Bootleggers and Baptists VII: Jones Act

 

 

 

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Introduction:

 

The Jones Act is an enduring piece of legislation that benefits only a few select invested interests.  The costs are borne by the rest of the country in the form of higher shipping rates and retail prices.  June marked the 100th anniversary of the law, yet it is seldom discussed in public discourse. Due to the relative obscurity of the Jones Act. Considering the number of unforeseen externalities caused by the law it would be worthwhile to reexamine the law. Even entertaining the possibility of a total repeal.

 

Because of the crewing and U.S. build requirements imposed by the Jones Act operating cost of a U.S. flagged ship are 2.7 times more than that of a foreign vessel. These higher costs are reflected in shipping rates which are based down the supply-chain in retail prices to the consumer. The costs of the Jones Act is not relegated to the costs of goods and services. The American taxpayer also pays for the Jones Act in the form of higher maintenance costs for infrastructure. Many U.S. to U.S. bound shipments travel by rail or truck when watercraft could be utilized. Due to the high costs. Trucks account for over 75 % of the maintenance cost on public roads in the United States. Also, the Jones Act has contributed to environmental externalities. Logistics companies opting to use more cost-efficient, but less fuel-efficient trucks. Contributing to the increases in greenhouse gas emissions. The higher shipping costs have generated the opportunity cost of lost business. For example, the states of Virginia and Maryland import road salt from foreign suppliers to avoid the costs of using a Jones Act compliant vendor.

 

What is the Jones Act:

The Jones Act is section 27 of the Merchant Marine Act of 1920. This clause implements what is known as cabotage laws. Laws that govern the transportation of goods between two domestic ports. For example, goods sailing on a vessel departing Boston and bound for Miami would be subject to the Jones Act. The bill was signed into effect on June 5th, 1920. The bill’s vociferous proponent Senator Wesley Jones (R-WA) promoted Section 27 as a national security measure. Due to the utilization of foreign-flagged ships for sealift in World War I. Presenting a grave national security concern. Some find the notion of this being a national security matter to be dubious. Rather it was an attempt to pander to his constituency by protecting the railroads from the competition of foreign-flagged ships. However, the law also aimed to give a boost to the domestic shipbuilding industry. An industry that enjoyed a comparative advantage due to North America’s dense woodlands. Until the later half of the 19th century when steel displaced lumber as the primary building material for watercraft. Relinquishing the U.S. domination of the shipbuilding market.

The United States has had cabotage laws in one form or another since the nation’s infancy. One of the earliest examples dating back to 1789. The Jones Act as a more stringent version of previous laws. Boosting a domestic flagging requirement, requiring the crew to be made primarily of U.S. citizens, domestically owned, and to be the U.S. built. There are a few stipulations concerning the U.S. built and domestic ownership requirements. Foreign cooperation can own a Jones Act vessel providing 75 % of their stock is owned by U.S. citizens. The U.S. build requirement does allow for minor components of the ship to be foreign-made parts. For the vessel to remain Jones Act compliance major upgrades to the ship cannot be done abroad, even if it is required for a repair. These requirements have resulted in higher U.S. port-to-port shipping rates and ultimately passing down higher costs to the consumer.

 

The Bootleggers:

It is difficult to pinpoint an exact party that benefits from the Jones Act. Mainly because there are so many that stand to benefit from it. Ranging from domestic shipyards, labor unions, to merchant marines. It could even be said that the Railroad companies and drayage enterprises are silent beneficiaries. The business lost due to the high naval shipping rates becomes their gainful opportunity. It seems fitting to assign the role of bootleggers to the merchant marines operating complaint U.S. flagged vessels. This is since the salaries of the crew are the largest contributor to the costs throughout the supply chain. 68 % of the operating costs are due to the salaries of the crew members. This accounts for U.S. vessel operations being nearly three times that of a foreign-flagged ship. As previously mentioned, these costs are spread passed on down to consumers. The factions in favor of the merchant marines are not arguing from a moral standpoint. Rather they are arguing in their self-interest. Making them Yandle’s proverbial bootleggers.

