Eighty-Five years since prohibition, but have we learnt anything?

This Wednesday was a special day. In the Netherlands, Dutch children celebrated the coming of Sinterklaas (along with his controversial helper Zwarte Piet). Walt Disney would have celebrated his 117th birthday. It was also world soil day, apparently. But the 5th of December 2018 also marked a particularly special anniversary: the end of prohibition in the United States. Eighty-five years ago, the Twenty First Amendment to the US Constitution was ratified, officially repealing the Eighteenth Amendment banning the sale and transportation of intoxicating liquors. After thirteen years, American citizens could at last enjoy a drink, legally.

Today, prohibition is widely regarded as a colossal failure. Driven by pressure from the Temperance Movement, who saw alcohol and the drunkenness it causes as detriments to society. Alcohol was blamed for crime, disorder, and poverty. A ban on booze, it was seemingly thought, would protect drinkers from themselves, and society from their behaviour while under-the-influence.

Of course, this wasn’t the case. Rather than eradicating the American market for booze, it simply drove the import, production, and sale of drinks into the hands of bootleggers and mafiosos.

In fact, the black market for booze during the prohibition era was so vastly profitable that some have credited the ban with creating the modern mafia. The total control over the market for alcohol provided a great incentive for gangs, such as those that came with the mass immigration from Italy in the late-1900s, to transform from small-time racketeers to firm-like, hierarchical organisations.

While these gangs certainly filled a gap with their black-market liquor and speakeasies, consumers and the rest of society undoubtedly suffered. Gangs, famously, preferred to treat friendly competition with a pair of concrete shoes than a new marketing campaign. Meanwhile, those indulging in illegal booze received no protection from the state, and no guarantee of what exactly went into their drink. While gangsters made millions, everyone else had to pay the price.

So, the eighty-five year anniversary of the death of such a disastrous attempt at social engineering undoubtedly warrants celebrating (perhaps with a drink?). But have we actually learned from the experience?

Not fully. In fact, you could read through the first half of this article, replace ‘booze’ with ‘cocaine’ or ‘cannabis’, and ‘Mafia’ with ‘Cartel’, and you’d have a pretty accurate description of the ongoing war on drugs.

Just like the Americans of the 1920s who fancied a beer, someone wanting to indulge in something harder today is left fully at the whims of organised criminals, and receives no help from the state. According to the drug policy alliance, almost 1.4 million people in the US have been arrested solely on possession charges.

Moreover, consumers of drugs today often have no guarantee that what they’re taking is actually what they paid for. While cities like Amsterdam now offer anonymous testing of substances, most people have no way if they just snorted a line of coke or laundry detergent.

Meanwhile, those selling on the black market enjoy participation in a global industry worth an estimated half a trillion dollars. While cartels and drug runners line their pockets, however, the communities around them have to deal with the violence and murder that comes whenever markets become criminal.

It’s probably wise to put in a disclaimer here: I am not advocating the use of hard drugs. Rather, I am advocating to follow the path of least harm. Just as the prohibition of alcohol created the mafia, bringing with it violence, more-dangerous products, and general suffering, the war on drugs, too, has done nothing to protect users or prevent crime; quite the opposite, in fact.

Eighty-five years ago the US government learned its lesson, and took the path of least harm. In doing so, they allowed users access to help and support and deprived criminals of their monopoly. While we’re starting to make progress, as countries like Canada, Luxembourg, as well as certain US states begin to decriminalise cannabis, there’s lots more work to be done before all the suffering brought on by the war on drugs can be ended.

Originally published at https://thebroadonline.com/eighty-five-years-since-prohibition-but-have-we-learnt-anything/

Province unveils its first economic outlook and fiscal review

THE SAULT STAR: The move for the extended hours is welcomed by the Consumer Choice Centre.

David Clement, North American Affairs manager for Consumer Choice Centres said “There is still a lot that needs to be done to modernize Ontario’s alcohol regulations. As we know from polling data, Ontario residents want increased access and for the province to move beyond its outdated model,” he said.

