I went to see Thank You for Smoking over the weekend, expecting to endure the usual one-sided attack on the business everyone loves to hate, Big Tobacco. I was pleasantly surprised. The film undoubtedly skewers the industry a bit (as when a tobacco executive proclaims, “We sell cigarettes. They’re cool. They’re available. And they’re addictive. Our work is almost done for us.”). It reserves a greater measure of derision, though, for the nannyish legislators who are seeking to mandate a ridiculous skull-and-crossbones label that resembles a rotting corpse.
The film’s climax occurs when the protagonist testifies before a Senate committee considering the proposed labeling law. After correctly noting that risk-benefit tradeoffs are ubiquitous and that eliminating risk would require prohibition of all sorts of utility-creating activities, the lobbyist sums things up by declaring that “It’s about liberty.” In other words, since the government is not in a position to decide whether the benefits from smoking exceed the risks entailed, it ought to (pardon the pun) butt out. Amen.
I’ve recently expressed a similar sentiment, albeit in a far less entertaining manner, in The Case Against Smoking Bans, which I just posted to SSRN. The essay rebuts the three justifications most commonly offered for sweeping smoking bans — that they (1) alleviate externalities, (2) shape individuals’ preferences in a desirable manner, and (3) reduce risks. It then sets forth an affirmative argument for a laissez-faire approach to smoking policies. Comments encouraged!
You make an empirical claim: “Because patrons select establishments based on the benefits and costs of patronage, they will avoid establishments with air policies they do not like.”
I believe you are ignoring a market imperfection arising from incomplete information at the point-of-decision. Example: if your room-mate SMS’es you that a group of your friends is heading to a particular bar, you generally do not have the opportunity to conduct proper due diligence regarding the air policy of that establishment. Absent some immediately obvious marker, I would hypothesize (and yes, this is also an empirical claim) that most decisions as to the establishment to be patronized will be made in the absence of information about the establishment’s air policy. Since the “wrong” air policy will be an irritant for a non-smoker, but a more severe hindrance to a smoker, most bars will opt to have a pro-smoking air policy, to maximize their customer-inflow. In the absence of information, most bar-goers (adopting the “lemon model”) will resign themselves to the probability that whatever bar they go to will, in fact, have a pro-smoking policy – leading to less outcry, despite a prevalent irritation at second-hand smoke.
One possible solution is to issue separate licenses for smoking and non-smoking bars, on equivalent terms (cost and ease of obtaining a license, frequency of inspections, etc.). The only difference would be that smoking bars would be required to adopt a name that reveals their policy, e.g., “Jake’s Dilemma Smoking Lounge”, or “Muldoon’s – Cigarette Bar”. Cf. incorporation laws that require corporations to include “Inc.”, “Co.” or some equivalent formulation in their name, in order to put suppliers and other creditors on notice of the entity’s limited liability nature.
Thom, I’d be curious to hear your reaction to this type of regulation, aimed at correcting a market imperfection rather than applying an outright ban. I appreciate that, by putting the naming burden on smoking rather than non-smoking establishments, a certain anti-smoking norm is being promoted (which may be a good thing). However, this burden is a relatively light one…