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By: Glen Whitman
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.
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.
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