Motueka’s (Very) Grey Market in Tobacco

This story of a Motueka tobacco farmer (hit tip: hefevice) makes me want to take up smoking again so I can buy this guy’s wares. Despite being raided and dragged through the courts, Laurie Jury is maintaining there is nothing illegal about what he’s doing: selling dried, unprocessed tobacco leaf, he says, is not the same thing as producing tobacco.

To him, his continued high-profile involvement in tobacco growing, as probably the last self-acknowledged commercial grower in the country, is nothing more than a small farmer growing a small crop of a plant he knows well and sees an opening in the market for.

The small fact that his determination to stick with tobacco has seen him fall foul of the authorities twice now in five years, the second time involving a raid by armed police on his Pangatotara home last week, only hardens his resolve.

The Customs officers who arrived at his place in the wake of the Armed Offenders Squad came with a search warrant that suggested Mr Jury was a suspect in a range of offences, including helping defraud Customs of revenue.

They took all the leaf he had stored in his shed – he won’t say how much, but one report said it was about two tonnes – and a bunch of other stuff, including $4000 in cash, but he is confident they didn’t take anything that is going to land him a conviction.

The last time they tried, as he likes to point out, their case all but collapsed and they had to return the tobacco they had seized.

His argument is that there is no law against growing tobacco and, as far as he has always understood it, nothing in the law to stop him from selling the raw, dried leaf.

So that is what he does, as he freely admits. Buyers, he says, range from passers-by in camper vans who have seen his roadside crop and want some leaves as a “souvenir”, to customers in the North Island.

To be honest, I don’t like his chances of surviving in the long term. The law may not currently prohibit his business, but law is always open to interpretation or change. Public and elite opinion is swinging violently against tobacco, and courts are responsive to public opinion.

The most disturbing part of the story is the way recent raids were conducted:

The memory of [the prior court case] also meant he wasn’t exactly floored by the events of Tuesday last week, which started with being woken before 6am by the sound of his partner, Michelle’s, dog, Diesel, barking ferociously at the end of their driveway.

He grabbed a spotlight to investigate, shining it on to the road frontage, where the dog was “nutting off”, charging up and down the fenceline.

Mr Jury could see nothing, but seconds later, his phone rang, the voice on the other end advising that the police – armed police – were outside his property to help Customs execute a search warrant, ordering him to turn off the spotlight, get dressed and go outside with his hands up.

As he describes what happened over the next few minutes, it is clear the police weren’t mucking around. Armed Offenders Squad officers had stationed themselves along the road, on his property and on the stopbank across the highway. He says he counted at least 10 blue laser sights on rifles being pointed in his direction.

He was shouted at, ordered down to the road frontage to be greeted by snarling police dogs, handcuffed and loaded into a car.

That’s pretty standard practice in the States, but armed cops are the exception rather than the rule here in New Zealand. Armed raids makes the image of a war on tobacco much more vivid.

Tobacco Taxes

So, the New Zealand government has voted 118-4 to increase the sin tax on tobacco.  The funny thing is, the move was led by the Maori party, whose supporters contain a disproportionate number of smokers who probably don’t want a tax increase, and supported by the centre-right National party, who campaigned on an anti-nanny state platform.  I’m with Eric on this:

You know who I really feel bad for? The folks who voted National thinking they’d get less nanny-state as consequence. And, worse, the folks who campaigned for them on that basis. Think harder about it next time, guys.

While I know most politicians don’t feel the need to justify the passing of laws, surely there must be some among those 118 who think that there should be some sort of reason.

Do we need to increase tobacco taxes to pay for the costs of smoking on the health system? Nope: smokers pay more than their share. On that basis, we’d decrease the excise tax considerably.

Does ignorance among smokers as to the true health costs of smoking undermine the welfare-maximising tendency of free choice, meaning we need to force people to do what they’d do given full information. Nope. Even if you think ignorance justifies coercion, the fact is that people radically overestimate the health risks of smoking. If we wanted to encourage people to make the decisions they’d make if they were fully informed, we’d subsidize tobacco.

