One of the essential terms I teach students in economics is what Adam Smith described in his 1776 treatise “The Wealth of Nations” as “mercantilism”. Today, we also know it as “Rent-Seeking”, or by its popular name, “crony capitalism”.
In essence, it’s the attempt by a business interest to gain at the expense of competitors and consumers by placing artificial political barriers in the way of new entrants who might compete.
And now we have a perfect example of mercantilism, coming from one of the crony capitals of the world, Massachusetts.
Thanks to Baylen Linnekin, writing for Reason, we discover that certain Massachusetts politicians are very eager to use the baton of government to crack down on pop-up beer gardens.
If this seems fuzzy to you because you’re not familiar with the world of “beer gardens” in Massachusetts, you’re not alone…
Beer gardens have quickly reshaped and improved Boston's summer drinking scene. Since debuting in the city in 2017, they've become, says writer Jeff Bernstone, ‘an indisputable fixture of city life.’ Last year American Craft Beer dubbed Boston ‘America's Beer Garden Capital.’
Linnekin also explains that there are nine beer gardens in the city of Boston and about that number outside Beantown.
The draw of a beer garden is obvious. Drinking outside is the best thing about both drinking and being outdoors. Beer gardens are fun. A typical pop-up beer garden might run several nights each week, and feature games, music, food trucks, and—of course—beer. They're a great use of underutilized space. Beer gardens typically pop up in a vacant lot or a strip of public park. Many are family friendly. Kids and pets are often welcome. Others have embraced high culture. Tree House Brewing, the top-rated brewery in Massachusetts, is featuring musicians from the famed Berklee College of Music at its beer garden.
Sounds great on all fronts! I don’t even like beer, and I’d enjoy the vibe, especially given the fact that Tree House has been able to take advantage of marginal profits and add value via live music from some of those Berklee musicians. The talent pool is as deep as an ocean there.
But likely you sense the other shoe – a heavy political boot – waiting to drop.
And, as you might have sussed, the new market opportunities are seen as enemies by…
A number of vested restaurant interests, business people who’ve plunked a lot of cash on standing real estate and plunked their establishments on them. This means that they aren’t mobile, and they don’t like the competition.
Here comes the attempted mercantilism. As Linnekin notes:
The bill, An Act Relative to One Day Alcoholic Beverage Licenses, would curtail (and perhaps derail) the ability of many breweries to operate beer gardens in the state.
And guess who wrote it?
In fact, the licensing bill was written by Bob Luz, the president and CEO of the Massachusetts Restaurant Association (MRA).
Delicious! This is “supers-sized” mercantilism, brought to Massachusetts citizens by the president and CEO of the MRA himself.
The restaurant association is particularly opposed to the comparatively low cost of beer garden licenses—which run under $100 per day—and by the ease with which breweries currently may skirt a frivolous cap on the number of such licenses that can be issued to a business: "[B]reweries and others can skirt that provision by simply having different employees apply for the permits," Boston.com reported this week.
So, under the proposed statute:
No person, firm, corporation, association, or other combination of persons, directly or indirectly, or through any agent, employee, stockholder, officer or other person or any subsidiary whatsoever, shall be granted, in the aggregate, more than 14 such licenses in the commonwealth in a calendar year, or participate in decisions regarding such licenses or receive any percentage or fee derived from gross revenues in exchange for management assistance, or participate in any other action designed to effect common results of more than 14 license under this section in a calendar year.
Nothing like telling other people how to engage in market exchange.
And to add bitterness to this brew, a co-sponsor of the bill offers this incredibly insulting propaganda:
State Sen. Nick Collins, who co-sponsored the bill to kill beer gardens, says he introduced it to "jump-start a conversation about [beer gardens'] long-term sustainability."
Senator Collins might do well to understand that fatuous language doesn’t easily hide mercantilism, that “long-term sustainability” isn’t the concern of politicians, and it’s pretty easy to see how beer gardens sustain themselves by seeing how they profit or lose business.
And... by seeing that legislation isn’t a “conversation”.
Legislation is force. It is a threat of government violence against people if the people don’t act the way the government wants. The people who write the legislation get paid through the use of taxation, also known as government extortion/robbery, and there is no “conversation” involved there, either.
If a mobster enters a business and threatens the owner with violence unless he behaves as the mobster desires, that’s not a conversation, Senator.
And one final point. As the Independence Day celebrations approach, Senator Collins and anyone else in Massachusetts keen on passing this kind of government boot-to-the-head might want to brush up on Bay State history and how it ties-in with the Declaration of Independence.
See, Senator Collins, the various mercantilist statutes the British imposed on American colonists – laws like “The Stamp Act”, “The Tea Act”, and “The Intolerable Acts” -- prompted many people, such as John Hancock and brewer Sam Adams, to operate in the black market. They were catering to demand for all kinds of things, and if they got caught, you know what the Brits would do?
They’d ship smugglers to Nova Scotia to be tried in “Kangaroo Courts”, away from juries of their peers.
And, do you know why they did that, oh, Mass politician?
Because there was a long-standing (and still extant) Common Law right to Jury Nullification, allowing jurors to find a defendant “Not Guilty” if they think the law is wrong.
That’s why Jefferson included the unjust transport of colonials overseas for trial in his “long train of abuses” in the Declaration.
So, Senator, and anyone involved in pushing this bill, keep that in mind as you raise a toast to the Declaration on July 4th.
You’re in the same position as the King and Parliament in 1776.
Jefferson’s spirit might want to talk to you.
And Adam Smith might have a word…
If you’re willing to hear them over your fatuous and nonsensical rhetoric.