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Just Another Protection Racket

Just Another Protection Racket

July 1, 2002

Conservatives and other free-market types spend a good deal of time complaining about the current state of the Constitution. They point out the many ways that the noble document has been interpreted to permit government to exercise powers that would have horrified the Framers.

While many of these complaints are valid, let’s not forget that the Constitution has succeeded spectacularly at one of its central aims – to enable all Americans to weave themselves together into a vast free-trade zone. From its ratification in 1789 until now, the Constitution has stood firm against attempts by state and local governments to interfere with their citizens’ rights to purchase goods and services from Americans living in other states.

Staying true to this beneficial constitutional tradition is one powerful reason for Virginia’s state government to stop telling us Virginians that we can’t purchase alcoholic beverages directly from out-of-state sellers.

If I want a bottle of Pinot Noir from the Willamette Valley in Oregon or a Hermitage from the Rhone Valley of France, I am not allowed to purchase it directly from the vintner or from a wine wholesaler. Instead, I must buy it from an in-state retailer who, in turn, must have purchased it from a wholesaler.

Freedom-lover and wine-connoisseur Thomas Jefferson would be drunk with rage.

By protecting wine retailers and wholesalers in Virginia from the competition of out-of-state sellers, this restrictive legislation increases the price that we Virginians pay for wine and shrinks our selection. The only winners are the retailers and wholesalers whose profits swell as a result.

Freedom-lover and constitutional-stalwart James Madison would soberly explain that one of the chief reasons for calling the 1787 Constitutional Convention was to craft a commerce clause to prevent just such state-level protectionist interference with the rights of Americans to engage in peaceful and voluntary exchange with each other.

Of course, the State of Virginia denies that its motives are protectionist. Its real motivation, allegedly, is to ensure that alcohol is distributed responsibly in the Old Dominion and that minors are prevented from going online, lying about their age, and, after a few clicks, having a shipment of Chateau Pichon-Longueville-Lalande or Mad Dog 20/20 delivered to their doorsteps.

But this excuse holds no water, Perrier or otherwise.

First, if the state government was really motivated by a concern to protect children, it would not permit Virginians to purchase and order wine directly from Virginiawineries. But such in-state direct purchases are legal. I can’t order wine directly from Caymus in California, but I can order it directly from Prince Michel in Culpeper. Unless the politicians can explain why Virginia wine is less harmful to minors than is non-Virginia wine, the “we-want-to-protect-our-children” argument is nothing more than a ruse.

Second, there is a way to protect children without simultaneously stomping on the freedom of Virginia’s adults – namely, the General Assembly can simply require that each shipment of wine delivered to a Virginia address be signed for by an adult. Problem solved. No teenager ordering wine from or directly from other out-of-state sellers will be permitted to receive the wine, but no adult wishing to buy wine from out-of-state sellers will be stopped from doing so by power-drunk politicians.

Not surprisingly, the state government also worries that direct purchases of out-of-state alcohol will shrink the tax revenues it receives from alcohol sales.

Perhaps it’s true that restoring Virginians’ freedom to buy alcohol directly from out-of-state sellers will make it more difficult for Virginia’s revenuers to rake in tax money. But this concern is beside the point. The whole point of constitutional protections is to keep government power limited. If such limits cause the state government to suffer lower tax revenues, so be it. That’s central to the idea!

Furthermore, the Commerce Clause contains no exception to protect tax revenues. The straightforward purpose of the Commerce Clause is to protect each and every American from state-government-imposed “protectionism.” Because each state government could legitimately claim that restricting out-of-state imports would enable it in a wide variety of circumstances to gather more tax revenues, the Framers of the Constitution wisely included no such exception.

Fortunately for Virginians, U.S. District Judge Richard Williams ruled in April that the state government’s ban on direct purchases from out-of-state sellers is unconstitutional. But the Commonwealth of Virginia has appealed. All Virginians – indeed, all Americans – should raise a glass to Judge Williams and hope that his ruling in Bolick v. Roberts is upheld on appeal.