The real reason for increasing the excise tax on tobacco is a combination of arrogant paternalism and bigotry. Turia and Key think they know what’s best for you better than you do yourself and see smokers as disgusting deviants who must be punished. As Joseph Gusfield (writing about alcohol) says:

As his own claim to social respect and honor are diminished, the sober, abstaining citizen seeks for public acts through which he may reaffirm the dominance and prestige of his way of life. Converting the sinner to virtue is one way; law is another.

Anyone in favour of the increase care to offer another explanation?

Healthists Say the Darndest Things

From the comments on this post on the dangers of third-hand smoke (bollocks):

Smokers should have to urinate in a separate system or something so as not to pollute the earth and harm others.

Hat tip: Chris Snowdon.

Tobacco Prohibition

Apparently, almost half of New Zealand want to ban smoking completely:

The 2008 Health and Lifestyles Survey compiled nationwide interviews from the Health Sponsorship Council of 1608 people, including 422 smokers, and has just been published in the NZ Medical Journal.

It found 49.8 per cent of people agreed cigarettes should no longer be sold in New Zealand in 10 years, 30.3 per cent disagreed and 19.9 per cent neither agreed nor disagreed. Of the smokers surveyed, 26.2 per cent agreed and 55.3 per cent disagreed. The study also showed public support for plain, unbranded cigarette packets and fewer tobacco retailers. …

One of the study’s authors, Dr George Thomson, from Otago University, Wellington, called on the Government to take action.

“There’s now a need for politicians to embrace and act on the idea of a foreseeable and planned end to tobacco sales through a predicable timetable by 2020. The public wants more defined action to reduce smoking, and not a series of incremental steps.”

I can’t find much information on the survey from a quick googling, but I strongly suspect they asked the prohibition question in a leading way, with a variety of anti-smoking priming questions beforehand.  The other surveys they’ve conducted don’t seem particularly neutral. My worry is that misleading survey results like this could trigger anavailability cascade which makes people more likely to express support for prohibition.

Of course, I could be completely wrong: maybe half of  New Zealand really is that meddlesome.

In other news, I’ve switched to electronic cigarettes, which are a very good hedonic substitute for smoking, and much, much safer than smoking. (I bought from vapor4life, by the way, who have provided excellent product and service so far.)

If government tobacco policy was aimed at reducing the harm caused by smoking, the government would immediately redirect all tobacco control funding to promoting and subsidising e-cigs. This would be more effective and less harmful than spending money telling smokers they smell and that nobody wants to have sex with them. Unfortunately,healthists seem to think consuming nicotine is sinful. Tobacco control is less about helping people than it is aboutsignalling disapproval of those with different preferences.

Smoking is Gay

This video from The Onion is funny, but not too far from the reality of current campaigns (Hat tip: Balko).

Many PSAs aim to stigmatize smokers rather than inform people of health risks of smoking. I’ve always hated New Zealand’s Not Our Future campaign for this reason. They’ve just started running some new ads. The message of one is a pretty clear: “If you smoke, you won’t get laid.” It seems to ask local two-bit celebrities (both male and female) whether they’d go out with a smoker. The responses are what you’d expect: “Hell no!” “It’s unattractive” “It stinks.”

They have a shitty site, so I can’t link to it directly, but you can watch it by going to videos (TV in lower left corner), adverts, advert 1.  If anyone finds a linkable or embeddable version, please let me know in the comments.

Yandle on Tobacco Regulation

Bruce Yandle, author of the wonderful paper “Bootleggers and Baptists: The Education of a Regulatory Economist,” applies the logic of that paper to FDA regulation of tobacco in the latest issue of The Freeman:

No, there is no evidence to suggest that tobacco has until now been “an industry that has gone basically unregulated.” But there is ample evidence that tobacco regulation has served the interests of the industry and the politicians that broker favors to the industry. Meanwhile, consumers of tobacco products, who are generally a lower-income population, have been denied the benefits of competitively determined product information; they also have unwittingly become major sources of revenue for state politicians, who generally provide more benefits to higher-income than lower-income consumers.

One can only speculate about what might have happened had the FTC not outlawed health-effects advertising and had the industry not become one of the more regulated industries in America.

Read the whole thing.

