New at Reason

February 21, 2007

Jacob Sullum asks why Congress's gambit to "cut smoking" boosts Philip Morris at consumers' expense.

Comments

Dave W.|2.21.07 @ 9:23AM|#

So Phillip Morris gets market power. With fewer firms having more market power there will strongly tend to be less consumer choice and higher prices. With less consumer choice and higher prices, smoking is a less attractive activity. When smoking is a less atractive activity, people do less of it. When people do less of it, fewer people get lung cancer. When fewer people get lung cancer, then fewer people die prematurely from that.

Why Big J. needed to spend 643 words on the issue is mystifying to me. Does he have it in for Rep. Waxman or summat?

|2.21.07 @ 9:45AM|#

Wow. Another paper utopia.

Just like the War on Drugs, eh--it's so simple. Nothing can foul this one up...it'll work too, you'll see! What? OK, we'll add asset forfeiture here too... Fine--we'll just tack on some hefty fines, this'll work... um, mandatory minumums? Er, well, nicotine causes crime, ya know! And on and on. So it goes.

|2.21.07 @ 9:49AM|#

Dave

Spoken like a true denizen of the land where consumers are mindless zombies who can't make their own choices. By the way, isn't anti-trust your primary schtick? Or do you make exceptions when it suits your "I know whats better for you then you do" beliefs?

Dave W.|2.21.07 @ 9:53AM|#

By the way, isn't anti-trust your primary schtick?

Bigness is badness. Except when it comes to cigarettes. Cigarettes are badness. So, bigness becomes goodness. That is my logic.

Big J. in the Big D's logic, as I can best understand it, is that bigness is not badness. Except when it is.

|2.21.07 @ 10:32AM|#

Big J. in the Big D's logic, as I can best understand it, is that bigness is not badness. Except when it is.

Well then let me clarify, and stop me if you have heard this before…. It is not bigness or littleness that is essentially more just or "better", it is government sponsored bigness and littleness that is illiberal and unjust. Or in other words retarded.

If you don't like monopolies then you simply don't like governments granting them in any circumstance. However, if you like some but not others, then you really don't have a problem with monopolization at all. You just don't some consumer choices that other people make, and one way of expressing this disapproval is by saying something like "Big- whatever". Which of course, "big" is irrelevant and epiphenomenal. However it is the characteristic people who "just don't like some people's choices" prefer to talk about when they talk about what is ethical business practice.

Dave W.|2.21.07 @ 10:46AM|#

. . . It is not bigness or littleness that is essentially more just or "better", it is government sponsored bigness and littleness that is illiberal and unjust. Or in other words retarded.

As I understand this comment, you saying that large firms and concentrated market power are fine (ie, unretarded), just so long as the large firms don't use their resources to influence government policy.

Is that a fair restatement of your position?

|2.21.07 @ 11:12AM|#

"...just so long as the large firms don't use their resources to influence government policy."

Too general, but close. I would amend "....[use resources] to influence government policy that would limit competition." Other then that, yeah I guess it seems fair.

I don't mind big, small, green, wooden, or whatever companies, I just don't like government giving unfair competitive advantages to any one or the other. It's not fair to competitors, and it's not fair to consumers. And in general there is no way of determining, even if it were ethical for government to give a leg up every now and then, when it would be fair and when not.

Dave W.|2.21.07 @ 11:20AM|#

Too general, but close. I would amend "....[use resources] to influence government policy that would limit competition." Other then that, yeah I guess it seems fair.

Should they be allowed to influence government such that they enjoy a more favorable relationship vis a vis their customers than they otherwise would?

Should they be allowed to influence government so that they enjoy a more favorable relationship with their employees than they otherwise would?

|2.21.07 @ 11:29AM|#

On the first I am not sure. I guess I'm a little stumped. I would probably say no or no if it limits competition and gives an unfair advantage. Or, no if it's just a bad policy in place of a market correction that would be better.

On the second, I view employees as part of the company. So there is a bit of a logical fallacy there, at least in my mind, or how I'm reading it.

Dave W.|2.21.07 @ 11:44AM|#

On the second, I view employees as part of the company. So there is a bit of a logical fallacy there, at least in my mind, or how I'm reading it.

when the government sets collective bargaining law or minimum wage law, it alters the balance between employers and employees. when the government decides how vigorously to enforce immigration law, it alters the balance between employers and employees.

Narrowly, what I am asking you is whether large consolidated firms should be allowed to freely influence government policy on these issues.

More broadly, you argue that large firms should not be allowed to influence government policy in a way that hurts smaller competitors. presumably because large firms lobby more effectively than small ones. However, my position is that large firms only ever lobby the government for 3 reasons:

to get a leg up on their competitors

to get a leg up on their customers

and

to get a leg up on their employees

All of these lobbying objectives, weilded by a large powerful firm, seem equally bad for me. Which leads me to the conclusion that large firms shouldn't be influencing government policy at all, and that the limits on its lobbying shouldn't be as limited as you suggest above.

|2.21.07 @ 12:22PM|#

I am inclined to lump "leg up on the customer", and "leg up on the competition" in the same group. Essentially the former and the latter are archived the same way, as in this instance with PM, or in any subsidy/tariff system. Competition benefits consumers, and vise versa.

