1. McG, “Smokers need encouragement, not abuse,” AUS, 8/2/94.
2. McG, “Class action may be smoking gun,” AUS, 1/3/94.
3. McG, “No ifs or butts for smokers,” SMH, 27/3/97.
4. McG, “Beware your heroic friend in court,” SMH, 11/6/98.

1.
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.

***
2.
Padraic P. McGuinness, “Class action may be smoking gun,”
The Australian, March 1, 1994, p. 43.

Unlike President Clinton, when I tried smoking pot I did inhale; but when I smoked tobacco I preferred not to. The trouble with smoking pot is that most times you get it mixed with that filthy tobacco stuff.

This is said only because once again I am writing about the economics of smoking. Perhaps it is necessary to state, as I have done before, that I do not smoke and never have been a smoker; that I detest smoking and its effects on the environment (I prefer to stay in dedicated non-smoking hotel rooms); and that I find most smokers incredibly ill-mannered and careless of other peoples’ comfort and sensibilities. The same is true of course of many people who use offensive scents and deodorants instead of washing.

But good manners are a matter of upbringing and education, and should not be imposed as a matter of social policy except in the most extreme cases.

Similarly, I do recognise that there are smoking-related diseases and extremely serious medical conditions which are either caused or aggravated by smoking.

But the fact remains that there is increasing evidence that most of the anti-smoking propaganda is either composed of deliberate lies or relies on carelessly, often wilfully, misconstrued evidence. Moreover, the evidence supports the proposition that even if smoking is harmful to the smoker, far from being a net burden on the community the smoker is a net contributor. Further, there is still not convincing evidence as to any harmful effects of passive smoking.

(The Full Bench of the Federal Court has made it clear that anyone who says either (a) there is no evidence that passive smoking has harmful effects, or (b) that Australian courts have found that it does have harmful effects could be found to be in breach of the Trade Practices Act or in contempt of court.)

Since I last wrote on the fact that smokers contribute far more to the community than they receive from it, the Tobacco Institute has released its submission to the Industry Commission inquiry into the tobacco growing and manufacturing industries together with a study commission from Canberra academic consultants ACIL on “Smoking: Costs and Benefits for Australia”.

This summarises and updates the various critiques of the Collins and Lapsley paper, disseminated assiduously by the Department of Health and Community Services, which is the shaky basis for much policy-making. In essence, the ACIL study repeats the fact that smokers’ taxes far outweigh the costs they impose on community medical and other services — in current terms they pay an excess tax burden (over and above that paid by the non-smokers) of $2.2 billion annually.

The ACIL study points to the fact that obviously smokers enjoy a benefit from smoking (pleasure, relaxation, aid to concentration) which they estimate to be worth about $9 billion a year. In addition, the added value contributed to gross domestic product by the industry is about $3.4 billion. Thus it puts the total “net benefits” of smoking to the community at more than $12 billion a year.

It also adduces evidence that far from consumers making mistaken judgments as to their smoking as a result of the addictive properties of nicotine, there is a rational basis for their behaviour; and it cites evidence that far from being unaware of the health risks of smoking most people, including smokers, greatly overestimate them as a result of the barrage of anti-smoking propaganda to which they are subjected.

The fascinating thing about this controversy is that despite the deep conviction on the part of most doctors and health professionals that smoking is peculiarly evil, and the tobacco industry full of accomplished liars and peddling coffin-nails to children, virtually the reverse is true.

Nobody says that because careless car-driving is dangerous, because there are many lives lost on the roads, and because injuries from car accidents can be horrifying and painful, therefore the motor vehicle industry should be closed down. Why then argue this with respect to the tobacco industry?

There are, of course, important insurance and liability issues involved. Most employees have been bullied into denying their employees the right to smoke because of warnings based on evidence which is simply not conclusive, that passive smoking is harmful. Similarly, some public venues like airports, or like bars and restaurants, are being made intolerable for smokers. Since class actions are becoming all the go, it cannot be long before a group of offended smokers launches an action against, say, the Federal Airports Corp for unjustly depriving them of their rights.

Moreover, there would seem to be a clear basis for superannuation contributors who smoke to demand better treatment with respect to the purchase of annuities, to contribute less to other than lump sum superannuation and pensions than do those with a greater life expectancy, and even to claim compensation for the ill-effects (which are very real) which they suffer from being denied their right to smoke at work. Perhaps the non-smokers who are against smoking in the workplace should pay higher taxes and receive lower wages than those who are habitual smokers.

