'Could these rules have emerged from agreement by participants in an authentic constitutional convention?'

That question is quoted from the 1986 Nobel Prize Lecture of James Buchanan. It is standard practice on this blog for entries to take the form of questions and answers, but this is the first time my question is a quote.

James Buchanan, an outstanding economist, died last week. There have been many tributes published, some of which are included in a collection published by Alex Tabarrok on Marginal Revolution.

Buchanan emphasized the importance of asking the right questions. He implied that economists were answering the wrong questions when they recommended what policy reforms should or should not be made without considering the preferences of citizens as revealed through political processes.

What did Buchanan mean by 'agreement by participants in an authentic constitutional convention'? The convention is a thought experiment. Its focus is on reforming the rules of the game in ways that are in the potential interest of all players. Agreement implies unanimity – the participants perceive that the rules further their interests. Participants expect the constitutional rules to be in place for a long time, so they are placed behind 'a veil of uncertainty' as to their own predicted interests. Constitutional rules have to be workable in a political system in which the players have the interests and frailties of ordinary humans.

In the prize lecture Buchanan asked a question which is unfortunately just as relevant now as when he asked it. He asked whether the debt-financing regimes of modern Western democratic polities could have emerged from agreement by participants in an authentic constitutional convention. His answer:

'It is almost impossible to construct a contractual calculus in which representative of separate generations would agree to allow majorities in a single generation to finance currently enjoyed public consumption through the issue of public debt that insures the imposition of utility losses on later generations of taxpayers'.

On that basis, Australian economists should not complain too loudly that our politicians have tended to be somewhat obsessed over the last year or so with moving government budgets back to balance. An authentic constitutional convention might see the simplicity of a balanced budget rule as having a lot of merit in helping politicians to resist temptation.

 I had forgotten, until a few days ago, that James Buchanan and Gordon Tulloch (B&T) had written about the concept of 'the good society' in the final chapter of The Calculus of Consent (first published in 1958). I was particularly interested to re-read what they had written in the light of discussion of 'the good society' on this blog and in Free to Flourish.

B&T's starting point is that widespread acceptance of moral principles that are necessary for harmonious social life does not guarantee that individuals will not behave badly to gain unfair advantage over others. They then ask:

'Should the social order be organized to allow moral deviants to gain at the expense of their fellows? Or instead, should the institutional arrangements be constructed in such a way that the "immoral" actor can gain little if at all, by his departure from everyday standards of behaviour?'

The answer they provide is that the relevant choice among institutions is that of 'selecting that set which effectively minimizes the costs (maximizes the benefits) of living in association'. In the political arena, as in other aspects of life, rules of the game need to take account of the potential for the players to attempt to exploit one another by diverging from accepted standards of moral behaviour.

The question which Buchanan asked at the end of his Nobel lecture defines the continuing question of social order. It should be an inspiration to everyone:

'How can we live together in peace, prosperity, and harmony, while retaining our liberties as autonomous individuals who can, and must, create our own values?'

What political issues should Australians focus on in 2013?

Free to Flourish, the book I published a couple of weeks ago, ends by suggesting that the most important contribution anyone can make to human flourishing is to help democracy work effectively. So, it would be reasonable to ask what contribution I am planning to make.

That poses a problem because the current state of politics in Australia is so dreadful that I would rather not think about it. Politics in this country seems to have become almost entirely a game of denigrating the leadership of the opposing side. Democratic politics also seems to be fairly dysfunctional in the United States (as well as in most other countries of the western world) but the politicians in the US have at least had the wisdom to devise a mechanism – the fiscal cliff – to help them to focus on some important economic issues.