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Government to extend hours to buy booze

BAY TODAY: David Clement, Toronto-based North American Affairs Manager of the Consumer Choice Center said: “Expanded retail hours for alcohol sales definitely benefits consumers. Expanding retail hours is a good first step, but there is still a lot that needs to be done to modernize Ontario’s alcohol regulations. As we know from polling data, Ontario residents want increased access and for the province to move beyond its outdated model.

“Now that hours are expanded, it is time to allow for private retail sale in Ontario convenience stores, and to end the LCBO’s monopoly on the sale of spirits,” said Clement.

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Minimum alcohol pricing doesn’t work

Criticising the Welsh government’s decision to introduce minimum unit pricing for alcohol, Bill Wirtz argues it is possible to curb consumer drinking through education rather than the heavy hand of the law.

There should, however, be no ambiguity about one point: the consumption of alcohol does bring health risks that all consumers should be aware of. Educational practices should promote and enable responsible drinkers without falling into blatant paternalism the likes of which will infantilise the Welsh consumer of their consumer choice.

In an effort to combat alcohol-related deaths, illnesses and injuries, the Welsh government has approved a law in June that will see the introduction of minimum unit pricing for alcohol. Ahead of its introduction next year, this autumn the Welsh government will determine the minimum price companies will need to charge.

Wales is hardly re-inventing the wheel by introducing minimum-unit pricing. This year, the Scottish government introduced the measure after being held back by the Supreme Court for six years. The European Court of Justice in Luxembourg had ruled (in an earlier decision) that Scotland would only be allowed to set minimum pricing if it were able to prove that the measure would improve the condition for public health. However, the Supreme Court’s conclusion was that “Minimum pricing is a proportionate means of achieving a legitimate aim”. It would stand to reason that the “proportionate means” part of the argument was actually backed up by science, but the opposite is the case: no evidence points the fact that minimum pricing would actually reduce the consumption of spirits.

Empirical evidence from other EU member states has shown that large-scale meddling in the food market often backfires. This has been shown in the example of Denmark, which introduced a special fat tax on certain goods, only to repeal the bill (with the same majority) 15 months later. What had happened? Not only was the tax an additional burden on people with low incomes, it also incentivised consumers to downgrade to cheaper products in the supermarket (while maintaining their consumptions of fats), leading to no impact on health and minor impact on consumption overall.

The evidence in favour of minimum alcohol pricing is simply not here. In a 2013 review of 19 studies, only two found that a significant and substantial reduction in drinking rates in response to alcohol price rises – “and even these two showed mixed results”. Earlier studies found responsiveness to prices to be close to zero.” This 1995 paper found that the heaviest drinkers’ responsiveness to price changes was statistically indistinguishable from zero, though it was based on very old data from the 1980s. This more recent one found that hazardous and harmful drinkers (people who consume more than 17.5 units per week) had a very low response to price changes.

Minimum alcohol pricing is inherently a regressive measure, as it hits low-income households the most. The measure is therefore not only failing to achieve its own objectives, it is also unfair to a large chunk of the population While minimum prices try to prevent consumers to pivot to lower-quality products, we need to realise that funds are fungible. Nothing prevents consumers to spend less money on healthy food or other essential items, in order to afford their consumption of booze.

An even more concerning issue could be a new rise in black market alcohol sales, which are known to bring considerable health hazards to the table. Given this regressive measure hits low incomes the hardest, it makes it likely that cities like Cardiff or Swansea will see a massive rise in illicit alcohol dealers adding to the already existing black market presence for drugs.

There should, however, be no ambiguity about one point: the consumption of alcohol does bring health risks that all consumers should be aware off. Educational practices should promote and enable responsible drinkers, without falling into blatant paternalism, the likes of which will infantilise the Welsh consumer and their consumer choice.

In the Committee Stage 1 Report in March of this year, the committee on health and social care & sports writes: “We note, and agree with stakeholders, that enabling the minimum unit price to be determined in regulations could ensure its impact and effectiveness can be reviewed and updated (if necessary) in a timely manner.” Let’s hope that lawmakers will stay true to this promise, and change the policy if the scientific evidence contradicts them.

