Bootleggers and Baptists

"Here is the essence of the theory: durable social regulation evolves when it is demanded by both of two distinctly different groups. “Baptists” point to the moral high ground and give vital and vocal endorsement of laudable public benefits promised by a desired regulation. Baptists flourish when their moral message forms a visible foundation for political action. “Bootleggers” are much less visible but no less vital. Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds. They are simply in it for the money.

The theory’s name draws on colorful tales of states’ efforts to regulate alcoholic beverages by banning Sunday sales at legal outlets. Baptists fervently endorsed such actions on moral grounds. Bootleggers tolerated the actions gleefully because their effect was to limit competition."

The two paragraphs above are taken from Bruce Yandle's article, "Bootleggers and Baptists in Retrospect," in which he looks back on an influential article he wrote in 1983, when he was executive director of the Federal Trade Commission. There are some fascinating arguments for how well the theory has stood the test of time.

Examples include the effort to protect the northern spotted owl, supported by the giant logging operation Weyerhauser, which not only protected the birds but drove profits for timber companies through the roof. Similarly, the National Corn Growers' support for ethanol production was touted as environmentally responsible, but also happened to result in huge windfalls for their constituencies. (Funnily enough, as the article points out, this subsidy had a literal Baptist-bootlegger connection: "the taxpayer subsidy benefits the producers of beverage alcohol as well as industrial alcohol.")

At least one other social issues comes to mind: why would drug dealers and cartels support legalization? It would ruin their business. It's logical for drug dealers to be staunch supporters of strict drug laws.

Similarly, "The Tobacco Settlement," by Jeremy Bulow, explains why higher taxes on cigarettes actually provide fiscal protection for the big tobacco companies, and help them retain market share.

Sources: Bruce Yandle of Clemson University. Hat tip: Megan McArdle, explaining why Wal-Mart is supporting national health care (hint - it's good for business, of course).

Image courtesy Flickr user Darren Copley.