to this. As the bottle gets more expensive, the tax becomes a smaller proportion of the overall cost. Your hypothetical 750ml bottle of Brandy has 16.6 shots in it with 1 unit of alcohol per shot, if we tax at $0.30 per unit we add $5 to both the high end bottle and the low end one. Higher proof liquor gets a higher tax, and it’s easy to apply to other forms of liquor, too, just figure out how many units of alcohol are in each container.
I'm surprised to read several comments extolling the social benefits of alcohol consumption. I thought the main idea here would be a slam dunk.
Yes, it's a social norm, it can help lowering inhibitions... but:
1) Replacing alcohol consumption with innocuous social habits would not require a Manhattan project, only social will and experimentation.
2) I personally know many people (and I feel that way myself quite often) that alcohol consumption makes feel out-of-place and prefer to clam up, not open up. This norm is pretty much imposed on (I suppose?) many people who just don't enjoy it (think: it's tough to meet people in universities, neighborhoods and even firms without attending alcohol-heavy parties and culture).
I suppose aggregating the good and the bad in these less obvious situations is challenging, so Arbituram is probably right that we might want to focus on the 1% unambiguously, critically bad outcomes from alcohol -the case is strong enough with this.
Plausible, although I'm sceptical that merely personally abstaining from alcohol has marginal effects. I think there's a stronger case that individuals should vocally not drink alcohol to try to start a norm shift. I don't expect to see a norm shift just from not drinking, but this is a much more costly action to take than just not drinking.
The other argument is that you're making alcohol cheaper for people at risk from alcohol by drinking. I think this is only true if the long run average cost curve for acohol production is continuously downward sloping. Given that we have small alcohol suppliers, I suspect that that isn't the case, although I can't be sure (although I don't expect that R&D is a significant input for alcohol companies.) I don't think your 1/38 case goes through - just intuitively it seems like alcohol companies will be able to sell their product at around the same price if alcohol consumption dropped by half.
My guess is that if one's in a social group with people who are at risk of significant harm from alcohol it could make sense to publicly stop drinking, and when one is in the position to set policy in some sense one should set it against acohol - e.g don't organise social events around alcohol consumption.
I'm not sure I buy the Minecraft analogy. In that scenario, sure, I wouldn't play Minecraft – I would just play a different video game. But alcohol isn't easily substitutable in that way. If the situation was "Video games in general are killing 140,000 Americans every year," I would still play video games!
A huge issue. Do you have a best guess as to how great a negative externality the marginal drinker produces?
Relatedly, some actions around alcohol seem especially bad on the margin (e.g. posting positively about alcohol consumption on social media, introducing alcohol to environments/occasions where it wasn't already). More ceremonial consumption seems quite fine (e.g. drinking a toast at a wedding or special occasion, or communion wine at church).
Really no idea, I haven't done as deep of a dive. I find that the super basic negative stats are enough to change people's behavior. Definitely agree that the ceremonial consumption seems fine and that the main concerning stuff is on the margin. I think I've actually had a moderate effect on the behavior of people around me just by not drinking.
Great post, thanks for writing! As a beer-loving Belgian who personally loves the low prices here, I reluctantly agree that it would be better for society if it were taxed much higher.
Anecdotally, but from a lot of sources, kids these days are drinking less. My university professor friends tell me that. I see it with my own children and their friends. Kids are just not drinking or partying like they did when I was in university. And those who do, binge drink less. There’s less peer pressure to “get wasted”.
Mostly this is a good thing. But kids these days are also more anxious, less social, and don’t know how to interact in large groups as well. I think this is related.
I do think you, if anything, understate what proportion of the harm is done by that top 1%, it's really the vast majority. That 1% also tends to be poor and dysfunctional, which is why alcohol taxes are so good. Specifically, we want a tax *per unit* of alcohol, to discourage the very heavy drinkers.
This concentration of damages in the most dysfunctional members of society also, therefore, overstates how much social influence anyone reading this piece is likely to have. The local drunks in the park do not give a damn about my values or my example, because I'm not in their reference set.
This is importantly different than the example of meat, where
1) Each incremental meat purchase is clearly harmful
2) There are meat eaters in my social circle who are influenced by my example
3) The vast majority of meat eaters eat meat from factory farms (so are in the 'problematic' category that only a small minority of drinkers are in).
I don’t think it’s quite as simple as that; your cultural impact isn’t quite as straightforward and direct as you seem to be imagining.
The idea isn’t that drunks in the park are going to see you happily sober and put down the can, but that over years and decades, fewer and fewer people drinking will lead to fewer and fewer people drinking, and 50 years from now there will be significantly fewer drunks in the park in the first place (this is also a vast oversimplification, but adds back in enough detail to illustrate a more plausible mechanism).
I think you’re ignoring or dismissive of the benefits of alcohol, which may be quite large.
In personal relationships, alcohol does a great deal to relax people and lower boundaries. This is often very positive, leading to friendship, romance, and generally having a good time. You could argue that we should be able to get by without that liquid encouragement, but it is baked into our culture and there is no ready replacement.
