Looking For Socialism? Try Buying A Drink In One of America’s State Controlled Liquor Stores

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Almost 80 years ago, the country repealed the prohibition of alcohol with the 21st Amendment.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

134 thoughts on “Looking For Socialism? Try Buying A Drink In One of America’s State Controlled Liquor Stores”

  1. I don’t want to get into the argument that seems to be blazing here, about what is “really” socialism and what isn’t. But I’m pretty much agreed with the Professor that the weird system of State stores in the 17 states that make alcohol sales a state monopoly are no advertisement for socialism.

    The fact that so many of these states are Republican-dominated only adds to the irony: bureaucracies of any stripe don’t like to give up their power and patronage.

    But if these states want to keep their inefficient and overpriced systems for alcohol distribution, I say let’s celebrate them. They help the economies of neighboring free-market states. Here in New Jersey, for example, we have lots of big liquor stores close to the Pennsylvania border. And those dismal State stores? Turn them into tourist attractions – label all their shelves in Russian, and invite people to go there for a look at what life was like in the Soviet Union…

  2. @Bron: As usual, you redefine everything to mean nothing. If sacrificing your life to save another is not “altruism” then there is no such thing as altruism. If “life is the highest good to a normal healthy living entity” but you aren’t talking about ITS life, then your statement becomes utterly meaningless, because it justifies anything. Using your idiotic logic I could justify putting you into slavery to feed 20 starving people, because using up your one life is saving 20 others; on balance you should be thankful for that opportunity to sacrifice because “life is the highest good,” buddy.

    The point isn’t whether firemen value life, the point is that they value the lives of others MORE THAN THEIR OWN.

    Even more, the point is that NORMAL people see that selflessness and willingness to sacrifice as heroic, brave, admirable, honorable, and worthwhile. That IS altruism, nobody sacrifices their life because that is their job; a job can be quit, and no contract can call for literal death. Soldiers, fireman, police and regular citizens sacrifice their lives for others out of altruism, not for reward, but because they are doing what is right even if it kills them.

    As for what most firemen would do: They would feed the hungry, shelter the homeless, and care for the sick, regardless of why they were hungry, homeless or sick, because most firemen believe in public service, and by their very job believe people that need help should get help regardless of why they need the help. They will risk their lives to save an idiot that started a fire by playing around even if they know he was responsible. They do not say, “Hey, you started it, we could get you out but we will let you die instead.” No, most firemen believe in saving people in trouble, no matter how they got into trouble.

  3. “On the contrary, the vast majority of people believe that those that sacrifice their life in the service of others have achieved the greatest good. A fireman that saves a child, or even dies in an unsuccessful attempt to save a child, is hailed as a hero, to be remembered, to be memorialized. ”

    Not on the contrary, the fireman saves the life because he values life, he values his own life and he values others lives. He also does it because it is his job, he has chosen to work in that vocation for selfish reasons, most firemen I know and knew as a kid loved what they did and they all had big hearts for people in trouble, they valued life. They weren’t altruists. Most would not go along with a person who could work not working and demanding money out of their pocket.

  4. @Bron: But people who can work and dont work and choose instead to live off the efforts of other people do not value their lives.

    What utter crap. Are you redefining the meaning of “value their lives?” Do you think they would not mind being killed? WTF are you talking about?

    You make the mistake of thinking that there are hordes of people out there that would truly be satisified with minimal life support. The socialist agenda is not to coddle anybody, it is to provide basic food, shelter, protection, and medical care for those that have none. When I was in the military, I lived fine for an extended periood of time in which “my” space amounted to about 40 square feet plus a public shower and restroom.

    2000 calories a day a multi-vitamin and a safe bed and closet with health care is not what the vast majority of people aspire to; if people CAN work they typically WANT to work. You are the one that underestimates humanity. I have no desire to coddle anybody, my desire is to provide the basic life support system and free education so nobody is crippled by lack of opportunity from the start.

    As for the tiny percentage of people (under 3% by Norway’s stats, and that includes the physically and mentally disabled) that would really stop working altogether, I am not worried, it is a small tax to pay. In the USA if you want to do that, commit enough minor non-violent crimes and end up in prison; same difference, plus TV. Why spend $60,000 a year on those people, plus the cost to citizens of the crimes they commit, when we could spend $10,000?

