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Source link: http://archive.mises.org/10471/store-em-if-you-got-em/

Store ‘em If You Got ‘em

August 17, 2009 by

Cigarettes, despite flunking the “durability” test, meet all the other criteria to make them a good monetary instrument. They are generally marketable, despite the constant attacks on their use as being unhealthy. Cigarettes are divisible, recognizable, (somewhat) homogeneous, and, due to the increased taxation, fairly stable in value and have a high value per unit weight. In fact, a 7-Eleven at the Jersey shore recently advertised selling cigarettes priced “at the state minimum.”

Cigarettes are so valuable that they are being stolen by the truckload to be sold in high-tax states — like New Jersey, New York, and Washington. But individual counties also ladle taxes on each pack leading to smuggling within a single state with varying county tax rates, reports the Wall Street Journal. “It’s a big business and it’s getting horribly bigger,” Paul Carey III, enforcement coordinator for the Northern Virginia Cigarette Tax Board, told the Wall Street Journal. FULL ARTICLE


Dick Fox August 17, 2009 at 7:54 am

“An injudicious tax offers a great temptation to smuggling. But the penalties of smuggling must rise in proportion to the temptation. The law, contrary to all the ordinary principles of justice, first creates the temptation, and then punishes those who yield to it; and it commonly enhances the punishment too in proportion to the very circumstances which ought certainly to alleviate it, the temptation to commit the crime.”

Adam Smith – Wealth of Nations

Brian Macker August 17, 2009 at 8:13 am

A friend was jokingly saying that the real new money will be bullets. The price of bullets went up after that and he’s been gloating ever since. ;)

N. Joseph Potts August 17, 2009 at 9:03 am

For purposes of keeping my treasure marketable, I was considering refrigerating my safe.

That effort led me instead ultimately to put a combination lock on my refrigerator.

Fortunately, I don’t smoke. But I do drink the beer I keep right next to my Luckies.

Matt August 17, 2009 at 9:07 am

Storing cigarettes? Ok
Just heard yesterday Cuba is running very short of Toilet Paper..so.. Cubans would have been foresightful in storing Toilet Paper. Seems to me that storing Toilet Paper makes more sense than cigarettes. Besides the government might confiscate your cigarettes but it’s very doubtful that they will confiscate Toilet Paper.

John August 17, 2009 at 9:35 am

cigarettes have a relatively short shelf life, making them unsuitable as a store of value. bullets, on the other hand, have almost unlimited shelf life and don’t take up a lot of space, either. Also, dont’ try defending yourself with a pack of Camels!

Silas Barta August 17, 2009 at 9:46 am

Also, dont’ try defending yourself with a pack of Camels!

Yeah — they’ll get smoked!

*rim shot*

Sean August 17, 2009 at 9:58 am

R.A. Radford has a great piece on Cigarettes as a currency in a WWII POW camp.

Gil August 17, 2009 at 10:26 am

Perhaps another factors in “what makes a good private currency” is ‘non-traceabilty’. Do thos engagin in underground transactions use commodities as money because they can’t be traced?

2nd Amendment August 17, 2009 at 11:07 am

I can’t think of anything better than GOLD !

You can keep the smokes, I will buy GOLD !

Nate Y August 17, 2009 at 11:14 am

John said:

“Also, dont’ try defending yourself with a pack of Camels!”

Are you gonna defend yourself with a handful of bullets?

FarSide August 17, 2009 at 11:18 am

@John -

Is the shelf life really that short? I smoke about 2 packs a *year*, and by the time I get to the end, I don’t notice any difference.

Of course, a year isn’t that long, and I obviously am not a very discriminating smoker, but what would a shelf-life of a plastic-sealed pack be? I would think a few years and most people would be still fine with them…

BT August 17, 2009 at 11:35 am

Who cares about “shelf life?” If things become so bad that cigarettes become currency, people won’t care what the quality of the cigarette is ;-)

And you may not be able to defend yourself with a pack of Camels, but you sure can do a lot of bribing.

Barry Loberfeld August 17, 2009 at 12:02 pm

RE War on Smoking:

When a principle or premise defends one’s case, it is affirmed; when it doesn’t, it’s denied. Think about these two statements:

*Individuals have the right to engage in consensual private behavior even if it can harm them.

*The government has the duty to stop individuals from engaging in consensual private behavior that can harm them.

So, which does our “liberal” believe in? Well, if the issue’s smoking, the second. But if it’s “sodomy,” then the first. And the “conservative”? Just the reverse. What prevails is a now-you-see-it-now-you-don’t commitment to any tenet. Moral integrity falls to personal prejudice, and hypocrisy becomes the standard of “social democracy.”


KSB29 August 17, 2009 at 1:21 pm

Short shelf life?

Remember, it’s the tobacco that is valuable, not the filter and paper. That can (and has) been improvised on the spot for centuries.

Tobacco can be stored for a very long time with little ill effect, provided it’s done properly. In fact age will improve the flavor the same way as with wines.

I’m already laying in my stock of pipe tobacco before the trolls in DC close that “tax loop-hole” or cram it full of that awful tasting FSC chemical as well.

Of course there is the most obvious solution. Buy Tobacco seeds while you still can.

2nd Amendment August 17, 2009 at 3:05 pm

Barry Loberfield,

What about those who are engaging in playful sodomy and want to insert cigarettes in the right place ? LOL !

I suppose then that a liberal government would regulate such practice and allow only unlit cigarettes, LOL !

2nd Amendment August 17, 2009 at 3:09 pm

Barry Loberfield,

“Government has no other end than the preservation of property.”

This is exactly the end which government should not be engaging in.

By giving the government the power to preserve your property, you are giving them the power to take away your property in the name of preserving it.

Property owners are the best suited to protect their own property and the government has no legitimate end whatsoever.

Let it organize art endowment shows and fireworks musical displays instead and let the property owners defend their own property without government interference.

C August 17, 2009 at 4:00 pm

90 percent of US bills carry traces of cocaine

Smoke yer bills and trade yer cigs, like in the pic! ;-)

Christopher August 17, 2009 at 9:50 pm

@2nd Amendment

That statement (about Government’s end being the preservation of property) must be taken in the proper context. It is meant to be understood as: Government has no other end than the preservation of property rights.
That falls more into line with Locke’s writings on Liberty, Property, Society, and Government.

panika2008 August 18, 2009 at 8:53 am

@KSB29: contrary to common wisdom, wine does not improve in quality by being stored beyond the first one-two years. And most wine experts I’ve read recommend sternly against storing any wine longer than 5 years.

Sally C. August 18, 2009 at 11:54 am

Just thought you might like to know what the cost of a (highly taxed) carton of cigarettes costs in the UK – £58 or $93 for a carton of ten packs of 20. In Belgium – a short drive from southern England – the same carton costs £38 or $62. Adults are legally entitled to buy up to 16 cartons each. You can guess that there is a steady stream of Brits travelling to Belgium to buy cheaper cigarettes. Going back to the article, I think most Austrian economists may be surprised by how strong the dollar will be for some time to come. As we saw earlier this year, at any sign of trouble, the world runs to the dollar for safety.

Barry Gordon August 27, 2009 at 3:09 am

We had a Dutch friend, now deceased, that was a prisoner in Japan during WWII. He told us that while he was a non-smoker, he could trade cigarettes for food and believed it was the only reason he was able to survive.

Barry Gordon August 27, 2009 at 3:09 am

We had a Dutch friend, now deceased, that was a prisoner in Japan during WWII. He told us that while he was a non-smoker, he could trade cigarettes for food and believed it was the only reason he was able to survive.

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