The Other Big Debate This Election Cycle — The ‘Wets’ vs. ‘Drys’

State monopolies on liquor sales don't create safer societies than states with privatized sales

Seventy-seven years after the end of prohibition the battle of the “wets” versus the “drys” is alive and well in those states considering ending their government monopolies over the sale of liquor. Though not as colorful as the epic battles between Al Capone and Elliot Ness, the underlining debate continues over whether government control of liquor sales has measurable societal benefits.

As one of 18 monopoly control states (only government sale of liquor allowed), this question is front and center in Washington State where not one, but two ballot measures are being considered on whether to end the state’s liquor monopoly.

A similar debate is occurring in the control states of Virginia and Pennsylvania.

Proponents of government control over liquor sales argue a state monopoly serves numerous social goals, such as preventing under-age drinking and reducing alcohol related deaths.

A central argument against private liquor sales is that ending government monopolies would lead to drastic social costs. For example, the National Alcohol Beverage Control Association argues that privatization of liquor sales would increase binge drinking and decrease road safety.

But a recent Commonwealth Foundation study looking at national per-capita alcohol consumption questioned the supposed link between state control and achieving social goals. The study examined rates of underage drinking, underage binge drinking, alcohol related road fatalities and DUI arrests.

Were the Commonwealth findings supportive of NABCA and other’s claims, then serious consideration should be given to slowing the privatization process. But the data paints quite a different story.

The study finds that while alcohol consumption in privately operated license states is slightly higher than in controlled states, “among controlled states, greater levels of control are actually associated with increased consumption rates.” Similarly, the rates of underage drinking and underage binge drinking “are virtually identical in license and control states.”

The study also found that states with private liquor sales don’t have any more alcohol-related traffic deaths than control states. However, “among control states, states with the most controls also exhibit the highest rates of alcohol-related traffic deaths – even after adjusting for differences in enforcement of DUI laws.”

Our own review of the data reveals that societal effects of drinking, such as the percentage of binge drinkers by state, is more closely correlated to regions of the country, rather than control versus private sales.

Essentially, the evidence suggests that state run monopolies do not result in any better social restraint than states with private liquor sales.

Another argument against ending government monopolies, particularly prevalent in the Washington State debate, is that treating liquor sales the same as beer and wine will lead to increased societal harm.

However, a 2007 study on binge drinking published in the American Journal of Preventive Medicine provides some sobering evidence against those claims.

According to the researchers: “Overall, 74.4% of binge drinkers consumed beer exclusively or predominantly, and those who consumed at least some beer accounted for 80.5% of all binge alcohol consumption.” B

Breaking down the numbers by beverage type, beer accounts for 67.1% of binge drinks consumed, compared to liquor at 21.9%, and wine only10.9%. The study concluded that beer accounted for the “most alcohol consumed by those at greatest risk of causing or incurring alcohol-related harm.”

This means that unless those arguing for government monopoly control of sales want to include beer and wine with the hard liquor restrictions, their arguments over societal costs ring hollow.

The “Great Recession” is forcing states across the country to reset their programs and focus on their core functions. The question for citizens in the 18 liquor monopoly states is whether selling liquor is a core government function or whether it is an outdated holdover from the prohibition era. Regardless of whether you fill your glass with private or government-supplied liquor, the answer is unlikely to alter alcohol’s impact on society.

Anthony Randazzo is Director of Economic Research for the Reason Foundation based in D.C. Jason Mercier is Director of the Center for Government Reform at the Washington Policy Center based in Seattle.

This column originally appeared at

Anthony Randazzo

Anthony Randazzo is director of economic research for Reason Foundation, a nonprofit think tank advancing free minds and free markets. His research portfolio is regularly evolving, and he maintains a wide interest in economic policy at both a domestic and international level.

Randazzo is also managing director of the Pension Integrity Project, which provides technical assistance to public sector retirement system stakeholders who are seeking to prevent pension plan insolvency. His research focus on the national public sector pension crisis has a dual focus of identifying the systemic factors that cause public officials to underfund pension obligations as well as studying the processes by which meaningful pension reform can be accomplished. Within the Project he leads the analytics team that develops independent, third party actuarial analysis to stakeholders considering changes to public sector retirement systems.

In addition, Randazzo writes about the moral foundations of economic theory, and is currently developing research on the ways that the moral intuitions of economists influence their substantive findings on topics like income inequality, immigration, or labor policy.

Randazzo's work has been featured in The Wall Street Journal, Forbes, Barron's, Bloomberg View, The Washington Times, The Detroit News, Chicago Sun-Times, Orange-County Register, RealClearMarkets, Reason magazine and various other online and print publications.

During his tenure at Reason he has published substantive research on housing finance, financial services regulation, and various other aspects of economic policy at the federal level. And he has written regularly on labor economics, tax policy, privatization, and Turkish-U.S. political and economic issues.

Randazzo has also testified before numerous state and local legislative bodies on pension policy matters, as well as before the House Financial Services Committee on topics related to housing policy and government-sponsored enterprises.

He holds a multidisciplinary M.A. in behavioral political economy from New York University.

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