Antony Davies & James Harrigan: Data disprove arguments against liquor privatization
Published: Saturday, July 28, 2012, 9:04 p.m.
“Nothing can be said to be certain, except death and taxes.” Ben Franklin, the most famous Pennsylvanian, wrote these words in 1789. Had he lived today, he might have added another item: the regular challenge to Pennsylvania's state stores.
Every few years a Pennsylvania legislator dares to challenge the state's control of alcohol markets. And every few years calls for privatization fail spectacularly. Case in point: In June, House Majority Leader Mike Turzai introduced a plan to get the state out of the liquor business. Turzai's plan called for selling 1,600 liquor licenses to private vendors. Some estimates claim the plan could have raised $2 billion for Pennsylvania.
Predictably, the proposal fell as soon as it was introduced. The House barely discussed the matter and no vote was taken. The message for Turzai and his supporters (including Gov. Corbett) is clear — when it comes to Pennsylvania's alcohol markets, state control is here to stay.
The recurring alcohol debate raises two larger questions:
Why does Pennsylvania maintain an alcohol monopoly? And why do our legislators fight to keep it despite the fact that 60 percent of Pennsylvanians support privatization?
Proponents of alcohol control argue that we need the state involved because alcohol is bad. If that's true, then why do they argue that the state should sell alcohol? Pennsylvania should outlaw alcohol altogether just as many towns and counties across the United States have done.
Further, the data show that states that operate alcohol monopolies actually have more on-premise and off-premise alcohol establishments than do states that leave alcohol sales to the private sector. In other words, the free market actually places fewer alcohol sellers on the streets than does the state.
Not wanting to advocate across-the-board prohibition, proponents of state control then argue that we need the state involved to keep alcohol out of the hands of some people, notably drivers and minors. Again, the data are a problem.
To take two examples, look at New Jersey and Tennessee, both of which have fully privatized their alcohol markets. The percentage of traffic fatalities due to alcohol is 50 percent higher in Pennsylvania than in New Jersey. The incidence of underage drinking in Pennsylvania is 36 percent higher than in Tennessee.
The Mackinac Center for Public Policy recently began a website that allows you to compare social outcomes for states that control their alcohol markets to states that don't. Regardless of the social outcome, the data show no relationship between alcohol controls and improved social outcomes.
Having lost the nanny-state arguments, proponents of alcohol controls lately have been falling back on the argument that state stores provided a necessary source of revenue.
But the data is no friend here either.
In 2010-11 the Pennsylvania Liquor Control Board earned a paltry $50 million for the state. Almost any licensure plan could eclipse that number. That licensing was barely considered is telling.
Every argument in favor of state stores fails. State liquor control will not make us more sober, safer or richer. Preserving jobs isn't even a viable argument since private vendors would need to hire experienced workers, and who better than the former state store workers?
The only thing left to justify the Liquor Control Board is that it keeps union bosses employed in their quarter-million dollar jobs. And since those bosses deliver votes, our legislators are very interested in keeping them happy.
Pennsylvania has held this tight grip on alcohol since the repeal of Prohibition in 1933. It is time to admit that there is a better way.
Antony Davies is associate professor of economics at Duquesne University and a affiliated senior scholar at the Mercatus Center. James Harrigan is a fellow of the Institute of Political Economy at Utah State University.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Host of Steelers veterans look toward career survival mode
- Early-morning snowstorm hampers Western Pa. commuters
- Steelers film session: Polamalu not at fault on long run
- 2-vehicle crash kills Ruffsdale man
- Monroeville police officer kills Freeport man in shootout
- Pirates notebook: Huntington narrows team’s offseason targets
- UPMC doctor killed trying to help at 50-vehicle pileup
- Expert: KO doesn’t mean ‘worst’ concussion for Pens’ Orpik
- I-70 closed in Rostraver Township after truck crash
- Young defensemen lift Penguins to win
- Ross man accused of assaulting gay man in Lawrenceville waives hearing