Alberto Mingardi  

Do criminals obey regulations?

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Don't be early in bubble predi... More markets please...

regulated2.jpg Is deregulation helping terrorists? So thinks The Independent, which points out that "changes made in the Deregulation Act 2015 scrapped an obligation on sellers of dangerous substances" which made "it easier to buy dangerous acids that have been used in a spate of attacks in recent weeks".

Instead of having to register with their local council, sellers of "reportable substances" are merely required to tell authorities about anyone buying a substance "if the supplier has reasonable grounds for believing the transaction to be suspicious", such as if there is a suspicion the chemical is "intended for the illicit manufacture of explosives" or "any illicit use".

The law says reasons for such suspicions could be if the customer is vague or uncertain about how they will use the substance, wants to buy large quantities, is unwilling to provide proof of ID or insists on "unusual methods of payment".

If none of these take place, people are free to buy and sell powerful acids without any regulation, licensing or registration.


I find the argument to be astounding. For one, regulations impact law abiding citizens and businesses. You need to be committed to play by the rules, that is, for rules to influence your behaviour. If you decided to be an outlaw, you're very unlikely to be brought in another direction by controls on substances you can or you cannot legally buy.

Our experience with outright prohibition (not even "controls") of certain substances is that, if there is demand for them, people will find a way to get hold of them.

Of course, costs will increase - as it is in the case of drugs. But would that, higher costs in getting supplies, substantially hinder terrorists?

I think we may agree that if someone decides to participate in a terrorist attack (and even more so, in a suicidal terrorist attack) her mind is pretty much made up. No matter how crazy such a decision may look to us, it is one which will be hard to shake. Can regulation in selling acids really do so?

It seems to me this is hardly an argument: it is more an expression either of blind faith in over-regulation, or of a distrust of any kind of de-regulation, regardless of what has been deregulated and to what extent.

I understand the British left is witnessing an impressive growth of its own consensus, and on a pretty extreme platform, so it needs to grow it even more by denouncing the hypocrisies and incompetence of the Tories. But if a political movement is propelled by this kind of rather badly argued propaganda and demands more of it (like in the case of Grenfell Tower), what shall we expect out of it the day it reaches power?


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CATEGORIES: Regulation




COMMENTS (8 to date)
JFA writes:

I'm always wary of arguments that imply a perfectly vertical supply or demand curve like this statement: "I think we may agree that if someone decides to participate in a terrorist attack (and even more so, in a suicidal terrorist attack) her mind is pretty much made up." Iannacone and Berman have shown how rational suicide bombers can be.

A person decides to participate given the costs and benefits. If those costs are raised, those marginal terrorists will not commit the act. You can argue the elasticity, but to say that behavior won't change is just a bit obtuse.

That's like saying if you increase the amount of gun regulation, you won't see a decrease in the use of guns, or if you prohibit alcohol, you won't see a decrease in consumption (Daniel Okrent provides the evidence for decreased alcohol consumption during Prohibition).

This reminds me of Rand Paul's (I think it was him) comment that he didn't think people would use more heroin if it were legalized. His comment is basically your sentiment in this piece, and it is an annoying habit of (it seems) a lot of libertarians (of which I consider myself one) to extol the virtues of the economic way of thinking except when it comes regulating or deregulating [insert product name here].

Why do you think the US has more gun crime than other OECD countries? I doubt it's because criminals in other OECD countries would find them less useful in carrying out their activities. I bet it might have something with the high cost of acquisition in those other OECD countries.

Miguel Madeira writes:

Even if criminals don't obey regulations, people who sell goods (like acids) to criminals could obey.

Jon Murphy writes:

@Miguel Madeira

Even if criminals don't obey regulations, people who sell goods (like acids) to criminals could obey.

This assumes no black market, that the sellers themselves are obeying all the rules, and that the knowledge exists that the buyer is a criminal.

Laws constrain good people. By definition, the people who do not follow laws are outlaws. Laws, by definition, cannot restrain outlaws; they just allow punishment.

All that adding in regulations will do is give monopoly power to the black market dealers of these illicit goods. It's the ultimate Bootleggers and Baptists problem.

Youri Verhoef writes:

1) Acid attacks are used as gang violence, in family feuds and robberies. The 'suicide terrorist' point is wide of the mark.
2) The UK regulates guns. There is very little gun violence (even terrorist attacks mostly involve vehicles/knives). Sometimes regulation can be effective.

Tom DeMeo writes:

@Jon Murphy

"This assumes no black market, that the sellers themselves are obeying all the rules, and that the knowledge exists that the buyer is a criminal."

It doesn't assume any of those things. The assumptions are spelled out in the article.

Black markets only occur when there is a profit motive that justifies such a risk. That probably doesn't apply here.

Jon Murphy writes:

@Tom: I was referring to Miguel's comment

JFA writes:

@Jon Murphy: if regulations give monopoly power to black market sellers, then the price of whatever is being sold will be higher than it otherwise would be. Given this effect, laws also constrain "bad" people too, or more accurately laws constrain those who have a relatively lower marginal value on the illegal activity, independent of that person's goodness.

Richard writes:
Of course, costs will increase - as it is in the case of drugs. But would that, higher costs in getting supplies, substantially hinder terrorists?

Probably. A lesson from terrorist attacks is that a lot of the perpetrators are mentally ill, low IQ, emotionally unstable type. For example, using a knife in a country like the United States where they could legally get a gun. Putting up a few barriers could potentially stop them.

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