Learn Liberty Schools Us on Beer Regulation

As they have done so often in the past, our friends at Learn Liberty have come up with a great new video series illustrating important economic concepts in an easily consumable format. In this case, they bring us a primer on what may or may not have been Benjamin Franklin’s favorite beverage, starting with Craft Beer 101.

In the first installment, Prof. Peter Jaworski of Georgetown University and Chris Koopman of the Mercatus Center discuss the current popularity of craft brewing and the dramatic fluctuation in the numbers of breweries across the U.S. over the past 150 years. Chris emphasizes the advances in technology and information sharing that have given more small producers the ability to start their own operations, as well as the regulatory changes that finally made home brewing legal in the 1970s.

Pete and Chris return with Craft Beer 102 in which they take on the problematic “three tier system” that regulates alcohol distribution in the U.S., and the scary-sounding economic concept that is getting in the way of eliminating it, the transitional gains trap.

We round out the series with Craft Beer 103, which explores why beer costs as much as it does. Chris explains that federal, state, and local taxes account for 44% of the cost of every beer we buy, with the figure rising to well over half the total if we include the costs of complying with multiple layers of regulation.

In case you’re wondering how your state stacks up on beer taxes, the data wizards at the Tax Foundation have got you covered with this handy map (short version: head to Wyoming if you’re extremely thirsty and avoid hosting any beer blasts in Tennessee if you can). The folks over at the Beer Institute also have a wealth of statistics and data on the industry. Cheers!