Risk Avoidance, Freedom Of Choice Or Government Coercion?
from Human Rights In Australia by LJM Cooray (1985)

Introduction
Defining The Issue
Risk: Dynamic Of An Evolving Society
Civil Libertarian Principle
Competitive Ethic
Epidemiology: The Collectivist Science
Concept Of Social Cost
Inefficiency Of Cost Benefit Analysis
Law Of Unintended Consequences
Safety In Risk

11.1 Introduction
The title of this chapter "Risk Avoidance — Freedom of Choice or Government Coercion?" goes to the heart of the conceptual debate surrounding public policy in the areas of health, safety, consumerism and environmentalism.

At the outset the real context of this debate is defined — namely, the tendency towards absolutism in public life today. Then some of the key concepts underlying public policy formation in these areas are pursued — risk as the dynamic of an evolving society, the principle of civil libertarianism, the competitive ethic, the function of the science of collectivism, the concept of social cost, the efficacy (or lack thereof) of cost benefit analysis in assessing consumer and social policy, and what may be called the law of unintended consequences.

Finally, it is argued, that in an ultimate paradoxical sense, there is safety in risk.

11.2 Defining The Issue
This debate is not about human health and safety, but is essentially about the political issue of the growth of absolutism in public life today. The aim of the regulators in our society is the total removal of risk in all its forms. Their motive is not simply the desire to insure people against the evil effects of risk. They are now attempting to eliminate all risks from society, and to hand over to government the role of final decision maker and protector.

This is the most recent manifestation of one of the more powerful tendencies in human history, namely the tendency towards absolutism and totalitarianism, be it the religious totalitarianism of the inquisitor, or the philosophical and political totalitarianisms with which we have only become too familiar in more recent times.

No secular substitute for these religions and philosophies is more attractive today than the creed of "Safety First". Uniting as it does the wide range of health and consumer pressure groups, and animated by a quasi mystical vision of total purity, it provides an unrivalled emotional outlet for the purveyors of glib solutions. It has become the leading "progressive" good cause of our day, combining the fear of technological change, antipathy towards capitalism (especially the large corporation), the itch to interfere, and the eternal nanny principle.

It is an essential element in all modern propaganda campaigns. By means of emphasising the importance and urgency of health and safety, it substitutes motherhood and emotiveness for rational discussion and consideration. For every complex problem, it proposes a solution that is simple, obvious and — usually wrong.

11.3 Risk — The Dynamic Of An Evolving Society
Its momentum has taken it far beyond the fundamental premises of previous orthodox thought about the Government's role in the life of citizens. It has abandoned the principle that Government only interferes where one person's welfare is affected by the actions of another, and has moved it into the realm of everyday personal decisions.

Common sense tells us that, in normal circumstances, no human being will knowingly and willingly expose himself to the risk of certain death or serious injury. We know from our observations of ourselves and others that each person is capable of making his own assessment of the risks involved in any given action. Equally we know that life is risky and no amount of Government intervention can change this.

Many people are prepared to voluntarily expose themselves to risks that are considered by others to be unacceptable. Some people like to climb sheer cliff faces, others are fans of hang gliding. In Japan, tens of millions of people every year choose to eat the deadly poisonous 'fugu' or puffer fish knowing full well, that despite Government licensing of cooks, a small but appreciable number of them could die because the fish has not been correctly prepared.

Each of these people is quite capable of making a reasonable assessment of these risks as they relate to his own personal capacities and circumstances. Usually, his reasoning will go something along the lines that either the risk is small enough to be discounted or that he receives a compensating benefit in return for taking the risk. A large proportion of people in our society would say that if people are prepared to take these risks, so be it.

The point is that life's choices come in bundles of goods and bads which have to be taken whole. There is no sense in our attempting entirely discrete choices in life, when the good and the bad are inextricably mixed. Even if we are to assume that there are risks in society which are to some extent involuntary, for example, coal dust in the air, and if we assume that information is freely available, or even if we take steps to make it available, what was previously the involuntary risk, becomes the voluntary one.

It is interesting to note that there is a large proportion of the population which is not even interested in having the information made available to it (through compulsory labelling of food etc) feeling that the evidence of its own observations of life is a quite sufficient basis for risk assessment.

One example of this is that a third of the population of Australia continues to smoke despite constant and widely publicised advice over twenty years that it could be dangerous to their health, and with virtually no publicity given to dissenting scientific opinion. An element of the population assesses the risk, and comes to the decision, against "expert" advice that it is worth taking, because it decides, on the basis of personal experience, that the benefits received outweigh the perceived danger.

11.4 The Civil Libertarian Principle
What then, are the political principles upon which we should base our assessment of Government's role in saving people from themselves? In the first place, our most fundamental principle should be that the only reason for exercising political power over a person is to prevent harm to others. Harm which a person may do to himself is no grounds for action. This basic principle of our society does not differ in any way from the other basic principles upon which our society is formed. Put briefly, we believe in giving people maximum leeway to make their own decisions, even if society as a whole may not agree with these decisions.

