Published in Financial Post, August 17, 2001, p. C-15
We don't think there is such a thing as light cigarettes," said the outgoing president of the Canadian Medical Association, echoing federal Health Minister Allan Rock's claim that "light" labels deceive people and encourage smoking. In contrast, tobacco manufacturers argue that labelling cigarettes for tar content transmits useful information to smokers, including to those who want lower-tar products.
What's the evidence? On the one hand, some evidence shows that cigarettes have become less hazardous as their tar content has dramatically decreased over the past few decades. On the other hand, some economists argue that the Pelzman effect is at play. Sam Pelzman is an economist who showed that safety belts and similar measures did not reduce traffic accidents because drivers felt more secure and drove less carefully. More generally, the Pelzman effect means that regulations don't prevent individuals from reverting to their own, preferred trade-offs between risk and pleasure. If a smoker of regular cigarettes were forced to smoke lights, he would compensate with deeper puffs and other such tricks.
The balance of the evidence in this debate between the health establishment and the tobacco companies does not matter very much. Even assuming a strong Pelzman effect, since smokers are not forced to smoke light cigarettes, some who prefer lights may want to smoke less. Certainly, nobody would choose them to smoke more. At worst, then, light cigarettes would have no effect on the hazards of smoking; at best, they would have a positive effect. What's the problem?
Answers Mr. Rock: "Labelling cigarettes as light and mild offers smokers a false sense of security." The false security argument has lots of problems. It may not be false security except for those who dream that nobody who understood the risks would smoke, drink, flirt and otherwise have fun in life. Security is, like everything else in human action, a subjective concept. Moreover, some individuals will pay for a sense of security that others may label false (overinsuring themselves, buying a guard dog, etc.). Who is the Minister of Something to ban this? In fact, the sense of security that the Nanny State gives to its wards is the most dangerous of all.
No one should trust tobacco executives. People with something to sell have an incentive to embellish the advantages, and underestimate the shortcomings, of their stuff. The principle remains: Caveat emptor.
In the case of tobacco, buyers certainly beware, and with a vengeance. American economist Kip Viscusi has shown that consumers overestimate the risk of smoking. While the smoker's risk of getting lung cancer during his life is estimated at around 10% in the scientific literature (much greater than the non-smoker's risk), the public's assessment of this risk is at least three times higher.
Neither should anyone trust what the government tells us. It, too, has something to sell. One of the major advances of economic theory in the second half of the 20th century has been to show that politicians and bureaucrats are motivated by self-interest just as other mortals, even if their incentive structure is different. Politicians make a (very good, thank you) living by selling policies to well-organized, vocal groups. Bureaucrats further their career interests by aggrandizing their domain of intervention.
Let's accept that moral ideals have more weight in the agendas of politicians and bureaucrats than in the market suppliers' goals. What idealistic statocrats sell is a bit farther from consumers' gadgets and a bit more like religion. There are good reasons to be more suspicious of the religious jihad peddler than of an Electrolux vendor.
Moreover, politicians and bureaucrats do not have to pass the market test. If you don't like cigarettes, you just don't buy any; you can probably even manage your life in such a way as to not own, even indirectly, tobacco shares. But if you don't want to buy a certain public health policy ... well, just try to stop paying taxes and obeying laws!
In other words, politicians and bureaucrats have more incentives to lie than private businesses. From a historical point of view, lying is the health of the state. More recently, just think of the Liberal promise to abolish the GST.
In public health, consider what has been called the "Lalonde doctrine." In a 1974 booklet published by the Canadian Department of National Health and Welfare, and signed by then minister Marc Lalonde, a chapter entitled "Science Versus Health Promotion" states: "The spirit of inquiry and skepticism, and particularly the Scientific Method, so essential to research, are, however, a problem in health promotion ... The scientific 'yes, but' is essential to research but for modifying the behaviour of the population it sometimes produces the 'uncertain sound' that is all the excuse needed by many to cultivate and tolerate an environment and lifestyle that is hazardous to health."
In 1968, federal health minister John Monro released a table of tar and nicotine content in Canadian cigarettes. The purpose, he said, "is to allow people to know tar and nicotine levels of the cigarettes they smoke so they may, if they wish, avoid those with high and choose those with low levels." At the time, the tobacco companies were naively cooperating with the government. What have they got in return?
Free speech is to ideas what free trade is to commerce. The only way to discover the truth is to let everybody express an opinion, including tobacco companies. The free flow of information is more efficient for the consumer than regulation of information by the state. Indeed, the main problem with tobacco advertising bans is that manufacturers are incapable of communicating new information to consumers.
Prohibiting tobacco companies from labelling the strength of their cigarettes demonstrates the incredible contempt in which Mr. Rock holds 6,000,000 Canadian smokers. Now, why would such stupid consumers suddenly become enlightened when they get addicted to the state and elect the party that names the health minister and hires bureaucrats? There is no such thing as a light tyrant.