Social costs

Social costs refers to an argument advanced by anti-smoking activists that smoking places additional financial burdens on society through increased workplace absenteeism, increased medical costs, additional cleaning costs and losses caused by fires and smoke damage. The argument rebutted tobacco industry claims that smokers more than paid their way for health services through paying extra taxes on cigarettes.

Academics
After it was well established that both cigarettes and secondhand smoke are harmful to public health, economic impacts became one of the few areas still contestable.

Economists promoting supply-side economics and economic rationalism were among the most vocal supporting pro-tobacco "social cost" arguments, from 1990 to about 1995. For example, George Berman of INFOTAB (under its old name International Committee on Smoking Issues (ICOSI), argued:

The economists are quite certain that most of the alleged medical expenses do not qualify as social costs. And much larger charges of absenteeism and lost productivity are not social costs at all.

The only valid and useful analysis is one that focuses on a proposed government action.

He then makes these points (note the prompt to stop and 'Light Up'):

"There is a value to having a government which does not interfere with personal behavior and freedom of choice. The economists tell us a social cost may exist when if falls on someone who does not share in the benefits. But if I am restricted from smoking because it bothers someone else, I have lost my benefits. That is, a cost has been placed on me. Don't those who benefit from this restriction owe me compensation for my loss of benefits?  Or do anti-smokers have exclusive ownership of the air rights in a public place?"

Industry ploys
To counter the social cost argument, the industry generally turned to economic consultants like Robert D. Tollison who ran the tobacco-funded Center for the Study of Public Choice and also the Social Policy Institute at George Mason University. He had his students perform complex calculations to prove that in economic terms, the red figures on the social costs side of the ledger were actually black on the financial side. See the third page of Tom Osdene's diary notes for Tuesday October 30.

Tobacco industry documents on social costs

 * Confidential Memorandum from Ernest Pepples to Horace Kornegay, February, 1979

Related Sourcewatch resourced

 * Social Costs/Social Values Project
 * W. Kip Viscusi