photo credit: Tatyana Kildisheva
After years of flirting with various amounts of alcoholic prohibition, Utah created the Department of Alcoholic Beverage Control in 1935. This department is granted statutory authority to conduct, license, and regulate the sale of alcoholic beverages within the state.
This is a government-enforced monopoly that exhibits the same corruption and failures that all such monopolies inevitably produce. The most recent example is the loss of $300,000 in taxpayer dollars. Uncovered through a legislative audit, the revelation that the DABC has been subsidizing a debt-laden and bankrupt distribution company led Senate President Michael Waddoups to tell the department’s director that the loss “shows terrible management skills on your part….You’re the person responsible for this debacle.”
Those responsible for this debacle are Waddoups and his legislative cohorts who allow this moral hazard to exist in the first place. This is akin to a parent providing alcohol to his teenage son for a party with friends, and then blaming the son for drinking, driving, and causing an accident. While the teenage son made poor choices and shares blame for the damage, the ultimate responsibility lies with the parent who provided the opportunity for the damage to even occur in the first place.
When the legislature empowers a few bureaucrats to play fast and loose with taxpayer dollars, they cannot legitimately feign outrage when those individuals make poor decisions and abuse the misplaced trust they were given. This circumstance can be considered a microcosm of what we’re seeing at the federal level, where the Federal Reserve is creating a monetary moral hazard by throwing money at the banks and institutions which helped cause our current economic crisis, further perpetuating the problem. At some point, and unless the supply is cut off, the moral hazard will cause the system to implode.
The government’s monopoly over alcohol and intervention into the marketplace is a relic of the failed prohibition era and demonstrates the hypocrisy of any legislator who simultaneously supports the arrangement and also claims to champion the proper role of government. For under what rational argument can it be considered the government’s legitimate role to be involved in business, strong-arm potential competitors out of the market, and mark up the product by at least 86%? What does that nefarious arrangement have to do with securing individual liberty?
The DABC, and Utah’s corrupt control over an entire sector of the marketplace, is a stain on the fictional image that Utahns are somehow a liberty-loving, limited-government, self-reliant people. Rather than acting surprised at this audit’s findings and expressing frustration at the reckless teenager types trying to manage what the legislature has tasked them with, government officials should instead put their legislative pens where their alleged principles are and turn alcohol distribution over to the private market.