Not so fast

Does Alex Tabarrok jump to a conclusion? He states the fact (and it does appear to be a fact) that a lot of moonshine is not particulary dangerous and that is

"...another example of market provided quality in the absence of government law."

Could be so.

But perhaps there are other possible explanations such as that
1. the pool of moonshiners who know "healthy" distilling techniques is deepened by the existence of legal producers
or
2. the existence of a licensed market offers consumers a standard by which they can judge "moonshine" and also an alternative place to buy
or
3. much of the "illegal" liquor is in fact coming from "legal" plants but is sold "out the backdoor" on the sly to avoid government taxation or perhaps as part of employee theft.

I have no knowledge of the moonshine world. But I am quite sure that the quality of un-permitted construction is higher because of the knowledge gained by carpenters etc who have worked on legal jobs and thereby learned correct and safe technique. Maybe something of the same "spillover" dynamic exists in other fields like brewing.

•••

Executive Summary of Moonshine Markets.

Comments

[Nagol Rotceps]

Boutique marijuana cultivation may be a useful example. Extraordinarily sophisticated processes have been developed for growing marijuana of desired strength, taste, aroma, and look. This has happened independent of any parallel legal industry. MJ cultivation is informed by horticulture in general, of course, but many of the processes are specific to cannabis alone. Of course, the post is discusses safety of black market products, while my example entails quality.

[TM Lutas]

Moonshine, properly speaking, is a term that comes from the fact that the producers are working outdoors at night, under the light of the moon. Illegal production that goes out the back door to evade the taxman would gain better profit by simply counterfeiting the tax stamp and slapping it on, selling it at a discount in regular stores like illegal cigarettes, a distribution network that moonshine is kept out of.

Moonshine also tends to be sold in concentrations of alcohol that are beyond legal limits. By your arguments, a bottle of perfectly legal Graves grain alcohol sold in Connecticut becomes moonshine when you cross the border with it in New York, which does not permit that purity of alcohol to be sold. I don't think so.

I can't see how the spread of legal distiller's knowledge is a non-market force at all. Perhaps those distillation tomes in the bookstore were written in a communal spirit before the nasty capitalists came along and sold it?

Also, I can't see any sane risk/reward curve that would justify moonshine increasing its fraction of dangerous output if it weren't for those darn legal distillers.

[JRoth]

Also, I can't see any sane risk/reward curve that would justify moonshine increasing its fraction of dangerous output if it weren't for those darn legal distillers.

And yet there are plentiful documented examples of poisonous moonshine being sold. You can argue that it only happens because it's illegal, but that's tautological: either an unregulated moonshine (heroin, whatever) market will inevitably include some amount of bad product, or the market will be regulated, and no longer be moonshine, but simply alcohol.

It seems to absolutely kill libertarians that government regulation is a concrete result of documented market failure, not simply some socialist plot. Bad meat = dead citizens = USDA. Patent medicine = dead citizens = FDA. Cocoanut Grove = dead citizens = BOCA. I'm sorry your market utopia doesn't work on Earth, but it doesn't, so just face facts and develop a grownup philosophy.

[limberwulf]

freedom = risk/opportunity,
restriction = safety/equalized poverty
I get somewhat tired of listening to people who's lives are run by fear. Ill take the risk if the opportunity comes with it. There is no such thing as a risk free life. Buyer beware, and seller too if he wants to stay in business. I dont need a safety net, I havent since I was a child. The grown up philosophers are the ones that take responsibilty for their actions and decisions, not pass them off to some group of people that want to govern everyone else and think that they know best. If I am too dumb to learn whether what I am eating is safe, then I need to grow up. If I am too lazy to take advantage of the opportunities that a free life grants me, then I deserve the consequences. The socialist concept is that of a child looking to a parent, or else that of an elitist thinking he is qualified to be a parent to the "common man". Well, no thanks, I dont accept the label of "common man," nor do I accept your label of yourself of knowing what is best for me. There are many arguments for and against FDA, USDA, OSHA, and every other regulatory mommy program of the government. I could go into those arguments, but its new years eve and Im going to get ready for a party. Perhaps I will revisit them if I find someone who can tell me what a "grown up philisophy" is.