"Want to distill spirits at home? Congress says you can’t. This ban from the Reconstruction era was not instated for health or public safety reasons. Rather, the prohibition arose from the inability to accurately tax home-produced alcohol. This reasoning does not justify such a restrictive practice. Distilling is a historically significant process with deep ties to the culture of this nation. Depriving Americans of this liberty in their own home undercuts a storied American tradition.
Creating home-brewed spirits was not a niche or commercial practice in early America; it was an everyday routine. Alcoholic beverages were a staple of the early American diet and were often much safer than local water sources. Wives were often responsible for the process and used various crops distilled into safe beverages to quench the thirst of their households. Stills were treated as ordinary kitchen appliances, like a butter churn or wood oven. In the late 18th century, 25 percent of households in Augusta County, Virginia owned and operated home stills.
Distilling was not just a household chore; it was also a primary source of income for many farmers. Common crops, such as barley, corn, apples, and peaches, were all vulnerable to spoilage even across short distances. Where travel was especially difficult, distilling these crops provided a more resilient product and a steady source of income for many.
After the Revolutionary War, Alexander Hamilton proposed an excise tax on distilled spirits to tackle the extreme debt the country had accumulated. Excise taxes operate by taxing the manufacture of a targeted good rather than the income generated from sales. Many farmers reacted in outrage, sparking the famed Whiskey Rebellion, during which George Washington led a militia of 13,000 troops to quell the unrest.
The rebellion represented the first violent domestic challenge under the new American Constitution. Hamilton’s enforcement of the tax required every still, no matter how small, to be registered with the federal government. The upheaval underscored the importance of distilling culture in early America. Citizens felt betrayed by their newly formed government, not only due to the tax, but also government intrusion into routine household activities.
Distillation remained common in the home despite the tax, and Jefferson later repealed it, much to the delight of many Americans. Soon after the distilling culture exploded. The early 19th century came with many advancements in distilling, making the practice accessible to non-farmers. An author at the time noted “we find men of science, men of capital, lawyers, doctors and merchants abandoning other pursuits to learn the art of extracting spirit from grain.” Distilling was no longer merely a household chore or a farmer’s practice; it had become a hobby.
The Civil War marked the second excise tax on spirits. Lincoln had to finance the war, and since stills were so common, spirits were the obvious choice for a tax. Once the war was won by the North, the tax extended to the southern states. The agriculturally dependent South hated the tax, often flouting federal collection officers. In fact, during the early days of the policy, nearly seven out of every eight distilled spirits went untaxed.
This led to a federal clampdown on spirits. In 1868, in order to “secure the revenue” of the spirit excise tax, Congress passed sweeping reforms on enforcement. Distillers were instructed by statute to turn over the keys to their distilleries, allowing inspectors to enter the premises at all times. If they were denied entry at any point, congress authorized them to use any force necessary to gain access.
Because of the obvious hurdles involved in enforcing this surveillance, home distilleries were banned outright. Taxing home distilled spirits would be nearly impossible. In order to further dissuade home distilling, Congress attached harsh penalties to the activity. From that point onward, operating a still in or near a home resulted in a felony, up to five years in federal prison, and, in some cases, forfeiture of their property. Home distilling, once the task of the homemaker and the fun of the hobbyist, was now strictly illegal.
The Treasury was not passive in its enforcement either. The 1880 annual report of Internal Revenue declared “the day of the illicit distiller” over with 4,061 illicit distilleries seized and 7,339 people arrested on account of the new enforcement techniques. Distillers were pushed into the forest under moonlight to avoid internal revenue officers, earning them the now infamous name “moonshiners.”
Around this time social perception of distilling was soured by its close association with violent criminal activity. Moonshiners would clash with enforcement officers, often leading to shootouts. The alignment of some moonshiners with the Ku Klux Klan damaged their reputation as well. Once the 18th Amendment and Volstead Act were passed, illicit distilling, including home distilling, had firmly cemented itself as a stigmatized practice.
However, the Prohibition would not stand for long. Due to enforcement problems, the propagation of organized crime, and the loss of revenue from the excise tax, the 21st Amendment repealed the 18th Amendment, decriminalizing the production and sale of alcohol. However, this liberty remained limited to heavily regulated commercial breweries, wineries, and distilleries. The government was seeking an easily taxable commodity to pull itself out of the Great Depression.
1978 marked the first meaningful restoration of home production of alcoholic beverages. With extensive advocacy efforts from the hobbyist brewing lobby, H.R. 1337 was signed into law. It amended the tax code exempting home-brewed beer and wine from taxation and legalizing their production for personal use. Notably, home distilling was neither decriminalized nor exempted from the tax.
