Why privileges for liquor retailers?

How do Connecticut’s liquor retailers manage not to be laughed out of the discussion about the government regulation they demand for their business? After all, why should only liquor retailers enjoy laws forbidding price competition for their product, forbidding competition in hours of operation and obstructing entry to their industry? Why aren’t all businesses given these extraordinary privileges? The liquor retailers say price competition — that is, lower prices — should be outlawed because their product is dangerous. But it’s not so dangerous that they refuse to sell it and profit from it, and the higher price resulting from the outlawing of competition accrues not to the government, as tax revenue does, but to the retailers themselves.The argument made for barriers to entry to the liquor retailing business — laws and regulations requiring licenses for liquor retailers and limiting licenses to a strict ratio with any town’s population — is only self-serving. That is, the liquor retailers say that if anybody could get into their business anywhere at any time, they’d all be destroyed as liquor supermarkets took over. This is the grandest admission that the liquor retailers draw their livelihoods not from business at all but rather from a convoluted system of political patronage and welfare.State Sen. Andrew Roraback (R-30), running for the U.S. House of Representatives in the 5th District, delighted the liquor retailers by taking up their theme the other day. If you like what the Walmart department store chain did to Main Street, Roraback said, you’ll love what big liquor retailers will do to small ones. But then what accounts for the success of Walmart if not better prices, product, service and selection? In the name of job creation, the law could impair prices, product, service and selection in any industry. Imagine the employment that could be generated if earth-moving equipment was outlawed and construction and landscaping could be undertaken only by people using shovels, or, better still, if both earth-moving equipment and shovels were outlawed and digging could be done only with teaspoons. But along with all that job creation would come enormous unnecessary cost.Yes, if ordinary competition is legislated for liquor retailing, supermarkets likely will replace many mom-and-pop liquor stores. But so what? Jobs lost at the mom-and-pops will be liquidated into savings for consumers, who then will have extra money to spend elsewhere, supporting different jobs. That’s the whole idea and proven success of competitive markets. That’s how progress has been financed from the beginning of time — through efficiency.Besides, the big department store chains didn’t kill Main Street. Many Main Streets still thrive — Middletown’s is a good example — with different merchants and service providers rather than with the department stores of old because the local population is still mainly middle-class, industrious, self-supporting and lives nearby. Main Streets fail where the local population is mainly impoverished and dependent — Hartford’s is a good example. All that is an area of public policy quite separate from liquor regulation.Perhaps sensing that there are no good specific defenses for Connecticut’s welfare-style system of liquor retailing, some legislators argue that the system should be preserved just because it’s not fair to “change the rules in the middle of the game.” Of course that is a rationale for preserving any mistaken policy forever. If even supposedly free-market Republicans hide behind such a rationale to avoid offending a special interest, Connecticut can give up on competing with the world.Connecticut’s liquor retailing system has survived so long only because the caliber of the state’s legislators is so low, with so few able to perceive and courageous enough to articulate the public interest over the special interest — and because the people of the state themselves don’t demand better. Maybe Gov. Malloy’s prodding on the liquor issue will make the difference this year, but as he is already weakening his proposals to try to mollify the liquor retailers and timid legislators, this most parasitic special interest well may prevail once more. Chris Powell is managing editor of the Journal Inquirer in Manchester.