    There are not hordes of people that could work and do not want to work, there are, however, many people that want to work and cannot, because there just are not enough jobs in their region, and the cost to them of moving to some other region is more than they can afford, and more than we as a society can afford.

    You are the one treating people like animals or slaves, without any regard for their emotions or well-being you would subject them to torture, desperation, starvation, catastrophic illness that could have been prevented or cured, and separation from everything they know, all so you can save a selfish buck. You are a sociopathic monster.

  5. @Bron:

    So we can say that life is the highest good to a normal healthy living entity.

    On the contrary, the vast majority of people believe that those that sacrifice their life in the service of others have achieved the greatest good. A fireman that saves a child, or even dies in an unsuccessful attempt to save a child, is hailed as a hero, to be remembered, to be memorialized. A man that works two full time jobs to provide for his family is considered a hero for sacrificing his own interests for somebody else. Mother Theresa is hailed as a hero, police that die in the line of duty are hailed as heroes (and criminals that die in the pursuit of selfish interests are considered to have gotten what they deserve). It is those that suffer pain and death in order to save others, or save others from pain and death, that are hailed by the vast majority of people across the world as having achieved the greatest good, of having done the most with their lives, and are admired and held up as brave heroes and role models and martyrs worthy of remembrance.

    In war, when somebody preserves their own life at the expense of others, we call that cowardice, traitorous, and sometimes worthy of punishment by summary execution.

    The simple fact is that in human psychology, considering your OWN life more important than the lives of others is disdained as selfishness, cowardice, and vaguely (or actually) criminal and worthy of punishment or shunning.

    By that simple fact, your Aynish argument falls apart. To a NORMAL healthy human being, selfishness and self-preservation is an understandable and often forgiveable flaw, but the highest good is self-less bravery, it is doing the right thing by others regardless of the consequences to one’s own life, well-being, or fortunes.

  6. Tony C:

    I have thought some about your chastisement of me for saying if you dont work you shouldnt eat. Lets examine what you are implying by saying the contrary.

    All animals in nature must “work” for a living or they die, they must hunt or they must gather fruits and berries and nuts. They must, by nature, expend most of their energy finding food to keep them alive to be able to reproduce and continue the species. It is axiomatic in nature that if you dont find food you die.

    Death is not a good thing because all normal, healthy living beings go to great length to sustain their lives. So we can say that life is the highest good to a normal healthy living entity. And all healthy living creatures want to stay alive.

    In the case of man, work is our way of foraging and hunting, we go to work for the sole purpose of putting food on the table to sustain our lives just as animals hunt or forage for theirs. We do this to continue our lives which we consider a good, at least to us as individuals, if we are healthy. So work must be a good because it keeps us alive.

    [I am not talking about people who cannot work because of mental or physical disabilities, we as humans should provide for those people.]

    But people who can work and dont work and choose instead to live off the efforts of other people do not value their lives. If they did value their lives they would work and if we valued their lives we would tell them no food unless you work which is what all animals must do to live. It is the natural order. It is what living beings must do. It is what man must do to value himself.

    Self esteem is not conferred on someone by parents telling them how great they are, self esteem is earned by working hard and by becoming good at something, by learning a job to the best of your ability and by working to the best of your ability. Whether you dig ditches or are the head of a national construction company excellence in what you do should be your goal. Excellence in any work endeavor allows you to make more money which allows you to put food on the table and to pay for pleasures which are also a good.

    So I would say that wanting to feed men who dont work because they simply dont want to is disregarding their humanity and keeping them ill equipped to deal with life. You are teaching them subservience and turning them into sub-humans. In short you are denigrating human life and do not consider it a value worth working for.

    I might also add that the only animals who dont really do anything and who are sustained by us are those we use for food.

    You consider men to be pigs, nothing but subservient pigs to be used as you think best.

  7. I think Skippy and Bron are both sociopaths. The other guys are better able to deal with this than I am.

    1. @Matt Johnson – A libertarian by philosphy is not a sociopath as most of the entire are willing to make take substancial risks in the attempt to minimize the corruption of government so that everyone will be less oppressed by the various usurpations of individual rights. We care just a much about our country as you, we just think your method doesn’t work very well. Don’t get me wrong, I do want liberty, which is the cool thing. If I pervail say in a court hearing while trying to protect an individual right, so does everyone. If the protections of individual rights would be embarced by everyone, it would literally change the world. We would eliminate pure “waste” somewhere in the realm of 33% of the social expences of our society, because that is how inefficient and wasteful government is at doing things. There would be a better distribution of wealth as the majority would not have their wealth constantly confiscated by government. The wealthly would not be able to manipulate the government into providing themselves with the enormous benefits they recieve such as business welfare and $multimillion contracts. I can go on with the list of benefits minimal government and free enterprise promotes, but that should not be necessary. You should already know what they are as you are constantly buying things produces by the private sector and trade on a constant basis.

