Butting-out on E-cigarette Regulations

“The state should confine itself to establishing rules applying to general types of situations and should allow the individual freedom in everything which depends on the circumstances of time and place, because only the individuals concerned in each instance can fully know these circumstances and adapt their actions to them.” – Friedrich Hayek, The Road to Serfdom

Friedrich Hayek wrote The Road to Serfdom about the government paternalism, and since publishing that book, very little has change. Aged, paternalistic governments are suffering from vision loss, and rather than fixing their sight, they are delimiting personal freedom by legislating intrusive, and often unnecessary, laws and regulations.

The proposed regulation of e-cigarettes in Nova Scotia and other provinces–which has been dominating the media cycle in the past few weeks–provides an illustration of overextended governance. Toronto’s city council legislated a ban against e-cigarettes in the workplace and other municipal and provincial governments throughout the country may follow a similar path.

Electronic cigarettes, or “e-cigarettes,” are battery-powered devices that vapourize liquid nicotine, flavouring, and other chemicals. They look virtually identical to real cigarettes, however, unlike real cigarettes, e-cigarettes do not have tobacco. These devices have created a political stir in Canada, Europe, and the United States, and more recently, in developing countries such as India, where 900,000 individuals die each year from tobacco-related diseases. Unfortunately, instead of embracing them as a smoking cessation device, governments abound are proposing laws and regulations that prohibit access to e-cigarettes.

In “Electronic Cigarettes: Review of Use, Content, Safety, Effects on Smokers, and Potential for Harm and Benefit,” published in the journal Addiction this past July, Peter Hajek, prominent tobacco researcher from Queen Mary University of London, discusses the potential benefits of e-cigarette usage and argues that “the evidence we currently have is clear: e-cigarettes should be allowed to compete against conventional cigarettes in the marketplace. Healthcare professionals may advise smokers who are unwilling to cease nicotine use to switch to e-cigarettes. Smokers who have not managed to stop with current treatments may also benefit from switching to e-cigarettes.”

Governments around the world rely heavily on information espoused by global health agencies such as the World Health Organization (WHO), however, that information is not always evidence-based. The WHO, for instance, recommended in a report that governments should consider banning e-cigarettes in “indoor workplaces and public places, and restricting their promotion to avoid initiation of non-smokers, youth, and pregnant women.” Upon publishing this document, a cohort of experts in tobacco research, and more broadly, addiction research, refuted the WHO’s claims, stating that the report “contains important errors, misinterpretations, and misrepresentations, putting policymakers and the public in danger of foregoing the potential public health benefits of e-cigarettes.” Last week, Maclean’s published an excellent editorial arguing that “public health agencies around the world [ought to] abandon their pet political crusades and efforts to control private personal choices, and instead focus their energies on fighting infectious disease, wherever it may occur.” If these agencies continue to mislead policymakers, which is the case in Nova Scotia, public policy may stray from rationality.

In 2008, roughly 5 million individuals in Canada smoked cigarettes on a regular basis and 90 per cent expressed a desire to quit. Nova Scotia’s smoking rate in 2011 was 18.1 per cent, slightly above the national average of 17.3 per cent.

Addiction is omnipresent, however, government initiatives to reduce cigarette consumption have been successful at both prevention and reduction. Moreover, as people engage with the evidence, the appeal of smoking begins to dissipate. E-cigarettes have the potential to be a serious smoking cessation device and, in fact, there is a glut of research indicating that they have aided in the reduction of convention cigarette use. In “Real-world Effectiveness of E-cigarettes when Used to Aid Smoking Cessation: A Cross-sectional Population Study,” Jamie Brown of University College London concluded that e-cigarettes are 60 per cent more successful in helping people quit their habit than other smoking cessation devices, such as nicotine patches. Bill 60 in Nova Scotia, the Smoke-free Places Act, sends a negative signal to those seeking to quit. Instead of solving the problem, the provincial government is making it harder to kick the habit by legislating regulations that do not reflect the current scientific literature.