Legalizing home distilling is the next logical step. The prohibition was a step too far, and ever since the regulation of alcohol has been trending downward. For such a common practice during the founding, it is shocking that home distilling carries such steep penalties. The federal government picked this fight, not frontier farmers. The ability to produce spirits in your home for personal consumption should not be infringed. It is what George Washington, with his own home distillery, would have wanted."
Monday, August 10, 2026
Revenue over reason: A case for home distilling
The ancient fear of overpopulation is rendered unwarranted by innovative free markets
By Chelsea Follett via Cafe Hayek.
"Chelsea Follett writes insightfully about the ancient fear of overpopulation – a fear rendered unwarranted by innovative free markets. Here’s her conclusion:
Globalized markets and modern technology have accomplished what even Zeus could not in the wildest dreams of the ancients. Humanity has pushed back the constraints that once seemed as fixed and inescapable as a hero’s fate in a Homeric epic. We now easily feed a population perhaps 100 times larger than the one known to the ancient Greeks. If only public wisdom would catch up."
Sunday, August 9, 2026
Illiterate and innumerate Americans earn as much as average British workers (and average workers in other G-7 nations)
See The United States vs. Europe, Part VI by Dan Mitchell.
"What’s the best public policy:
- A small-sized welfare state such as Singapore?
- A medium-sized welfare state such as the United States?
- A large-sized welfare state such as those in Europe?
I prefer Option #1. Sadly, almost nobody in Washington is pushing for that choice.
The debate in D.C. is about whether the U.S. should expand the burden of government (per-child handouts, Medicare-for-all, green new deal, etc) and become more like Europe (option #3).
I’ve written a five-part series (here, here, here, here, and here) explaining why that’s a bad idea.
All of those columns cite data showing that the United States is richer than Europe and that the gap is growing. The should-be obvious takeaway is that it would be a mistake for the U.S. to copy the policies that have resulted in lower levels of prosperity.
Today’s column will be Part VI in this series and it’s motivated by two amazing charts from the U.K.-based Financial Times. As you can see, illiterate and innumerate Americans earn as much as average British workers.
The charts also show that Americans at all levels of literacy and numeracy out-earn their British counterparts.
And it’s not just that the United States is out-performing the United Kingdom.
Here’s the same data for the G-7 nations (the major countries of Europe plus Canada and Japan). All of those countries, even Germany, lag way behind the United States at every level of literacy and numeracy.
The numbers for Italy and Japan are especially shocking. Illiterate and innumerate Americans have higher wages than university-level workers in those two nations.
But the data for the other G-7 nations is also underwhelming. Americans with the lowest level of education earn more than average workers in England, France, and Canada. And they almost earn as much as average workers in Germany (based on what’s happening in Germany, I expect that nation’s numbers to deteriorate in the future).
Looking at all this data, I’ll ask a different version of the questions I presented at the start of today’s column: If the goal is higher wages for workers, especially workers with limited skills, is it better to have smaller government or bigger government?"
Saturday, August 8, 2026
The McNamara Fallacy Returns: How Inequality Metrics Distract From the Real Causes of Poverty
By David Youngberg. He is an associate professor of economics at Montgomery College. Excerpt:
"Complaints about inequality that rely on political influence are really complaints about cronyism. Cronyism defies easy measurement, but it is what matters, and as long as the focus is on what’s easy to measure, we avoid tackling the underlying issue and the “solutions” just create bigger distortions.
But what about redistribution? Critics of inequality typically pair their concerns with some kind of tax-and-transfer system, and those funds would certainly help struggling families. If you take $1,000 from the rich and give it to the poor, the gap shrinks while the poor’s plight improves. Transfers, funded by taxing the super-wealthy, have a certain logic to them.
Even if the math worked, it’s not so simple. High taxes discourage work and encourage tax avoidance and evasion. The rich spend money on accountants (to find legal workarounds) or lawyers (to defend them if the government catches their illegal workarounds) rather than building new companies and ideas. They eschew high-risk investments when the high rewards that usually go with them are cut to a fraction. Getting rich is sometimes a matter of nepotism or corruption, and sometimes it’s a matter of hard work, thoughtful risk-taking, intelligence, out-of-the-box thinking, and all the things we associate with creating a more prosperous world. Punish that with higher taxes, and society suffers.
Economists call this the equity-efficiency trade-off. The economic pie can shrink as it’s cut more equally, so redistribution can leave the poorest people worse off, not better.
