17. Food Safety” to ban the use of Titanium dioxide in food products by January 2025. But keeping the Bootlegger and Baptists (1983), who benefits from banning Titanium dioxide as an ingredient of edible merchandise?
The company under fire (Mars) is the true beneficiary of the soon-to-be California law. Why? A company like Mars (arguably the largest candy company in the world) has the resources to accommodate the regulatory requirements imposed by California lawmakers. Mars can (at little cost to their profits) substitute Titanium dioxide for a legal ingredient. But smaller candy producers may not be flexible and will go out of business due to these new requirements. Therefore, Mars a silent Bootlegger in this scenario.
The current controversy surrounding Tennessee Lt. governor Randall McNally is a boon to the Left-wingers in this political climate amid America’s “Culture War”. He has tacitly supported several laws that the Human Rights Campaign believes targets the LGBTQ+ community [1]. Notably, SB0003 (2023) which places restrictions on drag performances, has been a hotly debated topic on editorial pages coast to coast. Why has McNally’s stance on Anti-LGBTQ+ legislation recently come under fire? McNally has recently interacted with a gay social media figure liking several sexually provocative posts, creating a gap between his political positions and his personal opinions. The TN Lt. Governor has expressed; that his replies were misinterpreted and did repudiate the perception that he was anti-LGBTQ, but never stated that he wasn’t a homosexual [2].
In the context of Bruce Yandle’s Bootleggers and Baptists (1983) framework, who benefits from these laws regulating sexuality and gender? We don’t need to look too far to see who the Baptists are, clearly the Conservative (most likely religious) lawmakers, because they are enacting these laws in the name of morality and the wellbeing of the youth. McNally himself is probably the most salient beneficiary of these laws. Why? Since he either sympathizes with the LGBTQ community or is a closeted member, he can easily refute any association with this enclave of sexual minorities within the state by pointing (free-riding) to the laws he implicitly endorsed. The optics of McNally not appearing to be openly pro-LGBTQ is imperative in a staunchly conservative state like Tennessee. If his open support is off-putting to state voters, he might as well kiss his cushy seat in the state house goodbye.
Notes:
This essay is merely an application of Bruce Yandle’s coalition model and is not a commentary on Tennessee state laws, McNally, or the LGBTQ+ community.
Interesting observation, but speculating about the nature of McNally’s sexual orientation is slightly outside the bounds of my analysis.
The debate on reforming Section 230 of the Communication Decency Act (1996) is one of the few issues in US public policy that has bipartisan support. Both parties have different objectives for abolishing or amending the law. Conservatives want social media platforms to be regulated as common carriers, to avoid the “censorship” of conservative users[1]. There may be some veracity to the claim of social media bias towards conservatives, since 35 % (the highest percentage of any other ideology polled) of participants identifying as “strong conservatives”, in a survey conducted by researchers at the Cato Institute, have experience having content penalized by social media companies. On the other hand, liberals challenge the status quo of Section 230 on grounds that social media firms are not sufficiently blocking the dissemination of misinformation. Despite their conflicting interests in reforming the law, both parties form an “odd bedfellow” coalition for Section 230 reforming. Making the bipartisan zeal for change an example of a Bootleggers and Baptists (1983) coalition.
What is Section 230
Many readers may be wondering what Section 230 is. Section 230 was the 1996 amendment to the Telecommunications act which has been dubbed by the media as the “.. 26 words that created the internet..”. These twenty-six words state:
“…(c) PROTECTION FOR GOOD SAMARITAN’ BLOCKING AND SCREENING OF OFFENSIVE MATERIAL- (1) TREATMENT OF PUBLISHER OR SPEAKER- No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider…” (p.101).
This section of the law insulates platforms from being liable for the content created by users. Effectively, there is a certain degree of rent-seeking implied; by this immunity, this privileged separation between the platform and the user is the proverbial glue that holds the internet together. Message boards, social media platforms, pornography, video-sharing websites (YouTube), and even blog-hosting websites would not exist without 230. These protections provide platforms with the incentive to be more permissive with what they allow users to post. If users find the content moderation from current social media applications restrictive, a world with this section nullified would be even worse. Freely allowing users to post any content they wish; would be a costly risk.
