Wednesday, February 02, 2005

Boozeblogging, cont.

Cosh has some updates on privatizating liquor retailing. I'd say great minds think alike, but I frankly think our position is so obviously the correct one that no one should be owed any particular respect for holding it.

As he notes, if your French is anything functional, go see Laurent's brief take. Among other points, he confronts a thesis put out in the original article by Greg Flanagan, assistant dean of the University of Lethbridge's Faculty of Management:
"We can only surmise that higher price equals lower consumption, lower consumption equals less problems," said Flanagan, who wrote a critical report on liquor privatization for the Parkland Institute and the Canadian Centre for Policy Alternatives.

"And so the whole point of taxing liquor - because it's cheap to make - is to keep it artifically scarce by the tax and thereby having less people using it."

I have no problem with a management academic starting with the premise that higher price = lower consumption; if it's true of 99+% of consumer goods, it's probably true of booze. (That said, I think it behooves him to keep an open mind here - like cigarettes, the price v. consumption graph for booze is not the same as that of other goods).

But! I have a serious problem with a management academic working off the premise that lower consumption = less problems. Laurent puts it simply: " consommation d'alcool n'est pas nécessairement mauvaise." Per the caveat above, when a price cut increases demand at the margin, Dean Flanagan does not know who's buying more beer, and when the price goes up, he doesn't know who's switching to ginger ale (hint: quite possibly not that guy yelling at his girlfriend on the street).

Moreover, the verbiage Flanagan uses in the second quoted paragraph seriously damages his credibility [insert reference to temporary war-financing income tax here]. Keeping consumption down may have been the initial purpose of liquor taxes; now, it represents a side benefit, if anything. He lives in Alberta - what is he teaching his students? ("In 2001, there was a looming provincial budget crisis. Coincidentally, the government then determined that smokes and booze needed to be 'made scarcer' for the public good, and the tax revenue made up the gap, The (Happy) End.").

It's hard enough keeping the politicians and health bureaucrats out of my fridge. Please spare me a freaking economics professor trying to get in there too.

(Fun sidebar: here's Quebec's Bruce Gottfred on the selection offered by his province's private retail distribution network.)


At 4:43 p.m., Blogger Sacamano said...

Speaking of boozeblogging. Hit one of your numerous local neighbourhood (if you are an Albertan) or inconvenient regional booze stores (if you are not) before the State of the Union tonight. A couple of options.


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