The Nanny State Creeps On

Last November, I posted a terrifically entertaining and informative video from Reason.tv about anti-smoking ordinances around the country.

The focus of the video was of several California communities and I never guessed that the nanny-state approach to smoking would ever become law in Virginia.

Call me naive. It turns out that, in a policy reversal, Speaker of the House Bill Howell has announced a "compromise" that will ban smoking in virtually all restaurants in the Commonwealth. (I am trying to figure out how a blanket ban is a "compromise" of any sort, since a "compromise" implies that each side in a disputed policy debate gives something up in return for something given up by the other. It appears here that the only side giving something up was the free-market side. The nannies gave up nothing.)

A real compromise would have respected the rights of property owners by giving them a choice in the matter. For instance, a law could have been drafted to require restaurateurs to post signs in VERY LARGE TYPE at the entrance to their establishments, stating whether it was a "Smoking Allowed" or "Smoking Prohibited" facility.

We know from experience in other states that when restaurant smoking bans are put in place, restaurants lose business. Smokers decide that, rather than going out for a meal and a few drinks, they will buy a six-pack or a fifth of vodka, some easy-to-cook food, and stay home to eat and drink. (Pizza delivery restaurants are not adversely affected by smoking bans.)

For example, a study by two economists from the University of North Texas in Denton, Terry L. Clower and Bernard L. Weinstein, found that in the year after the city of Dallas imposed a smoking ban on restaurants within its jurisdiction:

...the Dallas smoking ban ordinance

• Contributed to a decline in alcohol sales in the City of Dallas
• Negatively impacted revenue at many restaurants in Dallas
• Caused at least four restaurant closings
• Appears to be changing the business models used by hospitality business owners in Dallas.

The findings also track the trend experienced in Carrollton, Texas where a government imposed smoking ban led to a decline in alcohol sales and a loss of restaurant development and tax dollars in the city.

Clower and Weinstein note that, after the smoking ban was imposed:

Comparing 2003 to 2002, year over year sales of alcoholic beverage at eating and drinking establishments in Dallas fell $11.8 million – almost three times the decrease in sales between 2001 and 2002.

Later in their study, the economists add:

...restaurant owners have seen alcoholic beverage sales decline anywhere from 9 percent to over 50 percent since the Dallas smoking ban went into effect. Owners and managers of these establishments report mixed results in food sales, with one restaurant indicating no impact on food sales while others claim as much as a 25 percent loss in food sales. No responding restaurant indicated they had gained revenues since the smoking ban’s inception.

Regardless of whether restaurants lose sales as a result of smoking bans, they surely bear a regulatory burden that can be monetized. (A regulation is a form of taxation.)

University of Missouri law professor Thomas Lambert wrote in the Washington Post in 2006, based on a longer article he published in the scholarly journal, Regulation:

The case for smoking bans thus fails. Contrary to ban advocates' claims, the costs of smoking's externalities are ultimately borne by the owners of smoking-allowed establishments who, as a group, have incentives to efficiently accommodate smokers and nonsmokers. Efforts to shape people's preferences regarding smoking run into individual choice issues and may be counterproductive. Scientific evidence on the risk of ETS may be overstated and never addresses the important point that some people are willing to take that risk.

A better approach would be a hands-off policy permitting business owners to set their own smoking policies. Motivated by the pursuit of profits, the owners would have the proper incentive to maximize social welfare. The market would be far more likely than government regulation to accommodate the various preferences of nonsmokers and smokers alike.

Let the market decide. That, Speaker Howell, is the conservative (and the morally correct) solution. If you want us to vote for Republicans in November, you shouldn't be imposing policies that are bred by liberal Democrats.