 

The Baptists:

One of the flimsy arguments used to justify keeping the Jones Act enacted is national security concerns. These half-baked repudiations tend to fall apart quickly under the scrutiny of factual analysis. The point of needing the Jones Act to maintain a commercial fleet to provide sealift capacity in times of national emergency is spurious at best. During the first Persian Gulf War, the United States heavily relied on foreign ships for sealift assistance. The lack of a domestic fleet was a direct result of the Jones Act placing restrictions that have drastically reduced domestic ship production. Utilizing the pretext of the threat of terrorism is weak at best. Incidents of foreign terrorism are rare. Your odds of being injured in a terrorist attack on U.S. soil are 1 in 678,399. The odds of being injured in an act of terrorism influenced by Islamism on U.S. soil are  1 in 106,110,338.

 

The Baptists in this scenario are national security-minded Neo-Conservatives. Many are vestiges of the Bush administration. Swiftly being supplanted by the Trumpian Republican of the populous right. The “country-club” Republican is becoming an endangered species. They are the ones providing the moral smoke-screen for the invested interests who are shielded from innovation and competition by the Jones Act. It could be argued that the Reaganite conservatives support the Jones Act for security reasons. That the populous conservatives that have infiltrated the GOP are the bootleggers of not just the Jones Act. But of all protectionist measures. Typically, the country-club dwelling conservatives would not bother with protectionism. However, if it is in the name of national security, they are onboard.

 

 

 

Bootleggers and Baptists Part V: Occupational Licensing- Arizona Edition

 

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Introduction:

 

The policy of requiring occupational licensing for various jobs is billed by consumer protection advocates as a matter of health and safety. This perspective ignores the economic consequence of occupational licensing. The fact that in most cases such a restriction does not improve consumer safety, but merely operates as a barrier to entry in the market. Too often disproportionately impacting employees of lower socioeconomic status. Even preventing start-up businesses from laying any roots in industries that have licensing requirements that favor established enterprises. It is estimated that approximately 25 %of all jobs require some form of licensing. Is it really necessary to require barbers to obtain licensing to competently do their jobs?

 

It is always important to question who stands to benefit from the consequences of a specific policy.  This imperative inquiry illustrated in Bruce Yandle’s economic theory of  Bootleggers and Baptists. This conceptualization demonstrates the contrarian dynamics of advocacy for regulation. Frequently unlikely alliances are forged for the sake of regulation advocacy. Generally, one interest group has a moral or ethical agenda (the baptists). The other half of this coalition tends to utilize the moral agenda as a smoke-screen to obscure how the policy benefits them (the bootleggers). Detailing the irony of how seemingly opposing forces can often come together on a single issue.

 

Occupational licensing much like other issues that bring together unlike factions creates a similar dynamic. The moral advocates are concerned about protecting the average consumer from dangerous products and services. As well as the self-interested bootleggers who strive to reduce competition.

 

The Story of Dr. Carol Gandolfo:

 

Psychologist Carol Gandolfo moved to Arizona from California back in 2007. Due to her lack of in-state licensing, she continued to manage her California-based practice remotely.  She also served as an expert volunteer for various in-state organizations, such as the Northern Arizona Critical Incident Stress Management team. The same organization that provided therapeutic services for the surviving first-responders present at the 2013 Yarnell Hill Fire.  Dr. Gandolfo was a 20-year veteran of the field of psychology and had extensive training and experience working with prisoners, homeless shelters, private practice, and even those with developmental challenges. The only obstacle preventing her from practicing in Arizona was the state’s psychology licensing board.

 

In 2019, there appeared to be light at the end of the tunnel. Governor Doug Ducey working with the Goldwater Institute developed a bill that would universally recognize out-of-state licensing. The bill that went into effect August of 2019 was HB2569. While the bill does not automatically recognize out-of-state licensing, it still eliminates many of the steps required to start the process from scratch. HB2569 makes Arizona the first state to recognize out of state licensing. Anyone familiar with Arizona’s demographics can see why licensing reciprocity is crucial for the state economy. The population of Arizona is primarily comprised of out-of-state transplants. Most of the domestic migrants coming from western coastal states or the economically depressed Midwestern rust-belt. It was estimated back in 2014, that only 38% of Arizona residents were born in-state. That 15 % of all Arizona residents were born in foreign countries. Considering the number of people moving to Arizona, a universal recognition bill would be sensible.

 

However, even after the bill passed Dr. Gandolfo still was struggling with the licensing board. In November 2019, the board rejected Gandolfo’s application for licensing. The board cited two reasons for this 5 to 1 vote to deny Gandolfo the right to practice in Arizona. The first reason was she had lived in the state for too long. Even though no such constraints were specified in HB2569. Governor Ducey even criticized the board’s decision to reject her application on these grounds.

