Below is today’s column on the continued use of state controls over alcohol in the United States. With the decision this month of Washington state to embrace the free market system and drop controls, citizens in other states are rightfully asking why officials keep this form of central planning, including officials in conservative states that purportedly favor free enterprise over government regulations.
If current political rhetoric is to be believed, we are on the brink of either a Communist or Socialist takeover. Republican leaders and pundits have repeatedly denounced Obama administration programs from health care to bailouts as part of a creeping “socialist agenda,” which appears to mean any centralized control of a market.
What is fascinating is that the warnings over state monopolies omit one of the longest-standing institutions of central planning and control in the U.S.: state liquor boards.
Seventeen states continue to exercise control over liquor as absurd relics from the 1930s. Ironically, there is no better example of the failures of central planning than the “ABC stores” around the country from Alabama to Pennsylvania. Indeed, if Karl Marx were alive and trying to buy Schnapps today, he might reconsider aspects of Das Kapital after dealing with our central alcohol planners.
This month, many people were enthralled with a controversy in Idaho where the State Liquor Division had barred the sale of Five Wives Vodka. The division refused to allow Idahoans to buy the popular vodka because it might be offensive to the Mormon population in the state.
I represented the distiller of the vodka, Ogden’s Own Distillery of Utah, in raising a host of constitutional objections to the enforcement of such religious mores. The state recently agreed to rescind its bar on sales, but the controversy should not pass without some discussion of continued existence of these state monopolies on alcohol sales.
Out with prohibition
Almost 80 years ago, the country repealed the prohibition of alcohol with the 21st Amendment. Many states emerged from prohibition with strict state control boards, but the majority dispensed with this inefficient system years ago. However, millions of Americans continue to live in states that control where and what they can buy in terms of liquor. Beer sales are generally not subject to such controls.
Indeed, the Idaho Division blocked Five Wives Vodka despite the fact that bars in the state serve Polygamy Porter. However, when it comes to liquor, these states stand between the consumer and companies with an army of bureaucrats who add costs and delays for the public.
In the case of Idaho, the division’s director, Jeff Anderson, noted that his staff tasted the vodka and preferred the pricing and quality of other products. Imagine those enlightened folks you meet at the post office and think of them passing judgment on the relative value of different types of alcohol — literally of thousands of products sought by citizens. These alcohol apparatchiks in states such as Idaho sit around and debate whether citizens should be allowed to buy a particular liquor of their choice.
Anderson said they concluded that this vodka was not “something we want to have on our shelf, sitting next to Absolut vodka.” Putting aside the perceived need to protect this Swedish vodka from being seen near Utah vodka, there remains a question of the function and power of these bureaucrats. Like Anderson’s vodka of choice, the bureaucrats consider their power over consumers as absolute.
Most states have gotten rid of these boards and fared well in relying on the market and conventional regulations to protect consumers. Just last month, Washington state embraced the free market and got rid of its state control. Thirty-three states rely on what Adam Smith called the “invisible hand” of the market where consumers choose among products — and the law of supply and demand handles the rest. However, eleven of the seventeen control states — Alabama, Idaho, Maine, New Hampshire, Vermont, Oregon, North Carolina, Ohio, Pennsylvania, Virginia and Utah — exercise direct control over the retail sale and price of liquor, sometimes even owning the ABC stores where it is sold.
Out with the boards
Because I live in Virginia, I have to drive to an ABC store to buy liquor — a store that is insulated from competition, and it shows. Like many government-run enterprises, the place is run with all of the care and concern of your local DMV.
States differ on the rationale for these boards. The Utah Department of Alcoholic Beverage Control, for example, uses its authority “not to promote the sale of liquor” but to “promote moderation and to enforce existing liquor laws.” The heavily Mormon state is famous for imposing arbitrary limits on the sale of alcohol from formerly banning of bars (in favor of “clubs”) to the required use of “Zion curtains” to prevent bartenders from being seen pouring alcohol.
These and other laws seem based on the belief that “for the bureaucrat, the world is a mere object to be manipulated by him.” The man who said that was Marx, a great believer in central control. These states have allowed a fixed bureaucracy to take hold of a market — a self-perpetuating and inefficient middleman in the market.
Ironically, alcohol board heads often defend their decision to bar particular brands because of the limited space that they have at warehouses and stores — ignoring the obvious point that there would be no limitations if they were removed as a chokepoint in the system. Anderson noted that he and his staff have to decide between hundreds of vodkas in choosing what will be made available to consumers while in most states this is the function of the market and consumer choice.
Unlike Marx’s vision, free enterprise is the touchstone of our society. With such free enterprise comes free choice — not simply the freedom to choose between the options approved by the government. Smith in The Wealth of Nations stressed that “it is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.”
Smith could just as well have added that it should also not be from the benevolence of the bureaucrat any more than the brewer — at least in deciding our drink of choice.
Jonathan Turley, the Shapiro Professor of Public Interest Law at George Washington University, is a member of USA TODAY’s Board of Contributors.