Unfortunately, I can't claim that I didn't enjoy watching some of the brawling in Australian politics last year - even though, in retrospect, I might have obtained more lasting satisfaction by spending my time watching mud wrestling. The Prime Minister's famous 'hissy fit', directed at the Opposition Leader, was entertaining to watch the first time, even though it was unfair. I also found it entertaining to observe the PM attempting to defend herself against claims of misconduct as a lawyer 30 years ago. At the time it seemed to be entertaining in the same way that watching a cricket match can be entertaining, even when you know it is likely to end in a draw. There was no clear winner, but the Opposition scored more points than expected by establishing that during the 1990s Julia Gillard apparently thought it was acceptable practice for lawyers to help leaders of trade unions to set up legal entities for particular purposes, while knowing that they intended to use these entities for quite different purposes (e.g. as slush funds to help finance their re-election).

However, what bearing does knowledge that the PM may have engaged in some dubious practices a long time ago, while a practising member of the legal profession, have on how she conducts herself now? The same question can be asked of allegations about the behaviour of Tony Abbott in the distant past.

Do political leaders really think that public fascination with alleged misdeeds of their opponents in the distant past is likely to have a strong influence on the way people cast their votes? The standard answer seems to be that votes might change because 'character counts in politics', but the more plausible answer is that the politicians are actually playing 'gotcha' – the game of digging up dirt on an opponent's past life in the hope that he or she will make a false denial and be caught out lying to parliament.

In my view we have more reason to be concerned about the Prime Minister's current attitudes and policies toward the union movement – which are only too obvious - than about her attitudes and behaviour in the distant past. Similarly, we have more reason to be concerned about the apparent reluctance of the Leader of the Opposition to spell out the policies of his party than about his attitudes and behaviour in the distant past.

To answer the question I posed for myself, I think there are two main political issues Australians should all focus on in 2013.

First, where is where the money is going to come from to fund major government spending commitments in such areas as disability assistance and education? Given common usage of expressions such as 'no-brainer' to describe such commitments, it will be interesting to see whether the leaders of either of the major political parties are brainless enough to make firm commitments to proceed without making detailed proposals for funding – either by raising taxes or reducing spending in other areas.

Second, there is the issue of free speech.  The Attorney-General, Nicola Roxon, is proposing to change anti-discrimination laws in ways that will make it illegal to, among other things, offend or insult people on the basis of their political opinions. I believe that these proposals discriminate against me (and many other citizens) and I feel offended and insulted that the government should attempt to restrict my rights in this way.

We live in strange times when political leaders, who seem to spend much of their lives attempting to denigrate opponents, are now seeking to limit the rights of ordinary citizens to express their political opinions. Citizens should assert their right to continue to offend and insult fascists and others who seek to oppress them.  

Can the government make us happier by regulating what we eat and drink?

A guest post by Bridget Sandorford*

Introduction by Winton: The post comes at a time when some readers may be considering New Year's resolutions relating to what they eat and drink. When we have to make tough choices it is often tempting to think that governments ought to make life easier for us by introducing more regulation. The article has been written with particular reference to the US, but he issues raised are relevant in many countries, including Australia.

The post comes at an ideal time for me because it discusses an issue touched on in my book, 'Free to Flourish', published last week.

Bridget writes:

There have been a number of changes to the regulations surrounding the food and beverage industry in recent years, with the intention of cracking down on the nation's obesity epidemic. Fast-food chains have started posting fat and calorie counts directly on their menus, limits have been passed on the size of sugary drinks like sodas, and so-called "fat taxes" have been proposed as a surcharge on unhealthy foods and drinks.

All of these changes and proposals have been introduced as a way to curb the unhealthy eating habits that have become so ubiquitous in our culture and to stem the rising obesity numbers.

But is all this regulation really making us healthier? Happier? Here are a few reasons why it can't:

Spotty Regulation

The recent law in New York City banning sodas and other sugary drinks from being sold in containers over 16 ounces is a good example of the ineffectiveness of such programs. The ban, which will take effect in the spring, will only apply in restaurants, fast-food chains, theaters and other places that are under the regulation of the Board of Health. What that means is that if you really want a 32-ounce soda, you won't be able to get one when you're at a Broadway show, but you can get one by walking right next door to the 7-11.

Spotty regulation like this means that only some food or drinks will be targeted, and only in some cities, and will only affect some consumers. If measures such as these are to be effective, they have to be all-encompassing.