This gamesmanship by some Board members falls far below the standard expected of Board members,” Ducey wrote.

 

The second issue was the institution from which Gandolfo earned her PsyD back in 1998. Ryokan College which was determined by the board to not be regionally accredited. The board even suggested that it would be reasonable to investigate whether her volunteer work and practice in California violated state law.

 

Bootleggers  and Baptists:

 

The bootleggers in this scenario would be the psychologists who were certified in-state. Advocacy by these individuals for rejecting measures such as HB2569 is nothing more than domestic protectionism. Attempting to keep the flood of psychologists coming from states such as California out of the Arizona market. Any attempt to claim that Arizona has higher standards for licensing is flimsy at best. Arizona has licensing procedures that mirror the standards held in California. The only rational explanation for psychologists in Arizona to pose opposition to HB2569 would be fear of an increase in competition.

 

It is difficult to say who the baptists are in advocating for rejecting universal recognition of out-of-state licensing. Please keep in mind the members of the licensing board are licensed, psychologist. For the sake of argument,  I will assign the role of baptists to the licensing board members. There does seem to be a prevalent argument on their end about the quality of mental health services. To quote one of the board members:

“Arizona has now said that the standards to become a psychologist in this state are now equivalent to the lowest common denominator in the jurisdictions across the country,”

 

This premise is only valid if the practitioner is indeed coming from a state with lower standards. Also, this statement alone provides a moral justification for keeping out-of-state psychologists out of the Arizona market. The residents of Arizona need to be protected from subpar mental health services. At least in the view of the quoted board member. This moral repudiation of  HB2569 does not convey any facts or figures. Nor any search suggesting that the standards of states outside of Arizona lead to inferior results. Making these claims suspect.

 

 

Bootleggers & Baptists IV: Good Cop, Bad Cop. Qualified Immunity.

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Introduction:

 

Last Monday, the country bared witness to another occurrence of police brutality. In the death of  George Floyd. This miscarriage of justice and abuse of power has not come without repercussions. As riots break out across the country, demonstrators seethe with vitriolic indignation. Looting, vandalism, another means of violent action stirring chaos in America’s urban centers. The byproduct of fermenting resentment engendered by feeble responses by policymakers to similar circumstances. While frustration is understandable, these actions are not justified. Projecting your angst on innocent parties will not fix any institutional shortcomings in the justice system.

 

However, most law enforcement officers do not brutalize the suspects they apprehend. Most dutifully follow proper procedures when using force to subdue a suspect. It is important to remember that one bad apple does not represent all law enforcement agents. Even if most cops are honest and decent that does not mean that we cannot advocate for reform. Reform measures that can provide less protection to the few malevolent outliers.

 

Upon reading an article on the blog  The Volokh Conspiracy, I was horrified to learn about the background of the officer charged in Floyd’s death. The fact that the officer implicated in Floyd’s death had 17 prior complaints. He had been put on administrative leave in the past for “using lethal force”. To only compound matters, the notes detailing disciplinary parameters for this officer were scant. The city of Minneapolis has a well documented reputation for not reprimanding officers who violate procedure.

 

The question becomes how did this officer fall through the cracks? Shouldn’t he be held accountable for his transgressions? The author of the previously cited article attributes this failure of the justice system to Qualified Immunity.  This legal protection has been rigorously advocated for by police unions (Rosen, 2005). What is Qualified Immunity?  It is the legal doctrine that insulates civil officials from laws suits when exercising duties within their authority. Unless their actions conspicuously violate “statutory” or “constitutional” rights”. This protection was initially implemented with the best of intentions protecting police officers from frivolous lawsuits (Schwarz, 2014).  Per a 2014 study, instances where victims are awarded damages for law enforcement related rights violations, 99.98 % of the settlements were paid out by governments, not the offending officer! Even in situations where the acting officers’ judgment was profoundly questionable.  Such as Baxter v. Bracey (2018) were two officers “deployed a police dog against a suspect who had already surrendered and was sitting on the ground with his hands up“. Demonstrating that Qualified Immunity could be a significant variable in the lack of disciplinary action taken against exploitative officers.