In a sense, the dynamics of our whole society are built on this freedom of the individual, to take what other people may have considered quite unnecessary and dangerous risks. The discovery and settlement of the New World was based on risks taken by individuals almost universally against the "better advice" of "society". You could say that the industrial revolution was itself a gigantic risk. It took place on very narrow profit margins which would have been eliminated by even a fraction of the regulations now compulsory by law. If we had Naderism in the 18th century, the industrial revolution could not have happened.

11.5 The Competitive Ethic
Our economy is based on the competitive enterprise ethic which is essentially an ethic of individuals taking calculated (and in some cases uncalculated) risk. It is no accident that the proponents of greater Government regulation in the area of personal choice in health and safety are also opponents of "profit hungry multi-nationals", because in essence, opposition to personal choice, and to risk taking, is opposition to the free enterprise system.

This is true to such an extent, that in many consumer campaigns it is effectively impossible to separate the health and welfare motivation from the anti-free enterprise motivation. From Ralph Nader's first and most celebrated "consumer" campaign, it would be quite valid to conclude that the real object of his campaign was not the enhancement of the safety of Chevrolet drivers. Subsequent claims have been made that the Corvair was one of the best cars of its times, and that further modifications to cars have not, in any way relative to the cost involved, advanced the safety of car drivers. One might therefore conclude that Nader's real target, intentionally or otherwise, was the corporation, in this case General Motors.

The same can also be said of consumer campaigns against the marketing of infant milk formulas in the Third World. There is little evidence to support the view that Nestle were responsible for the deaths of millions of Third World babies. There is, on the contrary, considerable evidence to show that the cause of infant health will be harmed by restrictions placed on the marketing of infant milk formulas. Once again we conclude that the target is the corporation, in this case, Nestle.

As you can see, the two principles are inextricably intertwined: anti-individualism, anti-individual assessment, anti-risk taking means invariably pro-collectivism, pro-the collective, pro-the command economy.

11.6 Epidemiology — The Collectivist Science
Interestingly, one of the main tools used by the would-be regulators in health and safety is the technique of epidemiology. Epidemiology by its nature takes no account of individual differences, but seeks to extrapolate (when it is properly done) tendencies perceived in sectors of the populations to the whole populations. Perhaps it would be valid to call epidemiology the collectivist science par excellence, for it is the basis for so many contemporary calls for collectivist legislation and further erosion of individual freedoms.

11.7 The Concept Of Social Cost
Our second, and equally important principle is that the citizen is a free agent in a free society, not a "social production unit". This may seem obvious, but it is necessary to restate it, because a technique used by the regulators is to attempt to bring personal decision making within the realm of harm to others, by describing it in terms of its cost to "society". This is another element in the radical quality of these quests for security, their failure to perceive trade-offs in their push to collectivist totalitarianism, i.e. the political bottom line of all this is that the State comes to be seen as the total guarantor of security.

Take a simple example. If I have a car accident which only injures myself, it is alleged that I have also caused social costs. If I am not sufficiently insured, public funds may be expended on my medical bills and the same goes if I become disabled. If I die, my widow and orphans may become burdens on the public purse, not to mention the fact that society as a whole has a temporary or permanent loss of my productive contribution. Apparently these are social costs. According to this logic, the State has the right to protect others against risks which I used to consider were incurred by me alone.

These social costs do not stop at car accidents. Put simply, very few of my activities do not carry risks to society in the sense in which it is used by the regulators. My nutritional habis, my lack of exercise, the way I raise my children, my work habits, even my hobbies all harbour potential social costs. My gluttony and sloth may as surely disable me as a car accident, the victims of my child raising philosophy may become juvenile deliquents, and my scandalous job performance helps lower the GNP.

11.8 The Inefficiency Of Cost Benefit Analysis
The regulators attempt to put a figure on the social costs by an inappropriate application of the techniques of cost benefit analysis. For example, if I am a manufacturer of hang gliders, social costs arising from my activities will be measured by putting a figure on hospital costs caused by hang gliding accidents, on the loss of production due to premature death, on social security payments to widows, which may be necessary as a result of premature death etc.

These are balanced against another figure representing the benefit to society from hang gliding.

Clearly, the questions raised by the application of this technique are not as simple as its proponents would have us believe. The practice of applying cost benefit analysis to social issues raises serious policy questions.

Orthodox cost benefit analysis was designed to provide Government and business with detailed information about which of two alternative projects should be adopted. For example, should we control flooding by building dykes or by constructing a dam? The dykes are relatively cheaper but the dam provides benefits beyond flood control. Dams generate electricity, create a lake for recreation, provide a reservoir for irrigation of crops and water for drinking, etc. Thus, it is necessary to determine the value which each alternative may create and compare it to the cost.

Even in seemingly clear cut examples of cost benefit analysis, there are problems in determining costs and benefits. For instance, the real cost of a project may be much more than the bills paid by the accounting office. Many costs of a project may be borne by citizens never appearing on the books at all. The destruction of fish below a dam is a cost to the fisherman, not to the Government.

