The Commerce Clause and a Refreshing Glass of Delicious Beer

Courtesy Radley Balko, cops once again "just doing our job, ma'am."

So you can't sell this beer over state lines because "Sorry about the limited distribution, non-Wisconsinites, there are only so many hours in the day to make beer and we can only keep up with the local demand."

Uh huh. I see. Someone in a neighboring state took the time to drive out and buy your beer and transport it on their own time with their own nickel, and it what, it immiserates your other customers or something?

Look people, we have the Commerce Clause in the Constitution precisely to avoid interstate trade disputes like this. It's destructive enough to erect international trade barriers, but to prohibit commerce across state lines is not only economically inefficient, but contra the spirit of '76. The whole of the US is a free trade zone. That some local interests have managed to subvert the guarantee of commerce free of geographical constraints is embarrassing to anyone who cherishes the values of free association and free commerce.

This is Munger's ice truck story again, except I reckon nobody's cheering this time. And the media coverage wisely refrains from reporting what almost certainly happened to the beer in question: it either ended up dumped into a gutter somewhere or as gratis libation for a department kegger.

The thing itself is the [alcohol] abuse.

Pole Tax

On Twitter, E.N. Brown asks:

Hey, #sexwork twitter: Any thoughts on Nevada declaring strippers employees, not independent contractors, who must be paid minimum wage?
— Elizabeth N. Brown (@enbrown) October 31, 2014

Concatenated, EE friend The Honest Courtesan replies: "I think it'd be better to leave them as contractors, but stop TREATING them like employees & cash cows. The biggest problem is that clubs SAY they're contractors, then charge extortive fees & impose draconian rules."

A glib take: the Uber of exotic dancing already exists, and it is called "escort services." The physical property of the gentleman's club (614 Wharf Ave.) acts as one or more of the following:

• A clearinghouse: it provides a centralized location to match clients with performers. A customer might want something in particular, but the act of browsing helps define specific desires. Nota bene, this works both ways. In a club, performers can quickly visually screen customers before approaching for private dances. Call-in services oblige escorts to haul clear out to the site before assessing whether or not the client is tolerable.
• A (for lack of a better term) sacred space. This land is for a single purpose. There may be libation here, but this is not where we drink. There may be food here, but this is not where we eat. There may be music here, but this is not where we go to get our Creedence fix (brb, getting my Creedence fix). This place is the place to see undulating flesh. This place is the place to be on the business end of an inviting smile. This place is the place to feel a tempting, inviting touch, to smell forbidden musk, to hear gracious lies, to forget your loneliness for a little while. This place is a place of great glamour, in the old sense of the word: a gratifying, glimmering shared falsehood that lifts the weight of the world if but for a fleeting moment. It is an important, valuable space and should be kept as such. 
• A warren. This is the less-charitable interpretation of the "sacred space" interpretation. Like it or not, a great many people are simply disgusted by sex work, no matter how sanitized or discreet it might be. Zoning legislation keeps exotic dancing segregated from the God-fearing, pearl-clutching types. I see quite a bit of this here in my uptight Northern Virginia suburban corridor. I won't Google any addresses here at my work machine, but I'm fairly certain that I'd have to make my way clear to DC to see a dancer half my age swivel her hips in my direction. The median constituent in my neck of the woods has uttered a pretty unambiguous "nope" towards pole grindin'. 
• A place of ordinary business. Payment for services rendered, like at the dentist.

Club owners can get away with extorting dancers because of the aforementioned land use restrictions (and if you think Nevada is some sort of free-for-all when it comes to opening a strip club, you have another think coming). In the terms of econ 101, clubs provide a rent, and the rents are generated by way of the first three above bullet points. The value added to the client, to the performer, and to the community accrue to the residual claimant, which under the ordinary rules of organization is usually the property holder, the person with his (and don't kid yourself, it's usually a man) name on the title deed.

Typically, Ray keeps the [value] streams separate through multi-part tariffs. The cover charge and the drinks minimum goes to the club owner, the dancers get their tips (or some fraction after they tip out the DJ and staff [I presume]). The details almost certainly vary from venue to venue. The idea of treating dancers as independent contractors renting out space is actually quite a clever one—by paying a fixed charge to perform, the club obliges dancers to deliver de minimus that much value to the clients, thereby increasing the prestige of the club. Paying wages and heavily garnishing tips gives dancers an incentive to shirk (on the margin) and to hide tips (on another margin). Shirking and evading is evidence of a hostile relationship between owners, performers, and clients. This is less euvoluntary than a situation of mutual respect and service.

