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All human activities carry costs that have to be weighed against their benefits.Risk to limb or life is merely a type of cost that will occur with a probability lower than one but higher than zero. S., the annual death risk from motor vehicle accidents is 1/5,000.Now, public health insurance regimes have been set up with the avowed objective of operating a redistribution from the healthy to the sick; in fact, the whole Welfare State is based on cross-subsidies between social groups.
Yet, forcing the drunk to bear responsibility for the costs they impose would seem to be a more appropriate response than prohibition for everybody.
As for sedentary lifestyle and obesity-related diseases, economists Willard G. write: “Surprisingly, the lifetime external costs of a sedentary life-style are actually higher than the external cost of smoking. We estimate that lack of exercise imposes external costs of 24 cents for every mile that sedentary people do not walk, jog, or run.” The fact that not doing something might impose “costs” on others illuminates the troubling implications of this kind of transfer argument.
Interestingly, Public Health activists have turned this defeat to their advantage: they now argue that this is simply “not the kind of calculation that a civilized society engages in,” as MIT Prof. After the economists’ analytical assault, the case for smoking regulations seemed pretty thin in the early 1990s.
Then, a new argument was proposed by World Bank economist Howard Barnum.
The transfer argument claimed that health care costs of treating smoking-related diseases was partly supported by non-smokers and, hence, amounted to a forced subsidy to smokers.
This claim implicitly relied on the fact that health care has been more or less nationalized; otherwise, smokers would have to pay for their self-imposed diseases, possibly through higher private insurance premiums.
In the case of smoking, anyway, the transfer argument is empirically false.
Economists who looked at the figures in many countries (including Robert Leu and Thomas Schaub in Switzerland, Willard Manning in the U.
lthough the Greeks have one of the highest per capita tobacco consumption rates in the world, their country shows a relatively low incidence of lung cancer.
In an obscure annex to its famous 1992 anti-smoking report, the Environmental Protection Agency explains this paradox by high fruit consumption in Greece.