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Tobacco production just doesn't add up

 

The health costs of tobacco are widely understood, but not the economic ones. The tobacco trade is an inefficient use of vast resources manufacturing harmful products. The manufacturers' balance sheet and the country's GDP state it is profitable. Measured in money, the value of adverse production is calculated to be equal to prosperous production.

Arguably, because of the absence of any benefit for the consumer, the manufacturing process is destroying existing wealth and, in so doing, devaluing the money used as the measure. A problem of economics deeming all production to be of positive value - even when contrary to the individual good.

Taxation is another serious aspect. If we accept the above, it is reasonable to conclude that tobacco products are untaxable - there is nothing there of meaningful value to tax. Governments are using the tax revenue from the sale of tobacco as a means - a currency conduit - to tax the real pool of wealth produced by beneficial activities elsewhere.

Economists do not appear to understand that you cannot get good from bad; cannot fund beneficial public services from the taxation of harmful merchandise. Governments do, but it is an illusion. The tobacco trade is negative value production that adversely impacts on international currencies as well as health and living standards.

Geoff Naylor

By email

Belfast Telegraph

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