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Tom Flanagan
Tom Flanagan

Tom Flanagan

Pariah products will always find their way Add to ...

Some years ago, I was privileged to be the Seagram visiting professor of Canadian studies at McGill University, and I enjoyed the nominal connection the Seagram professorship gave me with Sam Bronfman, smuggler extraordinaire. Sam Bronfman became a wealthy businessman and a Canadian folk hero for smuggling whisky south across the St. Lawrence into the United States during that country's experiment with Prohibition, from 1920 to 1933.

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Fast forward to 2010. Now, Mohawk businessmen are getting rich smuggling another pariah product - cigarettes - north across the St. Lawrence from the United States to Canada. Sam Bronfman is considered a business legend while the Mohawks are decried as criminals and harassed by various police forces, and yet the situations are basically the same.

Canada hasn't prohibited tobacco for adults but has imposed some of the world's highest tobacco taxes in an attempt to reduce smoking. In both cases, predictable results have ensued; illegal activity exploded as would-be entrepreneurs sought the opportunity for profit created by prohibition.

Interestingly, ethnic minorities are involved in both cases. Sam Bronfman probably could not have attended McGill (which his family later supported so generously) because of that institution's notorious numerus clausus for Jews. The Mohawks, needless to say, are North American Indians. Pariah peoples are often drawn to pariah products because their other opportunities are limited. As the scion of Irish immigrants, I say this proudly. The Irish pioneered organized crime in America (some now call it politics), and my grandfather was a cashier in an illegal casino.

The prohibition of alcohol was a disaster and was soon repealed in the United States as well as in the Canadian provinces that had adopted it. But the same governments that repealed it outlawed marijuana, cocaine and opiates - products that had been legal and widely consumed in the 19th century. The cost of the war on drugs is now being paid all over the world - civil war in Colombia, violence in Mexico, financial support for Islamic terrorism in Afghanistan - while all these drugs remain illegal but easily available on the streets of the Western world.

Then the anti-smoking movement led Canadian governments to raise taxes on tobacco to punishing levels. The incidence of smoking did indeed go down, as the law of demand would predict. But the law of supply also kicked into action as smugglers found ways to evade the law and take advantage of higher prices, just as they always do with pariah products.

Indeed, the situation has gone far beyond smuggling cigarettes from New York State, although that is still ongoing. Now there is a first nations cigarette manufacturing industry in Canada. The manufacturing itself may be legal and licensed by the federal government, but the sales to non-Indians are probably illegal and certainly untaxed. That, of course, is the whole point - to make these contraband cigarettes much cheaper than the heavily taxed legal variety. And cheap illegal cigarettes are now so common in Ontario and Quebec that the smoking rate has stopped falling.

Does this sound familiar? Moralistic legislation produces widespread law-breaking, indeed an entire illegal industry, while the pariah product becomes more available than ever. Plus ça change …

Canadian law enforcement will never defeat the human desire for unhealthy pleasures. It would take a military occupation of the Iroquois communities to stamp out the trade, and that's not going to happen. The Iroquois see themselves as a sovereign nation; many have guns; some have been trained in the U.S. Marines. No Canadian government wants to relive the Oka experience of 1990. Either cigarette taxes will come down and the industry will be legalized, or the smuggling will continue.

Tom Flanagan is professor of political science at the University of Calgary and a former Conservative campaign manager.

 

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