This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
The editorial "Drinking Problem: Utah liquor laws make no sense" (Our View, Dec. 27) states "Willing sellers of a legal product are effectively prevented from doing business with willing, adult buyers for reasons that seem to make sense to members of the Legislature but to few others."
However, this makes perfect sense to any good economist. My graduate school advisor George Stigler won the 1982 Nobel Prize in economics for, among other things, developing the economic theory of regulation. Stigler demonstrated that governmental regulation is a "good" in that it responds to the laws of supply and demand. He showed that much governmental regulation exists because the demand for this regulation comes from the industries being regulated.
In economics, "regulatory capture" occurs when a governmental agency created to regulate an industry for the public good instead advances the financial interests of the industry it is charged with regulating. This is yet another form of government failure.
In this case, it is clear that the key winners of government regulators restricting the supply of liquor licenses is — surprise — existing restaurants and taverns. Those existing restaurants and taverns are thereby able to charge more for their product.
Phil Palmintere
Park City