Personal Choice

Even with more wide-reaching regulation, bans and taxes will never be truly effective for one reason: Personal choice. If you live in New York and you want a 32-ounce soda, you can get one. You just have to buy two 16-ounce sodas -- and there's no rule against that. Fat taxes are never likely to be high enough to be cost prohibitive. Those who want the foods that  are taxed will spend less on other foods to afford them -- or, in the case of Denmark's fat tax, the citizens will just go to neighboring countries (or states) that don't have the tax to buy foods.

Personal choice will always be the trump card for any attempt to regulate or curb behavior. Even if penalties are imposed, they may not be a deterrent. The key is to get to the heart of the choice -- to find a way to change the behavior.

Food Culture

The reasons for our obesity epidemic are complex and include the current food culture. Not only have servings sizes increased, but the quality of foods has decreased. Fast food is considered acceptable dinner fare (as well as breakfast and lunch), and not enough people seem overly concerned about feeding children chicken nuggets and fries for a meal. Even foods that seem healthy have become overly processed and loaded with harmful chemicals. GMO foods, corn and soy are pervasive.

Education, a change in food-manufacturing regulations, and a shift in our food culture will help to solve our obesity problem. Forcing people to make the choices we want them to will not.

What do you think about regulations attempting to curb the consumption of unhealthy food and drinks, like container controls and fat taxes? Do you think they can be effective? Share your thoughts in the comments!

* Bridget Sandorford is a freelance writer and researcher for Culinaryschools.org. In her spare time, she enjoys biking, painting and working on her first cookbook.

How easy is it to self-publish a Kindle eBook?

Only a few days have passed since I published 'Free to Flourish' at Amazon, but I am already starting to think that it can't have been as difficult as it seemed at the time.

If I didn't have any end notes or images it would have been easy. The book, 'Building Your Book for Kindle', published by Kindle Direct Publishing (KDP) is easy to follow and provides adequate guidance for a publication with no end notes or images.

My book contains a substantial number of end notes and images, and I wanted the end notes to be 'active'. The advantage of active end notes is fairly obvious. They enable you to click on a number, read the note, click return to get back to the spot you were reading, and then read on without any problems. By contrast, without active notes, you first have to find the note you want to read, which may require you to go back to the contents page first to find what chapter you were reading. After you have found the note and read it, you then have to get back to the spot you were reading. This is manageable with a printed book if you can remember to keep a finger inserted in the relevant page, but you can't insert your finger into an eBook.

I found Scott Locke's book, 'The Kindle Publisher's Guide', particularly useful for instruction on how to deal with notes and images.

Scott Locke recommends use of kindle-notes, freely available third party software, to make footnotes active. It is necessary to get the text in the required format for this purpose, but the time-consuming part of the exercise was restoring punctuation in the document after it had been processed.

After processing in kindle-notes, my document was returned with just about all punctuation other than full stops and commas replaced by question marks. This meant that it was necessary to look at every question mark in the document and decide whether it was meant to be a question mark, inverted comma, a dash, a colon or whatever. I tried to do it quickly late at night, made a lot of mistakes and then had to correct them (with the help of my editor). This is not a process that anyone would want to go through more than once per book. Once in a life-time might be enough for me!

Scott Locke recommends the use of Mobipocket Creator to insert images back into the document prior to uploading at KDP. I found that to be good advice. The alternative method recommended by KDP (creating and uploading a zipped file) didn't work for me, possibly because I had a substantial number of images to deal with.

In retrospect, I can't claim that it was enormously difficult to publish a Kindle eBook with a substantial number of end notes and images. The process was just more tedious and time-consuming than I thought it would be. This was despite the warnings I had been given by others (including the suggestion that it might be wise to use an aggregator, alluded to in an addendum to a guest post on self-publishing on this blog in October).

I still don't understand why publishing an eBook is a much more tedious and time-consuming process than publishing pdf documents and web pages. No doubt the technology will improve. At this stage, however, direct publishing of eBooks with a lot of notes and images is not a piece of cake.