At work, drinking similarly lowers inhibitions and allows coworkers and bosses to open up in a way that they simply would not otherwise. Again, ideally we would not need this, but in practice the best way to get the real scoop on what people at your company think is to share a few drinks and spill some tea together.
Yup I worry I'm getting this one wrong, I'm pretty uncertain here.
I do agree that raising the taxes on alcohol substantially would probably be a good idea. The first two drinks have a lot of utility that the next six probably don’t.
The social benefits typically occur out of the house. You could get a lot of mileage out of taxing liquor stores at a far higher rate than bars to discourage day drinking and drinking on your own I suspect. That could move us toward a happier medium.
Also a very good point. Although, a lot of alcohol bought at liquor stores is consumed in good company too. I'm certainly down for focusing higher alcohol taxes on liquor stores - maybe you could get some mileage out taxing the bottom shelf stuff the most, on top of that. Probably don't need to make a $50 bottle of scotch more expensive, but that $15 handle of "brandy" is probably not societally good.
Scotland, for one example, imposes a minimum per unit price, so the nicer and more expensive stuff is unaffected because it’s already over that price. It just raises the price of things that were previously the most price-efficient ways to get drunk.
Its introduction was a bit of an apocalypse for me and my friends as students at the time, but it is a simpler way of achieving the effect of your ‘tax the bottom shelf’ idea, with fewer logistical difficulties.
I think a flat per unit tax is an easy to administer solution to this. As the bottle gets more expensive, the tax becomes a smaller proportion of the overall cost. Your hypothetical 750ml bottle of Brandy has 16.6 shots in it with 1 unit of alcohol per shot, if we tax at $0.30 per unit we add $5 to both the high end bottle and the low end one. Higher proof liquor gets a higher tax, and it’s easy to apply to other forms of liquor, too, just figure out how many units of alcohol are in each container.
I'm surprised to read several comments extolling the social benefits of alcohol consumption. I thought the main idea here would be a slam dunk.
Yes, it's a social norm, it can help lowering inhibitions... but:
1) Replacing alcohol consumption with innocuous social habits would not require a Manhattan project, only social will and experimentation.
2) I personally know many people (and I feel that way myself quite often) that alcohol consumption makes feel out-of-place and prefer to clam up, not open up. This norm is pretty much imposed on (I suppose?) many people who just don't enjoy it (think: it's tough to meet people in universities, neighborhoods and even firms without attending alcohol-heavy parties and culture).
I suppose aggregating the good and the bad in these less obvious situations is challenging, so Arbituram is probably right that we might want to focus on the 1% unambiguously, critically bad outcomes from alcohol -the case is strong enough with this.
Plausible, although I'm sceptical that merely personally abstaining from alcohol has marginal effects. I think there's a stronger case that individuals should vocally not drink alcohol to try to start a norm shift. I don't expect to see a norm shift just from not drinking, but this is a much more costly action to take than just not drinking.
The other argument is that you're making alcohol cheaper for people at risk from alcohol by drinking. I think this is only true if the long run average cost curve for acohol production is continuously downward sloping. Given that we have small alcohol suppliers, I suspect that that isn't the case, although I can't be sure (although I don't expect that R&D is a significant input for alcohol companies.) I don't think your 1/38 case goes through - just intuitively it seems like alcohol companies will be able to sell their product at around the same price if alcohol consumption dropped by half.
My guess is that if one's in a social group with people who are at risk of significant harm from alcohol it could make sense to publicly stop drinking, and when one is in the position to set policy in some sense one should set it against acohol - e.g don't organise social events around alcohol consumption.
I'm not sure I buy the Minecraft analogy. In that scenario, sure, I wouldn't play Minecraft – I would just play a different video game. But alcohol isn't easily substitutable in that way. If the situation was "Video games in general are killing 140,000 Americans every year," I would still play video games!
Good point! It's been a while and I should probably rethink a lot of arguments here.
A huge issue. Do you have a best guess as to how great a negative externality the marginal drinker produces?
Relatedly, some actions around alcohol seem especially bad on the margin (e.g. posting positively about alcohol consumption on social media, introducing alcohol to environments/occasions where it wasn't already). More ceremonial consumption seems quite fine (e.g. drinking a toast at a wedding or special occasion, or communion wine at church).
Really no idea, I haven't done as deep of a dive. I find that the super basic negative stats are enough to change people's behavior. Definitely agree that the ceremonial consumption seems fine and that the main concerning stuff is on the margin. I think I've actually had a moderate effect on the behavior of people around me just by not drinking.
Great post, thanks for writing! As a beer-loving Belgian who personally loves the low prices here, I reluctantly agree that it would be better for society if it were taxed much higher.
Anecdotally, but from a lot of sources, kids these days are drinking less. My university professor friends tell me that. I see it with my own children and their friends. Kids are just not drinking or partying like they did when I was in university. And those who do, binge drink less. There’s less peer pressure to “get wasted”.
Mostly this is a good thing. But kids these days are also more anxious, less social, and don’t know how to interact in large groups as well. I think this is related.
What about cultures that have a much healthier relationship with alcohol than the US, like France or Italy? Confession: I have not read your piece.