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Nationalizing the Wine Industry


Tags InterventionismProduction Theory


Since we know the monstrosities associated with government buildings, monuments, and state-built cars, surely then, we can imagine a Europe with a nationalized wine industry. Don't laugh; the European Union's top agricultural official is wanting to do just that. EU Farm Commissioner Mariann Fischer Boel thinks that the state can spend money and market Europe's wine "more efficiently" than the private producers. The EU government already distorts the market for wine by directly subsidizing its wine producers and setting rules for production.

Though myriad subsidies are already provided to wine producers, the Commissioner's plans "originally called for winegrowers to give up some 12 percent of their vineyards in an ambitious plan to cut the most inefficient plots of land." So while subsidies have caused the overproduction of low-end wines and have skewed consumer demand, new subsidies will produce yet another mismanagement of resources. Wine producers are fighting back against these cuts in vineyard production, and all the while they are complaining about the meager intra-EU marketing subsidies that are to be provided to them for the coming year.

So the battle is between the state and the private producers, with the producers rejecting what they consider to be implausible demands over the way they ply their trade. Yet their own demands are voluminous, and always, they center around the notion of "what's in it for me?" Then of course, the ability to be able to shrewdly direct the booty toward its most advantageous uses is exactly why the wine producers of Europe do not dislike central planning. They just want a few seats of their own on the planning commission.

Karen DeCoster, CPA, has an MA in economics and works in the healthcare industry. She has written for an assortment of publications and organizations, including LewRockwell.comMackinac Center for Public PolicyTaki's MagazineEuro Pacific Capital, and the Claire Boothe Luce Policy Institute. Her website is KarenDeCoster.com.

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