Winner of the New Statesman SPERI Prize in Political Economy 2016

Sunday, 28 July 2013

Advertising, Paternalism, Information and Plain Packaging of Cigarettes

This is off the usual macro beat, so probably this point has been made in a much clearer way by others, but it is hardly ever made in the public debate, and I have read economists who argue the opposite. It was prompted by the UK government’s predictable decision to kick ‘plain packaging’ of cigarettes (example below) into the long grass. One of the arguments used against plain packaging is that it represents yet more paternalism by the government. My general thought is this: is banning advertising paternalistic, or is it enhancing our freedom?

A simple definition of paternalism is an action, by a person, organisation or the state, which limits the liberty or autonomy of other people for their own good. So we have individual freedom, interference, and crucially motivation. Advertising is usually portrayed as just providing information so that consumers can make informed choices. Sometimes it may do that. But advertising is often about suggesting associations, which provide no information at all. It is a mild form of brainwashing. Most of the time it is simply annoying.

For some, the information provided by some advertising might be useful. For most it is not. We can try and avoid advertising if we do not want its ‘information’, by turning the page, recording the programme and fast-forwarding through the adverts, averting our eyes, but this requires effort. Why should I have to make that effort? So for most people most of the time, it is advertising that mildly interferes with our freedom. (If I wanted to be clever, I could say that companies who advertise believe their product makes consumers better off, and therefore it is advertising that is paternalistic. However companies advertise to increase profits, not to increase consumer utility.)

So a government that prevents advertising can be seen as allowing individuals to make their own unencumbered choices. It is giving us a little more freedom and autonomy, rather than limiting it. The argument for advertising has to be that the benefits to the few in getting useful information outweighs the costs to the many in either avoiding it, or getting information they do not want. It is not paternalistic to ban advertising, just as it is not paternalistic to stop people being stalked.

That is the general point which hardly ever seems to be made. It applies, for example, to banning food advertising aimed at children, where the nuisance element of the advertising has to outweigh its information provision. However the debate about ‘plain packaging’ is not about either packaging that is plain, or the pros and cons of advertising. The Australian version of plain packaging replaces the logo of the cigarette with a picture of one of the health risks if you smoke these cigarettes (see below). So it is not about banning advertising, but replacing one type of advertising with another.



Those who do not smoke and have no intention of smoking are not forced to look at these adverts, so banning this kind of advertising would not increase their freedom. For those who do not smoke but might smoke, and probably for those who do smoke, the information content of the ‘plain packages’ is clearly much greater than packages that were dominated by a logo. So this is one example where the information content of advertising does dominate any reduction in freedom that the advertising entails.


One final point about information. Mark Littlewood, Director General at the Institute of Economic Affairs, says on their website that following the government’s decision:  “Hopefully this will mark a turning point against the excessive elements of the health lobby whose desire to interfere knows no bounds.” Yes, of course, that strange desire to restrict what companies that sell products that kill people are allowed to do. In the Notes to Editors on that website, it says that “The IEA is a registered educational charity and independent of all political parties.” Now I wonder whether the IEA is funded by the tobacco companies that have lobbied hard against plain packaging? That would be useful information, so why does the IEA not provide it, or even advertise it? 

14 comments:

  1. Precisely. The 'paternalism' argument relies on the idea of people as perfectly rational, individual decision makers (neoliberal Man, once again). In truth it's completely impossible to escape the influences imposed on us by all kinds of things - fashion, morality, advertising, etc. We make our choices in a state of dependency on that milieux; we are not and can never be independent from it.

    And it's precisely the role of government to legislate on what that milieux of influence should not include, what influences people should not be subject to - seductive advertising and packaging for cigarettes, for instance.

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  2. Quite right! We are not free at all, on or off the internet we are subject to relentless manipulation over which we have no choice, no control. We can only choose to live in an environment without these various forms of unrelenting manipulation through collective choice, that is, by passing laws to ban at least some of the assault. But those championing the cause of 'freedom' (and big tobacco) want to rob us of that choice simply because it can only be exercised collectively. Some choices can only be exercised collectively and one cannot be free without access to those choices.

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  3. All these human weaknesses: smoking, drinking, drugs, gambling, prostitution. Government clearly has a role in managing the consumption thereof. And often does that appallingly bad.

