Padraic P. McGuinness, “Smokers need encouragement, not abuse,”
The Australian, February 8, 1994, p. 48.

Whenever any issue of social policy or any issue with moral implications is examined carefully in terms of its financial and economic costs and benefits, or even in terms of its inevitable economic implications, there will invariably be some idiots who immediately start yapping about economic rationalism and its evils.

This has, of course, happened in the case of the EPAC paper on Australia’s ageing society. This simply points out that as a result of the fall in the birth rate from 1961 after the high birthrates following World War II, there will over the first half of the next century be a growing burden of ageing and senile baby-boomers on the subsequent generations.

A relevant fact is that the costs of supporting old people are also growing rapidly per capita, for a number of reasons. Expensive medical procedures prolong the life of the aged and large costs are incurred in keeping people alive in the last two years of life — that is, when there is simply no possible hope of any return in terms of longer useful and enjoyable life.

The rising cost burden on the young will inevitably mean that issue of voluntary termination of life and even of euthanasia will be discussed. Even if such things are considered morally repugnant, the cost of that moral judgment needs to be measured — and preaching will not change the fact that health budgets will always be limited and decisions as to the costs of prolonging a life as against improving the quality of other lives will always have to be taken.

It is worth considering, too, how sensible most of the moralistic propaganda campaigns in favour of supposedly healthy lifestyles are. The reality is that it might be wise from an actuarial point of view to encourage heavy smoking and drinking, as well as overindulgence in high cholesterol food and an avoidance of all exercise. As a result, people will live shorter lives (possibly more enjoyable ones) and hence reduce the future burden on the community generally.

How much shorter in the case of exercise is not at all clear. There is growing evidence that vigorous exercise over a lifetime extends life expectancy by at best a few months. And if you put rats on an austere, near-starvation diet they live longer — no doubt wishing all the time they were dead.

Of course, there is an argument that smokers and drinkers impose costs on the health care system, and ought to be discouraged on those grounds. By the same logic, football and other sports and recreations involving deliberate injury of the self and others ought also to be discouraged; or at least those participating in them taxed heavily to finance the health costs they are incurring for the future. Betting on horses is far healthier; and when the horses are injured they are simply shot, not parked in expensive life-support units.

But in the case of the most reviled of all unhealthy indulgences, smoking, is it indeed a good idea to try to prevent it?

Of course, children ought to be discouraged, even forbidden, to smoke for the sake of their health and the comfort of their parents. But if an adult (although legal adulthood for no good reason begins these days at 18, few girls and no boys are really adults before they are 21) consciously decides to indulge in an unhealthy activity, who has the right to stop him or her? Maybe it is to the benefit of society to encourage them.

Those baby-boomers who have smoked heavily all their lives can even be considered as public benefactors. They have paid heavy taxes on their smokes all their lives, their life expectancy has been considerably shortened and, as a result, they will impose a much less burden on the young of the next generation than the fitness fanatics and the health fascists.

In fact, smokers make a heavy net contribution to the community. A few years ago an interesting study was issued by the Department of Community Services and Health. This was Estimating the Economic Costs of Drug Abuse in Australia, by David Collins and Helen Lapsley. The interesting thing about this analysis was that only by inventing large “intangible” costs and putting arbitrary figures on them, as well as double counting, were they able to make out much of a case against smoking and drinking.

(There is, of course, no case at all against some illegal drugs. Heroin is, if provided in a clean and pure form and controlled dosage, totally harmless. It is, however, highly addictive and those who are foolish enough to try it and get hooked will go to extraordinary lengths to feed the habit. It is its illegality and resultant scarceness which gives rise to the social and medical costs of heroin addiction. Bob Marks, of the Australian Graduate School of Management, has produced convincing evidence on this.)

The Collins and Lapsley calculations for the budgetary cost of drug abuse are fascinating. In 1988, the excise revenues and customs duties derived from sales of tobacco products amounted to $1128 million. In addition, $502 million was collected by State tobacco franchise taxes. Adding in the revenues from taxes on booze lifts the revenue contribution to $2.5 billion. By contrast, the total health expenditure on account of all drugs (alcohol, heroin as well as tobacco) amounted to $991 million.

Thus the smokers and drinkers paid over $2.5 billion in exchange for $1 billion of health and medical services necessitated by their vices. In a word, they are being ruthlessly ripped-off. The authors of the study invent an additional cost to revenue, the loss to net indirect and income taxes.

But they do not offset against this the savings in outlays on pensions, and other welfare, health and medical support for the aged. It appears also that, trying to have their cake and eat it too, they are claiming that the fact that smokers die early and therefore stop smoking is a cost since it reduce tobacco excise collections.

Instead of refusing treatment to smokers, doctors ought to give them preference, since they are a proportionally much more important source of their incomes than health fanatics. But medicos love to preach while they are raking in the moolah.

Of course, there are economic costs apart from fiscal costs to the use of drugs. People who die or get sick as a result of drug abuse before retirement age impose a cost in lost production on the community (though the fact that tobacco and alcohol abuse is worse among the low-income groups, especially the unemployed, suggests this cost is correspondingly reduced).

But even here it turns out that, in the case of smokers, what their illness costs in production terms is more than offset by the reduced consumption demands on the community resulting from their shorter lives. A person who works hard all his life, smokes his head off and dies early as a result is a substantial net social benefactor.

The real story is that as a result of the high taxes they pay and their shorter lives, smokers in particular are an economic bargain. Maybe they ought to be encouraged.

So the message is, moral issues apart, that the kids of today ought to encourage their parents to eat, drink, smoke and be merry. It will cost them less in the long run.

(in order of appearance on Economics.org.au)
  1. Where Friedman is a pinko
  2. The Economic Guerrillas: A lecture in honour of Maxwell Newton
  3. The Libertarian Alternative
  4. Libel laws block insider's revelations of Australia's industrial mess
  5. But perhaps the merchants of doom have a point
  6. The Origins of Paddy McGuinness
  7. The Itch for Influence
  8. LA safe from religious poverty
  9. Aunty should hang up her boots in face of premature senility
  10. Warning: health is a budget hazard
  11. New ABC Tory chief won't rock the boat
  12. Time to sell the ABC
  13. Youth victims of the welfare con
  14. Paddy McGuinness on class sizes (1991)
  15. More teachers won't solve the problems in our schools
  16. Paddy McGuinness on Catholics and wealth distribution
  17. Paddy McGuinness proposes inheritance tax equal to handouts received by deceased
  18. Let them swim nude
  19. Time to legalise heroin
  20. State-sponsored sports rorts
  21. The blight of the baby-boomers
  22. To reduce the problems of crime and corruption, legalise heroin
  23. We should ban Olympics
  24. Evidence shows heroin policy is not working
  25. Wowsers deny society while killing children
  26. Will Australia compete?
  27. Canberra's social revolution
  28. Paddy McGuinness in 1994 on the 2012 class size debate
  29. Why not pay for the ABC?
  30. Paddy McGuinness on David Stove
  31. Sometimes the truth hurts
  32. Paddy McGuinness on compulsory, informal and donkey voting, and breaking electoral laws
  33. Thomas Sowell, McGuinness, Aborigines and other minorities
  34. Genocide with kindness
  35. Hyde, McGuinness and Sturgess on Chaining/Changing Australia
  36. Paddy McGuinness defends comparing IQ of races
  37. Do-gooders should glorify smokers
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