[Editor Note: MasterResource publishes a variety of energy- and classical liberal-related essays. We are not afraid of the pursuit of truth and certainly have found it. This post by Marc Rauch, vice-president and copublisher of The Auto Channel, presents a provocative thesis about how ethanol was blocked by government policy (taxation and then Prohibition) from capturing major energy markets more than a century ago. Comments are particularly welcome.]
Debates today rage over the ethanol mandate. Be that what it may, there is a market niche for ethanol as an anti-knock agent and an oxygenate to meet clean air standards. But did you know that a market for ethanol, a free-market market, existed or could have developed except for the unintended consequences of a major government intervention?
Prohibitive Taxation
Events of the American Civil War set in stone social and economic conditions that have been with us ever since, and they are certain to be with us long into the foreseeable future. …