Originally published at http://commentcentral.co.uk/minimum-alcohol-pricing-doesnt-work/

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About Bill Wirtz

Bill Wirtz is policy analyst for the Consumer Choice Center, based in Brussels, Belgium. Originally from Luxembourg, his articles have appeared across the world in English, French, German, and Luxembourgish. He is Editor-in-Chief of Speak Freely, the blog of European Students for Liberty, a contributing editor for the Freedom Today Network and a regular contributor for the Foundation for Economic Education (FEE). He blogs regularly on his website in four languages.

‘No Additional Health Benefit’ Dail to vote on alcohol price hike’

SHEmazing: Bill Wirtz, Policy Analyst for the Consumer Choice Center has said that the act will have little impact on public health and an impact on the pockets of the most financially vulnerable.

‘The evidence in favour of minimum alcohol pricing is simply not here. In a 2013 review of 19 studies, only two found that found a significant and substantial reduction in drinking rates in response to alcohol price increases –and even these two showed mixed results.’

‘Earlier studies found responsiveness to prices to be close to zero,’ he said in a statement.

Wirtz also suggested that as well as there being potentially no health impact, the increased prices will disproportionately impact lower-income individuals.

‘Minimum alcohol pricing is inherently a regressive measure, as it hits low-income households the most,’ he said.

‘The measure is therefore not only failing to achieve its own objectives, it is also fundamentally unfair to a large segment of the population.’

‘While minimum prices tries to prevent consumers from pivoting to lower-quality products, we need to realise that funds are fungible.’

‘Nothing prevents consumers from spending less money on healthy food or other essential items, in order to afford their consumption of alcohol,’ says Wirtz.

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About Bill Wirtz

Bill Wirtz is policy analyst for the Consumer Choice Center, based in Brussels, Belgium. Originally from Luxembourg, his articles have appeared across the world in English, French, German, and Luxembourgish. He is Editor-in-Chief of Speak Freely, the blog of European Students for Liberty, a contributing editor for the Freedom Today Network and a regular contributor for the Foundation for Economic Education (FEE). He blogs regularly on his website in four languages.

Why Is the Nanny State so Popular?

FEE: Bans on plastic straws, soda taxes, bans on diesel cars, the crackdown on smoking, restrictions on alcohol consumption: the list of restrictions on people’s personal freedoms is steadily increasing. But why is the Nanny State so popular?

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About Bill Wirtz

Bill Wirtz is policy analyst for the Consumer Choice Center, based in Brussels, Belgium. Originally from Luxembourg, his articles have appeared across the world in English, French, German, and Luxembourgish. He is Editor-in-Chief of Speak Freely, the blog of European Students for Liberty, a contributing editor for the Freedom Today Network and a regular contributor for the Foundation for Economic Education (FEE). He blogs regularly on his website in four languages.

Is Moral Panic Justified? The Effect of Alcohol Privatization on Impaired Driving in Alberta

By Heather Bone, Research Fellow, Consumer Choice Center

Nearly every time the prospect of privatizing alcohol sales in Ontario is debated, there is a moral panic. If alcohol sales are privatized, the argument goes, alcohol will be more easily accessible, and there will be an increase in alcohol-related crime. In this research brief, I investigate the extent to which we should be concerned about an increase in social ills resulting from liquor store privatization by focusing on Alberta’s experience with impaired driving (due to limited data availability on other crimes like underage drinking). Thus, this paper answers the following question: Does the retail distribution system of alcohol affect impaired driving rates?

If you were to trust the Ontario Public Sector Employees Union (OPSEU), which represents the province’s 7,500 LCBO employees, you would assume that the relationship is positive – that is, that private liquor distribution systems bring about higher rates of impaired driving. A radio ad released by OPSEU argued: “In Alberta, you can buy alcohol at the grocery chains and in Alberta, it’s three-and-a-half times more likely that the person you pass coming out of the parking lot is driving drunk. Do you want to make that kind of a trade-off in Ontario? A little bit of convenience for a whole lot of pain and suffering.”[1] However, the data tells a different story.

Using data from Statistics Canada and the differences-in-differences econometric technique, I compared Alberta’s impaired driving rates in the four years after the privatization of their state-run liquor stores (in 1993) to their predicted rates in the absence of the policy change (using a computer-generated synthetic counterfactual composed of the impaired driving rates of Newfoundland and the Yukon – two jurisdictions which experienced no change in alcohol policy over the period studied). I found a statistically significant decline in impaired driving rates in response to the policy change. What OPSEU, in their analysis, conveniently omitted was that Alberta’s rates of impaired driving were much higher than Ontario’s prior to liquor store privatization.