There are super-rich people who got their wealth completely from cronyism, and there are super-rich people who made their fortunes completely by creating and investing in things that make society wealthier. Most are in the vast gray area between: they have created companies that genuinely improved people’s lives but have also used governments to secure protections against competition. How much of each billionaire’s wealth grew the economic pie and how much was due to cronyism? The answer is as hard to measure as Viet Cong morale.
When the emphasis is on the gap between the rich and poor, hurting “the rich” becomes a goal in itself and leads to misidentified threats and misplaced efforts. For example, it’s not just the rich that benefit from cronyism. Occupational licensing restricts competition in jobs nowhere near the top of the income ladder: cosmetologists, taxi drivers, athletic trainers, travel guides, and countless others all drive up prices for everyone, low-income households included.
Unfortunately, tackling this particular problem won’t shrink the income gap because licensed salaries don’t reach the stratosphere. As long as anger is directed at the big numerical gaps, this very real problem doesn’t resonate. But taxing the super-rich, the very-rich, or even the somewhat-rich will “improve” inequality even as investment predictably falls. Inequality metrics decrease as the stated goals are quietly ignored.
Progressives often tout Europe’s low income inequality as evidence of the success of its generous social programs and broad, heavy taxes that pay for them. Those taxes, paired with a mangled mess of regulation, also stifle entrepreneurship and stunt firms that would otherwise grow. The end result is sobering. After factoring in both taxes and benefits, including health benefits, the median incomes of the largest European economies are 14 to 45 percent lower than America’s. Income might be more equal, but the typical person is worse off.
The focus on shrinking the measurable gap makes it harder to achieve much-needed regulatory reform. Robin Hood policies of redistribution might not help the poor, but they will definitely reduce inequality, and as long as that’s what’s prioritized, the real problems linger."
Friday, August 7, 2026
The Deadly Focus on Income and Wealth Inequality
Wealth Inequality, Sylvia Nasar, Jeff Bezos, Elon Musk, Bernard Madoff, LBJ
"Readers under age fifty-five might not realize this, but economic inequality was not a large issue in American political discussions until 1992. After that year, discussions of the issue ebbed and flowed. So much of what has been said by opponents of inequality is simple assertion. What has been missing in the statements of those who want government to reduce inequality is much information about why it exists and any sense of why some kinds of inequality are good.
Unfortunately, a single-minded focus on reducing inequality will lead to bad outcomes, even death. That conclusion follows from standard economic reasoning about the causes of economic growth. Reducing inequality by lopping off wealth from the wealthiest would lead to less economic growth; lower economic growth makes death rates higher than otherwise.
You might think that the focus on wealth inequality has come about because of the huge growth in wealth of the 100 or so wealthiest people in the world, many of whom live in the United States. While that surely has made the issue more prominent, the upset about inequality began well before that. I date it at 1992. In 1992, Jeff Bezos, whose wealth is close to $300 billion, had not yet even started Amazon, the source of his wealth. He and his then-wife MacKenzie Scott started Amazon two years later, in a rented garage. In 1992, Elon Musk, now the world’s wealthiest man, was a twenty-one-year-old undergraduate at Queen’s University in Kingston, Ontario, who was about to transfer to the University of Pennsylvania.
So, if not the wealth of Bezos and Musk, what did lead to the focus on economic inequality? Two key factors were an article in the New York Times and a politician running for the Democratic nomination for president who picked up on that article.
The New York Times article was reporter Sylvia Nasar’s “The 1980’s: A Very Good Time for the Very Rich,” March 5, 1992. In that article, Nasar reported data from the Congressional Budget Office on income gains at various percentiles of the income distribution. She quoted Paul Krugman’s exaggerated statement that “it [the additional income from a growing economy] all went to the very top.” As a good reporter, she also gave balance. She quoted Lawrence Lindsey, who, in his book The Growth Experiment, had noted that the early 1980s drop in the top federal income tax rate from 70 percent to 50 percent encouraged high-income people to use fewer tax loopholes and thus show more taxable income on their tax forms. One important example, which Nasar didn’t mention, was municipal bonds. Interest on those bonds was exempt from the federal income tax and so that interest income was not reported on tax forms. But when the top rate fell to 50 percent, high-income people shifted much of their investment away from tax-exempt municipals to other investments whose income was subject to the federal tax. The income from those investments showed up on their tax forms, making it look as if their income had risen substantially; in many cases, it hadn’t.
These are the opening paragraphs of my latest Hoover article, “The Deadly Focus on Income and Wealth Inequality,” Defining Ideas, August 6, 2026.