      Let’s take the health care issue being entertained by the Supreme Court. Manditory healthcare usurps the involuntary servitude clause as well as Article IX. What they are trying to do is force the younger people who don’t generally need much healthcare within the workforce to help support the the older people in society that do. We’ve WRONGFULLY PROMISED the older folks way to much and now we can’t fiqure our a way to pay for it. So let’s force people to pay for it even though it will put a bunch more people out of business. We’ve been doing that for 45 years and we all have seen what the ramifications are.

      We do not need these levels of taxation and regulation as it has bankrupted a huge percentages of our society. From what I understand approximately 40% of our society is literally insolvent so what ever we are doiung we need to stop and it is going to take huge changes to do it.

      I don’t here any significant ideas coming out of your side.

  8. Tony C:

    the cause of the $8k per year is the money lent to your nephew. No matter who earns $8k or who provided the $35k. You were lucky enough to be the one to whom your nephew turned for the funds.

    If your nephew didnt need the $35k then there is no need to pay it back.

    My pointless life is mine. And at least I understand that concept.

  9. Everyone embraces free markets when the government becomes a hindrance to their efforts to get intoxicated. Nice to see that realization finally coming around to prof turley.

    Now is he prepared to embrace that logic for all chemicals that people freely choose to put into their bodies or is his position on alchohol hypocritical?

  10. @Bron: As for Norway, Saudi Arabians and many others have FAR more oil wealth than Norway does, so did Iraq at one time, and you didn’t see THEM on the happiest country list.

    Norway lives well precisely because they have the right combination of socialist-safety-net that maximizes their capitalist opporutunities, no matter what the source of their wealth. The current budgetary constraint for Norwegian oil, based on the earnings of the fund, is that no more than 4% of the fund can be used for governmental programs of any kind.

    That is hardly the cause of them “living well.” Wealth for a country does not make citizens happy unless it is shared and typical of common citizens. Insurances and certainty make people happy, and a socialist life support safety net delivers that best.

  11. @Bron: No, they do not, and NO, it isn’t.

    The direct cause of my nephew’s success is my nephew’s idea and attention to recognize an opportunity when he saw it, and do the work (for free) to develop it and turn it into an actionable plan instead of an idle dream. My money was incidental, if I were too stupid to fund it, I am sure the guy I sent him to would not have been.

    I would say the direct cause of ME getting that $8K a year is that I was approached first, and the direct cause of that is my nephew’s knowledge that he can trust me to not screw him or take an unfair share.

    It has nothing whatsoever to do with where the money came from. I really doubt you will ever understand anything, Bron, and as a result you will live your pointless life convinced or bullshit that isn’t true. It must really suck to be you.

  12. tONY c:

    “In the case of Norway, you are simply wrong, you are denying the fact that before oil they were using taxes to support socialism.”

    All I am saying is they are living well today because of oil profits. Not because of government social safety nets.

    The direct cause of your nephew’s ability to provide you with $8k per year is your $35k consultancy fee.

  13. @Bron: If you trace things back far enough, we are all living off the stolen goods acquired by the outright murder (and slavery) of others; every single one of us. In America we took the land from the original inhabitants, and they were warring tribes that took their territories from each other.

    That is a ludicrous viewpoint. Money is money. In the case of Norway, you are simply wrong, you are denying the fact that before oil they were using taxes to support socialism.

    In fact, the natural resource they were exploiting is fishery; since fishery held the country together and allowed it to be defended, by your silly rules even having the oil is a direct result of fishery revenues. Russia’s oil is a result of forestry revenues. By your infinite-trace rules, all wealth everywhere is a result of hunting and gathering revenues, and contrary to your OWN Objectivist philosophy, those rules completely ignore the value added by human sweat and labor.

