I am writing a book about the quirky economics of anti-cigarette advertising. It is about the unintended consequences of anti-smoking legislation.
There are 6 billion people on earth. There are nearly 6 billion people that are misled by the anti-smoking legislation.
Think about it: When anti-smoking legislation is intended by the government do you see the cigarette companies campaigning against this legislation? Do you see advertising campaigns by the cigarette companies against the legislation? Do you really believe the cigarette companies cannot bribe politicians and political parties to not introduce such legislation? No.
Why don’t they? Simply because they want such legislation.
Consumer Goods companies typically spend about 12% of their income on advertising. When they do not have to spend this they simply add this money to their bottom-line.
So, when cigarette companies are banned from advertising this is what happens. Ask yourself: Who Profits?
When cigarette advertising is banned who loses? Well, nearly all of the 6 billion people on earth. Smokers and non-smokers.
You pay more for your daily newspaper, you pay more for your television, you pay more for everything that is subsidised by advertising. You also, probably, pay more for your health care.
Who are the winners?
There are two cigarette companies: Philip Morris and BAT. This is where the ‘savings from not advertising’ goes. America and Britain’s shareholders in these companies are the winners.
Let us have a look at this: If anti-smoking legislation hurts the cigarette companies then this will show in their share-price because the dividends are decreasing. In fact, Philip Morris is the safest share to have invested in since after the war. Why?
Can they have done this on their own? Of course not. They needed the help of the International Monetary Fund (IMF), the World Bank (WB) and politicians – mostly the Ministers of Finance of the different countries.
I am not suggesting it was a scam by the cigarette companies. I am suggesting that they benefit as a unintended consequence of the anti-smoking legislation and have learned about this.
Why am I writing about the? I just hate to be one of the scammed 6 billion people.
To write the book I need to get a lot of evidence and sort this into manageable chunks (chapters). I am using this blog as my workbook to get the evidence ordered.
You can help by commenting, criticizing and contributing thoughts.