·
Gonzales v. Google (2023)
The public debate over Section 230 is now coming to fruition in the form of two twins (based on the same facts) in Supreme Court cases. The first case Gonzales v. Google concluded the oral argument on February 21st,2023. The facts detail how the father of Nohemi Gonzales, Reynaldo Gonzalez, a U.S. citizen killed in a terrorist attack (2015) orchestrated by Isis in Paris filed a lawsuit against Google. Gonzalez asserts that Google (the parent company of YouTube) was complicit in the attack for YouTube’s algorithms leading users to terrorist recruitment videos posted on the platform. The next day after the attack, ISIS claimed responsibility for the attack in a YouTube video. The district court dismissed Gonzales’s claim against Google based on Section 230 and the court of appeals affirmed. The U.S. Supreme court granted certiorari on October 3rd, 2022.
In the oral argument, the attorney on the side of Gonzales, Eric Schnapper, argued (p.17) that Google so much didn’t fail to take down the content, but actively encouraged it through their algorithms. Schnapper implies that driving viewers to such content is outside of the scope of Section 230[2]. However, in the process of questioning Schnapper, the Court was seeking to determine if Section 230(c)(1) applies when platforms utilize “targeted recommendations” predicated on “..information provided by another information content provider..” The verdict is still pending on the case; only time will tell what the fate of Section 230 will be.
Twitter, Inc. v. Taamneh (2023)
In the twin case for Gonzales, Twitter, Inc. v. Taamneh, was only argued a day apart from Gonzales (02/22/23). The facts of the case were a copy-and-paste of Gonzales, but the scope of the argument was to determine if Google, Facebook, and Twitter were liable in the context of anti-terrorism statutes. Per Oyez:
“…The district court dismissed the claims based on aiding-and-abetting liability under the Anti-Terrorism Act, and the U.S. Court of Appeals for the Ninth Circuit reversed…”
While the SCOTUS deliberates on the future of Section 230, it is still worthwhile to evaluate who truly benefits from reforming this law. The bipartisan support for amendment/abolishment of this law; makes this determination a close call. The assignment of the role of Bootlegger and Baptist can be determined by ideological preferences, like in the scenario of Qualified Immunity reform. In the name of objectivity (for the sake of positive analysis), one faction within this coalition has more to gain than the other. While liberals get to cloak themselves in the robes of the white knight saving us from misinformation, this pales in comparison to what conservatives have to gain from overturning or revising this law. Social media platforms have an obvious left-leaning bias; conservatives are disproportionately penalized for their content. If social media companies block conservative content, right-wingers gain substantially through having more forums for disseminating their ideological message.
However, it would be shrewd to warn conservatives about pursuing this end too aggressively. This is the conservative version of the Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission. Why? In the Masterpiece case liberals were hoping the court would rule in favor of violating the rights of the bake shop owners by legally forcing them to bake the gay wedding cake. Thankfully, the court ruled in favor of the bake shop; but making liberal social media platforms host conservative posts is just as transgressive as forcing right-wing Christian bakers to make gay wedding cakes. Firms operating in the private sector; have the right to exclude users for any reason they deem fit. It is frequently unwise to discriminate against platform users, but that is the Firm’s prerogative. If conservatives cannot see the irony of this inverted scenario, I am at a loss for words and can only believe that such obtusity is the byproduct of partisanship.
Notes:
1.) There is a wide variety of views from conservatives on how they desire to reform Section 230 reform. Ranging from a tear-it-down methodology to a moderate approach to amending it. In his article Section 230—Mend It, Don’t End It, Klon Kitchen, former Director at the Heritage Foundation recommends an amendment strategy over abolishment.
2.) At many points in the oral argument, it appears that Schnapper fails to convey a convincing argument upon further scrutiny from the Justices. Schnapper obtusely justified culpability peripherally through JASTA. Justice Sotomayor calls him out on deviating from the initial complaint of YouTube being derelict for failing to remove ISIS videos when at oral argument, he shifted to claiming the algorithms were the issue (p.19-20). She further prods at the veracity of the claims of YouTube aiding and abetting ISIS; when the algorithms on their face are neutral and not tailored to support explicitly pro-ISIS videos (p.25). Justice Thomas also struggled to see how “inaction” ultimately led to “aiding and abetting” (p.33).