 

It is reasonable to question how Qualified Immunity relates to Bruce Yandle’s concept of Bootleggers and Baptists. It is important to remember that with every policy position you have various coalitions in the running to champion it. This can be even further divided into categorical subgroups.  Wherever you see an angel a devil is lurking around the corner. For example, one out of every ten teachers is insouciant and does not care about the well being of the students. Still a minority, but that one teacher is the rotten egg of the bunch. They operate as  “moral free-rider“. This individual enjoys the favorable perception of teachers due to the efforts of most teachers without having to live up to such standards. The same is true for police officers. The upstanding and compliant police officers are advocates of qualified immunity. The same is true of the minority of bad police officers. Protection from frivolous ligation is in the best interest of all police officers regardless of performance.

 

Bootleggers:

Police officers who abuse their power and exploit institutional protections. Bad Cops.

 

Baptists:

The Majority of Police officers who are law-abiding and care about their community. Good Cops

 

 

The Parameters of Qualified Immunity:
For the state of Arizona, Qualified Immunity falls under ARS 36-738.  Instead of mulling over the litany of cases about Qualified Immunity, let focus on the test case. Harlow V. Fitzgerald (1982). The case stems from the 1970 termination of A.Ernest Fitzgerald resulting from his testimony before the Economic Joint Committee of the U.S. Congress. His testimony detailed the “unexpected costs associated” with the C5-A transport plane. Believing that his termination was in retaliation he used two presidential aides.

 

Civil servants are not allotted blanket immunity. Rather, there is a specific criterion to determine if they were acting within limits of their job role. Was it extralegal for those two aides to fire Fitzgerald? Providing that they did violate any of his Constitutional rights and it was within their authority to do so, then no. The other piece of the puzzle that muddies the water is that so long that the official’s actions were reasonable and they believed their conduct to be lawful.

 

The Bootleggers and Baptists:

The dynamic of this coalition is quite simple. The good police officers (with the full support of the powerful police unions) justify Qualified Immunity. Why punish good-faith actors who risk their lives to protect us and our property?  They work hard to keep our communities safe. Why should they be held liable for an honest mistake?  Making the “Good Cops” our Baptists.

 

Our Bootleggers, the “Bad Cops” also support keeping Qualified Immunity. Again they have the backing of the police unions. The difference is their ” economic benefit” is not a quantifiable dollar amount. It is an institutional blank check to bend the rules. In some circumstances literally get away with murder. Per the minuscule amount of research  I have done on the topic it would appear as if QI tends to overwhelmingly favor the officer. Even in instances where the officer should not be protected. The few bad apples have the “good cops” taking care of the public perception portion of the equation. While the continue to exploit the flexibility of how QI is applied to law enforcement personnel. Making them the true beneficiaries of this legal privilege.
However, due to wanton and chronic abuse of this legal protection public opinion has started to shift. Especially in the wake of the death of George Floyd.

 

Conclusion:   

 

I will not get involved with the argument as to whether QI should be limited or abolished. That is best left to the legal experts. I will let the senior fellows at the Cato Institute handle that one. However, the arresting officer that killed Floyd certainly had a lengthy disciplinary record. Yet, he still had gainful employment. Leading me to believe that QI has served as a shield this officer from legal and disciplinary consequences.

Above all, I wish the violent protests would subside. It is probably the idealist in me.  Why cause more pain and suffering in the world? It will not undo and of the injustices done to the victims of police brutality.

Bootleggers and Baptists- Part III: Holy Rollers and The Beer Industry Take On Pot Legalization in The Bay State.

 

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Introduction:

 

The 2016 election cycle in the United States was one for the ages. It had all the markings of poetic drama or a sardonic comedy. Either way, it was a surreal slice of political theater. Many journals and political analysts’ predictions were defied by the electoral results. This upset left half of the country in jubilation and half reeling in horror. The quirks of the 2016 election was also a result of many of the state-level ballot questions. A historic five states having ballot initiatives to legalize recreational marijuana.  Ironically, four out of the five states passed the measure. Naturally, this was not met without some resistance from special interest groups. The shared opposition to marijuana legalization has made for some strange bedfellows in the political arena.

 

Even in deep blue Massachusetts (my home state), there were fierce opponents of legalization. As well as some peculiar alliances. One fine example was the Archdiocese of Boston and the Beer Distributors PAC. Two unlikely forces working to squash ballot question 4. Their efforts were futile as the measure passed by a margin of 53 % of the collective votes. This crusading duo seems like a bit of a stretch in terms of having any common goals.  After all, this was the election cycle in which America elected a reality-television star as president. If we invoke the wisdom of public choice economist Bruce Yandle we start to see there is nothing odd about the partnership of the local leadership in the Catholic church and beer distributors.

