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

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

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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: Jiro 08 February 2016 05:45:35PM *  3 points [-]

What quantifiable reduction in healthcare costs? Everyone dies once; unless death by old age is substantially cheaper than death by lung cancer, dying later wouldn't decrease healthcare costs at all. Furthermore, if they die later, they consume more Social Security and other things generally consumed by older people. Letting them die of lung cancer can save money.

Comment author: gwern 09 February 2016 11:13:58PM 3 points [-]

Furthermore, if they die later, they consume more Social Security and other things generally consumed by older people.

If human life is valueless, then there are even greater savings to be had than allowing tobacco use or subsidizing extreme sports...

unless death by old age is substantially cheaper than death by lung cancer

It is. Ignoring the costs of dying years earlier to the person in terms of DALYs/QALYs, smokers work less, are less healthy, have more comorbidities, worse outcomes from treatment, their cancers are long-lasting and require more expensive treatment than other things nonsmokers would die from (compare months or years of fighting lung cancer in your 50s to dying of a stroke while asleep in your 80s). 'compression of morbidity'/rectangularization might also imply that diseases in late life will generically be cheaper because they are more likely to be quickly fatal and periods of disability shorter.

Comment author: Lumifer 08 February 2016 06:12:19PM 1 point [-]

For lifestyle interventions to reduce healthcare costs you should incentivize people, especially older people, to take up extreme sports. For the best savings you want people to suddenly die just as they are starting to get sick more often.

I would recommend subsidies for things like ultralight airplanes, BASE jumping, fist-fighting sharks, and competitions to see who can get the furthest into the open ocean before his ice floe melts...

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