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Why Booze Bans Make No Sense — Neither Economically Nor Ethically

06/12/2016 8:40 AM IST | Updated 06/12/2016 3:05 PM IST
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First it was Gujarat, and now it is the Bihar government which has put a complete ban on the selling and consumption of alcohol. As if that was not enough, some people have now filed a PIL (Public Interest Litigation) in the Supreme Court demanding a nationwide ban on the sale and consumption of liquor. It is, however, important to analyze and understand the economics and ethical aspects of alcohol prohibition before such measures are taken. The people of India and, more importantly, the policy makers must know what consequences will flow from this ban. There are two key questions here: first, is such a ban ethically justifiable? And second, will it be successful in achieving its stated goals?

Stated objectives of prohibition

Before we answer the two questions, it is important to understand the stated reasons and objectives of alcohol prohibition in recent times. Post his electoral victory in 2015, the Bihar Chief Minister, Nitish Kumar said:

"My government is committed to fulfilling promises made to women during the election campaign. There was a surge of complaints from women about male members of the family resorting to drinking and creating nuisance, which also affected the education of their children."

Another rationale, invoking constitutional rights, can be found in the arguments put forward by those who are demanding a nationwide ban on alcohol:

The petitioner stated that the state was constitutionally obliged to protect human life and improve public health. It was prayed that the Right to health is an integral part of Right to life guaranteed under the Article 21 and Art 47 which levies the duty on the state to protect public health, should be implemented in letter and spirit by bringing about a ban on alcohol for its corrosive effects on human health and life.

An alcohol ban will turn what is essentially a health issue into a bigger criminal and social problem.

Now, the concern for others' health is a very noble thought and a virtuous goal to achieve and I also personally advise people not to consume anything that can spoil their physical and mental health, but the real question here is: will asking the state to impose a ban on alcohol achieve these stated goals? If we see the theory of alcohol prohibition and its history around the world and in India then the answer is a definite NO (those who want to know the detailed reasoning behind this answer can refer to Mark Thornton's important book, The Economics of Prohibition). Additionally, in the absence of structures and mechanisms to deal with alcoholism, this can aggravate problems.

Consequences

This brings me to the second question on consequences. Let me give a brief analysis of why this prohibition of alcohol sell and consumption in Bihar and in India will fail in achieving its stated goals. First of all, let us remind ourselves that since the beginning of their time on this earth the modern human being (Homo sapiens) has always resorted to use of one or the other kind of habit-forming substance/drink for religious/spiritual experiences or for simple recreational purposes. In India itself people in the ancient Vedic time were known to consume soma ras, which was kind of a hallucinogenic drink. Human history tells us that consuming such drinks was a natural and common practice—something that is natural to humans is impossible to remove by any governmental decree. The ancient habit is not going to die quickly or die at all because it is part of human nature. The government trying to impose its will—or the will of other individuals, such as those who filed the PIL—on people will always fail because it will go against the natural behaviours of many others. Such bans have never worked in history, and will not work in future too.

The fundamental issue here is of the ethical character of this ban. The Executive that is using the government machinery at its disposal to impose its will on others has no moral and ethical right of stopping people from voluntarily consuming whatever they want to. It is not a government's job to interfere in people's lives as long as they are not initiating physical aggression on others' lives or property. As the French classical liberal thinker Frédéric Bastiat said, "the law is a negative force which stops people from physically harming each other; it is not a positive force which can be used by an individual or a group of individuals like the government to stop others from living their lives according to their own wishes." This view resonates across a number of issues involving free will, liberty and right to live.

Apart from these problems of the ban going against the basic human nature and its immoral unethical character, other worse consequences may follow from prohibition. A basic knowledge of the laws of demand and supply will make this point clear; one need only look at the cases, across geographies, where prohibition was used as a tool to curb alcoholism.

In effect, the government policy will achieve the exact opposite of its stated goal.

First, in the aftermath of a ban, the supply of liquor will lessen, which will increase its price at a given demand. This higher price will make the liquor industry more profitable, which will now attract illegal sellers like bootleggers, liquor barons, mafias etc., into this market; given that selling prohibited liquor illegally is a very risky business and a crime, it doesn't quite attract upstanding citizens. No honest entrepreneur or ethically run business will now want to enter the liquor industry. The entry of criminal entities will turn a once-peaceful market into a violent one! Crime will increase. More people will go to jail for the victimless "crime" of consuming liquor. People who are addicted to liquor will have to find new sources of income to buy now-costly liquor, and for that some will resort to petty crimes like theft, robbery etc. If men were creating a nuisance at home before this ban, they will create a greater one after the ban to get more money for consuming liquor. If they were spending ₹100 on liquor before the ban, now they will have to spend ₹200 for the same! This means less money will be now left over for their children's education! In effect, the government policy will achieve the exact opposite of its stated goal.

Second, the quality of liquor will also deteriorate once the ban is imposed. Alcohol prohibition will make liquor more potent. Because liquor is banned, those who will sell liquor in the underground market will produce low quality liquor e.g., hooch. Many people will die consuming this hooch like we have witnessed time and again in Gujarat where liquor has been banned since the 1960s. Similar incidences are now being seen in Bihar too.

Third, the police force will now be busy in imposing this ban, leaving aside the important work of apprehending real criminals and protecting citizens. This means, real criminals will have more leeway to commit crimes.

All these means is that an alcohol ban will turn what is essentially a health issue into a bigger criminal and social problem. The central and state governments instead of making people's lives better will make it even worse! It is time we learn from history and experience.

(The author is Assistant Professor of Economics, Department of HRD, Veer Narmad South Gujarat University, Surat, Gujarat, India)

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