Michael Hicks is director of the Center for Business and Economic Research and an associate professor of economics at Ball State University. His column appears in Indiana newspapers.
The smoking ban signed by Governor Mitch Daniels this week was a much needed law. Of course my libertarian friends will object to its intrusion on liberty, and my leftist friends will say it didn't go far enough. To them I ask, "What are you smoking?"
The legislation bans smoking in most public places and restaurants. Casinos, private clubs and a few other exemptions exist. No one is seriously inconvenienced, and few businesses likely to shutter their doors. At worst, this legislation will make Hoosiers look like we've entered the 21st century. At best it will motivate folks to stop smoking. But the issue of smoking offers three broader lessons.
First, smoking is increasingly looked upon as a problem for businesses. Health care insurance for smokers is much more costly than for non-smokers. So it is increasingly clear that states with high rates of smoking face a growing economic development barrier. This is a challenge to those of us who live in places with higher smoking rates.
Second, when it comes to economics, the loudest voices from the medical and public health community have missed the target. During this legislative session, a former public health official cited huge public costs figures for treating smokers. Shortly thereafter research from a state university restated some parts of that argument. In both cases the same error was repeated by assuming that smokers would not otherwise require medical care and die. This is, in the parlance of research, an optimistic assumption.
The truth is that smoking among private sector workers actually reduces the cost of government healthcare. You see, the government doesn't pay most health care bills, and smokers tend to die young. Moreover, the costs of dying from smoking-related diseases are relatively low when compared to the maladies of old age such as Alzheimer's. The reason for this is that most folks simply die of smoking-related diseases before they can rack up an extra couple decades of health care costs.
So, if we worried exclusively about government finances, the best possible scenario would be for someone to smoke through age 65, pay taxes and then die. This would keep medical costs out of the public sector, maximize tax receipts and save on Social Security expenses. It would be a public finance boon. But in that lies the third lesson—almost no regulatory policy can be usefully thought of purely in terms of fiscal or commercial economic activity. The value and enjoyment of human life matters also. Sure, this value is not infinite; we all behave as if there are limits to the value of being alive. We do things that are exciting, but which may cause us to die and we engage in behaviors which will shorten our life. However, the real cost of smoking, secondhand or otherwise, is that it prematurely kills people whom we love and cherish. Their lives have value. A government that understands and behaves as if life has value will still be imperfect, but less so than one that does not.