In the car yesterday, I heard an advertisement that encouraged people to quit smoking. This is not an unusual thing at the beginning of the New Year. So many people still make New Year’s resolutions, and those wanting to turn a profit use this opportunity to market to the people wanting to make changes. However, I missed what was being sold. I think it was probably an ad paid for by either government or maybe a foundation, so it was just selling the idea that people shouldn’t smoke. I quite agree. Smoking is really bad for your health.
Why am I concerned with this then? It was the way the ad came across. It was a man that was questioning why he was spending so much money on tobacco. Great, I think it is a stupid thing to spend money on. He talked about the price of cigarettes per pack, $5 or $6. He talked about how at that price he was spending over $2,000 a year on smoking. His rationale for quitting is that the tobacco companies are evil, able to charge whatever because they know people want to smoke. He is going to sock it to the tobacco companies by quitting. They think they can just keep charging these high prices, I’ll show them. Of course the anti-capitalist mentality caught my attention.
I could say, whatever your reason for quitting smoking, good for you. But I don’t roll like that. It is a commercial, and the guy is an actor. Whoever is paying for it is purposely playing on the anti-capitalist sentiments that are so prevalent in our society. They bring up a good point that cigarette prices are really high, but they put the blame in the wrong place. I like truth.
Why are cigarette prices so high? Where I live, tax on a pack of cigarettes is $1, In this area then, about 15% of the price of cigarettes is tax. But that still seems high, even without the tax, it would be close to $5 a pack. Why has not supply and demand worked to bring down the price of cigarettes? The answer again lies with the government. Link to CDC.
1996 is the key year here. Before that year, the FDA did not regulate tobacco. Look at how prices have risen since then, since the FDA got involved. Regulation works to stifle competition. It seems invisible to the consumer. The consumer can observe the taxes, but the taxes only tell part of the story. The public is largely unaware of the connection between regulation and price. It is then easy, for those so inclined, to demonize the sellers of the cigarettes as greedy profit seekers that are exploiting people by selling an addictive substance.
There are plenty of good reasons to quit smoking. Do it for your health, do it to smell better, do it for better looking teeth, do it to spend your resources on something else that will bring you joy or improve your life. Absolutely, find a reason and quit. If you are quitting to stick it to the capitalists, then your rationale is specious.
What the world needs now, is love sweet love, and a big dose of economic education.