Even in the middle of a busy holiday season I find it is worth taking time to commemorate the end of Prohibition. Eighty-one years ago today the 18th Amendment was repealed and Americans could breathe–and drink–easy again.
For 13 years Americans were subject to the nanny-state experiment called Prohibition, during which the production, sale, and distribution of alcoholic beverages was illegal in the United States. But instead of a dry Utopia filled with rainbows and ponies, a violent black market emerged, jeopardizing the livelihood of many bystanders. This “Noble Experiment” had disastrous results with a host of unintended economic and social consequences.
Since the end of Prohibition, American entrepreneurs have embraced the economic opportunity a legal alcohol industry creates. But in many states hints of the Prohibition Era continue to exist. A recent Mercatus Center study examined how the three-tier distribution system, tedious labeling requirements, unfair franchise laws, and exasperating permitting processes “bottle up the market.” These laws benefit established brewers, distillers, and wine makers, creating an environment that makes it extremely difficult for new businesses to emerge.
There are a number of other burgeoning industries that endure cumbersome mandates controlling the distribution of goods and services. R Street recently published a report evaluating how a number of cities are imposing overbearing regulations on transportation network companies (TNCs) such as Uber and Lyft; companies that have improved services and reduced their own costs, thereby upending the status quo for local taxation structures.
Similarly, Tesla has changed the car sales model by working directly with consumers and cutting out the car dealership who act as a middleman. This new approach has angered many established interests who have pushed states such as Texas, New Jersey, and Michigan to block this revolutionary approach, protecting the middleman and thus limiting consumer choice.
So on this day let’s raise a toast to celebrate the end of the Prohibition experiment and look forward to a day when policy makers embrace the benefit of consumer choice across all industries.