The Chinese social media app TikTok is currently in the crosshairs of U.S. lawmakers. Representative Michael McCaul (R., TX.) has proposed bill H.R. 1153 that confers to President Biden the authority to ban application in the United States. On Wednesday (03/01/23), “..the U.S. House Foreign Affairs Committee..” approved the bill; however, per Reuters:
“…The fate of the latest measure is still uncertain and faces significant hurdles before it can become law. The bill would need to be passed by the full House and U.S. Senate, which is controlled by Democrats before it can go to Biden…”.
The bill still has a few bulwarks to clear before becoming law. The content of H.R. 1153 justifies the prohibition of social media applications on the grounds of national security concerns. The bill cites “..espionage action..” from data collection, election interference, and the use of algorithms to target content to promote the interests of the Chinese government. There may or may not be any veracity to these concerns.
In the context of a Bootleggers & Baptists (1983) coalition, who truly benefits from the United States restricting TikTok? Our Baptists in the effort to ban TikTok are the Republicans. This is not an endorsement of the political party; but an objective acknowledgment that a national security argument could be considered moralistic.
Now, this begs the question, who are the Bootleggers? The most obvious answer would be competing social media platforms, but these firms are tangential actors in this scenario. If American-based social media companies conspired with Republicans in the house to propose this bill, that is next-level four-dimensional chess. A more likely situation would be that the Democrats are the real beneficiaries of the nascent stages of outlawing TikTok. Why? If a politician’s objective is to retain their seat in office, then Democrats have a lot to gain; because Gen-Z is the largest constituency of voters who use TikTok. An estimated 60% of all TikTok users are members of Generation Z. Only to up the stakes, the fact that Gen-Z is more likely to vote for Democratic candidates. Since Gen-Z also is the majority of TikTok users, pandering to this patch of voters through opposition to the ban is imperative.
Outside of Democratic politicians, there is an additional agent(s) that could stand to benefit from the direct fallout from H.R. 1153, and that is the ACLU. There is the possibility that the organization spoke out against the bill for reasons of ideological leanings (left-wing proclivities), but it is more likely the ACLU desired positive publicity. The ACLU is an organization that defends civil rights, publicly denouncing the proposed law as a threat to the First Amendment and perpetuating its public image. More positive publicity may entice donators to give more to the nonprofit and assist them in furthering the ACLU’s advocacy goals.
Now that we are into early February, Dry January has finally concluded. Most participants are alcohol consumers looking to take a brief break from imbibing beer, wine, and spirits. This health/self-improvement movement has spurred a proliferation of various faux-alcoholic alternatives, hence the rise of the Mocktail. Even the original alcohol substitute, non-alcoholic beer, has grown in popularity (global revenue from N/A Beer is projected to nearly double).
While non-alcoholic beer may be seeing a surge in popularity, how does the consumption of this beer substitute impact sobriety for those with addictions to alcohol? Many addiction experts agree that O’Doul’s may only contain residual alcohol, but it can be a trigger for recovering addicts. Beer lovers in recovery have a bit of a conundrum, either; risking a relapse or forever giving up the flavor of beer [1].
The companies producing Non-alcoholic beer also have incentives to produce this profitable product, especially when the amount growth of the market for this product category. It is conspicuous; that both coalitions (presenting us with Bootlegger & Baptist features) have something to gain from this product existing (profits and a pleasurable alternative to beer). Long run, many former drinkers may relapse and revert to consuming alcoholic beer. There are certainly potential costs for recovering ex-drinkers testing the boundaries of their environmental triggers.
Superficially, we would assume that beer producers are always the clear winners. Even if recovering drinkers fall off the wagon, the large macro breweries all produce both varieties of beer and will yield even more potential revenue. Not so fast; there is one circuitous way “Big Beer” may be shooting itself in the foot. Producing the liquid training wheels back to alcoholism may stir the ire of national public health experts. The number of alcoholics returning to alcoholism because of N/A beer may only be a sliver of domestic sales, but beer corporations not appropriately marketing their products is not a sincere effort to curtail alcoholism. Public health experts tend to urge lawmakers to implement Pigouvian taxes to reduce Social costs. An additional tax (think cigarette taxes) will cause a slump in sales for breweries. This will hit Budweiser, Miller, and Coors the hardest in the wallet as it would impact their best seller, alcoholic beer ( N/A beer only represents 37% of the market).
