Cigar Fascism

During the Cold War, the Cuban government becomes communist and aligns with the Soviet Union, and many of that country’s productive citizens flee to the United States where property rights are more secure and the government is more constrained. Cuba’s economy predictably fails and is kept afloat for years by foreign aid provided mostly by the Soviets. Meanwhile, Cuban businesses first take root, then flourish in the US, particularly in Miami, including a cigar industry based in Little Havana.

Ironically, many of these cigar manufacturers succeed due to government intervention in the form of the Cuban trade embargo, enforced by the US government. Meanwhile, American demand for Cuban-grown and rolled cigars remains high, and many purchase them in extra-legal markets or on trips abroad — often when “abroad” translates to Mexico or Canada. I once met a man who smoked a Cuban cigar in the 1980s. It was such a profoundly pleasurable experience that he vowed to never smoke another cigar again.

So it went until the Cuban embargo was lifted by the US government last year and questions arose about whether Miami-based cigar manufacturers would survive competition from los cigarros cubanos. Unfortunately, a threat of government regulation of business, that regulation always causes secondary effects that are sometimes anticipated, and sometimes not. In this case, we see that previous intervention in the e-cig market (which I wrote about here) might have been causing low-income and teenage e-cig consumers to switch to cigars, and this could not be allowed. Once again, one set of regulations leads to unanticipated consequences that lead to a new round of regulation. (This is a major explanation of government growth described by Mises in the 1920s.)

But such coercive wealth transfers being imposed by the government are actually acts of extortion worthy of the Castro brothers. The FDA’s policies — fascist in the sense that they allow for private ownership but government control — mean that, at the end of the day, the portion of the US cigar industry that escaped Cuba simply traded one repressive regime for another. Sadly, they’re not the only ones who can go up in smoke. It’s also the small businesses and other entrepreneurs who decide it’s just not worth adding to the wealth of the world through voluntary trade and the satisfaction of consumer demand, only to have profit confiscated to illuminate the offices of DC lawyers and bureaucrats who actually deserve to have cigar smoke blown in the faces.

The FDA has caused hundreds of thousands of deaths through its policies. In a truly free society, the private market regulation would regulate it out of existence. When that happens, I won’t be the only one lighting up a Partagás to celebrate.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

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