Liquor Licenses and Government Scarcity

It is self-destructive for any society to create a situation where a baby who is born into the world today automatically has pre-existing grievances against another baby born at the same time, because of what their ancestors did centuries ago. It is hard enough to solve our own problems, without trying to solve our ancestors’ problems.--Sowell

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Despite China’s juggling, the dollar is, and will remain, the reserve currency. Try visiting Costa Rica with Chinese renminbi. Or bitcoin. China is our factory floor, though it’s now contracting. I’m convinced manufacturing will eventually move to India, once they sort out the socialist mess the British left them.--kessler


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Liquor Licenses and Government Scarcity

Under rules that have been in place since Prohibition ended in 1933, the state limits the City of Boston to approximately 1,200 licenses to serve alcohol. That is far too few for a city with 700,000 residents and tens of millions of annual visitors, so the demand for liquor licenses long ago outstripped the supply.

As the shortage of licenses has grown steadily more acute, their market value has grown more extortionate. The prevailing price in Boston for a license, typically purchased from an establishment going out of business, is now $600,000.

It's a system rooted in bigotry. With the repeal of Prohibition, the Yankee-dominated Legislature didn't trust Boston's Irish politicians to regulate the city's bars and restaurants, and imposed a stringent cap on the number of establishments where alcohol could be served. In the decades since, the artificial scarcity induced by the Legislature has become notorious.

Jacoby's solution: clone every liquor license in Boston into two liquor licenses, freely transferable and unrestricted. By that means, every owner of a license in Boston would become the owner of a second license, which could be disposed of as the owner wished. It could be used to open another restaurant or bar, sold to a new owner, donated as a gift, or retained for future use. The market value of liquor licenses would quickly descend from the stratosphere. But existing licensees would be compensated by the doubling of their holding.
--from Jacoby