Friday, 4 July 2014

Every e-cigarette user should be a free market libertarian

How libertarians are created

I've been using e-cigarettes almost exclusively since October 2012 and, as a customer, I've noticed that the e-cigarette market in Britain has the closest thing to perfect competition that you will see in the real world.

Perfect competition is a theoretical economic model but, like most economic models, it is a useful one. In a market with perfect competition there are a large number of sellers, no barriers to entry, and a largely homogenous range of products. As a user of a second generation e-cigarette, that is pretty much what I see in the marketplace. I live in a fairly small place in Sussex—a big village, really—which has an independent e-cigarette shop (hell, let's give them a plug) and at least a couple of other shops that sell second generation e-cigarettes as part of their business.

All these shops—like many thousands of them nationwide—are buying their gear from China and rebadging it to various degrees. There is a huge range of fluid, but when it comes to the hardware I can buy a battery from the specialist e-cigarette boutique and it will work with the atomiser I bought from the cornershop. It is essentially all the same and anyone can import and sell it.

In terms of first generation products, I've tried the E-Lites and the Vypes and the N-Joys and the Gammuccis and many over cigalikes and, whilst I have slight preference for one over the other, there isn't a big difference between them. As with real cigarettes, if people become loyal to one brand it will be on the basis of price, image and slight differences in taste.

I won't discuss the third generation devices because I don't use them (yet), but what I am about to say also applies to them.

If you have a perfectly competitive market, with no barriers to entry, lots of sellers and homogenous products, an economist would expect to see lower prices and greater innovation as competitors strive to be the top dog. That is exactly what has happened in the e-cigarette market. It has been to the benefit of consumers.

Some Marxists argue that industry is all about capital and that the big players come in, push out the competition and soak up excess profits. Some businesses do indeed hope to do that—and governments on left and right help them—but free marketeers say that it is only through government action that such oligopolies can be formed. We free market libertarians believe that it is regulation that pushes up prices, stifles innovation and allows big business to prosper at the expense of small businesses. The price is ultimately paid by the consumer, whether as a financial cost or a welfare cost.

I know that this blog is read by people with a broad range of political views and I wouldn't want it any other way. I don't much care for champagne socialism (or champagne Toryism for that matter), but I don't vote. Whatever your political preferences, so long you're against state-sanctioned lifestyle regulation you can have a drink with me any time (preferably not champagne).

But if you're a vaper and you've been following the whole mess with the Tobacco Products Directive and the MHRA and the WHO and the BMA and all the other bastards who want to regulate e-cigarettes into the dust, you must surely have learnt a lesson about the joys of laissez-faire and the horrors of big government. Even if we leave aside the fact that it was the socialist parties in the European Parliament that were most keen to ban e-cigarettes, there must be something about this debacle that makes left-leaning punters see some wisdom in the free market.

The vaping scene in Britain today is simply fantastic. Anyone can get into it and, as a result, there is a vast array of retailers and manufacturers fighting on a level playing field to produce the best product at the best price. It's not quite perfect competition, but it's not far off and so there is an incredible amount of innovation and prices are extremely—what's the word?—competitive.

No matter how 'light touch' the EU and MHRA regulations prove to be, we will look back on the first half of this decade as the golden age of vaping. Not because technology and ingenuity will come to a halt in 2016, but because someone has said the nine most terrifying words in the English language: "I'm from the government and I'm here to help" (h/t Ronald Reagan).

Being in favour of the free market doesn't necessarily make you a libertarian, of course (the Conservative and Republican parties have given us ample proof of that over the years). As a vaper, it will be necessary for you to step into any bar, restaurant or office in the growing number of places that have banned the use of e-cigarettes by law before those libertarian muscles really begin to flex. A park would be good enough in New York City. I haven't kept up with the regulations in California, but vaping in your own bathroom is probably an offence there.

All I'm saying, dear reader, is that vapers have more reason than most to appreciate the magic of a loosely regulated free market because we have been lucky enough to see one appear before our very eyes and we now have the prospect of seeing it disappear before our very eyes. This is why I called my IEA paper about e-cigarettes Free Market Solutions in Health. Whether you wish to apply that lesson learned to other markets is a matter for you but, y'know, I'm just saying.




3 comments:

Jean Granville said...

That's right. Free market in most sectors is a distant memory.
Likewise, the 90's were the golden age of computing, when Microsoft had one (1) lobbyist in Washington.

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