The Indian state of Bihar banned all alcohol a couple of years back. They’ve also hired a couple of, erm, think tanks, to study the impacts. Which are said to be that the money people didn’t spend on alcohol has been spent upon better saris and milk products and honey. Some will say that this shows the success of the policy. But which would the people of Bihar prefer? A reasonable clue being what did they spend money upon when they had the choice?
Prohibition is making people of Bihar spend on good clothes and food with sale of expensive sarees rising by 1,751 percent while consumption of honey by 380% and that of cheese by 200% in the first six months of the ban, according to latest studies on the measure.
No doubt better food and clothes makes some people happier. But this art of governing thing is to please the maximum number of people, no?
The studies, conducted by reputed think tank Asian Development Research Institute (ADRI) and government-funded knowledge institute Development Management Institute (DMI), also pointed out that 19 per cent of households acquired new assets from the money they earlier splurged on alcohol.
Splurge is something of a loaded word. It makes the assumption that what other people desire is a waste. And you’re really got to have some good proof to assert that about other peoples’ consumption choices.
Both studies were mandated by the Bihar government to find out the consequences of the liquor ban. According to PTI, the studies are intended “as a response to demands of rural women who suffered because of the widespread practice of drinking alcohol.”
It’s not obvious that their wishes should be paramount, is it?
There’s one idea we can put forward here. Rather more than a little odd, true, but it’s possible. That illegal booze and only illegal booze made it cheaper in Bihar. Homemade hooch isn’t exactly unknown in India, it’s also possible to gain it from other states. And if there’s no tax to be paid at all upon it (excise duties are state by state, meaning that booze from outside Bihar will be untaxed) it could be that booze is now cheaper. Agreed, unlikely but it is still possible. Meaning that the rise in spending upon other things is not a result of booze not being taken, but of the lack of a government slice being taken upon booze.
There’s also one rather more obvious point. Those who were drinking before the ban were doing so voluntarily. If they had wished to spend the money on saris and cheese then they would have done so. They didn’t, they spent it on booze instead. Thus they preferred to booze, didn’t they? From expressed preferences we can thus see that this is a reduction in utility to the people of Bihar. Which isn’t really what governments are supposed to be doing, is it?