Sunday, January 18, 2004

Where There’s Smoke, There’s Corporate Rent Seeking

Alarmed at the success of small tobacco companies in recent years, Big Tobacco is trying to persuade their good friends, the state attorneys general, to smack down their underpriced competitors. These smaller firms weren’t part of the industry’s multi-state cartel agreement which gave them immunity from legal health claims and gave state legislators billions of dollars revenue, therefor many are able to significantly undercut the major national brands in price. Philip Morris and friends want the little guys to abide by the terms of the agreement – even though they never agreed to it. Their logic makes sense, however, when you realize that it was never meant to be a voluntary legal agreement. It was a new form of industry-wide national regulation dressed up as something else. Now the AGs and Big Tobacco are crying when their hypocrisy gets exposed.


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