Thursday, June 04, 2009

The Bizarre World of Regulation

By David Henderson


Today's Wall Street Journal carries an article that highlights how strange regulation can be. Before reading, recall that one of the major alleged goals of regulation of cigarettes was to handle the problem of second-hand smoke. The idea was that cigarette smokers don't take into account the damage done to others through second-hand smoke and, therefore, the government needed to regulate where smokers smoked. Kip Viscusi cast doubt on this, but let's take it, for these purposes, at face value.

Trust the free market, though, to upset the pattern. If smoking and blowing out cigarette smoke was going to be illegal, what would some entrepreneur do? Come up with a way of letting people enjoy smoking without creating second-hand smoke. And that's just what happened. E-cigarettes now allow people to enjoy nicotine and, instead of creating second-hand smoke, create second-hand water vapor, which is not alleged to be harmful.

Now, if the people who favored the smoking bans really cared about second-hand smoke, they would applaud such a development, right? But they haven't. Here's a paragraph from the Journal story:

The American Lung Association, along with the American Cancer Society Cancer Action Network, the American Heart Association and the Campaign for Tobacco-Free Kids, recently called for e-cigarettes to be removed from the market. The groups say e-cigarettes have yet to be proven safe and that kids may be attracted to the products, some of which come in flavors like chocolate and strawberry. "Nobody knows what the consumers are actually inhaling," says Erika Sward, director of national advocacy at the American Lung Association.

It's probably true that e-cigarettes have not been proved safe. But then you would think, given the potentially huge value of such devices, that the skeptics would want some evidence of safety. Instead, they call for e-cigarettes to be banned.

It gets more bizarre. The FDA wants to regulate the device, not because it's like cigarettes, but because it could be used by those who want to quit smoking. The Journal's author writes:

Regulators have acted quickly to quell the rising popularity of e-cigarettes, saying e-cigarettes are drug devices that need regulatory approval before being legally sold and marketed in the U.S. The Food and Drug Administration says that as of March 1 it "has refused 17 shipments of various brands of these 'electronic' cigarettes, cigars, and pipes, and their components."
The FDA has the power to regulate smoking-cessation products but not tobacco. It says it has examined electronic cigarettes and determined that they meet the "definition of both a drug and device under the Federal Food, Drug, and Cosmetic Act," according to legal filings. Drugs and delivery devices must receive FDA approval before being marketed.

Get it? The FDA wants to regulate the devices, not because they might be simple substitutes for cigarettes but because they might actually, perish the thought, help people quit.

Don't be surprised if you see some of the anti-smoking advocates call for a ban on e-cigarettes on the grounds that such devices will undercut the existing smoking bans in restaurants, bars, and restaurants. Thus does a belief in regulation to solve a problem become a belief in regulation independent of whether there's a problem at all.

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