Strange Brew
Alcohol and Government Monopoly
Published on 1. May 2003
58 pages
978-1-59813-262-5 (ISBN)
Description
After Prohibition ended in 1933, many states passed laws regulating the sale of alcoholic beverages, now known as Franchise Termination Laws. Ostensibly intended to protect wholesalers from shady suppliers, and the public from the harmful effects of alcohol, these laws in fact created government-protected monopolies.
In Strange Brew, one of the first studies of this topic, economist Douglas Glen Whitman subjects these laws to critical scrutiny.
Strange Brew demonstrates that the "monopoly protection laws" in the alcoholic beverage industry reflect powerful special interests in the political process who use such measures to restrict markets, shield themselves from competition and consumer preferences, and set higher prices with relative impunity. It also shows how the notion that alcohol consumption is a "sin" in need of legal restraint substitutes the choices and moral judgment of politicians for that of consumers.
Strange Brew demonstrates that the "monopoly protection laws" in the alcoholic beverage industry reflect powerful special interests in the political process who use such measures to restrict markets, shield themselves from competition and consumer preferences, and set higher prices with relative impunity. It also shows how the notion that alcohol consumption is a "sin" in need of legal restraint substitutes the choices and moral judgment of politicians for that of consumers.
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05/2003
Independent Institute,U.S.
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Douglas Glen Whitman is a Research Fellow at the Independent Institute and Associate Professor of Economics at California State University at Northridge. He received his Ph.D. in economics from New York University and has taught at the John Jay College of Criminal Justice and the Institute for Humane Studies at George Mason University. His research areas of specialty include applied microeconomics, economic analysis of law, and game theory. Professor Whitman is a trustee of the American Parliamentary Debate Association, and his articles have appeared in such scholarly journals as Journal of Legal Studies, Critical Review, and Constitutional Political Economy.
