(Berkeley Springs, WV) I really enjoy having intelligent adult children. I learn a lot from them; if I can get them to talk; and if I can shut up long enough to really listen.
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One of the quaint and pleasant things I enjoy about traveling is listening to how people politely address a stranger. In the Midwest, it is often a simple “hey.” In some parts of Texas it is a “How-DEE”, almost like a question. In southern England you might get plenty of love: “yes love”, “can I help you love?” Pre-noon in German towns it is a sing-songy “morgen” — short for Guten Morgen, with the voice going up on the second syllable, again, almost like a question.
Here in the hills of the Northeast corner of West Virginia, you are likely to be called “honey” by just about any lady in any store or restaurant. A polite and simple way to say “hey”, “how-DEE” or “love.”
In New York City, greetings between strangers might go something like “how about a Loosey?” (Pronounced “Lucy”). This would be a single cigarette, a “loose” cigarette, out of its pack … perhaps even a Marlborough, America’s most popular brand.
Of course, a dollar would be expected in exchange. The going price for a Lucy. A tip for a good provider might bring him $2.
New York has the highest price for a pack of cigarettes in the nation. Due to its taxation. Add on to that an additional tax imposed by the City, and New Yorkers pay about $13 per pack of cigarettes. Across the river in New Jersey, the cost is about $6 or $7.
Homeless residents of the area transport cigarettes across the river and sell them at a 200% mark up, selling them one at a time, a buck a piece (fetching $20/pack by selling $1 at a time, for an average $6.50 investment). This is an economic niche created by high taxation, truly an unintended consequence. The ad hoc distribution system serves multiple needs, joining providers and consumers in a beauty that surely brings a smile to Adam Smith’s ghost.
First, it provides low-risk income to homeless. They distribute it from serve-yourself pockets on the sides of their backpacks. Transactions are cash only. They can spend, save or re-invest anyway they choose. They provide a service and product, and get paid in return. The downside is minimal, as court dockets are jammed with petty criminal cases. At worst, it’s a night in jail, complete with warm bed, shower, and a couple of meals.
Second, it provides casual smokers — those who seek a moment of secret pleasure on the way from home to work, or vice versa, or between meetings — a chance to suck down a quick smoke. A complete pack would be too large an investment, too difficult to hide. Too cumbersome to carry around.
Third, it provides an outlet for loose cash that would otherwise go to simple beggars and street car window washers.
In this way, the governments of the city and state of New York have essentially subsidized the state of New Jersey at their own expense (by sending cigarette sales across the river), spawned a homeless-based supply industry, and provided extra cigarettes to casual and light smokers who might otherwise be smoking less — or not at all. And by raising taxes so high, they have tremendously raised taxes on the working poor, those who can least afford it; raised taxes on those who can’t afford a buck a smoke and can’t afford the time or money to go across the river. But can’t stop smoking, nonetheless.
As the NYC Lucy smuggling industry grows, no doubt there will be growing pains. There will be conflicts. Territory wars and battles will break out. More homeless will descend on NYC. The courts will be ever more burdened by enforcement of feel-good freedom-restricting legislation. All for our own good. Right.
This is not unlike so many other government efforts to make things better, only to achieve the opposite … or at least gain pitiful minor progress toward the expressed goal, with pathetic underachievements when measured against the funds and social capital expended. This list includes rent control, affordable housing, minimum wage, racial quotas and the Department of Education.
I love the law of unintended consequences. And I love having brilliant children.
Joe Girard © 2013
Note: with gratitude for my sons Aaron and Kurt, who had the patience to explain most of this to me. And to Thomas Sowell, for clearly explaining, over-and-over, how the good intentions in Government action often blind us to the negative consequences of those actions.
Additional Sources:
[1] Cigarettes and Taxes in NY state and city. — NY Times
[2] Cit Taxes in NY State and City — NY State Gov’t