Both breweries and consumers recovering from alcoholism are amid a Prisoner’s Dilemma. Recovering alcoholics and breweries simultaneously attempt to serve their interests. Ultimately, end up paying for it down the line. If those in recovery could part ways with beer and beer companies could focus on alcoholic beer and responsible marketing, both parties would be better off.
The reward for Mutual Cooperation: R= .5
It is difficult to provide accurate and inclusive quantification of the values for both parties. We don’t have the means to calculate or estimate the number of recovering alcoholics who relapse due to N/A Beer or how much breweries would stand to lose if Pigouvian excise taxes were placed on beer nationally.
However, the payoffs will be quantified on a -1,0, .5, 1 scale. E.g.) 1= The a complete victory; Alcoholics consuming N/A Beer and there being no risk of relapse. This example is our “Have-your-cake-and-eat-it-too” Payout. It is the unattainable payout in PDs that all the players seek to obtain
Breweries and recovering addicts should abandon the self-interest strategy; otherwise, both will suffer adverse consequences.
Punishment for Defecting: P-0
There is nothing legally stopping a brewery from producing N/A Beer.
Technically, non-alcoholic beer cannot get you intoxicated. The addiction experts frown on it; but it is unlikely that drinking a Coors Edge while watching Netflix will get you kicked out of AA.
The temptation to Defect: T= 1
Beer corporations = make more profits from producing both varieties of beer.
Recovering alcoholics = Similar taste, no intoxication.
Sucker’s Payoff: S= -1
Beer corporations = Losing out on more revenue when there is a demand for N/A Beer.
Recovering alcoholics = Forfeiting the opportunity to continue to enough beer when N/A Beer is available on the market.
Condition 1:
· T>R>P>S
· 1> .5> 0 > -1
Condition 2:
· (T+S)/2<R
· (1+-1)/2 <.5
· (0)/2 <.5
· 0 < .5
Notes:
Historically, breweries making non-alcoholic beer have produced lackluster beers lacking flavor. Although, the quality of N/A Beers has drastically improved over the years.
Walmart has decided to raise its starting wage to $14 per hour. This seems contrary to conventional wisdom, as firms strive to minimize labor costs. Walmart may appear to be the proverbial white knight in this scenario. By the end of 2023, less than ten states will have minimum wage requirements that exceed Walmarts starting wage. In the context of a Bootleggers and Baptist (1983), is Walmart the Baptist? Is Walmart meeting Progressive politicians and the American public (51 % support a $15/hr. minimum wage) halfway? By offering slightly less than what the left-wing populists want, are they providing voluntary compromise?
Not so fast. On a superficial level, Progressive politicians would be the Baptists for championing the moral concern of the quality of life experienced by low-skill workers. It is important to note that their normative position does not account for the potential negative consequences of raising the minimum wage. Walmart is most likely not enacting this new corporate policy out of the kindness of its own heart. It is important to remember the insights made by Adam Smith (the butcher, the baker, and the brewer) in The Wealth of Nations (1776), business is not charity, Walmart executives need to act in the interests of the firm to survive in the marketplace. Walmart might be upping wages to retain employees, which would be the best-case scenario.
However, there may be a more oblique strategy the firm is circuitously implementing. This is purely speculative and not a conspiratorial claim. The following statements are merely conjecture. If a firm seeks to reduce labor costs; why would the company voluntarily increase wages? Indirectly, such a policy could assist in reducing labor costs. How? Through urging companies to automate operations. The St. Louis Federal Reserve even notes; when the minimum wage increases, the greater the potential for worker displacement.
“… Increasing the minimum wage is a controversial issue. Although a higher minimum wage can provide higher income for low-wage workers, it can also reduce the number of job opportunities for those workers. Some of the reduction in jobs occurs because a higher minimum wage increases production costs, causing firms to shift away from, or stop, production of some goods…”
While the public would be disgusted by this realization, reviling such business tactics ignores the role of incentives in decision-making. If you were a Walmart executive, you would take the same measures to reduce operational costs.
The War on Drugs waged by the United States since the 1970s has created a myriad of Bootlegger and Baptists (1983) dynamics. Few people question who stands to benefit from the legalization of currently prohibited drugs. This question becomes more prominent as more jurisdictions globally legalize recreational Marijuana. What happens when the most evident Bootlegger of the illicit drug trade (the Sinaloa Cartel) works to legitimatize commercial Marijuana sales? Does this strategic move shift their position in the coalition to that of the Baptists?
