As Capitol Hill speeds towards the August deadline for the debt ceiling, one must nervously start to wonder what a world with a government shutdown would look like. Of course, one need not look further than the Land of 10,000 Lakes, whose state government shutdown recently forced brewing behemoth MillerCoors to remove its golden liquid from bar taps after the company’s license to operate in Minnesota expired. Meanwhile, some Minnesota bars were forced to close their doors because they couldn’t renew their liquor licenses. With that being said, maybe — just maybe — we could be looking at the rise of underground booze again. And maybe that wouldn’t be such a bad thing.
Ignore the rise of the mafia and organized crime, as well as the bullets and destruction that came with it, and think about the benefits of a scenario where small entrepreneurs are forced to innovate underground. Frankly, many good things came out of the era of black markets and Prohibition. Take technology. Thanks to Prohibition, we have the wonderful sport of NASCAR and the technological advancements that come with the necessity of evading Barney Fife. Distillers were forced to invent new ways to store their spirits, in essence recreating the warehousing system and supply chain management. Furthermore, the successful moonshiner of the day utilized small, portable stills that could be quickly moved and hidden.
Next, consider the comparative advantage small businesses would have thanks to the immobility of large firms. Craft breweries such as Dogfish Head Brewing Company would be able to operate underground much sooner than Anheuser-Busch, thereby crushing any pseudo-monopoly in the libations market. Those that survived would be strongly branded, and would also become cultural celebrities. Just as the music industry once discovered new American heroes, such as John Lee Pettimore from the 1980s classic “Copperhead Road” by Steve Earle, the genre of Folk Americana might rediscover the value of sticking it to the man.
Ultimately, it was deregulation in the shadow market during the Prohibition era that helped inspire innovation. The beer market in colorful Colorado provides a delicious modern-day example of that same feat of the free market. Over the past 40 years, an increase of classically liberal liquor laws helped create the home of the Great American Beer Festival. Colorado produces more beer than any other state in the union, and its more than 100 breweries provide an overwhelming quantity of unique brews.
While the government might, and probably will, fail, the people it governs will not. Maybe this is the moment the federal government finally gets its fiscal house in order. But if not, innovation from deregulation could be the ultimate solution, and a bankrupt government is the ultimate in deregulation. So in the face of Washington, D.C.’s nauseating circus of political positioning leading up to a fast-approaching deadline, remember the words of the great Benjamin Franklin, “Beer is proof that God loves us and wants us to be happy.” That includes the beer of the bootlegger of yesteryear, as well as the potential bootleggers of the future — something we all might need if this “bipartisan” political headache continues.
Trey Malone is a Masters of Science in Agricultural Economics candidate at Oklahoma State University, and is currently interning at a free market think tank.