On March 11, 2009, the Michigan House of Representatives voted 61-42 on HB 4565, an anti-consumer bill that requires, “retailers to attach an identification tag signed by the buyer to kegs of beer when they are sold, and not return the keg deposit unless the tag is still on the keg, subject to a $500 fine for failing to do either. A non-retailer possessing a keg without the tag would be subject to a $500 fine and 93 days in jail.” The bill is currently on the state Senate calendar under general orders.

Other than making common people criminals, the rationale behind this bill is to deter underage drinking by imposing liability on whoever purchases the keg. It’s bills like this, which raise costs for everybody, discouraging competition and providing consumers and retailers with reduced choices that threaten the creative energies that fuel our economy.

Let me provide an example. Consider all the people you know who drink Natty Light, Keystone or some other type of beer. You’d think at least one person in the city would know how to make beer. But they don’t. In fact, nobody in the world knows every skill necessary to make beer.

To be able to make beer, one would have to know how to grow barley and hops. Not to mention make the fertilizer, sprinklers and tractors involved with that process. To build these tractors, this person would require knowledge of steel refining and automotive engineering. The sprinkling system would involve the construction of an intricate irrigation system of pipes and canals. This person would have to know how to make glass and paper for the bottles from sand and timber, respectively. To manufacture the metal caps or cans, some type of ore would have to be mined. And some method to transport the beer’s ingredients from place to place would be necessary. This person would have to know how to produce a truck or freight train for all intents and purposes.

In short, the process involved with manufacturing beer is so complex that no one person could do it. If you dared to attempt to acquire all of the skills required to produce a bottle of Bell’s Two Hearted Ale, you would be foolish. Not only would you die before attaining a marked level of progress, but it would also be incredibly inefficient to dedicate your time to the task when there are so many other groups of individuals who specialize in specific aspects and can make beer better and faster than you.

I did not conceive this scenario. I found the prompt for the complexity of beer creation on Division of Labour, an economics blog. Based on “I, Pencil,” a timeless essay written by economist Leonard Read, it serves to illustrate the concepts of spontaneous order, specialization and division of labor. These ideas were first pioneered by economist Adam Smith and later refined by the minds of individuals like Nobel Laureate Friedrich Hayek. They are a reflection of the incomprehensible complexity of the human behavior that defines our modern economy.

The millions of individuals involved in making beer today come from all corners of the world. Under most circumstances, they’d never interact. Yet, these millions of people manage to engage their human energies and spontaneously cooperate in response to a human desire for booze without the presence of any governmental body or mastermind.

This lesson reiterates the fact that in this world, knowledge is dispersed. Our brains possess a mere fraction of the knowledge of the collective human mind. And the freedom to pursue one’s self-interest unleashes levels of cooperation unmatched by any attempt at central planning by the government.

While some government restrictions may provide us with more sanitary and humane work environments, as well as protect our forests and rivers, every regulation that is put into place is at the expense of some release of human creativity and a waste of potential. In the vein of Kurt Vonnegut’s short story “Harrison Bergeron,” it’s a weight on the proverbial head of humanity by the handicapper general.

Many times, regulations like HB 4565 that may seem beneficial produce government-enforced monopolies that hurt consumers and stifle progress that could have been achieved otherwise by allowing private individuals to work with market incentives.

Legislation like HB 4565 is as likely to curb underage drinking as me penning a column urging my fellow underage Wolverines to stay sober. With heavy government regulation, unleashing humanity’s true creative potential is severely compromised. And that’s something we should seriously consider in an age during which we are constantly enacting foolish, freedom-killing laws. We often take for granted the spontaneous order that brings us goods in life as unique and precious as beer. So drink up, everybody.

Alex Biles can be reached at jabiles@umich.edu.

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