This essay will examine this point to determine if the bad boys of the illegal dope game have turned over a new leaf. The legal status of Marijuana in Mexico is not as loose as the laws of their northern neighbors, California and Arizona. Medical cannabis has been legal in Mexico since 2017, but what about the recreational consumption of pot? Mexico has decriminalized possession of up to 28 grams of Marijuana; recreational cannabis is still not legal. The staunch competition from the United States has caught the attention of various cannabis vendors in Mexico.
American dispensaries have achieved immense success considering sales for recreational weed are projected to hit “.. $25.1 billion in sales in 2025, with an average yearly growth of %23.60 from 2019 to 2025…”. It is self-evident that the illicit drug cartels would want a piece of the action. Yes, the most infamous cartel in Mexico has been watching. In the city of Culiacan, those left in charge since the incarceration of “El Chapo” Guzman, the “Narcosjuniors”, have established quasi-legal dispensaries. Selling various products ranging from edibles to best-sellers(manufacturing around 1,200 to 1,500 a week); pre-rolled joints. However, the cartel creating formal business networks, does this mean they are making sincere inroads to legalizing a drug with relatively few societal externalities? The transparent motive profit, leading them to create a commercial channel transitioning to a legal market.
If Sinaloa is once again the proverbial Bootlegger, who are our Baptists? We need to look at whom the cartel is employing to ensure quality control. After all, the cartels do not have the best reputation; when it comes to producing primo Marijuana. El Chapo’s successors will not be the Baptists, but they have enough sense to enlist the help of the passionate pot aficionados to cultivate higher-quality weed. They have hired weed-loving growers who have previously lived in California. Their love for cannabis urges them to:
“..We only have the permit to produce. The organization is giving us their money, their trust, and the green light to make the best product. But we can only sell to one client: the organization. We get good pay for our job, not in the millions, but enough to live off well, but more than that, the opportunity to develop top-notch weed,” one of the producers said..”
As usual, the cartel is still chasing profits, but the growers they employ want to grow the best pot in the world. Because of their love for the product, they want to dominate the global market (Canada, United States, and the Netherlands being the current movers and shakers). Only time will tell; once legalization takes full effect, if Mexico can overtake the California market. It would be nice to see an aggressive resurgence of high-caliber Acapulco Gold as a result of market competition.
Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, once masqueraded as the regulation-friendly face of the crypto markets. SBF was known for his openness to regulation and willingness to work with lawmakers; he not only wanted to graciously assist our elected officials in Washington with guiding policy but was also “socially conscious”. Sam was a vocal proponent of effective altruism and possessed a Benthamite concern for maximizing social benefits to help the most people. This wunderkind 30-year-old was too good to be true
Whether it was Bankman-Fried donating large sums of money to the Democratic party (the purported political advocate for the economically disadvantaged) or his views on veganism and charity, it was all a façade, a thin veneer masking his actual conduct. Per Reuters:
“… The turmoil at FTX has seen at least $1 billion of customer funds vanish from the platform, sources told Reuters on Friday. Bankman-Fried had transferred $10 billion of customer funds to his trading company, Alameda Research, the sources said.
New problems emerged on Saturday when FTX’s U.S. general counsel Ryne Miller said in a Twitter post that the firm’s digital assets were being moved into so-called cold storage “to mitigate damage upon observing unauthorized transactions.”
Cold storage refers to crypto wallets that are not connected to the internet to guard against hackers…”
As investors fled the platform and Binance pulled the plug on bailing out FTX, it is clear that SBF misrepresented the financial health of the exchange and its business practices. All of these developments are reminiscent of the Enron scandal. A corporation rubbing elbows with congress to engage in regulatory capture and foster a positive public image. While concurrently; creating a smoke screen obscuring the company’s off-color conduct.
