Author Page

Author Archives: Aveek Bhattacharya

In 1850, the French economist Frederic Bastiat wrote the parable of a shopkeeper whose window is smashed. Aghast at the damage, the shopkeeper is consoled with the idea that at least his broken windows are good for the economy, since “Everybody must live, and what would become of the glaziers if panes of glass were never broken?” The alcohol industry is, in some ways, like the glazier of Bastiat’s story. Global alcohol producers profit from harmful behaviour. And they, too, try to defend themselves with the promise of employment and income. Such appeals to the economic benefits of a thriving […]
Read More

Tagged |

Alcohol produces externalities – costs that are imposed on others without their consent. For example, drinking is associated with crime and violence, road traffic accidents, costs to the healthcare system and lower economic productivity. Externalities are problematic because they are not reflected in market outcomes: consumers typically only consider the costs and benefits of drinking to themselves, and fail to consider the impact their drinking has on others. According to standard economic theory, externalities should be corrected through taxes which raise prices to reflect the social harm of a product. For example, if a pint of beer typically imposes £1 […]
Read More

Tagged , |