Classic Example

Conservatives tend to bring up the argument about the proper role of government in discussion of policy. If we start with an acceptance that there are some public goods which the market would not provide then we begin to get what government should be involved in appropriately. Some obvious ones are security through police at the local/domestic level and defense at the international level. Roads aren't generally a profit-making activity but are critical to an economy. As you go on, however, you begin to find serious issues with what government should be regulating.

A traditional sticking point in Bible Belt states has been alcohol. I still tell the story about my first experiences in Texas. Realizing I was in a dry county was a bit of a shock. Experiencing the first kabuki dance of a restaurant which offered a "Family Room" and a "Club Room" was worse. The club, of course, was a section that required membership. Membership was free. One free membership authorizes unlimited guests. The club required jackets for men. Oh, no jackets? Well we've got a closet full for you to wear right here.

The good news was that with few bars or night clubs around the natural gathering place for all of the local young ladies with any sense was the bar at the AFB Officer's Club. Ahh, the good ol' days.

But there is always the question of protection of society. The ravages of drunken driving, alcohol abuse, control of accessibility by age, licensing of facilities all have mandated some form of state alcohol regulation.

Here we come face to face with the truism of any regulatory power offering the inevitable potential for abuse. Few agencies are so routinely abused as state Alcoholic Beverage Commissions. When I lived in Alabama I first encountered the state-run liquor store. The only place to legally buy alcoholic beverages was the Alabama ABC store. What did they carry? A few standard brands were on the shelves surrounded by an array of the most unusual liquor bottle labels I'd ever encountered. This was rot-gut masquerading as quality booze. Why was it there? The state beverage commission was charged with determining "the taste of the people of Alabama."

Apparently the taste of Alabamans was determined by which liquor distributor was willing to kick back the biggest bag of money to the ABC.

Then there was New Mexico. The trick there was that the total number of liquor licenses in the state was limited by law. The only way to open a liquor outlet was to find a license-holder going out of business. The licenses were transferable and the supply-limited market meant the prices soared. All approvals for transfer flowed through the state ABC.

Last week I posted the emerging crackdown on personal shipments of decent wine into Texas. There is no doubt possible that this is driven by local wholesalers leveraging the ABC against competition.

Now take a look at this for an example of micro-regulation without rationale:

Micro-Brewer Fights Name-Calling and Restriction

Seriously? What societal benefit derives from keeping Joe Bagadonutz Beer from calling itself Ale rather than Lager? What justification can there be for keeping a butcher, a baker or a craft-beer-maker from selling his product on his premises in a responsible manner?

Somewhere there has to be a line drawn against government regulation and the corollary of kickbacks and political pay-offs.