Virginia Is for Lovers of Liquor Monopolies

by Jacob G. Hornberger
Nov. 26, 2014

A Virginia court recently sentenced 26-year-old Daries Lamont Coles to five years in jail for violating Virginia's drug laws. He joins a long line of other people who have met a similar fate in the decades-long war on drugs.

Meanwhile, the State of Virginia is celebrating the 80th anniversary of the Virginia Department of Alcoholic Beverage Control (VABC), a monopoly agency that has the exclusive privilege of selling liquor to people in Virginia.

The Virginia judge who sentenced Coles to prison would undoubtedly cite the damage that illicit drugs do to people. But whatever damage such drugs do, they pale to insignificance compared to booze. The World Health Organization says that nearly 4 percent of all deaths are related to alcohol. Those deaths include injuries, cancer, cardiovascular diseases, and liver cirrhosis.

Given its monopoly status as Virginia's liquor seller, the state of Virginia is actually one of the state's biggest drug dealers. Of course, Virginia officials would deny that liquor is a drug. But they'd be wrong. Booze is just as much a drug as marijuana, cocaine, heroin, and meth. And it kills a lot more people than illicit drugs do. In fact, I'm surprised that the state hasn't also monopolized the sale of tobacco, another deadly drug that kills many more people than illicit drugs do.

The VABC came into existence in 1934, when Prohibition was brought to an end. During Prohibition the government was waging a war on booze in the same way that the government today wages a war on drugs. During the war on booze, regular people like Daries Lamont were being sent to jail for selling liquor. That war was as big a failure as today's war on drugs, and it produced the same collateral consequences that the war on drugs has produced -- official corruption, gangs, gang wars, disrespect of law, violence, destruction of individual liberty, and a long line of ruined lives. That's why the American people finally said enough is enough and legalized booze.

After having helped to send people to jail for selling booze, the State of Virginia decided to become the only booze seller in the state, thereby replacing people like Al Capone who had been selling the substance during Prohibition.

But that's not all Virginia did. One option would have been for the state to sell liquor along with everyone else who wished to engage in such an enterprise. What the state did instead was make it illegal for others to compete against the state. If anyone dared to compete and persisted in doing so, he would be sent to jail.

That's what a monopoly is all about. It vests exclusive authority in the state or in a private business to be the exclusive provider of a particular service. If anyone tries to compete, law enforcement agents shut him down. Think of the Postal Service. That's a good example of a federal monopoly.

Why didn't the state of Virginia permit private entities to compete in the selling of liquor to the public? Isn't the answer obvious? Government agencies have a terribly difficult time competing against businesses in the private sector. That's because bureaucrats are more focused on rules and regulations than with making a profit. And they're more interested in pleasing public officials than with pleasing customers.

There's another reason that the state of Virginia loves its liquor monopoly. It enables the state to charge more for booze than what the price would be in a competitive free market. That, needless to say, means more money for state officials.

Not surprisingly, there is a lot of money involved in this operation. According to a news release dated September 16, 2014, from the VABC, Virginia ABC gross sales rose to $801 million, up $32 million over last year. That's the 16th consecutive record-setting year.

Imagine that: Sending people to jail for selling illicit drugs while making a financial killing by selling a substance that kills far more people. There are two good words that describe Virginia's liquor racket: immorality and hypocrisy.

If drug prohibition is ever ended, I predict that the state of Virginia will demand to be the exclusive, monopoly purveyor of heroin, cocaine, meth, and marijuana, along with liquor.
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Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News' Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano's show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.