A subtle tobacco control self-contradiction lie, re FDA pumping cigarette stock prices

by Carl V Phillips

Tobacco controllers contradict themselves all the time. That is the inevitable result of them saying whatever seems expedient at the time, without any concern for whether the evidence supports it, or even even flatly contradicts it. When someone is sociopathic enough to do this (*cough* Trump *cough*), they will not only contradict the evidence, but (unless they have incredible discipline and intelligence, which they do not) also inevitably contradict themselves. Many of tobacco control’s self-contradictions are quite simple, with patently contradictory statements appearing in the same document, or even the same paragraph. It hardly seems worth searching out the contradictions that require analysis and observations across multiple threads. But this one is kind of interesting.

A classic tobacco control trope, which you still see a fair bit, is that tobacco companies have to recruit new generations of smokers to replace their current customers. Most of those reciting this probably actually believe it, which reflects public health people’s fundamental lack of awareness about how the world works. Anyone familiar with business (and I mean at just the level of reading the newspaper) will know that markets these days hardly look beyond the next quarter’s earnings. There is not the slightest interest in future generations, and barely any interest in two years from now. C-suite executives respond mainly to these very-short-term incentives. Even stakeholders in the company – medium- to high-level employees who are planning on working there for another couple of decades — do not care about selling products to future generations.

Similarly, an economic theory or long-term shareholder perspective says companies should not care about future generations. Even the most modest discounting of future profits makes sales to upcoming generations approximately worthless in present value terms. Shareholders would rather the companies buy back shares rather than investing in “recruiting” future smokers. If you believe in an anthropomorphic view that cigarette companies “want” to stay in business – rather than making the economically rational choice of maximizing profits as far as they go and sunsetting – then they would be better off expanding horizontally into other logistics businesses (including other tobacco products) rather than worrying about whether anyone is smoking in 2060.

But let’s assume that tobacco controllers are sufficiently innumerate about business that they actually believe that companies “need” to recruit new generations. Then it cannot possibly be that they also believe this:

FDA’s attacks on the vapor product industry drove up cigarette company stock prices because they portend less competition for cigarettes over the time horizon that actually matters to the markets, a couple of years. The market cap increase reflects the expectation that the companies will be able to sell cigarettes for a higher per-unit profit and sell more cigarettes (the former is more important in terms of profits — another simple market fact that tobacco controllers do not understand — but the latter is what matters most in terms of social impacts).

Here’s the thing: If someone believes that the companies (i.e., their shareholders) actually care about selling to future generations, as they have claimed for decades, and believes that vaping will cause future generations to smoke, as they claim in this tweet and frequently, they they would have to predict that threatening to shut down the vapor product industry would depress share prices, or at least not send them through the roof.

As I said, tobacco control lies of self-contradiction are typically so blatant that there is no reason we have to dig this deeply. I certainly do not want to give tobacco controllers too much credit, by implying that they ever actually assess their hypotheses against the evidence. Still, it does not hurt to run through the scientific implications of what they say to illustrate the layers of their dishonesty.