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8 - Free Trade and Federalism

Published online by Cambridge University Press:  06 January 2010

Jim Leitzel
Affiliation:
University of Chicago
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Summary

The Internet demonstrates how cross-jurisdictional exchange of ideas, services, and goods threatens preexisting vice regulations. Exchange, however, is vital for raising living standards and fostering economic growth. As a result, there is a longstanding conflict between vice control and commitments to open trade, between the fundamental principle of market freedom and the desirability of vice policy exceptionalism. Vice-related problems perceived to stem from trade policy will generate political reactions: if free trade extends to vice goods, and social problems mount in the face of the unfettered trade, then a free-trade policy becomes decidedly less appealing.

Alternatively, it might be a liberal vice policy that proves unsustainable in the face of a free trade mandate. In other words, the impossibility of providing special restrictions upon trade in legal vice might lead to a world of near or total prohibition. If the only available vice policy options are (1) the ketchup alternative, that is, legal vice with no vice-specific restrictions or (2) illegal or intensely regulated vice (the current heroin control regime, perhaps), then it might be that polities find themselves choosing the second option. Alcohol, cigarettes, and other vice goods are not ordinary commodities like ketchup, and public policy should respond to the special issues presented by such goods. Allowing free trade to overrule vice controls, requiring that alcohol be treated identically to ketchup as components of commerce, holds dangers for vice policy as well as for free trade.

Type
Chapter
Information
Regulating Vice
Misguided Prohibitions and Realistic Controls
, pp. 247 - 267
Publisher: Cambridge University Press
Print publication year: 2007

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