And:
The other main myth is that the rich don’t deserve their wealth. It’s true that a small percent of them didn’t or don’t deserve their wealth. If they obtained their wealth through fraud or by using the political system to get special treatment, then they are undeserving. Exhibit A for someone who got his wealth through fraud is Bernard Madoff, who ran a Ponzi scheme to take wealth from strangers and even from friends.
Exhibit A of someone who got his wealth as an insider in the political system is Lyndon B. Johnson. In the 1940s, after he had defended the budget of the Federal Communications Commission, an official at the FCC suggested that the Texas congressman’s wife buy a license to operate a radio station in the Austin market. She did so and only a few weeks later, applied for a better part of the spectrum and for longer hours of operation. Both requests were granted within weeks. The FCC also was slow to grant licenses for other radio stations to compete in the lucrative Austin market. By the time LBJ ran for president in 1964, the market value of his and his wife’s net worth was between $9 million and $15 million, over half of which was the value of their media holdings. To put that in perspective, $14 million in 1964, when adjusted for inflation, would be $151 million today."
Thursday, August 6, 2026
Did Elon Musk Sentence Millions to Death by Dismantling USAID?
The study cited by Rep. Ro Khanna as the basis for that claim is statistical nonsense
By Aaron Brown of Reason. Aaron Brown teaches statistics at New York University and at the University of California at San Diego. Excerpts:
"As I explained when I first wrote about the Lancet study for Reason in July of last year, with some basic arithmetic and a bit of common sense, you can see why the study's topline figures are nonsense. Just put the claim that nearly 92 million people were saved by USAID between 2001 and 2021 into perspective: During this period, the world's total death rate fell substantially. If the death rate prior to 2001 had remained steady for the next 20 years, about 79 million additional people would have died, according to data from the United Nations.
So how could USAID have saved 92 million lives? That's more than 100 percent of the global mortality decline, meaning that not only was USAID responsible for saving all 79 million people who didn't die thanks to the fall in the total death rate, but it saved an additional 13 million who otherwise would have died if not for USAID's charitable efforts.
Since I wrote about this study, its authors have effectively backed away from their number. The Lancet published formal critiques and a non-response reply. None of this produced a correction, a retraction, or a single follow-up story in the outlets that ran the 92 million figure. The number is still in circulation, still being cited by Khanna, and still generating threats of litigation from Musk.
Reason emailed several of the study's co-authors, laying out the criticisms cited in this article and video. They didn't respond.
The study's authors failed to establish that USAID saved any lives at all because they built a statistical model based entirely on correlation: Funding for USAID doubled during the study period. Since global mortality fell over the same time span, the two trends correlate, which is all their evidence adds up to. The authors did do a lot of complex statistical hocus-pocus, which they explained in a dense, technical online appendix, making the analysis look sophisticated. But all they were doing was correlating two lines with no evidence that one affected the other."
"On February 2, 2026, Lancet Global Health, a sister journal of The Lancet, published by the same house, ran a paper titled "The Impact of Two Decades of Humanitarian and Development Assistance and the Projected Mortality Consequences of Current Defunding to 2030.""
"The new paper looks at all official development assistance: every donor country, every agency, roughly $250 billion in 2023—and found it associated with a 23 percent reduction in age-standardized all-cause mortality across low- and middle-income countries. The original paper looked at USAID alone, which, at its peak, was somewhere around a sixth of global official development assistance, and found it associated with a 15 percent reduction.
These estimates don't square. The same research group, using the same technique, has now credited one agency with roughly two-thirds of the mortality effect of all foreign aid on Earth."
Related post:
Birthright Citizenship and Youth Crime
Evidence from Germany
"A study of German immigration reform provides evidence for the debate over immigrant assimilation.
The study looked at the
Act to Reform Nationality Law … [under which] children born in Germany on or after January 1, 2000, automatically acquired citizenship if at least one parent had legally resided in Germany for at least eight years at the time of birth.
Researchers found
a sharp decline in offenses committed by non-Germans born after the reform. … [T]he actual increase in offenses committed by Germans was smaller than the decline in offenses committed by non-Germans, suggesting that birthright citizenship reduced crime among immigrant children. Specifically, [the] calculations reveal a 70 percent reduction in youth crime among children who obtained citizenship because of the reform.
Altogether, these
findings suggest that inclusive citizenship policies can reduce crime and its associated costs, which could strengthen social cohesion. Moreover, other research has shown that the German reform improved the educational outcomes of immigrant children and promoted their social integration."