Last month, while watching the news, I learned a startling fact about our nation, one of which I was completely unaware. The fact of which I am speaking is the allowance of state policies of Alcohol Beverage Control(ABC). A month ago, I had never heard the phrase Alcohol Beverage Control; I still would be in the dark about this policy if Virginia Governor Bob McDonell had not made the news by announcing a plan to bring the policy to an end.
What does Alcohol Beverage Control mean? Essentially, the 19 states that have ABC policies require state monopoly over the wholesaling and/or retailing of some or all categories of alcoholic beverages. At face value, this policy is shocking. There are 19 states where an entire industry is told by the government: you cannot sell your products, you must let the state sell them for you. This policy is counter-intuitive to free market economics. By definition, this kind of policy will eliminate any competition in liquor sales, drive up prices, and diminish selection. It is a wonder why any state would want to implement such a policy.
But alas, these results are exactly what supporters of ABC policies actually want! According to the Utah Department of Alcoholic Beverage Control:
"The purpose of control is to make liquor available to those adults who choose to drink responsibly - but not to promote the sale of liquor. By keeping liquor out of the private marketplace, no economic incentives are created to maximize sales, open more liquor stores or sell to underage persons. Instead, all policy incentives to promote moderation and to enforce existing liquor laws is enhanced."
So, the purpose of these ABC policies is to eliminate profit from the liquor industry. As clearly, a profitable liquor industry promotes a decadent society, right? Disciples of sound logic might disagree.
There was once a time in this nation, when taking part in a profitable industry was considered a good thing. Private companies manufacturing and selling products actually help society! Maximizing sales, thereby increasing profit, allows companies to create more private sector jobs. In fact, holding a job is an important factor which may help determine whether an individual will develop a problem with alcohol abuse.
Furthermore, there is no evidence to suggest that having state control over alcohol sales will eliminate or even curb underage sales. In a privately owned liquor store, store clerks have incentive to check for identification. That incentive is this: if they fail to check for age, they are in threat of getting the liquor license taken away, and having the business shut down. When the state takes away the incentive of store workers to check for age, underage sales will likely rise. The state then does not have the incentive to enforce rules against underage sales. This is because, if it were known that ABC takes away incentive to check for IDs and increases underage sales, the idea of ABC policy itself would be called into question.
Thankfully, somebody in politics sees the flaws in these policies. Governor Bob McDonell has just received support from The Virginia Wineries Association in his bid to end ABC policy and to privatize the liquor sales industry. Privatization will cut government waste and will allow for the expansion of private industry, which will promote the creation of permanent private sector jobs.
However, it's not just the fact that privatization will be good for the local economies. It's also about the Rule of Law. Why should the alcohol industry not be allowed to pursue profit? Isn't that the purpose of having an industry in the first place? As long as alcohol is legal, why should wineries and breweries be treated any differently than jewelers and mechanics? All provide a needed service or good(needed as defined by the existence of it's demand in a free market, not by the state's endorsement). All make profit; and by creating wealth, all promote job growth.
If for only the sake of sound economics, let us hope that more states follow the direction of Governor McDonell in returning to the Rule of Law with respect to beverage sales. It would be shameful for more states to go down the path of taking over private industries in the hopes of changing the behaviors of the industry's patrons.
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