Lynne Kiesling

Upon reflection, I think I may have been a little too harsh on Justice Souter, given that the transcripts are not out yet. He may have been referring to “you” as the state of New York getting ripped off on tax revenues.

I stand by my claim, though, that patronizing paternalism is one of the legs of the wholesaler rent seeking stool. I reserve judgement on the full tenor of Justice Souter’s remarks until I can read the full transcript.

Lynne Kiesling

For more on the Supreme Court’s hearing of oral arguments in the interstate wine shipment case, please see Todd Zywicki’s handicapping of how the Justices are likely to vote, and Dahlia Lithwick’s Slate column that offers a spirited and heady summary of yesterday’s arguments.

The one that really chaps my shorts is this little exchange:

Justice David Souter asks how state authorities can audit wine producers if they cannot “drop in and monitor” them, suggesting “it’s one thing to do that in-state, but another across the country.” Bolick responds that the state’s elaborate three-tier regulatory system for out-of-state wineries doesn’t allow for auditors to just drop in and monitor sales, either. …

Michigan says it needs these different sets of rules to protect minors, “but that is belied by the fact that they allow 40 Michigan wineries to ship directly to the homes of residents.” Not that anyone really thinks minors order their wine on the Internet. They get it at the Chevron, like I do. Sullivan [Kathleen Sullivan, arguing for the interstate commerce team] adds that out-of-state audits are hardly impossible; in order for out-of-state wineries to be licensed, they must agree to submit to state jurisdiction. She tells Souter that in his “home state of New Hampshire” wineries are asked to “submit monthly records and samples.”

“But maybe you’re getting ripped off,” replies Souter.

We then later hear that New York wants to reserve the right to perform such audits on out-of-state wineries, even though they don’t bother to perform such audits on the in-state wineries over which they currently have such jurisdiction! If that’s not a red herring for protectionism, I don’t know what is. Oh, wait, yes I do … it’s the minors buying Screaming Eagle Cab over the Internet! And the auditing is typically counting the numbers of bottles and ensuring that those numbers correspond to reported numbers. Sounds like a customs/tax audit, not one that has anything to do with the well-being of consumers directly.

But what really chaps my shorts about this exchange is Justice Souter’s presumption that the mission of the regulation of alcohol in New York State (and, by extension, the Court, if they agree to uphold the interstate barriers to shipment) is to protect consumers from getting ripped off. We can all go on the Internet and research most of the wines that are produced in this country, and the world for that matter. We have access to vast quantities of evaluations of wines from the wineries themselves, from wine publications, from wine blogs published by wine lovers, sommeliers, wine shops, random economists who love wine, etc. If we combine all of these sources with the fact that enabling Internet purchases extends the market in such a way that competition would minimize the probability that we would get ripped off, where the heck does Justice Souter get off saying that we need some regulatory agency at the state level to protect us from being ripped off? Are we so incompetent, so unable to understand our own preferences and the choices available to us that we need the paternalistic protection of some set of bureaucratic functionaries to mediate them for us?

My response to that is this: with all due respect, sir, bite me.

How dare he be so condescending and paternalistic! Of course, that mentality is one of the three legs of the stool on which the protectionist rents sit (the other two legs are the 21st Amendment and the power dynamic between wholesalers and state regulators) that the wholesalers currently enjoy and are striving to maintain.

I hope that his voice is not decisive, and that the ultimate decision reflects the power and self-knowledge that consumers acquire through participating in competitive interstate markets.

Lynne Kiesling

I am glad to see from Virginia Postrel’s recent post that Mark Edmundson is being introduced to Hayek, albeit at perhaps a later stage in his lifelong education than may be befitting the power and importance of Hayek’s ideas.

However, I must pick one nit that always grates on me when I see or hear it. The interviewer characterizes Hayek’s Road to Serfdom as “a bible for people on the conservative political side”. I really must object to this characterization, and I’d like to think that Hayek would too. Indeed, one of his most powerful essays was titled “Why I am Not a Conservative”. Note that although the essay was written in 1960, it still resonates. I offer as evidence the first three paragaphs:

At a time when most movements that are thought to be progressive advocate further encroachments on individual liberty, those who cherish freedom are likely to expend their energies in opposition. In this they find themselves much of the time on the same side as those who habitually resist change. In matters of current politics today they generally have little choice but to support the conservative parties. But, though the position I have tried to define is also often described as “conservative,” it is very different from that to which this name has been traditionally attached. There is danger in the confused condition which brings the defenders of liberty and the true conservatives together in common opposition to developments which threaten their ideals equally. It is therefore important to distinguish clearly the position taken here from that which has long been known – perhaps more appropriately – as conservatism. [NOTE: by "rational liberalism" Hayek is referring to that arising from the constructivist Cartesian tradition.]

Conservatism proper is a legitimate, probably necessary, and certainly widespread attitude of opposition to drastic change. It has, since the French Revolution, for a century and a half played an important role in European politics. Until the rise of socialism its opposite was liberalism. There is nothing corresponding to this conflict in the history of the United States, because what in Europe was called “liberalism” was here the common tradition on which the American polity had been built: thus the defender of the American tradition was a liberal in the European sense. This already existing confusion was made worse by the recent attempt to transplant to America the European type of conservatism, which, being alien to the American tradition, has acquired a somewhat odd character. And some time before this, American radicals and socialists began calling themselves “liberals.” I will nevertheless continue for the moment to describe as liberal the position which I hold and which I believe differs as much from true conservatism as from socialism. Let me say at once, however, that I do so with increasing misgivings, and I shall later have to consider what would be the appropriate name for the party of liberty. The reason for this is not only that the term “liberal” in the United States is the cause of constant misunderstandings today, but also that in Europe the predominant type of rationalistic liberalism has long been one of the pacemakers of socialism.

Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving. It may succeed by its resistance to current tendencies in slowing down undesirable developments, but, since it does not indicate another direction, it cannot prevent their continuance. It has, for this reason, invariably been the fate of conservatism to be dragged along a path not of its own choosing. The tug of war between conservatives and progressives can only affect the speed, not the direction, of contemporary developments. But, though there is a need for a “brake on the vehicle of progress,” I personally cannot be content with simply helping to apply the brake. What the liberal must ask, first of all, is not how fast or how far we should move, but where we should move. In fact, he differs much more from the collectivist radical of today than does the conservative. While the last generally holds merely a mild and moderate version of the prejudices of his time, the liberal today must more positively oppose some of the basic conceptions which most conservatives share with the socialists.