Wednesday, July 13, 2011

Bootleggers and Baptists

I became familiar with the economics phrase "bootleggers and baptists" this month. It comes from the days of the Prohibition, obviously, but can refer to any issue where a government mandate will have those who would profit from it, either materially or morally, on the same side. For instance: during the Prohibition, the bootleggers backed the anti-alcohol policies because it kept other alcohol venders out of competition. The Baptists (and others) backed prohibitionist policies because it was a moral issue to them. So in this basic example you have two groups who might never have anything to do with each other both advocating for prohibition but for completely different purposes.

Here in VA, all vehicles are required to have a vehicle inspection which is good for one year. I have yet to have mine, however I have heard from others that often you will be required to have a certain part fixed if the inspector so mandates. This is a bootlegger/baptist situation in that some morally principled legislator said at one time I am sure that in the name of safety and the children, the state should inspect all cars on the road. The mechanics fully agreed because they had the power of the state on their side mandating people to get their cars fixed.

One other example: tariffs on imports. The baptist side says we must protect American industry and the American worker. Think of the children. While the domestic companies (bootlegger side) fully agree because the high tariffs will keep otherwise viable competition out of the market.

It seems that any legislator proposing these sorts of idealistically motivated laws/protections/whatever would be doubly lobbied. The baptists and the bootleggers will beat a path to their door. No wonder we have increasing regulations.

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