    From a slightly other angle it is being a serious danger or a serious nuisance to others what is imho the relevant issue. With smoking mainly secondary smoke and financially doing dangerous etc things but still rely on the government to pick up the bill when things go wrong.
    Ideally people should manage their smoking in a way that other people are not bothered with it. In practice this only works partially at best.
    Seen the massive health issues concerned even only with secondary smoking the government imho has the right (may be even the duty) to interfere if necessary. Secondary smoking is probably more dangerous (causalty wise) than participating in traffic. And we demand all sort of safety stuff there. Something a bit over the top imho, but that is another issue.

    Smoking for the smoker seen the fact that people in general demand effectively healthcare there is clearly an issue there as well. However ideally I would personally rather have this solved by making people simply responsible for their own behavious. However here comes the youth issue around the corner. Has to be assured that people nobody before the legal age starts with smoking. Which is of course a huge problem. Most likely therefor only overall policies will be effective and therefor necessary.

    In this respect a lot of the arguments of the free drugs movement seem very naive as it goes largely along the same ways as smoking only in the other direction. With iso secondary smoking often strongly increased unacceptable and legally forbidden behaviour. While it targets the whole population as well including the youth and effectively dumps the healthcare costs with the taxpayer.

    However on the health lobby he probably has an issue. So called unhealthy food is basically only unhealthy when consumed too much. There is also not really a secondary effect. It is simply mainly an unhealthy livingstyle. And no big cokes like in NY seems simply a lot over the top.

    Another issue is that governments are pretty bad at managing human vices. Take smoking: shops are closed but still in a lot of places via machines sigarettes can (could in other countries) be bought. Scientific evidence was completely ignored for decades.
    3/4 of the prisonpopulation in some countries are there for relatively minor drug offences. Etc.
    It is an issue of managing it, but it often gets combined with all sorts of moral stuff and not for the better. Imho it also means that the way things are best managed are different from country to country (and could change over time simply because other social behaviour in this respect), something most people and governments still donot grasp.

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  4. Simon,

    I expect you are aware of the Productivity Commission in Australia which is a statutory authority pumping out economic reform recommendations. When I sat on it in the mid 1990s I brought this issue before it and got it's imprimatur on the kind of action that Australia led the world on.

    Here's a brief writeup of it.

    http://clubtroppo.com.au/2010/04/30/productivity-commission-backs-world%E2%80%99s-most-draconian-cigarette-packaging-regulation/

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  5. It would be extremely unsurprising if the IEA were so funded, since many of its American counterparts are, as this paper describes: http://tobaccocontrol.bmj.com/content/early/2013/02/07/tobaccocontrol-2012-050815.abstract

    It's worth adding that there is a decent body of research that shows how smokers' experience of smoking is conditioned by the colour and style of the packaging - cigarettes from white boxes taste 'smoother' and 'lighter', while those from red boxes are 'rougher', and so on.

    Also, one of the aims of plain packaging (and also of requiring shops to put cigarettes in cabinets, rather than having them on open view) is to make it harder for the sight of cigarettes on sale to trigger relapse among those trying to rid themselves of their addiction, another respect in which these regulations are aimed at fostering autonomy.

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  6. The only two donors of the IEA I know of comes from Professor Harold Perkin’s 2002 autobiography ‘The Making of a Social Historian’, in which he wrote on page 225 that:

    “to my surprise and the Guardian’s, the IEA [Institute of Economic Affairs] issued a writ of libel against us…they had deep pockets, funded by 160 great corporations (including, incidentally, nationalised industries like British Steel and the BBC!) and determined to teach us a lesson: abjectly apologise or suffer immense legal defence costs.”

    This was the early 1970s, and the IEA eventually dropped the case in which they had said that Perkin had questioned their charitable status by linking them to the Tory Party.

    The BBC, when I asked them recently to explain why they were on a donor list only seen because Perkin sent in the lawyers to defend himself, said they don't respond to FOI requests which question their 'journalism'.

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  7. usual economist missing the forest for the trees
    talk about advertising, and no mention of for profit companies doing what they want, regardless of how it affects you ?
    just sort of a bland, well, I get adverts I don't want.
    Sort of a perfect illustration of Orwell's admonition on not draining the juice from "the race goes not to the swift..."

    I think that every economist, to get a phd, should be required to live for six months on minimum wage , or whatever the non us equuivalent is

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  8. I think an acceptable alternative would be to tell tobacco companies that, in exchange for the freedom to advertise, they have to keep their cigarettes 100% full of tobacco and nothing else; none of those extra addictive additions...

    We would see who comes on top...

    http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2040350/

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  9. By obliging companies to sell 50% of their product as normal and 50% in plain packaging, you could do a revealed preferences study as to which form of packaging the smoker finds more informative and useful based on which version sells more. You could then see whether your argument is correct.

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