My research suggests, if anything, that private retailers can be trusted more than government at keeping alcohol out of the hands of those who are most likely to abuse it. The key results are shown in Table 1 and visually depicted in Figure 1 below. The parameter of interest is the interaction between province and time (Alberta*After) which is negative and statistically significant, demonstrating that the policy change resulted in less impaired driving.

Table 1:

Impaired Vehicle Operation Offenses in Alberta per 100,000 people

Alberta -1.5

(37.2)

After -684.8***

(49.0)

Alberta*After -150.7*

(62.5)

Source: CANSIM Table 252-0013, Statistics Canada

***p <0.001, **p<0.01, *p<0.05

Figure 1: Impaired Vehicle Operation Offenses Per 100,000 People Over Time

Source: CANSIM Table 252-0013, Statistics Canada

The idea that Ontario, and other jurisdictions with state-owned liquor stores, need to choose between social ills and more consumer choice is a false dichotomy. While the costs of liberalizing alcohol sales are overstated, the benefits are clear. As a result of privatization, Alberta drastically expanded the range of products available to consumers from just 2,200 varieties of beer, wine, and spirits in 1993 to over 19,000 varieties today.[2] Ontario, and similar jurisdictions where the state is responsible for the sale of liquor, should, therefore, follow Alberta’s example and pursue privatization for the sake of consumer choice.

[1] OPSEU (2015), “OPSEU radio ads spark strong response from Alberta’s privatized alcohol sector”, https://opseu.org/news/opseu-radio-ads-spark-strong-response-albertas-privatized-alcohol-sector

[2] Milke, “Success of Alberta’s liquor store privatization a lesson for other provinces”, https://www.fraserinstitute.org/article/success-albertas-liquor-store-privatization-lesson-other-provinces

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About Heather Bone

Heather Bone is pursuing a doctorate in economics at the University of Toronto. Her research interests are broad, but generally relate to public policy. Right now, she is particularly focused on studying the economic functioning of cryptomarkets, including what they mean for consumer choice and how online drug markets are shaped by public policy decisions. For several years, Heather has been a dedicated advocate for consumer choice. She performed research to help advocate free trade while working in the Office of the Chief Economist in the Canadian Department of Global Affairs. She then went on to work as a legislative assistant in Ontario’s provincial government before working for the Manning Centre in Calgary, Alberta where she studied the economics of Business Improvement Areas. A list of Heather’s working papers and publications can be found on her website, heatherlynnbone.com.

Un jugement sur la bière qui ne fait pas de sens, déplore Gérard Comeau

ACADIE NOUVELLE: L’organisme Consumer Choice Center estime qu’un coup a été porté aux droits des consommateurs. Il souligne que dans sondage mené en juillet 2017 par l’institut Nanos 93% des Canadiens interrogés se disaient favorables à l’achat et au transport d’alcool entre les provinces. «L’idée d’avoir une nation et un marché est la fondation sur laquelle ce pays a été construit», argumente David Clement, directeur du Consumer Choice Center.

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

N.C. alcohol rules should join the 21st century

CHARLOTTE OBSERVER: Due to strict N.C. alcohol laws, online merchants such as Amazon can’t stock your favorite wines, craft beers or liquors unless they follow a very strict line of regulations.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

Irish tax on alcohol is enough to drive everyone to drink

TIMES OF LONDON: Consumer Choice Center’s Bill Wirtz is published in the London Times: “We need to recognise that consumers have the right to make choices. This implies that they make the choice to drink because they are allowed to enjoy themselves. Or at least while they are still allowed.”

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About Bill Wirtz

Bill Wirtz is policy analyst for the Consumer Choice Center, based in Brussels, Belgium. Originally from Luxembourg, his articles have appeared across the world in English, French, German, and Luxembourgish. He is Editor-in-Chief of Speak Freely, the blog of European Students for Liberty, a contributing editor for the Freedom Today Network and a regular contributor for the Foundation for Economic Education (FEE). He blogs regularly on his website in four languages.