State Alcohol Laws- Arbitrary?

In this article, the writer expresses frustrations in what he believes to be “punitive and arbitrary laws” that the Department of Alcoholic Beverage Control sets in regulating the market for spirits. The author sites laws requiring establishments to regulate lighting and music volume, as well as requiring that food sales account for 45% of the total. The author expresses frustration with these laws because he only examines two of the rationales for regulation as mentioned in both Stigler’s article and in class. The author claims that the laws do not serve any public interest, and therefore are arbitrary.

George Stigler would disagree with this conclusion. Stigler claims that politicians are rational and use their power to benefit members of society. Stigler would say “every industry or occupation that has enough political power to utilize the state will seek to control entry” (emphasis added). Rent seekers, he would say, essentially pay politicians through votes and other resources in order to gain entry controls to the industry. The author is missing an essential piece of the puzzle. Just because heavy regulation is not necessarily in the interest of the public, or even owners of bars, does not make the laws arbitrary. A more interesting question for the author to address would be who is gaining from the heavy regulation. Stigler would say that some subgroup involved in the sale of alcohol is benefiting from the regulation because they "payed" to gain it. Another question the author could ask might be why bar owners, or an irritated public are not able to overcome the heavy regulation. The author briefly touches on this point when he mentions that “Virginia’s alcohol laws… give an inordinate amount of power to state bureaucrats…”. The author claims that bar owners are not able to challenge the regulations because they do not have the funds to fight. Stigler has a reasoning for this claim. Because benefits are concentrated to successful rent seekers and costs dispersed amongst the rest of the population, the public has little incentive to organize to combat the regulation. Bar owners would then be unable to change regulations because costs of organizing and lobbying are too high. Thus they fall in to the category that does not have enough political power to utilize the state.