Business Blog: Hoover’s Business Insight Zone

[This is a bit of a Monday-morning ramble coming in between doses of coffee. Please just take it for what it's worth -- and feel free to tell me what it's worth, good or bad, in the comments.]

When should an industry die? Should consumers hasten the process? Should regulators? These questions don’t have easy answers, but they’re worth thinking about, especially when we consider some of the macro-scale problems facing the U.S.

Once upon a time, the tobacco industry peddled what Doonesbury has lampooned as a “healthful lung snack.” But centuries before that, the fledgling tobacco industry brought thousands of adventurers, planters, and indentured servants from England to Virginia and the Carolinas, planting the seeds (literally and figuratively) not just for the worldwide boom in smoking and snuff-taking, but for the cash-crop economies of the New World. Oh, and the sustained European settlement of Virginia and the Carolinas, too.

But that was before people understood the now-obvious connections between tobacco use and various ailments including cancer and emphysema. Nothing against tobacco farmers, who typically work like dogs to support their families, but they grow a crop that (eventually) makes a lot of people sick. It’s not a political statement or even an editorial statement to point that out — it’s just the state of reality as understood by disinterested parties today.

A disinterested view of the early-onset obesity that now afflicts so many American children says that these kids are taking in way too many calories while getting way too little exercise. That doesn’t mean that we outlaw corn syrup — which, simply by the numbers, represents a lot of the empty calories in the typical American adolescent’s diet — or that we try to ban video-game use among kids in the U.S. But it could mean, in the long run, a consumer backlash against couch-potato activities (and, by extension, video game makers), possibly extending to calls to cut subsidies to the corn farmers whose crops help to produce all the yummy corn syrup that sweetens our sodas and everything else.

One more short example: coal is the largest source of electricity in the U.S., but also by far the largest source of greenhouse emissions related to energy production. Again, that’s not a judgment against the coal industry — or coal miners, or electric utilities that run coal-fired plants. It’s just an observation of the facts as we have them now. At some point, if worries about global warming become widespread enough, there will be calls to shut down the coal industry and coal-fired electricity generation in the U.S., or else to force emissions controls on these industries, even at costs that today seem too exorbitant even to contemplate.

I carry no brief for tobacco — I’ve never smoked and I don’t invest in cigarette companies. But I surely take in my share and more of corn syrup, and I happily use plenty of electricity produced from coal-fired plants. No one needs to tell me that people in these industries work hard, and I’m well aware of the unintended consequences — and large inefficiencies — that often accompany broad-based governmental regulation. In general, I’m a believer in the power of markets to deliver the goods to the public.

But what about when we decide that the goods in question are more than economic? We did that when the Surgeon-General started putting the warnings on cigarette packets, and when cigarette advertisements were banned from television. We did it, to a degree, when the elder President Bush helped push through bipartisan legislation that regulated emissions of sulfur dioxide and other acid-rain-causing chemicals. We’ve done it, piecemeal, as school districts have banned soda machines from their schools.

Of course, the industries affected don’t go along quietly with these changes. They will preach up and down about how we can’t afford to regulate these things, or how the products aren’t actually harmful at all, or how the real responsibility for childhood obesity lies with parents (which, as a parent, I can say is incontrovertibly true). But if there’s enough of a groundswell — and even if it’s ill-advised — these industries could go the way of the asbestos business.

Like I said, pardon the philosophical Monday-morning ramble, because these thoughts are still only semi-formed. But there’s something here worth talking about. If you want to tell me what you think it is, I’ll be most grateful.