The economist Bruce Yandle’s theory of Bootleggers and Baptist (1983) coalitions perfectly describes the Machiavellian tactics utilized by Mr. Bankman-Fried. After all, perception is what matters. If investors were not distracted by his social advocacy and success, they might have spotted the red flags. As observed by Yandle, there is often a demand for regulation. Often from parties that prima facie would oppose such measures (p.13). Why? This gives industry elites the to help shape rules that will benefit their bottom line and yield good publicity. Frequently, these scenarios are win-win for the firms involved. SBF proposed a licensing system for Defi (decentralized financial technology); per Erik Vorhees:
“..self-enforced rules and blacklists would only serve established exchanges that could afford to pay for compliance…”
SBF simultaneously worked to craft regulation that FTX would benefit from while appearing to share some of the concerns of crypto-phobic politicians like Elizabeth Warren. Progressive politicians are the Baptists in this scenario. SBF’s arrogance ended up being his own Achilles Heel, ultimately revealing his true colors, those of a covert Bootlegger (p.190).
In recent Arizona election news, Libertarian senate candidate Marc Victor has withdrawn from the race and openly endorsed Republican Blake Masters. Much like other circumstances in politics, there is a moralizing rationale for Victor’s capitulation and an obvious beneficiary of his exiting the race. There is a Bootlegger and Baptists (1983) dynamic in this development in the Arizona mid-term election.
Victor left the race and lent his support to Master to avoid a spoiler effect; a phenomenon where third-party siphons off votes from a major party candidate. This is an enduring problem for Arizona Republicans for a while, hence the passage of HB 2608 (2015). This has only been exacerbated; by the fact that the Democratic party made numerous donations to Marc Victor’s campaign. By any metric, Victor calling it quits to avoid a spoiler effect has the normative underpinning of moralistic reasoning [1].; he is a Baptist in this scenario.
The Bootlegger in this situation is indisputably clear, Blake Masters. One less candidate in the race means more votes for Blake. Masters has been after the Libertarian vote before Victor even dropped out of the race. He has been dog-whistling and pandering to certain Libertarian sensibilities that are still congruent with the new strain of right-wing populism (no one will accuse him of being soft for wanting to “End the Fed”). Even leaning on his ties to the Ron Paul movement back in college. His strategy to capture the voters of a right-wing leaning third-party is a shrewd move on his part; if the polls are accurate, this will be a tight race. Per Five-Thirty-Eight, Mark Kelly currently holds a meager lead over Masters, Kelly polling in at 48.4 % and Masters trailing behind at 46.8%.
Notes:
Victor may have been concerned about the effect of his third-party campaign on the election results, he may only be a superficial Baptist. Why? Per Reason, Victor did receive threats from supporters of his opposition. This fact cannot be dispensed with when evaluating his decision to exit the Arizona senate race.
2. Data source Five-Thirty-Eight. Figure A.
3. Figure B. data was processed in Microsoft Excel.
Do not let the hollow promises of populist ideology fool you! Populism of the right or left is antithetical to the individual liberty cherished in Classical Liberalism and Libertarian philosophy. For one, populism frames policy in collectivistic terms rather than individualism. Populism tends to advocate for policies that support Positive rights (a right to an economic good, e.g. Social Security) over Negative rights to protect the individual from interference with exercising their rights (free speech). Much of what populists advocate for is the retribution of wealth and market privilege instead of individual freedom. Policies such as Single-Payer Healthcare and tariffs impose costs on all voters. This is because populism holds the interests of the group; without unanimous consent. Sure, by choosing to live within a certain jurisdiction you may be tacitly consenting to the laws. However, the rise in populism has spurred an increased demand for state intervention to provide more economic privileges. The problem is that the preferences of the “average voter” cannot be known, as every voter has their own opinions and preferences (p.20). Ordinary voters are not unitary actor, but many individuals with different political proclivities; populism assumes too much about what is best for all of society (p.16).
It is not just the threat of majoritarian tyranny that makes populism perilous to liberty, but populism also requires conferring more authority to the state. This may seem ironic with all the “drain the swamp” rhetoric of the Trump presidency. Even in applying rudimentary logic, more collectivism requires a more centralized authority to be enforced and implemented. The unified will of the people is not recognizable; it takes the personified form of a “strongman” leader embodying the general will (p.20). They generally shift towards autocratic regimes (p.20) since implementing and justifying factually flawed and illiberal policies necessitates large sums of political authority. Beyond the threats of authoritarianism, the elites still benefit from waves of populism. The elites can hide behind the fluid nature of populism and allow majoritarian sentiment to shape crony policies that benefit narrow interests (p.171-172). For example, the supervillain of retail Walmart’s (not the author’s opinion, but a commonly held belief)CEO publicly stated the minimum wage was too low. Raising the minimum wage has been a longstanding talking point of the populist left. In true Bootlegger and Baptist (1983) fashion, Walmart stands to gain. Why? Because a higher minimum wage means more automation and fewer salaries. The bonus is that not only will the firm gain monetary from saving money while maintaining the veneer of having concern for those in the lower income brackets.
