Minimum drink prices - responsibility or idiocy?
[ Update 05/10/2010 : UK home secretary Theresa May has announced today at Conservative Party conference that the government will be imposing a similar policy at UK level - banning the sale of alcohol below cost. "Below cost" is almost impossible to define - how much fixed costs do they include? - but at least it's not quite as simplistic as the Scottish version. Still not a smart policy.] Today the Scottish Executive announced that it wants alcohol in Scotland to be sold at a minimum price of 45p per unit . From time to time, governments around the world have imposed maximum prices on various products - petrol is a typical one - usually with the intention of helping their poorer citizens, and with a secondary effect of causing shortages. The Scottish Executive's goal is instead to reduce consumption - and setting a minimum price is, according to economic theory, a valid way to do that. Naturally, if two litres of cider has to be sold at £3.80 instead of £1.32,...