Government Waste I Support, Relatively Speaking

Michael Marlow has a very good paper in Regulation questioning the effectiveness of tobacco control spending:

In 2007, the Centers for Disease Control and Prevention (cdc) released a report detailing “best practice” spending recommendations for state tobacco control programs. According to the report, “Research shows that the more states spend on comprehensive tobacco control programs, the greater the reductions in smoking—and the longer states invest in such programs, the greater and faster the impact.”

Marlow points out that this research, like so much used by the public health movement, is deeply flawed. Looking carefully at the data, he concludes that:

Empirical evidence does not generally support the cdc claim that states that spend more on tobacco control deter more tobacco use than states that spend less. Contemporaneous spending on tobacco control is never found to exert an inverse effect on sales, and at times is found to exert a significant and positive effect on sales, contrary to the claims of the cdc. The true effect, however, appears to be zero based on current and past spending discounted at various rates. There is limited support for cdc claims regarding its recommendations on funding adequacy when this spending measure is discounted at rates of 5 and 10 percent, but not at rates of 15 and 20 percent. When significant, however, these effects arise at fairly low levels of confidence and with trivial effects on cigarette sales, and therefore suggest very cautious support for the cdc recommendations concerning adequacy. These conclusions are based on a battery of tests that consider various measures of contemporaneous and past spending and adequacy and are conducted over an eight-year period in which over $5 billion (in 2005 dollars), or roughly $18 per capita, was spent on tobacco control.

This study raises questions about the process by which the cdc determines its spending recommendations and whether the process is designed to reach a particular conclusion about tobacco control policy rather than to uncover policies that may best allocate resources toward controlling tobacco use.

Given that I think people smoke too little, I see the ineffectiveness of tobacco control policies as a good thing. Sure, the government extracting money from taxpayers and pouring it down the drain is a prima facie bad thing, but the alternative is for the money to be effective in promoting the healthist agenda of maximising lifespan while ignoring fun.

As Crampton and Farrant have shown, when government is evil, we should want it to be incompetent as well. Now, I don’t think health promotionists are evil, but I think they succumb to the all-too-human impulse of treating their own preferences regarding health and fun as universally valid, and assuming those in disagreement must be rescued from their own stupidity. That’s a very dangerous attitude when backed by the coercive force of government.

Money down the drain is better than money being used to efficiently take away our liberties.

Anti-Nannyists Roundtable

Watch Jon Caldara, Radley Balko, David Martosko, David Harsanyi, and Andrew Boucher discuss nanny-statism on PBS:

Stigmatizing Smokers

I have a post up at Fr33agents.com in which I complain about the bigotry of the anti-smoking movement. Excerpt:

Tobacco control advocates are often quite candid about their intentions. The California Department of Health Services in 1998 described its tobacco control strategy as an attempt ‘to push tobacco use out of the charmed circle of normal, desirable practice to being an abnormal practice; in short, to denormalize smoking and other tobacco use.’ Other examples of public health authorities seeking to deglamorize or denormalize smoking are not difficult to find. Government has extended its reach beyond human behavior and into the human mind itself, with conscious attempts to sway the public’s perception of smoking and smokers – to regulate social meaning.

I’ll hopefully be blogging a bit more on explicitly libertarian stuff over there, which will mean less of it here. I’ll keep blogging about economics and whatnot here, but the total output of this site will presumably fall somewhat.

Smoking Bans and Norms

Henry Farrell has an excellent post at Crooked Timber on smoking bans and public norms:

I haven’t seen any research on this (if someone knows of any, let me know in comments), but my best guess in the absence of good evidence would be that the success of the ban reflected instabilities in previously existing informal norms about where people could or could not smoke. Laws that work against prevailing social norms face an uphill battle in implementation – unless people come to a general belief that non-compliers are highly likely to be sanctioned by the public authorities, they are likely to carry on doing what they always do. Hence, for example, the continued failure of the RIAA etc to stop file-sharing – file-sharers who both (a) think that there is nothing wrong with swapping music and movies, and (b) that the chance that they are going to be punished is low, are going to go on sharing files (current US law tries to counterbalance this problem by applying relatively draconian penalties to the few file sharers who are caught, but this strategy carries its own problems). Laws that broadly fit with prevailing informal norms, will, obviously, have few implementation problems.