 

Bruce Yandle formulated the concept of Bootleggers and Baptists while he was on the Council on Wage and Price Stability.  These observations were summarized in his 1983 paper. To Yandle’s astonishment, many industry lobbyists opposed deregulation. Due to this fact, these restrictions helped reduced competition by increasing the cost of operations. In many situations, you will have seemingly opposite factions joining together to champion regulation. The segment that does so out of moral concerns, the Baptists. Those who seek to benefit economically from the regulation of decreasing competition, the Bootleggers. Hence, why the church and beer industry forming a united front against Cannabis isn’t so outlandish after all.

 

 

Our Bootleggers and Baptists:

Bootleggers: Beer Distributors Political Action Committee

Baptists:  Archdiocese of Boston

 

Parameters of Recreational Marijuana in Massachusetts:

Ballot question 4 passed by a slim majority back in November of 2016.  The legislation was effectively signed into law on December 30th, 2016 by Governor Charlie Baker. Passed with a dizzying array of ordinances governing the sale of Cannabis. There the standard parameters of age requirements.  Not operating a motor vehicle while under the influence. Prohibitions on the possession of marijuana-related products within the vacuity of a school zone or substance abuse rehab facility. Requiring specific licensing to sell or produce marijuana products. Regulations regarding purity and proper labeling. Limitations on the amount of marijuana that can be possessed 1 oz in your possession in public no more than 10 oz in a private residence. The establishment of the Cannabis Advisory Board. A 10.75 % excise tax applied to the sale of recreational marijuana. Rest assured the state has broadly defined earmarks for allocating these tax dollars.

Thereafter, money in the fund shall be expended for (i) public and behavioral health including but not limited to, …. substance use prevention and treatment  …. ; (ii) public safety; (iii) municipal police training; (iv) the Prevention and Wellness Trust Fund established in section…; and (v) programming for restorative justice, jail diversion…

 

If the contours of the state regulations weren’t enough local municipalities have the option to implement local ordinances. Needless to say, marijuana sales in Massachusetts are highly regulated which is to be expected from the Bay State. Also, this demonstrates that this abolition of prohibition would be far from a lawless affair.

 

The Baptists:

The  Archdiocese of Boston back in late October of 2016 provide an $850,000 donation to the opposition campaign against Ballot question 4. At the time it was the second-largest donation accounting for approximately 30 % of total funding. This gesture was quite generous when you consider that “archdiocese lost $20.5 million in operating income between 2014 and 2015″. In the eyes of the Archdiocese, this investment was worth the cost. Cardinal Sean O’Malley expressed his concerns about legalization from a public safety perspective. Invoking the “gateway” hypothesis how this could potentially compound the opioid epidemic. O’Malley stated back in 2016 “..  thinking how do we get people to back away from these addictive drugs, rather than making it more attractive and accessible..”. He even urged local religious leaders outside of the Catholic church to take a stand against legalizing Marijuana.

The Catholic church of Boston does not benefit economically from their opposition. If anything they are willing to incur a loss to support this cause. Superficially it is a laudable goal. It is admirable to voice concern for the youth and the health of the community. Whether or not it is scientifically or socially misguided is another issue. It is difficult to find another incentive outside of moral concern that would drive the church to fund this cause.

 

The Bootleggers:

 

Companies that market, produce, distribute, sell, and market alcohol have a lot to lose from marijuana legalization. Not really.  This is a misconception. Per a 2019 study, the states with the longest history of legal Marijuana have not seen an impact in sales. While beer sales are down, distilled spirits have seen an increase in sales. However, back in 2016, this data wasn’t so clear. The urge to engage in rent-seeking advocacy proved too strong for the Beer Distributors PAC. Alcohol before Marijuana had little competition in the arena of legal recreational intoxicants. The natural inclination is to fear for your bottom line. This results in the knee-jerk reaction of joining the holy rollers in advocating against Pot. The moral guise of concern for public safety provides the ideal smokescreen for the representatives in alcohol-related industries to hide behind.

