China lung disease 'to kill 83m' - the true cost of busness?

This article reminds us that the TRUE cost of doing business can be very hard to measure . A US report predicts that more than 80 million Chinese people may die over the next 25 years partly due to lung disease caused by cigarette smoking.

What is the TRUE cost of producing cigarettes?
Until very recent times, everyone would have said that the cost of producing any product is the cost cost of the business inputs to produce it. So th cost of producting cigarettes would be the cost of tobacco, paper, labour and chemicals to make them. However, more recently, economists have started to rethink how we should measure the true cost of producing a product. For example, shouldnt we include the cost of pollution and the cost of increased health services for smokers in the real cost of making cigarettes?

Why Should we think about the true cost of making products?
All of us need to be worried about the impact of business on peoples health - for exaple, the Chinese Milk Crisis , and businesses contribution to global warming. We seem to be prepared to damage our health and our planet in the race to produce more and more products to meet our needs and our unlimited wants.

Some theory - Social Costs and Social Benefits
Economists have started to see production in terms of its SOCIAL COSTS (Total Cost of Production) and SOCIAL BENEFITS (Total Benefit from Production)

1) SOCIAL COSTS = Total Cost of Production = Private Cost + External Cost
2) SOCIAL BENEFITS = Total Benefit from Production = Private Benefits + External Benefits

Private Costs: These are costs that a person or business must pay themselves in order to carry out their consumption or production. For example the private cost to a concumer is the money paid plus the damane usiness that makes cigarettes is the cost of buying the resources to produce their products.For example the private cost to a business that makes cigarettes is the cost of buying the resources to produce their products.

Private Benefits: These are benefits that a person or business receives when they carry out their consumption or production. For a person, the benefits will be the satisfaction from consumption the cigarettes. For a business, the benefits will be the revenue received from the sale of its product.

External Costs (negative externalities): These are the costs to 3rd parties from the production of the business. For example people's health may be damaged by passive smoking. Also, cigarette manufacturers use chemicals that may pollute the area surrounding their factory, further harming the health of the people who live nearby.

External Benefits (positive externalities): These are the benefits for 3rd parties from the production of the business. For example the cigarette manufacturers may train their workers who may later leave the business and use these skills in another job.

Many Economists belive that society should only accept production when

Total Benefit from Production > Total Cost of Production

Do you agree??