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OPINION ONLY
Daniel P ('Dan') Williamson
— An economist from Californian Polytechnique, San Luis, who was temporarily recruited for the Tobacco Institute's cash-for-comments network He was rejected when he criticised their papers and fallacious economic claims. — Professor Dan Williamson was temporarily recruited into the cash-for-comments conspiracy organised by lobbyist James Savarese and Professor Robert Tollison of George Mason University (GMU) on behalf of the tobacco industry.
This surreptitious network of compliant economists operated by using the facilities and staff of George Mason University's (GMU's) Center for the Study of Policy Choice [supposedly an independent study center within the university]. It extensively utilized the Center's membership list of extreme-libertarian professors of economics — most of whom were members of the 'Austro-Libertarian/Randian' tradition; belong to the Public Choice Society; and had tenured positions at various State universities.
These ultra-free-market professors were contracted on a pay-for-service basis to react to requests circulated by the tobacco industry for help in defeating either excise tax measures or smoking ordinances, and were paid ($300 to $1000 per time) to write op-ed articles for their main local newspapers. [chosen by the tobacco industry] and lobby their local Senators and Representatives.
Dan Williamson only made his appearance in the tobacco archives in 1991 and 1992, and he appears to have been asked to write a flattering 'discussion paper' to follow papers produced by three of the network economists ( Dwight Lee, Gary Anderson and Ben Zycher) who had been paid about $3,000 each to produce tobacco propaganda for a meeting of the Western Economics Association.
Williamson's paper was a genuine criticism of the poor quality of the economics, rather than a flattering promotion of the Tobacco Institute message — and it appears as if he was not given the opportunity to discuss the points. He was abruptly replaced as discussant by Thomas Borcherding, who was an old, tested and trusted lacky of the tobacco industry.
Some key documents 1990 Apr: /E Tollison and Savarese have sent the Tobacco Institute a proposal to run special tobacco-oriented sessions at various regional conferences of economists.
They plan to run one for the Western Economic meeting in San Diego (June 30) on "Smoking and Public Policy", and another at the Atlantic Economic Society conference (October) on "User Fees" [The then current Tobacco Institute obsession]
They will use six or seven cash-for-comments economists from a pool consisting of: Robert Tollison, Richard Wagner, Dwight Lee, Fred McChesney, Bruce Yandle, Kevin Grier (George Mason University) Gary Anderson, Dan Williamson (Cal Poly San Luis), and Benjamin Zycher (The Rand Corporation).  
Notes on the letter from Martin Gleeson, Carol Hryjak and Susan Stuntz show that they think this is a good idea — "an opportunity for promotion". Carol Hryjak is given the go ahead and Ogilvy & Mather is to be advised to promote. James Savarese is asked to do further work on groups like this.
1991: The Tobacco Institute felt that their "Invited Session" at the Western Economic Meeting in San Diego was such a success that they promoted a similar one for the June 1991 meeting in Seattle. It was also populated by their cash-for-comments lackeys.
This time the tobacco-required theme was to be "Earmarked Taxes: Economic and Political Dimensions," with papers by Dwight Lee, Henry Butler and Robert Hayes under the chairmanship of Benjamin Zycher. Steve Jackstadt was to be a discussant along with Zycher.
- This agenda has been faxed by Dwight Lee, Uni of GA
- Robert Hayes of Seattle University only figures in the archives on this one occasion, so clearly he didn't last as a networker for tobacco.
- Steve Jackstadt from the Center for Economic Education, School of Public Affairs, University of Alaska, Anchorage, is the same.
- A later replacement Dan Williamson, from California Polytechic, San Luis also only worked for them the once.
The Tobacco Institute ( Martin Gleason, Susan Stuntz and Carol Hryjak) gave them an enthusiastic go-ahead despite the fact (part concealed) that Jim Savarese would charge them $18,500 plus expenses.
1991 Jun 29: Dan Williamson of the California Polytechnic at San Luis has submitted his discussion paper to Savarese, and it has been sent to the Tobacco Institute for checking. It appears that they were not happy with his criticisms. Three possible sources of externalities are considered: medical costs, lost productivity in the work place, and environmental tobacco smoke.
Comments on the first two are valid and interesting although no mention is made of possible health insurance cost externalities created by smokers (Zycher discusses this). ETS externalities are not discussed at all. He disputes Dwight Lee's claims about the incidental nature of costs associated with ETS.
The image the paper attempts to create of the powerful anti-smoking lobby pitted in the political arena against the individual smokers, strains for credibility.
Also, it appears that government has made significant use of its tax incentive powers rather than direct regulation in this "externality war." How does this reconcile with the political rent acquisition motive suggested of the anti-smoking lobby? He also disputes Gary Anderson's interpretation of the theory of external cost.This is incorrect. What the sufferer of the external cost does not do is negotiate with the party (parties) causing the externality. He or she will nevertheless do something in the face of the externality, e.g., clean up the mess that without consent has been dumped upon him. And then he hs the nerve to criticise Ben Zycher The main point here is that insurance companies, as residual claimants, have incentives to eliminate cross-subsidies from non-smokers to smokers. Do they? The reasons mentioned are to get a better mix of clients (more non-smokers).
But if all insurance companies do this they will each likely end up with the same mix of clients they started with (a prisoner's dilemma situation). Perhaps we have in fact a cooperative solution of this conflict in which none of the insurers follow this strategy and hence externalities do exist from smokers to non-smokers.
Clearly some empirical verification is called for. You'll be amazed to read that Dan Williamson was abruptly removed from the discussant role and replaced with the old reliable Thomas Borcherding.
[The expenses claims of Wagner, Lee and Butler are included here]
Note the "OK $18,500" agreement on the later agenda.
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