When we move from concrete choices between projects, we immediately involve ourselves in serious problems, and some would say we engage in a cynical political exercise. Even if we are to assume that hang gliders die prematurely, how can we account premature death as a social cost, and ignore the fact that a person who lives longer is, in the longer run, likely to cause a considerably greater strain on the nation's hospitals and medical services, particularly in the geriatric area. A cynical approach, certainly, but the point is that if this technique is to have any use at all, one must be rigorous in the application of economic principles.

If we accept that cost benefit analysis is a useful tool for social policy making, we also accept the proposition that the individual has no legitimate position in society except as a contributor to economic worth. In fact, the citizen becomes the property of the State. For example, lost working time and absenteeism are social costs only if labor belongs to the State.

It may be that there are people who are prepared to accept this proposition but if this is the case, they should state it clearly and follow it through to the end. For example under these circumstances, what is the social value of the young, the disabled, the unemployed and the sick? Are these seen merely as a cost to society? Clearly this approach is not one which leads us in productive directions, and should be rejected by all democratic societies which value individual rights and human dignity.

11.9 Law Of Unintended Consequences
The glorification of the collective before the individual, and the propensity to see the actions of individuals primarily in terms of their costs, or other impact on society, also leads me to a discussion of what I would like to call the Law of Unintended Consequences.

If a collectivist approach is to be taken to regulatory issues, it is essential to look past the intended consequence of the regulation to all possible consequences. I have already discussed the implications of the collectivist approach for individual liberty, for the strengthening of the role of the State, and for the downgrading of the role of the individual. This is the first and most important of the unintended consequences of this approach to public policy. But each attempt at over-regulation brings many other unintended consequences, which are of a perhaps less fundamental nature, but nevertheless have an impact on those sections of society on whom their burdens fall.

For example, the West Australian Government considered that it could protect the health of its population, and lower health costs by banning the advertising of tobacco products. Without going into the arguments too deeply, it had discounted the fact that the tobacco industry was a major supporter of that State's sporting bodies, and that removal of tobacco advertising also meant a downgrading in the standards of sport and thereby possibly in the health and physical fitness of West Australians. If a Bill is passed against cigarette advertising in Western Australia, there will unquestionably be unemployment generated in the advertising and in several other industries. This unemployment will constitute a direct cost to the Government. There has also been work done in the US which suggests that mortality amongst the unemployed is significantly higher than amongst the employed.

A further impact will be to directly contravene the International Covenant on Civil and Political Rights. Smokers and non-smokers alike have been asked to forego certain civil liberties in order to avoid a possible cost alleged to be associated with the pursuit of one lifestyle option — in this case smoking. The result of all this is that the Western Australian Government in its attempt to solve a perceived problem, runs the risk of creating new problems for itself in exactly the same area.

The Victorian Government wishes to lessen the cost to it of collecting litter. It tries to pass these costs on to the consumer through compulsory deposits on drink containers. The Victorian Government is also in favour of increased investment and economic growth, and fails to see that a measure such as compulsory deposits which would lower demand for aluminium cans would not be compatible with new investment proposed by ALCOA in a giant aluminium smelting plant in Western Victoria.

Since the Canadian system of Medicare is a model for our present policy makers, it is instructive to note that in Canada the hospital system is a public hospital monopoly, private hospitals for acute care do not exist, insurance for private hospital cover is illegal, and the only safety valve for acute patients in the Canadian hospital system lies below the border. By raising the standard of "Free" health care for all, the Canadians initially raised expectations way beyond the Government's capacity to deliver. Today, Canadians are all too aware of the gap between Government rhetoric and performance — what else does one expect from a scheme which is inherently unstable and which progressively restricts choice and moves the power of decision making in health care matters decisively away from those closest to the problem, the patients and providers, in the direction of those who know least, the public servants and politicians.

There is poor irony in the advertisement with former NSW Health Minister Brereton exclaiming in reference to the provision of equivalent standards of health care for all under the new Medicare system — "The Government will see to it". There is another example of the operation of the Law of Unintended Consequences which comes much closer to home for doctors. A corollary of the use of social cost to justify regulation of manufacture and sale of goods is that, by extension, there is political pressure for the control of doctor's incomes. This may be by way of compelling doctors to be employed by the State, or by putting limits on doctors fees and other income. As the collectivists see it, doctors fees are a large part of the "social cost" of health care and they are in their view excessive. These views are widely held in the community and are a necessary but possibly unintended consequence of adherence to the social cost philosophy.

The list is endless, but it is an almost inevitable consequence of attempts made by Governments to tinker with people's rights to make decisions for themselves.

11.10 Safety In Risk
The whole of our civilisation in its spiritual as well as its material aspects rests upon an endless accumulation of risks taken over successive generations by individuals. The consequences, good and bad, of these actions have been accepted by these individuals and not by society as a whole. In most cases, when the outcome is negative, the one to suffer has been the risk taker. When it has been positive, the whole society, including those who chose not to take risks, has taken the benefit.

In our society, the non-risk takers ride on the backs of the risk takers. The converse cannot be true. Calculating risks is a matter of common sense for the individual. For the State to seek to eliminate them altogether, abolishes the role of the individual and has, as we have seen, dangerous consequences. Not to take risks, is the biggest risk of all.