Government Incentives to Business Distort Free Market Forces, by A. Barton Hinkle

The market can’t be allowed to separate winners and losers among beers; it’s certainly a job for government. From A. Barton Hinkle, at the Richmond Times-Dispatch, via reason.com:

Are people drinking enough beer? Most people, quite sensibly, are likely to answer with some variation of “How the heck should I know?” But Virginia Gov. Terry McAuliffe (D) and state lawmakers think they know. In fact, they’re sure of it.

The other day McAuliffe joined the founders of Hardywood Park Craft Brewery for a big announcement: Hardywood, which opened its Richmond brewery just four years ago, will commence a $28 million expansion in Goochland County. The project will include a brewery and distribution center, a beer garden, an amphitheater and more.

This is good news for Hardywood, for Goochland and for beer aficionados. But it’s not so good news for other craft-beer companies — because Hardywood is getting a big financial boost courtesy of Virginia taxpayers. The $1.15 million package includes a $500,000 grant from the Commonwealth’s Opportunity Fund (essentially, a slush fund the governor can use to grease the skids for new development); $250,000 from another state fund; $56,000 for job training; and more. Goochland has pledged an additional $1 million in tax incentives.

This is patently unfair to those craft brewers who don’t get special treatment. The governor and members of the General Assembly — who recently dumped millions more into the Opportunity Fund — say this is good business. Hardywood, for example, was considering expansion in North Carolina, among other places. Besides, other states also offer incentives, and you can’t expect Virginia to compete with one hand tied behind its back.

To put that another way, a level playing field for state governments requires an unlevel playing field for private enterprise. Since everyone else cheats, letting Virginia cheat too is only fair.

That was the argument when Virginia lured Stone Brewing to Richmond with a $5 million grant for its own brewery-and-beer-garden combo. And when the commonwealth arranged an $11 million incentive package to bring the Redskins training camp to Richmond. The city is paying one of the world’s richest sports teams $500,000 a year — taken from the pockets of barbers, waitresses and other working stiffs. And when — OK, you get the drift.

To continue reading: Government Incentives to Business Distort Free Markets

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