    You are being ridiculous; Norway would be socialist whether they had oil or not, because they were socialist both before and after (1969, when oil was discovered in the North Sea). Your entire argument is that you think they would not exist as socialists without some kind of free money from oil. But Norway was a socialist country for 150 years before they had oil, and that disproves your argument. You are wrong, the socialized safety net is not dependent upon found wealth in any way. That is lucky if you have it, but a socialized safety net can exist just fine based upon value-adding labor alone, which is how it existed in Norway for 150 years before oil was found.

  14. Bron,

    Did you not understand what I said in the slightest how governments work in relation to providing social services?

    Apparently so. That whole “learning” thing still isn’t working out so well for you.

    However, that isn’t going to stop you from trying to make the exact same false equivalence that skippy was trying to make, now is it?

    All forms of government except for anarchistic forms provide some form of social safety nets.

    Period. End of story.

    Not just totalitarian states, but almost every form of government including democracies provides social safety nets in one form or another.

    That is, every form of government except the anarchistic forms – like Libertarianism.

    Enjoy your false equivalence.

  15. Gene H:

    I think we can safely say that Nazi Germany was a totalitarian government so was Soviet Russia. They had a social safety net.

    There is a spectrum of totalitarianism with North Korea on the extreme end.

    1a : of or relating to centralized control by an autocratic leader or hierarchy : authoritarian, dictatorial; especially : despotic

    b : of or relating to a political regime based on subordination of the individual to the state and strict control of all aspects of the life and productive capacity of the nation especially by coercive measures (as censorship and terrorism)

    2a : advocating or characteristic of totalitarianism

    b : completely regulated by the state especially as an aid to national mobilization in an emergency

    c : exercising autocratic powers

    There is a good deal of latitude within that definition supplied by Merriam Websters on-line free dictionary. The state could range from North Korea to a paternalistic socialist country. It says especially it does not say exclusively.

  16. If you did not make the $35k from your consultancy you would not be able to enjoy an $8k per year return. The $8k came from your consultancy income which you invested in your nephew’s venture. You put your money to work for you. The $8k per year had a cause, your $35k and your nephew’s ability to make a profit but the $35k from your consultancy income made it all possible. Your nephew could be the Cornelius Vanderbilt of black-toppers but if he couldnt get that $35k it really doesnt matter what he could do.

  17. Tony C:

    “Then you look at it wrong. Norway doesn’t use oil revenue, they use the RETURNS on the oil revenue. The revenue is a natural resource converted to cash, and the principle is not touched. Saying they are living off of “oil revenue” is a lie, because it implies if they run out of oil the party is over. That isn’t true; Norway has done the sensible thing with a limited resource, they are converting it to cash and an inexhaustible supply of earnings, and utilizing only the earnings in excess of inflation.”

    What makes the investment income possible? Oil revenue, they are living on oil revenues. Just like the Kennedys are living on the efforts of old Pappa Joe Kennedy.

    Oil made it all possible. If there was no oil there would not be the same level of economic security.

  18. Nothing to add to this discussion, just wanted to thank the commentors on here. It’s been educational, to say the least! 🙂

  19. Bron,

    “what Harry Skip is saying is that totalitarian governments clamp down on industry and limit growth. Tax revenues are reduced and there is less money for social safety nets.”

    That’s not what totalitarianism means either. Totalitarianism consists of a political regime based on subordination of the individual to the state and strict control of all aspects of the life and productive capacity of the nation especially by coercive measures. If they don’t have enough tax revenues to pay for social services (which, btw, are rarely at the top of the agenda in a totalitarian state, the top item in most totalitarian regimes is feeding as much resources as they can steal to the dictator or oligarchy on top) then they simply take what they want at the end of a gun barrel and use it how they see fit – no taxation required. That’s how totalitarians roll.

    What skip was saying was simply a (double) false equivalence. No amount of rationalization will change that.

    Social safety nets of some sort are characteristic of any form of government except for anarchist forms. They are part and parcel of the mutually derived benefit of the social compact. For example, while it may not seem on the surface to be a social safety net, what is common defense? A mechanism of protecting a society from outsider aggression. What are programs to feed the hungry? A mechanism for protecting society from the negative health consequences and social strife created by famine. Both are social safety nets, one is just highly specialized and usually recognized as a function of government in its own right. There is no point at which social safety nets “become” a form of government. That’s nonsensical. Social safety nets are a function of most forms of government; a component, not the whole.

Comments are closed.