Can variances in institutional structures between markets and governments lead to morally divergent outcomes? We explore the behavior of early American whiskey distillers in the market and political spheres. In a market where it was difficult for consumers to detect hidden impurities in whiskey, and thus there was an opportunity for distillers and dealers to engage in fraud, market competition led distillers to take innovative steps to assure consumers of the authenticity and quality of their product.

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Straight whiskey distillers sought consumer-protection legislation to stifle competition from rectifiers producing popular whiskey-flavored alcohol spirits. Honest outcomes prevailed in the distillers’ market dealings, but dishonest outcomes prevailed in their politicking.

From a new paper by NOUS member Daniel Smith and Macy Scheck. The full paper is available here. A nice bootleggers and baptists story.