As far as the "leg up on their employees" part, I guess we have now entered into a minimum wage dispute, and I did take a moratorium on complaining about that. However, as I stated before I do see an employee as part of the company. So the idea that a company is lobbying against itself is a bit of a non sequitur. After all, what is a company other then a collection of employees?

Of course a distinction could be made between shareholders and employees, but in that circumstance I would think that shareholders then fall into the customer category.

Other then that I would mostly agree that the lobbying motives of companies are by and large illiberal and anti free market. Although banning such behavior would then prohibit any company from petitioning the government when it passes anti-competition laws that affect it.

Dave W.|2.21.07 @ 12:35PM|#

As far as the "leg up on their employees" part

Let's say that Tyson Chicken lobbies the federal government to make undocumented workers a low enforcement priority. Assuming that Tyson Chicken is a large firm with market power (and let's put those thorny ishes aside for a moment), should they be allowed to engage in that kind of lobbying?

btw, I don't have a problem with small firms, without market power, lobbying the government on employment issues. I think that it is important that small firms have a voice in these matters.

that is why I used Tyson as an example, rather than some small-time chicken farmer.

|2.21.07 @ 1:23PM|#

In a discussion of economic justice I would associate anti-immigration sentiments with anti-competition sentiments.

So I guess, in the quasi-hypothetical of Tyson lobbying for liberal immigration policy, I would have to say that this is o.k. In other words it is a case for more competition not less, which is evident in the fact that it is asking for less intervention.

In addition this would be a perfect case of how the employee is actually a part of the company, not separate.

Dave W.|2.21.07 @ 1:59PM|#

Fair enough answer on the employment. tentaively you have convinced me that businesses, regardless of size or consolidation, should be allowed to lobby on employment issues for the reasons you say.

I guess I still see that more of an exception to a general rule that big-enough businesses should not be allowed to lobby at all.

I am less comfortable when businesses with market power lobby* on things like:

- environmental law

- product liability law

- war in Iraq

- tarriffs

It is not that I always disagree with big businesses in these areas and others, but rather, I think market power gives big businesses a level of persuasiveness in government that far outstrips their usefulness as a separate voice at the table. Small businesses lobbying in these areas, and most others, I do not have a problem with. I look at that as more akin to an individual's right to petition the gov't.

FOOTNOTE:

* I would also cut back on the right of people employed by big businesses to do lobbying on their own behalf. like you say, a business is its employees. Just like I wouldn't want Microsoft telling the government whether and how to manage the Internet, I would not want employees of Microsoft doing this on their own behalf. As far as I am concerned, if you are employed by Microsoft, then you don't get to contribute money, neither personally, not through the Microsoft corporate entity(ies) as such. If you work for Apple its okay.

|2.21.07 @ 2:22PM|#

Cool. :)

Like most I think I am very comfortable with my beliefs in such areas, and the theories behind them. I am sure if the conversation kept going and got into major details about real cases my knowledge would exponentially decline, and if I kept talking I would make an ass out of myself.

I like the world to be divided up into simple compartments like "lobbying is always good", or "always bad". The reality is, I only know so much.

|2.21.07 @ 2:27PM|#

I am less comfortable when businesses with market power lobby* on things like:

- environmental law

- product liability law

- war in Iraq

- tarriffs

So, for the most part, big business should only lobby on things that aren't important to it?

And who decides when you have gotten too big to lobby? Some government functionary, you say? Well, since the government never has a stake in any issues before Congress, that should work out well.

Howsabout unions? Are they too big to lobby? Cause they're pretty damn big businesses, you know.

Dave W. responds to RCD|2.21.07 @ 2:49PM|#

So, for the most part, big business should only lobby on things that aren't important to it?

I think businesses with market power shouldn't exist because they thwart the Invisible Hand, which I hold dear. Allowing market power is not consistent with a "free market," to my mind.

But assuming a world, like our world, where market power is legal, then at least there lobbying should be cotrolled. I found steveintheknow persuasive on the idea that big businesses should be allowed to lobby on employment issues, but not on most things for the reasons I sed upthd. No, not on the things important to it. Hopefully, in any given economic sector there are enuf small businesses left so that the interests of the economic sector will be heard somewhat. if there aren't enough small businesses in a sector for that to happen, then I refer you back to the stuff I sed earlier in this post about the Invisible Hand.

And who decides when you have gotten too big to lobby? Some government functionary, you say? Well, since the government never has a stake in any issues before Congress, that should work out well.

I say, the courts. the same ones who have applied the Sheman Act for 117 years now. I just wish the Sherman Act spoke in terms of "achieving pricing power" rather than "attempted monopolization." Small wording change really. I really luv the way the Sherman Act fits on a single side of a single page. With lots of room to spare.

Howsabout unions? Are they too big to lobby? Cause they're pretty damn big businesses, you know.

Some are, some aren't. I am not in a union. Very few people I have ever known have been in unions. Tough for me to get too misty eyed about unions. If I had to make unions illegal to get the no-big-business-lobbying reform I suggested on this thd, then I would make that trade-off in a heartbeat. maybe half a heartbeat. (And sorry to any Teamsters who may be following this blog.)