The advocates of worker rights have always been in a precarious position; reforms often do not align with the interests of employers. This is an enduring pattern that supporters of California Assembly Bill 275 need to consider. Most initiatives for economic equality tend to be more moralistic than practical and do not account for how firms will respond to such measures. Depending on how establishments defined in the bill as Fast-Food Restaurants (only the larger companies with 100 + stores) adjust to the requirements set by AB 275.
The law aims to establish a governor-appointed council (comprised of workers, union representatives, etc.) that reviews and amends workplace standards and wages. Even boasting a requirement where any measures would need signatures from 10,000 (consent of the governed?) fast food workers employed in California to move forward. On the surface, this new bill sounds like it will provide reforms that will improve the lives of millions of workers struggling to make ends meet on a low salary. However, the lofty aspirations of AB 275 may have the exact opposite effect.
When analyzed from the framework of Bruce Yandle’s Bootleggers & Baptists (1983) theory of coalitions, it is easy to see the fast-food workers as the proverbial Bootleggers. But such an assumption is flat-out erroneous; the hourly employees at the local Jack In The Box are the ones who will pay the price for this new labor reform.
Prima Facie, it sounds like the hourly fast-food employees of California make out like bandits. The prospect of escaping penury wages and making $22/hour. Then there is the bonus of having a voice in shaping the regulation that will impact your work life. These benefits will be short-lived; because the titans of the drive-thru will eventually respond to the monetary and transaction costs of fulfilling these new legal mandates. Few (if any) companies in any sector of business can whether a significant increase in labor costs ( there is a potential for labor costs to increase by 60 %). Depending on how large the increase in worker compensation becomes, menu prices stand to increase by 22 %. (p.7). Some may speculate that firms such as Mcdonald’s would benefit from passing along labor costs to the consumers at higher prices; there is a strong likelihood that patrons may just opt for cheaper or higher quality alternatives. There is also an increase in transaction costs because of the additional layers of complexity added to the relations between the management of franchise owners and hourly employees. AB 275 may discourage smaller regional fast-casual restaurants from expanding to avoid the onerous conditions of this new law.
Ultimately, our Bootleggers, the established fast-food eateries will gain from decreased labor costs. How? These firms will decide to automate operations and benefit from long terms savings in not having to pay salaries and benefits or cope with the loss in productivity from theft or employee absence. Only increasing the minimum wage is enough to drive many firms to reduce costs. Creating a price floor is a price control that causes disruption throughout the market. Because businesses will attempt to avoid the artificial increase in labor costs. For the workers that are lucky enough to keep their jobs, certain nonmonetary forms of compensation disappear (p.10-11); no more free coffee in the breakroom.
Efforts to shield the public from the negative externalities and pharmacological effects of drugs have been unavailing. One example of this has been the dismal failure of the decades-long War on Drugs spearheaded by President Nixon. Most of these fruitless measures go up in smoke since they attempt to suppress human nature; we like to feel pleasure ( hence why neurotransmitter receptors exist) and the desire for money. As long as both characteristics remain true, the drug war will never prevail.
The languishing policies pushing for a “drug-free” America are not limited to the federal level of government. 60 % of all states prohibit recreational Marijuana sales. Despite that, Cannabis is believed to impose fewer social costs than hard drugs. Considering the powers conferred to the states under the Tenth Amendment, there is still plenty of room for lower levels governments to enact ineffectual drug laws [1].
One recent example of this was Legislation (S.2819-A) a bill sponsored by New York Senator; Joseph Addabbo, Jr. S.2819-A, requiring an individual purchasing a “whipped cream charger” to be 21 years old. The restricted device depicted in the laws as being “.. steel cylinder or 5 cartridges filled with nitrous oxide (N2O) that is used as a whipping 6 agent in a whipped cream dispenser…”. However, there are several issues with this legislation. First (minor issue), the bill lacked clarity. Several stores and NY-based news outlets stoked public confusion by declaring that these age requirements applied to cans of aerosolized whipped cream ( e.g. Reddi Wip). From the perspective of the Bootleggers and Baptists (1983)model of coalitions, makers of non-aerosolized whipped cream (Cool Whip)may have temporarily made out like bandits. However, once this misinterpretation of the law is cleared up, these temporary and meager gains will fizzle out. The Kraft Foods corporation is far from being the biggest beneficiary of this new law, especially considering how whatever the organization gained was negligible.
