TezlaKoil comments on Open Thread, Feb 8 - Feb 15, 2016 - Less Wrong

4 Post author: Elo 08 February 2016 04:47AM

You are viewing a comment permalink. View the original post to see all comments and the full post content.

Article Navigation

Comments (215)
Tags: open_thread

Comments (215)

You are viewing a single comment's thread. Show more comments above.

Comment author: Clarity 08 February 2016 05:59:05AM -2 points [-]

Whenever I used to think of nationalising industries, I would think of industries relating to critical infrastructure or 'prestige industries'. Reading the following threw my intuitions overboard!

A tobacco industry buy-out

In the current model, the tobacco industry has a corporate mission of selling unhealthy products so as to profit its shareholders. Its aims and purposes are intrinsically misaligned with the public good and will ever remain so. However, if the tobacco industry were nationalised, with the intent of winding down operations, the interests of those providing tobacco and public health would be aligned.

For the amount of health harms caused, the tobacco industry is not highly profitable. The total profit of the three major tobacco companies in Australia in 2007 was $600 million on assets of $3.6 billion.27 The profit per tobacco related death was approximately $20 000. Profits must decline in time as smoking rates fall as intended. Based on asset base and a reasonable profit to projected earnings multiple, a buy-out in Australia might cost in the range of $5 billion. Estimates of the cost of nationalisation in Canada range from $0–15 billion.28 Purchase could be sweetened by protection from civil litigation. Even if it costs of the order of several billions, it would rapidly return that in terms of quantifiable reductions in healthcare costs.

-http://www.racgp.org.au/afp/2012/november/towards-an-endgame-for-tobacco/

Would the tobacco industry be for or against this? Would there be an opposition except from deontological libertarians?

Comment author: TezlaKoil 08 February 2016 01:07:36PM 2 points [-]

Dagon's points are very good. There's another aspect as well:

Tobacco import and distribution (and in some cases, production) are already nationalized in many countries, especially in the EU. National governments try to impose artificial scarcity (winding down operations, tax increases, fixed pricing), and this makes the statistics look better - officially monitored tobacco sales decrease.

Artificial scarcity cannot last: a black market of RYO tobacco, and home-made cigarettes of dubious origin is always ready to serve customer demands. In the end, the health effects of nationalizing the tobacco industry, and winding down operations, can easily be negative.

Comment author: Douglas_Knight 11 February 2016 02:37:18AM 3 points [-]

Australia has a track record of doing a better job of enforcing bans than other countries. It's a island.

Comment author: Clarity 08 February 2016 01:47:16PM 1 point [-]

Artificial scarcity cannot last: a black market of RYO tobacco, and home-made cigarettes of dubious origin is always ready to serve customer demands.

True, but if it's less than the total market that existed before hand, that's still a public health gain

In the end, the health effects of nationalizing the tobacco industry, and winding down operations, can easily be negative.

It can be, but that's just not the best supported hypothesis. The weight of evidence best demonstrates that control measures have thus far been quite uniformly positive.

Comment author: TezlaKoil 08 February 2016 04:06:12PM 2 points [-]

The weight of evidence best demonstrates that control measures have thus far been quite uniformly positive.

I see. The black market effects are well-documented, but I am not familiar with evidence which shows that control measures have any measurable effects on public health. Where could I find that data?

Comment author: Clarity 10 February 2016 05:04:00AM -2 points [-]

Tobacco import and distribution (and in some cases, production) are already nationalized in many countries,

that's not what nationalising means

Comment author: TezlaKoil 10 February 2016 07:07:40AM 2 points [-]

I mean nationalized, as in the distribution of tobacco products (imports, wholesale, retail) is handled by companies that may or may not have been private at some point, but are now property of the state.

What do you mean by nationalizing?

Powered by Reddit Powered by Reddit