While personally I would suffer not at all if smoking, football and cricket (all dangerous activities) were banned I am not so presumptuous as to think I have the right to deny these pleasures to others, still less to tell lies about their real dangers.

***
3.
Padraic P. McGuinness, “No ifs or butts for smokers,”
The Sydney Morning Herald, March 27, 1997, p. 21.

There has been a great deal of jubilation in anti-smoking circles over the way in which the Liggett company in the United States has broken ranks with the major tobacco companies and has sought a settlement of claims against itself and released evidence which will supposedly be of harm to the industry as a whole.

Maybe this is justified. If it is true that the tobacco corporations have deceived the community as to the real harm done by smoking and nicotine, if they have conspired to conceal evidence of harm, if they know that nicotine is in fact addictive in some meaningful sense, and if it is true that they have deliberately sought to enlist children in the ranks of habitual smokers despite knowledge of harm which will be done to their health and life expectancy, then there is no moral defence for the corporations concerned.

They would then deserve both criminal and civil sanctions, with both fines and compensation being exacted from them and their shareholders. But even this would not be an argument for the prohibition of tobacco or of smoking. If a company, as does one UK company, calls its cigarettes “Death” and makes no bones about the fact that smoking will do you harm and may be addictive, then the moral responsibility for smoking and any damage it inflicts on the smoker must rest with the individual who smokes.

In the case of children, it must rest with their guardians, parents and teachers. In the “good old days”, many schools would instantly expel a pupil found smoking; these days smoking and copulation seem to be equally acceptable in the young. It may be that the complaints levied against the tobacco companies ought to be directed to those in the community who have relaxed the sanctions and care owing to children.

There is a case for advertising directed at children to be censored, but it is difficult to place reasonable limits on this, since children are subjected to a barrage of propaganda from all sides.

Thus even if all the tobacco majors were fined out of existence and their executives jailed, it would not be the end of the issue.

There is, however, some doubt as to whether all the hypothetical sins posed above were in fact committed. The motives of the Liggett company are not at all clear and it must never be forgotten that State courts in the United States are not worthy of the respect which our courts deserve. Many of them are corrupt or at least biased in favour of the residents of their own States as against the “deep pockets” elsewhere.

Liggett is acting rationally in its own terms, in trying to limit its own liability at the expense of its larger competitors. It has no moral obligation to them, especially if all have been guilty as alleged. But it needs to be remembered that many of the product liability suits against large American corporations are settled simply for reasons of risk minimisation. Thus it remains the case that there is no good evidence at all on the harmfulness of silicone breast implants, but the company offered a settlement because the risk of loss if the issue were tried at length was too high.

While there is no doubt that smoking is harmful to many if not all smokers, there is a lot yet unknown about the causality involved. In the case of addiction, there is still no clear definition of addiction, which may not be universal. It is well known that there are many “recreational” heroin users who simply do not fit the classical pattern of addiction; there may be those who are genetically predisposed to addiction as there are to alcoholism. When tobacco companies say that they do not believe nicotine to be addictive they may be telling the truth. There is a world of difference between physical and psychological addiction and a difficult-to-kick habit.

Of course, as with most things in the US, it is a good idea to follow the dollar. There are many lawyers who make handsome livings out of pursuing product liability, personal injury and class action claims.

They have their imitators here. The various State governments in the US which see an opportunity to bolster their health budgets by recovering against the tobacco companies are not necessarily honest in their motives, either. Why should a person who suffers from obesity as a result of overindulgence in junk food be entitled to shift the costs of medical treatment off onto the companies which sell it? Why have the US States claiming for medical and hospital costs incurred by tobacco users not recovered these costs from them by way of higher taxes on tobacco? In Australia those studies which have not merely invented all kinds of fictitious costs of smoking consistently show that smokers are net contributors through the tax system — they pay more in taxes on smoking than they receive back in medical treatment. This is in part because they die earlier on average than non-smokers. Far from suing the companies in Australia for recovery of medical costs, there is a case for the estates of deceased smokers to recover from those non-smokers whose taxes have been lowered as a result of excessive taxes on smoking.

Both in the US and in Australia, the fundamental issue is the responsibility of adults for the consequences of their own actions. It is not compulsory to smoke, even though some of those who have begun to smoke (often through peer pressure as adolescents, or out of defiance of nagging adults) find it difficult to give up when they feel they ought.