June 18, 2012
Yet another article on “socialism” by an author who doesn’t know what socialism is. Prohibition was a conservative idea, and the states that had a hard time letting go of it are the ones that decided to support the grand bourgeoisie by selling their products while putting the petty bourgeoisie out of business. Democratic socialism controls corporations, not people, and a true people’s economy would educate people on safe distillation without concentrating toxins, so that they wouldn’t be forced to buy a commercial product, although we’d also own our fair share of the commercial enterprises. Libertarians think the market will make them free. It hasn’t happened yet, and I don’t see it happening in the future, as the market takes over more and more of the government and turns what’s left of democracy into full-blown fascism.
Harry Skip:
Socialism is very expensive, just ask Greece and Spain.
Too bad Greece and Spain dont have oil or some other natural resource which could be exploited to pay the bills.
I wonder if the amount per pupil spent on education includes all of the expenses such as athletics, building construction, teacher pensions, and that sort of thing? Or do the school districts low ball it for obvious reasons?
If the actual cost is $15,000, $18,000 or $25,000 when all costs are included is public education that good a deal? Facility costs, employment costs, etc. should be included in the per year pupil cost. It is in private schools.
I will say that my son got a very good education in our public school system, as good as from any private school but he was in the IB program which is not available to all students. Just like anything else there are good public schools and bad public schools.
Too bad Greece and Spain had their economies wrecked by the same property bubble created by the CDS debacle that is currently ruining our economy and Greece’s problem was compounded by a corruption problem that makes ours look quaint and they were lying about their national finances to meet the standards required to participate in the Euro.
Harry Skip:
Socialism is very expensive, just ask Greece and Spain.
Too bad Greece and Spain dont have oil or some other natural resource which could be exploited to pay the bills.
Tony C:
I dont think the working poor should have to pay taxes at all. None, nada, zip, nil. They should get a pass on property tax, sales tax, social security tax, medicare, unemployment, etc. if they make under $40,000/year and have children.
So we are on the same page.
Idealist
“Cool, and what advice could you provide as to what wine to drink with hard smoked salmon?”
Don’t drink wine with smoked salmon. Drink Rauchbeer, or Alaskan Smoked Porter (Alder is THE smoke for salmon, which is what Alaskan uses). If the smoke isn’t overwhelming, you could probably do a saison, or maybe a wit beer, the fluffy carbonation of the wheat beer, would actually cut the fat of the same really well.
“Or italian wines in general compared to French wines as to character and price? ”
There’s a huge variety in both quality and character in both country’s wine production. They both take their local appellations VERY seriously, and so you’ve got a wide wide variety of micro-regions and styles.
“Could you compare the different single malts?”
The one’s I’ve had yes, the others I could make an educated guess about.
“What qualities of grappa can you inform on? What is grappa made from?”
I never like grappa, and honestly in the two and a half years I sold booze, I sold maybe 4 bottles, 3 of them to the same guy, and I never had anyone ask me more than “what’s that?” I think if you’re the kind of person that drinks grappa, you’re the kind of person that already knows about it. I do know however that it’s made from the left overs from wine making. It’s different than regular brandy because brandy ferments and then distills grape juice and grappa ferments and then distills the actual solid left overs from pressing the grapes for wine making.
“Want some stats, go look yourself. I’m not doing your work. ”
Here’s the thing, it’s not my work to prove or disprove what YOU said. It’s your work. If you don’t care enough about your views to do that, then why should I care what you say?
Seriously, I took the time to take your little test about my knowledge, because I made the claim that I knew about that kind of thing. Why on earth shouldn’t I expect you to live up to the same standards as me. You make a claim, YOU prove it. That’s how conversations work.
I thought it was boat speed and assumed catamaran.
Now realize it was perhaps wind speed. We use meter per second here.
Jude:
“That’s why, before leaving for the Outerbanks on Friday, I bought my liquor at home, in MD… Free market at work.”
Which outer banks? Carolina? Heard of Ocean City? Niece was invited for a sail on large catamaran there over the weekend. Too much wind. 27 knots registered, if it is to be believed.
Gyges,
Cool, and what advice could you provide as to what wine to drink with hard smoked salmon?
Or italian wines in general compared to French wines as to character and price? Could you compare the different single malts? What qualities of grappa can you inform on? What is grappa made from?
Want some stats, go look yourself. I’m not doing your work.
I was comparing results socially, which we all know is invidious. Sweden and whatever state you choose.
Apples and oranges. We belonged to the vodka belt. Had to get us over to beer and wine instead.
Succeeded. Would NOT have with private sales.
And we know who pisses ón themselves when legalization of marijuana is named.
Here, you can’t advertize more than a name, only a name of a whisky or wine, etc.
Ho lying pictures of swank people or young hots looking tough. Where are the pictures of liver cirrhosis, broken homes, etc. Time for cancer pics on cig packets. And Afghanistan children slain tending goats. Time for reality.
CLH,
Thanks for the heads up. JT is too smart ie subtle for me often.
