Up In Smoke

On Saturday, BBC World ran a program, Bannatyne Takes On Big Tobacco: This World (its been telecast in the UK couple of weeks back), which raised serious questions on marketing strategies followed by British American Tobacco (BAT) in developing countries like Mauritius, Malawi and Nigeria – particularly the targeting of minors. You can read about its contents in brief here. And BAT’s response here. One small item which finds no mention in either of the reports is the story of a boy (he is 10-12 years old) who makes his living selling cigarettes. He also smokes about 4 sticks a day, but since he is illiterate, he cannot read the “injurious to health” warnings that governments force tobacco companies to carry on cigarette packets. He is puffing away without being aware of the risks involved.

Most people are aware of the risks of smoking cigarettes – it can kill (my grandfather, a case in point, died of throat cancer); and the risks involved in “passive smoking”; and the addictive nature of nicotine which makes it very difficult for adults to quit the habit, leave alone children. That is why people in developed countries are giving up on the habit. And so tobacco companies are trying to encash on “uninformed” demand from developing countries before common sense catches up there. However, it would be unfair to give the entire credit of falling cigarette sales to consumers, since restrictive laws have played their own part.

Marie Brenner’s 1996 Vanity Fair article, The Man Who Knew Too Much (the basis for Michael Mann’s 1999 film The Insider), provides an in depth account of the workings of Big Tobacco. Consider this statement attributed to Jeffrey Wigand, the whistle blower who had worked with Brown & Williamson, subsidiary of BAT – “you have to look at the age somebody starts smoking. If you don’t get them before they are 18 or 20, you never get them,” – and it becomes clear why youngsters are a big market.

A lot of people might be angry at such practices – how dare they target poor kids in Africa! We need tougher laws! Etc etc. But this reaction is an emotional one – and has no sound basis. There is another danger to such blind reactions – a slow and steady movement towards an authoritarian state. Before I move on to the whats and the whys, consider this quote that was on a button Wigand once wore – IF YOU THINK EDUCATION IS EXPENSIVE, TRY IGNORANCE.

Informed choice
Informed choice does not mean that the seller has to provide you with the information. It means you should know what you are getting into. Governments exist to protect people from other people, and not to protect them from themselves. Whether I am in the market for a prostitute, a pancake, a packet of cigarettes, or for potassium cyanide, it is my choice, and therefore my headache what I intend to do with them. Each one has its own risks, and the government has no business interfering in the transaction. Unfortunately, while the editor of the Guinness Book of World Records understands the balance between choice and risk when he says – “if you put your life at risk, then fine; if you put someone else’s life at risk, not fine,” governments, don’t.

Choice – informed choice – is the strongest argument that can be used to counter any government action that subverts a free market. And banning tobacco product advertising, regulating growth and sale of tobacco in its various forms, and forcing establishments to follow laws prohibiting smoking are subversive actions. If a television channel or newspaper or comic book decides to run tobacco adverts, it is their choice. Responsible parents who have children of impressionable age will immediately stop subscribing to them – the market at work. A tobacco farmer grows tobacco because there is a demand for his produce. The moment demand plummets, he will move over to some other alternative – the market at work. If a restaurant or bar wants to have a smoking area, or they want to become 100% smoking establishments, it is their prerogative. Customers patronizing them can make a choice, If they choose to enter an environment that they know is smoke-filled, it is their choice. The market works, again.

Government intervention
The kid who sells cigarettes and smokes them too, without knowing the risks is an unfortunate case. But that does not in any way give governments the authority to play around with the market. Laws cannot be based on whims, and they cannot be based on emotions. If these were sufficient reason enough to justify action, why have laws in the first place – the Salem witch hunt trials and similar kangaroo courts worked just as fine.

While a lot of big businesses, particularly those which we pejoratively address using the adjective Big do play hardball, governments are not any less guilty. They are infact the deadliest trustees of unimaginable power ever invented by man. Governments (and parliament) have the power to make laws and hence when you deal with them, you are always playing against an opponent who uses loaded dice. And the US government is one of the worst when it comes to such tactics. Consider the decade old US Tobacco Master Settlement Agreement, which on the face of it probably is the biggest extortion in world history, and government was party to it.

The US government spends hundreds of billions of dollars on subsidizing health care costs. Many people who took advantage of the subsidy fell prey to tobacco related diseases. So various US state governments banded together and sued the tobacco companies who then signed an agreement to pay out 206 billion US dollars as penalties over a period of time. But things are not that simple. A few state governments changed their laws so that tobacco companies could no longer defend themselves in court. Lawyers who engineered the deal pocketed fees in tens of billions of dollars for work that is suspect. The payment over a period of time is being recovered by raising cigarette prices – basically a tax. What did the tobacco companies get in return? A virtual monopoly. Read Walter Olson’s January 2000 Reason Magazine article Puff, the Magic Settlement for more information.

How does this help the consumer in anyway? It does not. The addict will always be smoking, paying high prices all the time. Some will quit, some will die, the others will go on. The tobacco companies now have a government sanctioned monopoly. And governments have plenty of money to fund their brain dead schemes; the sale of tobacco is controlled so that vocal sections of the population are mollified, but it is not banned altogether because it is a huge revenue source. Government intervention helps? Whom?

Rise of the Nanny State
This BBC report presents a worldwide picture of government attitude towards the “smoking menace”. And it is not a good sign. The “nanny virus” is spreading. In New York, restaurants are now compelled to post calorie counts on menus. So consumers can now know how many calories they are taking in. But here’s the thing – if I really want to know about it, I will do my own research, won’t I? If people feel governments are justified in looking into matters concerning their citizens personal health, surely they won’t mind if governments introduce mandatory morning yoga classes. All citizens who don’t make an appearance should be fined heavily. After all governments are doing it for their own good. The “calorie count” law is not the only thing. Governments are also into “ban the trans fat” game. And things are only going to get worse.

You may not like smoking cigarettes, or drinking alcohol, or any of those things. But if you consider your dislike for them or the harmful nature of those products reasons enough to ask for their regulation or ban, you dismantle yet another barrier that protects you from the Government. And once Government enters a territory, it does not cede control. If you have read the Mahabharata or seen its TV adaptation, you know that Bhishma fought against his favorite grandsons because he had pledged his allegiance to the throne of Hastinapur. Now you probably understand why he did what he did – it was a matter of principle.

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