Following consultations with Nova Scotians who have a smoking addiction, the Law Amendments Committee of Nova Scotia decided to remove a ban against certain flavours of tobacco and e-cigarette “juice.” These changes will come into effect in May 2015, and although this step is a small one in the right direction, the provincial government can do much more to make smoking cessation devices accessible to those with a smoking addiction.

Rinzin Ngodup is an AIMS on Campus Student Fellow who is pursuing a graduate degree in economics at Dalhousie University. The views expressed are the opinion of the author and not necessarily that of the Atlantic Institute for Market Studies

Against Smoking Bans in “Public Spaces”

In Canada, the government prohibits smoking in “indoor public spaces,” which, according to the law, consist of bars, restaurants, bowling alleys, etc. The term “indoor public spaces,” however, is misleading: they are public only in the sense that there are other people sharing the space, yet, many of these “indoor public spaces” are owned by private individuals. There are several reasons for protecting their right to choose whether they want a smoke-free or smoke-filled establishment.

Many complain that smoking in bars is encouraging to nonsmokers and exposes them to secondhand smoke. There are many reasons why this argument may not hold. For now, though, it is more important to focus on the demonization of smoking. By categorically prohibiting restaurant owners from allowing their customers to smoke inside, the government prevents people from doing something they may want to do, i.e. to smoke in a bar or own a bar that allows smoking). Smoking is not good or bad “in itself,” but, rather, it is only good or bad according to individual preference, including, but not limited to, the tradeoff of overall health for immediate pleasure, the terms of which some individuals would happily agree with. Moreover, there is an enormous amount of information detailing the economic, health, and social harms associated with smoking available to consumers that allows them to choose intelligently.

A popular argument for banning smoking in indoor public spaces pertains to workers’ rights: smoking indoors threatens employee health and welfare and because many workers do not have the convenience of choosing their place of employment–so the argument goes–allowing it forces them to choose between inhaling toxic cigarette fumes and unemployment.

To some extent, indoor smoking harms workers. Does that really justify banning it?

Closer examination of firm behavior demonstrates that it varies based on the economic implications of “safety.” Between 2008 and 2010, 700 construction workers died from workplace injuries in Canada. In addition, 637 individuals died in manufacturing workplaces and 329 in the transportation industry. Although these numbers may seem surprising, the theory of compensating differentials explains why outcomes in some industries differ from those in others.

According to the compensating wage differentials theory, workers are compensated by firms in a number of ways: these include wages, nonwage benefits, and working conditions. Any given individual has a set of preferences between these forms of compensation. A risk adverse employee, for instance, may be willing to give up much of his paycheck for a little more safety. Someone comfortable with risk, however, could be willing to put herself squarely in danger’s way for better pay. That some individuals are comfortable with more risk explains why construction workers, for instance, agree to work in dangerous settings: higher compensation allays most concerns, whereas lower compensation highlights them. Firms need to offer compensation for labour to attract workers—when they decrease safety, labour supply shrinks and forces the firm to boost wages. Thus, there is a positive correlation between risk and compensation. And there is no authoritatively “ideal” level of risk; instead, there is a multitude of individually preferred ones.

Thus, to attract workers, owners of establishments that allow smoking indoors would need to offer wages high enough to distract employees from the health hazard associated with working there (assuming these concerns are present). For some workers, the increase in pay would offset their health concerns. Similarly, restaurant owners must consider whether indoor smoking discourages consumers from eating at their establishment. If there is growing opposition to smoking, for example, restaurant owners must choose between allowing customers to smoke indoors and losing whatever percentage of their customer base that refuses to eat in an establishment that permits indoor smoking.

Examining both consumer and employee perspectives on smoking indoors lead to a common conclusion: laws dictating firm behavior typically enforce an arbitrary standard and ignore individual preferences. Instead, the government should allow property owners to decide what is best for their respective establishments and let people pursue their individual desires freely.

Michael Sullivan is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute