By Chris Powell
Nothing this year is likely to illustrate the enduring corruption of politics and government in Connecticut as well as last week’s crowded six-hour hearing of the General Assembly’s General Law Committee about whether supermarkets should be allowed to sell wine, in addition to the beer they already sell.
The hearing’s focus was rather misplaced — as a conflict between two special interests, liquor stores defending their monopoly on wine against competition from the supermarkets.
While the supermarkets have the far superior case, they feel obliged to pretend that the additional competition won’t work against the liquor stores, as if competition doesn’t always work against those who oppose it instead of rising to meet it.
Lost in the battle of the special interests is the far bigger question: Why, even as Connecticut plunges into the marijuana business, does the state need so much regulation of the sale of alcoholic beverages?
Of course there is a public interest in preventing alcohol sales to minors and sales at times when drunken driving may be especially facilitated. But pursuing that public interest does not require restricting sales to particular retailers. [ITALICS] Any [END ITALICS] retailer is perfectly able to comply with the age and hour rules, as supermarkets already do with beer. So why not let them sell wine and liquor as well? Other states allow that and have survived.
Indeed, why not let liquor stores sell everything supermarkets sell? Why not let [ITALICS] all [END ITALICS] retailers sell [ITALICS] everything? [END ITALICS] What is the need for liquor licenses at all, or the need to limit licenses?
Liquor store operators used to claim that forbidding competition, including price competition, was needed for public health — to make an intoxicating substance more expensive. But of course the extra money was taken not by the government but by the store operators themselves.
The “need” for anti-competitive regulation is only to create and sustain a special interest that feeds on government patronage. For this regulation long has given the state high prices for beer, wine, and liquor and an absurd number of small stores with lousy product selection. Classical economics calls them rent seekers — an industry that survives only through government favoritism.
At least some of the liquor store operators and their tools in the legislature now acknowledge that the real issue here is whether the price of alcoholic beverages in Connecticut should continue to be propped up by government, and consumer choice diminished, to maintain the profitability of a small and uniquely privileged class of people.
That is, the small liquor stores can’t compete, so competition should be forbidden and its benefits forfeited.
Almost 50 years ago state Sen. Robert D. Houley, D-Vernon, not only saw how contrary to the public interest this was but also realized the issue’s political potential. Houley waged a campaign to repeal minimum prices for alcoholic beverages and to inject competition into the liquor industry generally, and he faced down a legislative hearing bigger than the one held last week — a hearing so packed with angry “mom and pop” liquor store operators that it had to be moved from the state Capitol to the Bushnell Memorial Hall across the street.
Houley had been a Marine and few legislators had his courage. Most legislators found his pursuit of the public interest quaint and sided with the special interest, figuring that pandering to the dozen or so store operators who reside in every legislative district would be better for them politically. So Houley’s legislation failed. But many people were watching, and though his district had been politically competitive, Houley became unbeatable.
That’s why the liquor issue is so distressing.
There is no good reason for letting the special interest continue to determine public policy at such expense, and the public remains largely persuaded in favor of change, as it was when Houley pressed the issue long ago. But today as then, if some special interest stands in the way, most legislators lack the courage to pursue the public interest even when they can perceive it.
So “rent seeking” prevails in Connecticut under a political rationale as old as Charles Dickens, who mocked it in one of his novels. If you make man-eating illegal, Dickens warned, you’ll starve the cannibals.
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Chris Powell is a columnist for the Journal Inquirer in Manchester, Connecticut. (CPowell@JournalInquirer.com)
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Chris Powell column 