Tuesday, June 14, 2005

Boiling the frog one degree at a time

Babble on.

Not content to monopolize the supply of alcholic beverages on Prince Edward Island, the province's Liquor Control Commission is now setting minimum prices for drinks at Island bars. I kid you not.

The commission has introduced minimum prices of $2.85 for a beer and $2.35 for a shot.

"There was overconsumption. We have inspectors out there every night, and they are the pulse for the commission to guide their decisions," said Wayne MacDougall, chairman of the liquor control commission.


There's much evidence that increasing liquor prices decreases the abuse of alcohol. Even if one is willing to concede that discouraging alcohol abuse through price manipulation is a perfectly reasonable function of government - and at that my libertarian readers begin digging up the boxes of rifles and ammunition buried in their backyards - this is still a bad policy.

Instead of simply bumping the price at the point of supply, which they're perfectly capable of doing, the Liquor Control Commission has instead chosen to determine an independent business owner's profit on each drink sold. Think about it: the bar owner is forced to buy beer, wine, and spirits from the LCC at set prices, and then forced to sell it to customers at LCC-mandated prices. Oh, technically, a proprietor could bump the price of booze higher than the government minimums, but we all know how long that would last in the face of cheaper drinks at the establishment just down the street.

The problem with nanny-state intervention in issues like this one isn't just that the state is trying to nanny, it's that the state can never, ever nanny enough to keep each and every citizen safe and tame. And so it struggles to plug each inevitable hole in the societal pen with yet more regulation and control, chipping away at individual free choice until it exists in name only, and spawning a myriad of unintended consequences that each require their own government interventions.

Here are the only results of this policy that I'd be willing to bet money on: the minimum drink pricing will reduce alcohol abuse, but not enough for the mommy-knows-best LCC; and the next measure they impose from behind the fig leaf of "the public good" will be even more intrusive and insulting than the last.

Babble off.

11 Comments:

At 1:37 PM, Blogger Paul said...

Good thing nobody on the island abuses alcohol at home, eh?

Still, what do bars pay for their beer on the island? I came out of the beer store (Ontario) yesterday having paid $43 for a total of 24 cans of beer (12 Cdn + 12 Bud, if you must know). It wouldn't be worth a pub's time to sell them for $2.

 
At 3:21 PM, Blogger The Tiger said...

Prediction: more bathtub liquor.

 
At 3:56 PM, Blogger Greg said...

Don't they have a good conservative government in PEI? Haven't they read the memos from headquarters?

 
At 3:57 PM, Blogger Greg said...

P.S. Ben is right. PEI has a thriving bootlegging industry and this will stoke it mightily.

 
At 3:59 PM, Blogger wonderdog said...

Seems kinda silly considering that serious alcohol abusers don't drink in bars, because it's already too expensive.

Seems less like an effort to curb serious alcohol abuse than to curb drinking, period.

 
At 1:02 AM, Blogger The Tiger said...

Just because a party calls itself "Conservative", it doesn't mean that it believes in limited government.

That's why The Road to Serfdom is dedicated to "the socialists of all parties".

 
At 10:45 AM, Blogger Matt said...

Note that Grandma MacDougall doesn't say, "There was fights" or "There was vandalism" (though there may well have been) -- he says "there was overconsumption".

Exactly what interest this harpy has in how much booze I swig, if I'm not going to interfere with anyone else's safety or property, is uncertain.

I wish that in these situations his ilk would at least take a stab at articulating what state interest they're attempting to further.

 
At 3:52 PM, Blogger deaner said...

"I wish that in these situations his ilk would at least take a stab at articulating what state interest they're attempting to further."

Yup. While they're at it, they might like to discuss why it is a state interest - presumably your medical insurance carrier has an interest in reducing the cost of your future cirrhosis. It's not apparent why the insurance carrier needs the coercive powers of the state to do that job, instead of the power of market-based competition to see that health-nazis (and other busybodies) either rein in their interest in my health or produce demonstrable benefits, such that I will be willing to tolerate their intrusions in order to avail myself of their services.

Cheers,

Dean

 
At 4:36 PM, Blogger Babbling Brooks said...

Deaner, the state is our medical insurer in the Great White North.

 
At 12:48 PM, Blogger deaner said...

Ummm....

Yup - that was my point, Damian. So long as the state is the provider of medical services, they can justify (or at least rationalize) any amount of interference in our personal lives. Bike Helmets? Mandatory - saves neurological theatre dollars after an accident; Seat Belts? Ditto; Smoking? - prohibit and discourage (while retaining the tax revenues) - reduces cancer and oncology expenses; Liquor Policy - as for smoking; Fatty Foods? - discourage (taxes are next) to reduce coronary care costs - the list is literally endless.

I have seen every one of those arguments made in support of intrusive policies. Hell, I agree with them - from the point of view of an underwriter - they all proceed logically from the assumption that the insurance provider has the right to request (or impose) modification of behaviour that affects the risk he is underwriting. Underwriters certainly have that power in non-health markets, although it is usually expressed in pricing and policy terms rather than in public policy pronouncements - this just shows up the different powers available to insurers and governments on the one hand, and the implicit assumption in the health care system that all insureds must pay the same premium.

If this argument is sound but leads to an unacceptable outcome, then we have to re-examine the premise of the argument - which is that governments (ie you and me)should be in the health care business. That is what I meant by suggesting that not only should the government identify what state interest it is trying to protect in such mattters, but why it is a state interest. Frankly, I don't expect governments to back away from health care simply because the logical consequence is an unwarranted intervention in the lives of their citizens. First, governments (or their employees) are either not that sharp, or are not willing to follow logic where is leads them. Second (and the explanation of the willing abandonment of logic by some governmental employees who are awfully sharp) - governments like to interfere in the lives of their citizens. It's what they do. It's why they exist. Far from seeing this as an argument against state health-care, they see it as an argument in favour of greater interference!

Cheers,

Dean

 
At 10:25 AM, Blogger Steve said...

Alcohol consumption may or may not go down.

I predict that bar owners, precluded from competing on the basis of price, will find other means of attracting customers. Such marketing tactics might include free food and games and renovations to make their establishments more attractive.

Consequently, the possibility exists that new approaches may attract more and different customers, and even lead to increased alcohol consumption.

 

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