Competition Raises Prices

Here’s how little understanding some folks have of economics.

Yesterday Pennsylvania Gov. Tom Wolf vetoed a bill that would have privatized the sale of wine and liquor while liberalizing the rules for selling beer in the Keystone State. Wolf counterintutively argues that replacing the state monopoly with private businesses would be bad for consumers. “During consideration of this legislation,” he says, “it became abundantly clear that this plan would result in higher prices for consumers.” He also worries that letting private businesses sell beer and wine would result in “less selection for consumers.”

To be fair, Wolf probably knows perfectly well that competition lowers prices – the real motive behind his veto was most likely to protect the public employee unions.