Thursday, 5 November 2009

Daylight robbery


Prohibition creates lawlessness. Few dispute the fact that organised criminals, smugglers and thieves are the main beneficiaries of prohibition. This is true of total prohibition, as seen in America in the 1920s, but is also true - albeit to a lesser extent - when prohibition is brought in by degrees.

Putting a 'sin tax' on a product is a prohibitionist measure. It is explicitly designed to make the product prohibitively expensive. In theory, this should reduce consumption most amongst the poorest members of society. Anti-smoking advocates refute the obvious economic argument that high cigarette taxes are regressive by saying that, actually, they benefit the poor most because they are the ones who will quit smoking. It's a nice bit of rhetoric, and clever, but it doesn't stand up to scrutiny.

Every piece of evidence collected, not just over decades but over centuries, tells us that the poor are the least responsive to tax rises on tobacco. We also know that people are quite prepared to buy smuggled or counterfeit tobacco if they feel the tax burden is too high. It happened under Jame I in 1604 and - as I mentioned yesterday - it's happening now.

An excellent article by Wat Tyler on the Burning Our Money blog shows us that as cigarette prices are rising across the whole of the European Union, there is less incentive for smokers to go day-tripping to France and Belgium for cheap cigarettes. Consequently, and predictably, organised gangs are now turning to robbery.

Just in the last few months, small shopkeepers have been hit in Croydon, Oxfordshire, Glasgow, Sussex, Devon, Gloucestershire, Liverpool, Yorkshire, and back in Sussex again. AND THAT'S JUST THE FIRST PAGE FROM HUNDREDS OF GOOGLE RESULTS.

This is a massive crime wave.

One of the most damaging effects of alcohol prohibition was that it turned normal people into criminals and undermined respect for the law. The criminals who rob the shops may be, as Wat Tyler describes them, "thieving scum" but their customers are otherwise law-abiding people. 

Yesterday, I quoted ASH Ireland's Luke Clancy, who said:

"If we are serious about becoming a nation of non-smokers, the government has to start paying attention to the data. Price increases stop people smoking and deter young people from starting."

But as Frank Davis said in the comments:

Who the hell is this Clancy anyway to decide that the Irish are to become a nation of non-smokers? I mean, really, the sheer, mind-bending arrogance of it! Why the hell should anyone pay a blind piece of attention to someone who seems to have appointed himself into an unaccountable public role as adjudicator of a nation's pastimes?

Smokers everywhere are expressing a similar sentiment, in action if not words. Just as Americans in the 1920s were never consulted about the introduction of prohibition, no one today - beyond a self-selecting elite of 'health professionals' - has been asked if they want a "smoke-free world". When the law comes to be seen as unfair, punitive and unnecessary, people feel no guilt about breaking it. To quote Wat Tyler again:

Fundamentally, with tax now accounting for three-quarters of the price of cigarettes, even normally law abiding folk like the parson and the clerk can convince themselves such taxes are onerous and unnatural, and that it's reasonable to resort to the black market. After all, it isn't as if the black market is real crime, like murder or something.

We have moved beyond the realms of workable taxation. High taxes become the excuse for criminality.

It has always been thus. I've said it before and I'll say it again: no man-made law will ever be as powerful as the law of supply and demand.



3 comments:

Curmudgeon said...

And the same will increasingly start to happen with alcohol if plans for significant increases in real selling prices come to fruition.

Blueblackjack said...

The Wat Tyler article is interesting and gives a pretty convincing cause/effect for high taxation.

Not entirely in agreement though. His HUNDREDS OF GOOGLE RESULTS (Google returns hardly being the best place to get a realistic view of crime stats) give the impression that every crew moving illegal fags now is doing a rip and run from SPAR, which, while it might have increased, isn't really the source of the majority of illicit trade.

The smart, risk averse, criminals, see that illicit tobacco from ex-soviet states and asia provides ~60% of the profits of moving 'hard drugs' (heroin, coke, E, amphetamine) with ~30% of the penalty if you get caught (rough numbers ofc but about right) and realise things on average look pretty rosy for illegal tobacco and have invested more and more in that.

For sure, high taxes contribute, but if Wat thinks that "Cam and Oz need to get a lot more serious about cutting spending rather than raising taxes yet further" is a solution then he's kidding himself. Unless Conservative policy is to cut cigarette tax by 200-300% or more then that won't do squat - it'll still be attractive for illicit sales based on risk/penalty balance. The penalties for supply and enforcement needs to be heavy enough to put off major players if you want to see off illegal sales.

Anonymous said...

Prohibition in the USA essentially gave birth to the Mafia. The Mafia functions as a state within a state. It operates it's own laws and persues the enforcement of those laws via it's own system of, for want of a better word, justice. It had and it's decendants have an almost limitless, guaranteed source of revenue, granted by unjust and irrational laws that made criminals of millions. Under these conditions organised crime is an unstoppable force. Is this what the governments of Europe and the UK want? A criminal class comprising one third of the adult population and an alternative form of government with more and freer acess to resources than the legitimate goverment.
Is there some form of infectious madness on the rampage?

Outraged Englishwoman