Bootleggers and Baptists

Bootleggers and Baptists is a theory of the origin of particular regulations first proposed by Bruce Yandle in a 1983 "Regulation Magazine" article. The story is based on an actual phenomenon in certain communities, though it can easily be applied to other regulations.

The story

The story begins with Baptists in a rural community demanding the local government ban the sale of alcohol on Sundays. "Alcohol", they might say, "is a vile drink and efforts should be curbed to restrict its spread through society, especially on the Lord's day." Under this noble tone, the government complies and enacts a ban.

But the demand for alcohol doesn't disappear when the supply does. People still want to drink on Sundays and so the bootleggers step up and illegally sell alcohol. And because the supply is restricted because far few people are selling liquor, one day a week the bootlegger gains monopoly power and the lucrative market that goes with it.

Willie Morris's memoir "North Toward Home" [http://stuartbuck.blogspot.com/2005/09/bootleggers-and-baptists.html contains a real-life] example of this phenomenon:

Mississippi was a dry state, one of the last in America, but its dryness was merely academic, a gesture to the preachers and the churches. My father would say that the only difference between Mississippi and its neighbor Tennessee, which was wet, was that in Tennessee a man could not buy liquor on Sunday. The Mississippi bootleggers, who theoretically operated "grocery stores," with ten or twelve cans of sardines and a few boxes of crackers for sale, stayed open at all hours, and would sell to anyone regardless of age or race. My father could work himself into a mild frenzy talking about this state of affairs; Mississippi, he would say, was the poorest state in the union, and in some ways the worst, and here it was depriving itself of tax money because the people who listened to the preachers did not have the common sense to understand what was going on.

Every so often there would be a vote to determine whether liquor should be made legal. Then, for weeks before, the town would be filled with feverish campaign activity. People would quote the old saying, "As long as the people of Mississippi can stagger to the polls, they'll vote dry." A handful of people would come right and say that liquor should be made legal, so that the bootleggers and the sheriffs would not be able to make all the money, and because the state legislature's "black-market tax" on whiskey, a pittance of a tax that actually contradicted the state constitution, was a shameful deceit. But these voices were few, and most of the campaigning was done by the preachers and the church groups. In their sermons the preachers would talk about the dangers of alcoholism, and the shame of all the liquor ads along the highways in Tennessee and Louisiana, and the temptations this offered the young people. Two or three weeks before the vote, the churches would hand out bumper stickers to put on cars; in big red letters they said, "For the sake of my family, vote dry." An older boy, the son of one of the most prosperous bootleggers, drove around town in a new Buick, with three of those bumper stickers plastered on front and back: "For the sake of my family, vote dry."

In Kentucky a similar, but thought to be more reciprocal, phenomenon has been [http://kpac2.blogspot.com/2007/04/unholy-alliance.html referred to] as the :

...the marriages of convenience between bootleggers and ministerial associations that occur in small towns all across Kentucky every time a wet-dry local option issue comes up for a public vote.

Analysis

The bootleggers and the Baptists both have an incentive to limit the consumption of alcohol, the former with the economic reason and the latter with the ethical justification that people will support, though by their very nature the two groups wouldn't get along. The politician effectively acts as the [http://en.wiktionary.org/wiki/go-between go-between] , taking the bootlegger's campaign contributions and citing the Baptist's morals in speeches. The result can be ultimately less regulation and a certain Victorianism with regard to alcohol consumption in the Southern states. Open container laws are an example. They tend to be looser in more Baptist areas. [ [http://www.valpo.edu/geomet/pics/geo200/religion/baptist.gifMap of USA showing Percentage of Baptist Population in each county] ]

Child labor laws

Yandle notes that, in the 18th century, the laws against child labor first appeared as a recommendation to the Parliament of Great Britain from a blue ribbon committee, which was populated in part by owners of textile mills. Unlike most mills, however, the mills the committee members owned used the latest automation technology and needed far less labor. The committee cited ethical reasons for banning child labor (more humane work force, etc.), but those mill owners on the committee knew that such a ban would hurt their competitors, who needed manual labor, far more than it would hurt them.

Gambling

An example of the regulatory back-fire described by this theory is the Jack Abramoff Indian lobbying scandal of the work of political lobbyists, Jack Abramoff, Ralph Reed, Grover Norquist, and Michael Scanlon, on Indian casino gambling interests for an estimated $85 million in fees. Abramoff and Scanlon grossly overbilled their clients, and all four split the multimillion-dollar take. They secretly orchestrated lobbying against their own clients in order to force them to pay for inflated lobbying services. Three lobbied legislatures while Reed remained outside, inflaming existing conservative religious sentiment against gambling in the South.

External links

* [http://www.cato.org/pubs/regulation/regv22n3/bootleggers.pdf Yandle's retrospect on Bruce Yandle, "Bootleggers and Baptists: The Education of a Regulatory Economist." "Regulation 7", no. 3 (1983): 12.]
* [http://www.econtalk.org/archives/2007/01/bruce_yandle_on.html Yandle discusses the story with Russ Roberts at EconTalk, a PodCast]