A Tentative Defense of Paternalism Thresholds

I don't think that the objection Scott raises to Robin Hanson's idea has much force to it. If the rule was that it's illegal to sell X to anyone with an IQ below 120, then smart people re-selling X to stupid peole would still be illegal. Whether or not they would do so would depend on whether or not B > C * p, where B is marginal benefit of selling to stupid people, C is the marginal cost incurred if caught, and p is probability of being caught.

It's important to note that in general, C is not uniform across all individuals even if the legal penalty itself is the same for anyone: for people who have a lot to lose by being arrested, the marginal cost of being arrested is far greater than it is to someone who has little to lose. I have a juvenile friend who's been arrested seven times and wouldn't be too perturbed by the prospect of one more, yet for me the consequences of a single such arrest would be disastrous because it would mean the loss of my relatively cushy job and would be quite the hindrance to my academic career. And since IQ tends to correlate with socioeconomic status, for most people above the cutoff point C will be substantial.

For most people above the cutoff, B likely wouldn't be all that great either: making a profit on arbitraging contraband takes a non-trivial amount of time and work (remember that you can't operate in the open, which greatly increases transaction costs), and there are probably better things a high-productivity individual could do with their time than resell contraband to stupid people, unless the effective demand among said stupid people was substantially large. This demand can also be reduced by imposing penalties on stupid people for posession (though the incentive leverage would be less than it is for smart people for the same reasons outlined in the previous paragraph).

So, I guess the scary thing is that this actually could work, though as always the devil is in the details. Fortunately we need never have to worry about such an eventuality since the smart fraction of a population never decided an election with their votes.

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