How to collect and distribute rents is a matter of negotiation. The minimum wage idea is perhaps one way to get to a just outcome, but it isn't the only one. Relaxed land-use regulations help to strip the location premium from the owner. Re-formatting the multi-part tariff might also help. Most of all, it's important to recognize which property rights regimes lead to the most efficient allocation of scarce resources. Treating exotic dancers like factory workers is probably a lousy approach. Then again, treating factory workers the way they're typically treated is no great shakes either. Hm.

Obligatory:

Euvoluntary Marketing Part 4 of 4: Place

The EE project was born (in part) out of how people squabble over prices. Ordinary consumers get bent out of shape when prices increase in times of duress. And when anti-price gouging statutes are enforced, the predictable result is often that nobody gets what they want at any price. That's important and worth quite a bit of analysis, but it's an acute problem, one that comes and goes. It's painful whenever there's a hurricane or an invasion by a hostile army or a Godzilla attack, so it riles up the senses, raises the dander. In Bastiat's terms, it's "seen".

But Bastiat asked nicely of us to lend some consideration of the unseen. I'd like to oblige this request by urging you to think about the fourth pillar of marketing: location, location, location.

"Where shall we sell this" is usually a fairly benign question. Bananas go in the store, cars in the dealership, tumpety-tump. But how about high-energy radioactive waste? Sure, we need to get rid of that stuff, but just... please... not in my back yard.

Zoning is one of the bigger stealth wealth transfer tools in the kit. Zoning means that sleepy neighborhoods across America needn't worry about factory fumes or heavy trucks rumbling through lazy boulevards. Of course, the price of peace ends up being foisted on communities that can't afford political influence, so it's a transfer from the poor to the middle and the rich. But it's a popular transfer, so don't expect it to change any time soon.

More worrisome perhaps is that since zoning is political action, it can be employed coercively free of any meaningful accountability. This is why low-price emporiums like Wal-Mart end up shut out of locations where they might be able to actually benefit low-income consumers in city centers. Or how "food deserts" mysteriously erupt in thickets of humanity. Who would bother opening a grocery store (a notoriously low-margin business) in a place with rapacious rents hoist on the petard of the false humanitarianism of rent-controlled apartment living? There ain't no such thing as a free lunch... literally.

And this list parades on, putting Macy's at Thanksgiving to head-hanging, soul-shredding shame. You can't have gentlemen's clubs within half a mile of an elementary school, you can't sell food from a truck here here and here, you can't turn up the bass in the French Quarter anymore, you can't park here, you can't build a shed over there, and I'm sorry little girl, but you need a food handler's permit to sell that lemonade.

Price gouging is the court jester of public choice: loud and zesty. But commercial location allocation is the hierophant: silent and powerful. This is the primary tool by which the sullen public behemoth guzzles from the commonwealth of the poor, pinioning the destitute in thrall to a misguided public conscience.

Eudaimonia insists on harmony. Misbegotten zoning flaunts the natural limits of eudaimonia, of genuine community. It is the plebeian fantasy that tries to squeeze a 600 lb gorilla into a kindergartner's tutu. The result is not pretty and it usually ends up throwing poop at the audience.

BATNA vs. NIMBY: Elites and Externality Compensation

People like getting a good deal. Paying less than your reserve price for something you want is one of life's little pleasures, and I'd be receptive to the hypothesis that part of the history of Western Civilization, particularly following the Industrial Revolution has been one extended effort to deliver this pleasure to the good people of the earth. In my own lifetime, I've seen cinematic film transform from something I'd enjoy maybe a few times a year in a smoky theater (yes, I'm old enough to remember when it was permissible to smoke in movie theaters) to an embarrassment of riches: open up my Netflix account and there sits a dizzying array of movies of all description.

Or coffee. Remember when coffee was the same black sludge everywhere you went, drip-brewed and stored at scalding temperature in an unwashed tureen? I sure remember those days, and un-fondly as I sit here nursing a cup of Kenyan highland that was roasted not two days ago within walking distance of where I sit. Coffee not your thing? Maybe you're a gamer. When I was a boy, I had the fun of watching Frogger give way to the classic Mario games. I recently had the strange joy of complaining softly to myself about the first DLC for Skyrim, Dawnguard. That's right, I complained (a little bit) about a game that lets me navigate my amazingly customized character around a near-photorealistic landscape battling dragons, vampires, werewolves, trolls and the dessicated undead, pausing occasionally to, if the mood so struck me, chop wood, cook, smelt iron or decorate one of my several homes. If you would have shown the seven-year-old me a copy of Skyrim, I wouldn't have recognized it as a video game. It would have been like those apocryphal tales of the natives of Hispaniola who were unable to see Columbus's arriving ships, as ocean-going vessels were so far outside their ken. Modern video games would have been magic as recently as 30 years ago. Try this for a fun exercise. Meditate for a minute on what you remember from sometime in the Reagan administration, then watch this:



Yes, that's in-game footage. That's the character you control. Mesmerizing.