Idealist, I don’t think they were calling it socialism per se. They were applying the socialist definition used by the R. in the US, which is, uh, not quite in touch with reality. Prof. Turley was subtly making fun of the idiots who equate socialism with any kind of government control of any resource, which is facially silly, and then calling them on the hypocrisy of utilizing those same types of government control that they oppose to maintain complete control of a commodity. In other words, government control is bad except when it prevents sin…
Idealist,
Well, so far it’s my experience against your… um, what exact evidence did you provide? You want to talk stats. Fine. You’re making a claim (that is, state run liquor stores prevent “neighbors barfing on your lawn, the bums panhandling for a drink, or other social ills”), so it’s your responsibility to prove it’s true.Let’s see a comparison between states with state run liquor stores and those without.
I don’t quite get what you mean by “beverage advice,” but when I worked in liquor stores, I was expected to be knowledgeable about the inventory, and be able to give recommendations. In fact, I don’t really follow what you’re saying in general, so let me just ask: Do you think that states should directly sell liquor? If so, why?
Now personally, I don’t see a single problem that the state sale of liquor solves that simple regulation of liquor (like pretty much every other consumer good) doesn’t.
Everyone else,
Relevant in the discussion is the history as to WHY we view liquor in a different light than beer and wine. It goes back to the founding of the prohibition movement in the US (which actually goes back to the founding of the country). Back then, water wasn’t safe to drink. Beer and wine however were. EVERYBODY drank beer, wine and cider, because it wouldn’t kill you. If you had a big enough estate, you brewed your own, if not you bought the excess. At any rate, calling for the removal of beer and wine would have been a no go, but liquor… well that was much more workable. It wasn’t “Food” like the other stuff, it was medicine at best and devil water at worst. So hard liquor was able to be demonized in a way that the non-refined stuff wasn’t, and that particular bit of rhetoric still shows up in the oddest places. Like states with different rules for selling liquor and beer.
Harry Skip Robinson – you’d never convince the government of that, because even if you did, why would they care? In any state that has a percentage tax, higher prices = more money for the state.
That’s why, before leaving for the Outerbanks on Friday, I bought my liquor at home, in MD… Free market at work.
idealist707 1, June 19, 2012 at 3:10 pm
Gyges,
So one persons experience proves something???
==================================
Only anecdotally.
It may be time for Five Husbands Vodka, which I am sure Mika of Morning Joe would imbibe.
Gyges,
So one persons experience proves something???
We’re talking about social systems, and that means stats.
Do your liquor stores give advice on beverages? Never saw it in an ABC store either.
Social systems are an expression of public perceived need. Requires goals, methods, etc and following up, cutting out things no longer worth it. Find me a liquor chain or store that does that. And getting a system that provides what private profit interest will provide to do it BETTER is the challenge.
The politicians are actively working on these things too. When and if we can drink after 12AM in the parks?
What can we do to lower the amount of traditional boozing at school year end parties, public and private, through education and information?
Do we go around town in near-age groups, hip uniformed, to hand out condoms and advice? And call for the “woozy-wagon” to take them to the de-toxification clinic.
GeneH,
One hundred percent. Best so far. Frame it. I will.
@Skip: That is not true. False. The problems with public schools are a result of idiots cutting their funding and leaving them without the resources or personnel they need. The people doing that are idiots because they do not understand that an educated workforce repays society in economic productivity at ten times the investment, or they are selfish jerks and sociopaths that do not really care about anybody but themselves.
Actually Tony we have one of the highest costing public schools systems in the world. The administrators and operational costs are thought to be utilizing all the money. The public school teachers unions are also the second largest campaign contributors to the Democratic Party. If some of the poorest people in India, can somehow send their children to private schools, despite the availability of free public schools, your claim of both the necessity and and reason for the lack of quality of public education is not defensible. The more money we spend on socialism the worse our society will become and that’s the one fact you cannot deny.
Idealist,
“It’s a simple question if you want the neighbors barfing on your lawn, the bums panhandling for a drink, or other social ills. Is requiring prescriptions for drug purchase socialist?”
You know what’s odd? I live in a state where all liquor stores are privately owned and operated, and have most of my life. I’ve never had anyone puke on my lawn because of alcohol consumption.
There’s a difference between regulating a substance and selling the substance.
@AY: I do not think government should be in business for a profit. Ever. I think government operations should be break-even or run at a loss, run by government employees with civil service wages from top to bottom, CEO to janitor. There is no need for any civil servant worker to be earning more than about what a military General or Congressman earns a year, or to get bonuses, perks or anything else, other than a fair retirement package.
Operations intended to run at a loss (like welfare programs, free schools, free roads, free military protection, free law enforcement, free firefighting) should be funded by fair taxation, operations intended to break even with fee-per-use charges (like the post office or building inspection) should have any shortfalls covered by government bond-type loans that must be paid back by raised prices (increase the cost of a stamp), and any surpluses returned in the form of reduced prices.
I think of government as the un-business, they should do the jobs that the vast majority of us do not want to be done for a profit, because the profit inevitably creates a conflict of interest.
I think the incessant demand among some to run government “like a business” is asking for precisely the wrong thing, it is asking the government to be as corrupt, corner-cutting and self-serving as possible: Just like the profit-obsessed corporations we simultaneously complain are ripping us off and out of control.