Government Monopolies Even Liberals Can't Love

In a post yesterday, I said that it would be absurd for the federal government to produce its own brand of cola, not because doing so would make us all less free, but because there's just no need. Well lo and behold, today I find out that the state of Pennsylvania, where I used to live, has its own brand of mediocre wine, called Table Leaf. It's manufactured by a winery in California, but sold through state-owned Pennsylvania liquor stores. Does that seem nuts? Well, it starts to make sense when you recall that in Pennsylvania, the state has a virtual monopoly on liquor sales through the stores run by the Liquor Control Board. So in addition to making it incredibly inconvenient for you to buy a bottle of wine or other booze, they also are able to market their own house brand (at apparently inflated prices). In the decade I lived in the state, I never met a single person who thought the state monopoly wasn't ridiculous (polls show support for privatization to be strong, albeit not universal).

As the National Journal writes today, Tom Corbett, the highly unpopular governor there, might be able to save his political skin with an effort to privatize liquor sales. Last week the state House passed a privatization bill, though the outcome in the Senate is uncertain. Why I find so puzzling is that every Democrat in the House voted against it. It isn't as though a state liquor monopoly provides some essential service like health care that liberals feel everyone needs to be guaranteed, or that the private market has proven to be unable to satisfy consumers' liquor needs. Yes, there are government jobs at state stores that would be lost if the system were privatized, which is why unions are opposed, but there's only so far you can go in defending a system that is almost impossible to justify on any broader conception of the public good.

But as one longtime Philadelphia columnist told me, when you combine the unions' opposition and the fact that Democrats just hate Tom Corbett and aren't inclined to support anything he's pushing, that's enough to keep their opposition solid. There are also some other interests at stake. There have been allegations of corruption at the LCB, and one Philadelphian with good knowledge of the liquor situation whom I contacted points to another small but powerful constituency that likes the system as it is: "The powerful and connected cabal of top-shelf restaurateurs. They can get Special List Offering (SLO) wines, which we the public can't get in State Stores. Take away Steven Starr's and Jose Garces' monopoly on serving non-state store wines, then the strong BYOB movement in Philly becomes a tsunami."

So let it not be said that I'm a knee-jerk ideologue who'll just accept whatever passes for the left position on any issue that comes up. I still think there are places where markets don't work as they should, and government has a right and an obligation to step in. But when it comes to the distribution of alcohol, the free market (properly regulated, of course) can almost certainly do it better, even if in this case it's the Republicans who are pushing privatization.

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