***
4.
Padraic P. McGuinness, “Beware your heroic friend in court,”
The Sydney Morning Herald, June 11, 1998, p. 17.

The culture of blame and litigation for damages might have disastrous social consequences. And line the pockets of zealous lawyers.

One of the early surprises of this year’s Sydney Film Festival was the offering by the Egyptian-Canadian director Atom Egoyan, The Sweet Hereafter. From the blurb it sounded like yet another of those stories of heroic lawyers going in to bat for the little people against the evil doings of big corporations, and bringing home the bacon. One’s heart sank.

But no. This story of the drowning of many of a small town’s children when a bus goes off the road turned out to be something different — a denial of the value of the increasingly litigious turn of American society, in which a lawyer (himself with his own personal problems) attempts to persuade the people that what was clearly an accident, nothing but, must have somewhere someone with deep pockets behind it who can be sued for huge sums in compensation. The manufacturers of the bus must be at fault.

The denial that any accident can be purely chance, that every sufferer must be compensated, that blame must be attached even when everyone was acting according to his full knowledge with the best intentions, and that someone, anyone should pay is poisoning much of American commercial life — and the same kind of thing is happening in Australia.

There is a growing class of entrepreneurial lawyers who concern themselves with what are presented as good causes, but which at the same time are expected to be extremely lucrative. And of course there are the solicitors who advertise, touting for compensation business, assuring anyone who is injured that he or she might have a case.

With the cutbacks in legal aid funding there is always a chance that this kind of business will dry up. So there has been a rash of offers of initial free consultations, and even a kind of contingency fee payment, in which lawyers will take a cut of the proceeds of an action but will not charge if it fails. The actual legal status of such arrangements is not clear.

The latest development is the setting up by Rene Rivkin, who is not a lawyer, of Justice Corporation, which will make a business of financing actions on a cut-of-the-proceeds basis. If nothing else, this is likely to concentrate the minds of the legal policy makers.

It will also force the courts to come to some sort of consistent approach to the treatment of what are, if not frivolous actions, often at least unnecessary and misguided.

Of course, Mr Rivkin and his colleagues would say that they are only concerned with serious claims where a claimant cannot obtain legal aid and is unwilling to risk the costs of an expensive action. But even if this is so, there will be imitators who will be less scrupulous.

The implications of this kind of financing of legal actions, if it can go ahead without opposition on grounds of public policy (the common law offences of maintenance and champerty are obsolete), for the court system and the workings of our society generally are disturbing.

The Egoyan film nicely illustrates how lawyers can tempt people into taking actions they otherwise would not consider, and, in doing so, disrupt what was a tight-knit community. When the concept of an act of God — a bus skidding on an icy road with no-one at fault — disappears from the law, as the doctrine of strict liability requires, there is no barrier to general litigiousness.

On a larger scale the campaign in the United States to force the tobacco companies to contribute to the finances of State governments for the harm done to smokers by their voluntary indulgence in a harmful pleasure, while it has stumbled over the excessively greedy demands of the anti-smoking lobby, has turned the anti-smoking campaign into a pretty unsavoury device of government policy.

If indeed the tobacco companies suppressed information they had about the addictiveness of nicotine they ought to be punished. But did anyone, ever, seriously believe that smoking was not bad for you? My mother, a heavy smoker, was always warning us kids against the habit. And in those days you could be expelled from school for smoking (tobacco, not pot).

While there is a good case for public health warnings against smoking, and even some prohibitions, the privatisation of public policy, which is what the anti-smoking litigation in the US involved, is a dangerous path. It encourages the belief that personal responsibility for unhealthy behaviour does not exist, that the mistakes of the past can somehow be made good by cash payment to survivors and incidentally can greatly enrich lawyers.

Not that it seems Mr Rivkin’s corporation intends to confine itself to accident compensation or product liability cases. Discrimination actions might be added, as well, no doubt, as environmental matters.

And the actions being promoted by a Melbourne firm against the Auckland electricity authority over the recent cable failures and blackouts will also be an interesting precedent. While it has been popular to blame Auckland problems on privatisation they obviously relate first to a long history of bungling by publicly owned authorities, and second the peculiar halfway house approach to privatisation of the New Zealand Government.

To what extend can past policy mistakes of government be put on trial and compensation demanded for their results?

There has been a good deal of criticism of the adversarial system in criminal matters, some of it justified; but the adversarial system in matters of scientific and technical assessment whether of accidents or product defects is totally inappropriate. It is made worse when courts or tribunals begin to believe that they exist to dispense abstract justice rather than to interpret and apply the law.