Exclusive to this site, September 24, 1999 [Available in an Italian translation]
The lack of economic basis for the U.S. government suit against tobacco companies is, indirectly and paradoxically, illustrated by a recent World Bank report against smoking: Curbing the Epidemic. Governments and the Economics of Tobacco Control (Washington, DC: World Bank, June 1999). The Bank talks very prudently about “possible financial costs” that smokers may impose on others. These possible costs are “difficult to identify and quantify,” says the Bank, as studies “have reached conflicting conclusions.” In short, World Bank economists have given up the hypothesis that smokers impose financial costs to nonsmokers.
And for very good reasons. What the Bank calls “conflicting conclusions” is a wide agreement among economists that the public health literature of the last two decades had it wrong. All major economic studies over the last 20 years – Leu and Schaub in Switzerland, Gravelle and Zimmerman of the Congressional Research Service, Manning and Viscusi in the U.S., Raynauld and Vidal in Canada, Rosa in France – have demonstrated that smokers pay their own way and that, if there are any net transfers, they flow from smokers to nonsmokers, not the other way around. So-called “smoking-related diseases” cost less to the public treasury than what smokers pay in tobacco taxes and what they do not collect in social security benefits when they die younger.
This economic conclusion has been so well demonstrated that, more recently, it even made its way into the public health literature. Taking a lifetime view of health care costs, some claim that smokers cost less than nonsmokers, even without considering social security savings (see Barendregt et al., “The Health Care Cost of Smoking,” New England Journal of Medicine, October 9, 1997, pp. 1052-1957).
The situation is actually quite ironic. In the 70s and 80s, public health specialists accused smokers of imposing health care costs to the rest of society. Economists countered by demonstrating that, if anything, there was a net financial transfer from smokers to nonsmokers. Antismoking activists now argue that this is simply “not the kind of calculation that a civilized society engage in,” as Prof. Jeffrey Harris of MIT puts it!
All lifetime costs being considered, then, smokers cost less to the public treasury than nonsmokers. This means that there is no cost that the government can legitimately recoup from smokers via the tobacco industry. The federal suit looks more like extortion than anything else, as a Philip Morris lawyer suggested (Wall Street Journal, Sept. 23, 1999).
Or perhaps there is more than extortion. A recent book by Penn State historian Robert J. Proctor shows how today’s public health policies are disturbingly reminiscent of Nazi health fascism. Even the strongly antitobacco New England Journal of Medicine recognized this concern by publishing a favorable review of Proctor’s book. “To some extent,” writes Dr. Marc S. Micozzi, “the social intolerance of contemporary progressive movements, such as animal rights, antitobacco activism, temperance efforts, and enthusiasm for natural foods, may be seen as similar to the ‘progressive’ aspects of Nazi Germany, not only in their goals, but increasingly and alarmingly also in some of the methods used to impose collective solutions on individuals.”
From this vantage point, government persecution of tobacco companies would better be simply extortion.
At any rate, the federal suit is another instance of what is, despite other indications to the contrary, mounting state power. When RICO was adopted in the early 70s, who would have feared, or dreamed, that it would one day be used against important, legitimate businesses? If Alexis de Tocqueville came back to life and pursued his work on Democracy in America and The Ancient Regime and the Revolution, would he not argue that America has become one of the worst “administrative tyrannies” of the late twentieth century?