But what we may have seen (if my guess is right) with smoking bans is an unusual case in which prevailing norms (that Irish people can smoke in pubs to their hearts’ content, and that others will just have to put up with it) were much more fragile than they appeared to be, and that the change in law made it easier for those disadvantaged by the prevailing norms to challenge smokers and to shame them into stopping smoking in certain places, hence creating a new set of robust norms.

I think that’s about right. Jonathan Adler, Stephen Bainbridge, and Patri Friedman also have interesting posts on norms and smoking bans.

For the record: I smoke, but hate the smell of stale smoke and generally have a preference for it being done outdoors (below-freezing Christchurch nights excepted). New Zealand banned smoking in all indoor workplaces a few years ago. I think this was very bad policy – I oppose coercive solutions to minor or nonexistent problems – but don’t feel particularly put out myself.

It seems pretty obvious that the optimal market outcome would involve some smoking and some non-smoking bars. This is what the market was moving towards, with a small but growing number of smokefree bars here in New Zealand before the ban. Due to the stickiness of social norms, though, this movement might have been slower than we might prefer. I have no idea what the optimal mix would be, but I’m fairly comfortable saying there were too few non-smoking bars in New Zealand before the ban.

I’ll put on my vulgar utilitarian hat for a second and offer some thoughts. My feeling is that the situation in which all bars ban smoking would be preferable to the situation in which all bars allow it. I can even buy the idea that the new blanket ban increases welfare relative to the old situation with few non-smoking bars. To simplify things horrendously, I suspect there’s a relationship between utility and the proportion of non-smoking bars which looks something like this:

smokingban

Before the ban, we were somewhere near the far left of the curve. With the ban, we were pushed to the extreme right. This is welfare improving in the short run, but if we think we were slowly moving towards the centre anyway – which seems undeniable – the ban precludes the optimal long-run equilibrium. Whether the ban is welfare-improving depends on the relative magnitudes of the short-term and long-term welfare effects, as well as the appropriate discount rate. As a vulgar utilitarian, I have no way of knowing which dominates without some sort of revealed preference mechanism. The aggregate welfare implications of the ban are not obvious. What is obvious, though, is that a removal of the ban would improve things, as Jonathan Adler argues:

What would happen were such bans to be repealed? My best guess is that relatively little would change. When I think about my favorite local restaurants, I cannot see any of them allowing patrons to smoke even if the law were changed. There are one or two local bars, however, that I suspect might allow smoking on the premises, but they would be the exception. So whereas before the smoking ban here in Ohio, most restaurants and bars allowed smoking in a separate room or at the bar, were the ban repealed today I would be willing to bet that most restaurants and bars would remain entirely smoke-free.

What does this all mean? On the one hand, if most restaurants and bars would remain smoke-free, it seems to me the argument for allowing some establishments to adopt different rules is that much stronger. Remove the bans and us libertarian-types can still toast to the free market system in a smoke-free pub. But it is important to acknowledge that this state of affairs exists today because of the initial government intervention. The smoking ban appears to have helped solve a collective action problem that had kept a suboptimal norm in place. So even if a ban limited the ability of business owners to set the rules for their own businesses, it may have also helped them shift toward preferable business practices. Non-governmental efforts may have produced the same result eventually, but it would almost certainly have taken longer. So smoking bans have been beneficial, but it may also be the case that the maintenance of such bans is unnecessary to retain most of their benefits.

The initial ban shifted us to the extreme right of the graph, which was preferable to the old situation. A removal of the ban would allow us to move towards the centre as some bars would allow smoking, presumably right up until the optimal point. This would be the best of all possible worlds. Unfortunately, I can’t see the New Zealand smoking ban being repealed anytime soon. The normally-dominant angry libertarian in me still thinks the anti-smoking movement is all bigotry, by the way. At worst, I think smoking in bars bothering others is a small problem. Social norms are only going to stop people voting with their feet for smoke-free bars when they are pretty close to indifference.

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