 

It was well documented that the Boston Beer Company (maker of Sam Adams beer) voiced concerns about legalization. Spirits conglomerate Brown-Forman (Jack Daniels, Woodford Reserve) expressed concern about recreational Cannabis back in 2014.  The Beer Distributors PAC in 2016 contributed $25,000.00 to the Campaign for a Safe and Healthy Massachusetts. Not the exorbitant amount that the Archdiocese of Boston donated. It is still a sizable contribution to the anti-pot coffers.  Ranking the association the third-highest contributor. It is quite transparent that an association of beer distributors are not truly concerned about public safety. Rather seeking protection from legal Marijuana chewing into their profits. Rational? From a cursory assessment of the incentives to keep pot illegal, yes! Prohibition would work as protection from the marijuana industry without having to engage in product innovation.

 

Conclusion:

 

It would be reasonable to question why single out this specific instance of opposition to the legalization of Marijuana back in the 2016 election cycle?  After all,  alcohol-related trade associations were one of the factions that helped snuff out Proposition 205 in Arizona. For one, this would be an example were the invested interests did lose.  Then again, on the other side of there were probably pro-pot investors funding the legalization campaign. However, back in the early 1980s Massachusetts was home to one of the pioneering faces of the craft beer revolution, Sam Adams. The irony is that the Boston Beer Company may not have ever existed if President Jimmy Carter hadn’t signed  H.R. 1337 into effect. Lifting the prohibition on home brewing. It would be reasonable to speculate that the big brewers of the day (Miller, Pabst, Anheuser-Busch, etc.) felt threatened by this loosening of restrictions. Fast forward nearly 40 years later and the past beneficiaries of deregulation want protection from the new wave of innovators.

 

It would appear that the tides may be turning in the other direction. Many alcohol producers are starting to embrace the legal Cannabis market. Even the Boston Beer Company who back in 2016 exhibited irrational trepidation of facing the prospect of legal Pot is joining the party. Last August the CEO expressed interest in developing a Cannabis-infused product. It appears as if some breweries have already beat them to the punch. Craft beer veterans such as the Flying Dog Brewery and Lagunitas have already made inroads in this new niche market. As a homebrewer and craft beer aficionado this was a possibility I was toying with back in  2012 (conceptually, due to the legal status). Seeing the lack of foresight and vision in the complaints of the rent-seekers, perplexed me.  Legalization would have presented the golden opportunity to experiment with infused-beer. If done correctly it could be a gold mine. Then again, I suppose the Hashish Porter was ahead of its time.

 

 

 

Bootleggers and Baptists Part II- Netflix is One of the Winners of COVID-19

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As it has now approached Memorial Day weekend many localities are either starting to loosen or lift their shelter-in-place orders. Even in regulation heavy Massachusetts beaches have been reopened in commemoration of the holiday. The beaches were reopened with specified safety restrictions [1]. Even though states are starting to slowly reopen it is hard to say whether or not we are out of the woods. There is still the potential of a second wave resurgence in COVID-19 cases.

The economic turmoil that has been spurred by state-mandated shelter-in-place orders has been well documented. Approximately 38.6 million American workers have applied for unemployment benefits within the past couple of months [2]. Per the National Bureau of Labor Statics unemployment rate increased to 14.7% in April [3]. The recent surge in high profile companies filing for bankruptcy could be seen as another oblique consequence of COVID-19 lockdowns [4]. Painting a very bleak economic picture for the United States.

 

Despite the financial carnage caused by government-mandated shelter-in-place orders some businesses are thriving. Certain sectors such as cleaning and delivery services have experienced relative success in light of the pandemic [5]. It could even be fair to argue that some businesses have prospered due to the virus-related restrictions. Reminding us that there the unseen beneficiaries of many regulatory proposals. Even those implemented in the name of public health and safety.  Regulation cuts both ways. It may benefit some while being a detriment for others.

This odd phenomenon is punctuated by economic Bruce Yandle’s concept of Baptists and Bootleggers. The formation of coalitions with seemingly opposing factions coming together for a common goal (Munger, 2020, P.513) [6]. The Baptists being individuals who support the regulation on moral grounds such as public safety or common decency. The bootleggers are proponents of such measures due to the financial benefits they stand to gain. The example Yandle uses is the prohibition of alcohol sales on Sundays (Yandle, 1983, P.2) [7]. This regulation satisfies the moral concerns of the Baptists. The Bootleggers effectively have no competition on Sundays.

