Baptists, Bootleggers, and the Regulatory Cocktail

Zachary Lewsen

In the early 1930s, after the prohibition on alcohol in America was formally repealed, Baptists and other religious leaders across the country lobbied for the Sunday Closing Laws. Often referred to as the “Blue Laws”, these regulations prohibited alcohol sales on Sundays. Yet in advocating for this restriction, the religious community was undoubtedly unaware of allies in unlikely places.

During the Blue Laws’ heyday, bootleggers sold alcohol illegally without competition from regulated vendors. In Louisiana, they distributed the potent and sometimes fatal “moonshine” concoction. Rum-runners and bootleggers benefitted from the Sunday Closing Laws, as they would otherwise be forced to compete for sales with multiple alcohol distributors, who sold a drinkable product at market price. Ironically, these individuals benefitted from — and advocated for — the very legislation that Baptists had hoped would curb alcohol consumption on Sundays.

But was this alliance just an absurdity of the post-Prohibition era? Economist Bruce Yandle would say no. In his 1983 paper, Bootleggers and Baptists—The Education of a Regulatory Economist, Yandle used the analogy to describe the emergence of modern regulation. Activist groups (Baptists) support restrictions that, ostensibly, carry public benefits. Meanwhile, special-interest groups (bootleggers) stand to gain from these rules — often by undermining them. When lawmakers receive support from both groups, extensive restrictions become politically feasible: politicians could publicly reference the Baptists’ altruistic goals, while receiving private kickbacks from the bootleggers.

Since its inception, Yandle’s theory has been used to describe countless regulations, from gambling legislation, to food-labeling standards and tobacco restrictions. In a follow up paper, Bootleggers and Baptists in Retrospect, he claims the Baptist/bootlegger to be a “marriage of high-flown values and narrow interests continues to thrive.”

This was evident, for example, in American forestry legislation. During the 1990s, environmentalists raised concern about the Northern Spotted Owls’ potential extinction in the American Pacific Northwest. Their efforts resulted in stronger forestry regulations. In response, Weyerhauser Corporation, a major logging company, commissioned a team of environmental biologists to find forest areas that — to comply with new environmental laws — should be barred from loggers. The catch: only 320,000 acres of Weyerhauser’s forestry lands were in violation, compared to millions of acres of federal timberland.

The discovery sparked a drop in industry-wide production and, in turn, an increase in timber prices, allowing Weierhauser to charge more for its products. Afterwards, the company’s “owl-driven profits” yielded $86.6 million in the first quarter — an 81 per cent increase from the previous year.

Not only can the Baptist/bootlegger story apply to regulations, but the analogy has also been extended to subsidies, one example being the National Corn Growers’ Association’s 1998 Earth Day celebration. The organization, which benefitted from the US government’s ethanol (corn-based oil) subsidy of 5.4 cents-per gallon, joined forces with the Renewable Fuels Association. Designating their product as a clean alternative to fossil fuels, the Growers’ Association and their partners contended that the industry needed a subsidy that coal and petroleum producers would be excluded from. Then-U.S. Secretary of Agriculture Dan Glickman was quick to support the legislation’s extension.

Ethanol, however, is not an environmental silver bullet, according to some climate-change experts. University of California Berkeley Engineering Professor Ted W. Patzek has argued that its usage pollutes approximately 10 per cent more than fossil fuels do. Ethanol, Patzek claims, uses significant amounts of fossil fuel in its production: petroleum based fertilizers, mechanized farming, and drying and cooking the corn at massive plants. Maybe the corn bootleggers are at play.

While difficult to prove, the Baptist and bootlegger theory does provide an interesting window on stakeholder mobilization. As the example of today’s ethanol distributors seems to suggest, stakeholder tactics pioneered in the 1930s continue to be used today. But, this time, the effects might not be washed away with a strong tonic.

Zachary Lewsen is a 2016 Master of Public Policy candidate at the University of Toronto and an Editorial Assistant with the Public Policy and Governance Review. He previously completed an Honours Bachelor of Arts degree in Political Science at McGill University, and has since interned for the NATO Council of Canada. A keen observer of provincial and municipal politics, Zach hopes to explore a career in urban, immigration, or economic policy.

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