Yandle came to this counterintuitive realization while serving on Council on Wage and Price Stability back in the 1970s. Yandle was surprised to find out that many industry lobbyists opposed deregulation (Yandle, 1983, p.2) [8]. To a certain extent, there is a demand for regulation (Yandle, 1983, p.3) [9]. Commodifying the legislative process due to the benefit of reducing competition. Smaller companies may not have the resources to adapt to the new regulations effectively making continued operation illegal. Effectively putting them out of business. Creating barriers to entry without even requiring an antitrust exemption such as those allotted to agricultural collectives and Major League Baseball.

 

The Baptists of the shelter-in-place orders would have to be healthcare professionals. Coast to coast doctors and nurses on the frontlines have expressed their concerns about the spread of the virus. Back in March, an Arizona doctor started a petition urging the state to impose a statewide lockdown order [10]. Motived by the laudable goal of stifling the spread of the disease or in the vernacular of epidemiologists “flattening the curve”. Certainly well-intentioned from the standpoint of point of public health. Especially considering the death count from COVID-19 in the United States is presently estimated at 73,639 [11]. One unfortunate side-effect that good intentions have not accounted for was the “temporary” suspension of civil liberties. Such as the freedom of mobility and property rights issues (F.E. Guerra-Pujol, 2020, P.2-4) [12]. That is a separate issue.

 

Some states have loosened lockdown orders and have even allowed for dine-in services [13]. However, many healthcare professionals are slow to even reconvene business due to concern about the spread of COVID-19 [14]. Many health care professionals have urged states to reopen slowly to veer away from a secondary spike in cases [15]. Clearly demonstrating lingering worries for the spread of COVID-19. Also, strongly demonstrating a moral dimension of lockdown orders. These appeals for cautious relinquishment of restrictions has been framed in the context of harm reduction. Have been centered around the moral imperative of saving lives. Providing the moral smokescreen for anyone with products or services that will increase in demand due to the lockdown.

 

One of the quiet beneficiaries of shelter-in-place orders has been streaming services, particularly Netflix. Any company with a business model that requires little interaction with customers has the advantage. Entertainment venues such as movie theaters, restaurants, bars, clubs, etc. were closed due to government decree. Effectively narrowing the array of entertainment options to activities that involve minimal social interaction. The top contenders being social media, television, and video games. Netflix was already an established fixture in television streaming services. As well as one of the earliest entrants to the market. Over the past couple of years. television viewers swapping out cable boxes for stream services has secured Netflix’s foothold on the market [16]. Even though  Netflix has not openly petitioned for any “lockdown” legislation they are clearly the Bootleggers in this situation.

 

The spike in Netflix subscriptions within the past couple of months is clearly correlated with the shelter-in-place orders nationwide.  Back in April the company reported a 28 % increase in revenue [17]. The rabid success of Nexflix exclusive content such as the docuseries Tiger King is undeniable. This documentary mini-series become a cultural phenomenon. Solidifying itself as a distraction from the uncertainty we face in a COVID-19 impacted America. While such programming may serve as an entertaining diversion it also has helped Netflix excel and emerge as the dominant form of entertainment.  It certainly helps to have a captive audience with a limited number of alternatives when faced with various restrictions. Per consumer surveys, Netflix has been voted the most reliable streaming service [18]. Regardless of the conditions of the pandemic is merely another feather in their entrepreneurial hat.

 

This is not an indictment of the success of companies that have prospered in the COVID-19 economy. Rather an observation of how the regulatory sword slices both ways. The “quiet beneficiaries” such as Netflix may not have openly called for shelter-in-place orders, but they without a doubt have seen increases in revenue due to such laws.  In part, this surge in business has been facilitated by the Baptists in the health care industry.  Putting pressure on state governments to shut down all nonessential businesses. Creating clear winners and losers in the COVID-19 economy.  Some companies are thriving will others are dying.

Extrapolating the lessons from Richard Cantillon concerning the non-neutrality of money is very much applicable to regulation.  Much like how increasing the money supply impacts factor other than nominal prices (Thornton, 2006, p.6) [19]. Regulation isn’t regulated to the narrow window of the issue that it is intended to solve. It can possess loopholes that can be exploited. By design can create unintended anticompetitive features. Demonstrating the non-neutrality of regulations. They have downstream consequences that often are overlooked by the Baptists and are well known to the Bootleggers.