The true Bootlegger in this scenario would be Addabbo himself. This law will have a minuscule impact on public health and safety, but by being the lead advocate, the senator fosters a positive public image. The fact that S.2819-A will be virtually ineffectual is the most notable shortcoming of this law. Inhalant abuse only comprises a small percentage of all drug use in the United States. It was exceedingly difficult to find specific data on inhalant abuse in the state of New York, but we can always extrapolate from national data. This would only be untenable if New York (specifically Queens) had an outrageous epidemic of young people huffing nitrous oxide.
Here are some numbers:
0.9% of Americans 12+ years old have reported abusing inhalants in the past year.
Only 4.8 % of eighth graders, 2.0 % of tenth graders, and 1.8% of twelfth graders reported using inhalants in the past year.
In 2015, 97.3 % of teenagers (ages 12-17) did not use volatile vapors/industrial chemicals or other solvents to get intoxicated.
1.8 % of individuals who reported having a major depressive episode in 2022; admitted to using inhalants (12 + years old).
Unless an overwhelming number of young Americans abusing inhalants happen to be residing in Addabbo’s district, it is difficult to see why there is such an exigent need to remedy the issue of youth inhalant use. If anything, he merely reached for the low-hanging fruit; regulating a legal product is far easier than mustering the resources to combat a thriving black market. He avoids jumping through the hoops of justifying the expenditures for drug-related taskforce and all the associated red tape. Simply, slap a fine on the vendors who do not comply. For Addabbo to grapple with the opioid crisis that most likely impacts his district would require more tax dollars and coordination with multiple levels of government and agencies (after all the heroin and fentanyl supply chain is international). The kind senator gets to sidestep all this mess and still look like a hero.
Footnotes:
This statement is not a critique of Federalism but a pointed observation of flawed policies implemented by individual state governments.
Many believe that food safety measures are necessary for promoting public health. We do not consider these desiderata as conferring a benefit to competing eateries. The renowned Washington D.C. bakery Georgetown Cupcake was shut down due to several health code violations. For a licensing issue, mouse dropping, and mold on consumable items. It is easy to become disgusted by these findings; there are several questions we need to answer. Outside of the cost of internalizing the externalities of a food-borne illness outbreak; (estimated at a scale of “…$4,000 for a single outbreak in which 5 people..” and 1.9 million for a single outbreak in which 250 per person). Even if no patrons become ill after consuming baked goods from Georgetown Cupcake, they still stand to lose business from the bad publicity alone.
While most people wallow in the grotesque of such hygienic incompetency of this bakery, it is easy to lose sight of the covert beneficiaries of their misfortune. One man’s loss is another’s gain. Per Superpages, there are at least thirty bakeries of the high esteem in the Georgetown section of Washington D.C. At a minimum, there at least thirty Bootleggers stand to gain from the bakery’s momentary lapse in cleanliness. It would be rational to apply Bruce Yandle’s framework of Bootleggers and Baptist (1983)coalitions to this situation. While the Washington D.C. metro health inspectors emerge as the white knights shielding the public from deleterious dining options, their published findings effectively divert business to other food vendors. Who wants to eat at a restaurant where there are rat feces everywhere? Many of the giddy Bootleggers may not be as squeaky clean as they seem. Since budgets for health inspections have decreased most restaurants are only inspected annually. There is a correlation between the number of health evaluations and instances of outbreaks of food poisoning originating in restaurants. Georgetown Cupcakes may have gotten the short end of the stick this time; next time, one of their callous competitors may pay the price.
Few issues in the current political scene are as divisive as the Second Amendment; as articulated in the SCOTUS case District of Columbia v. Heller (2008), an individual right. Anytime a mass shooting occurs or restrictions are purposed, gun rights advocates tend to double down. After all, regulating firearms is a prisoner’s dilemma in which neither side of the aisle is interested in making any concessions. Prima facie, it does seem that guns have become increasingly regulated over the years. Potentially vindicating the slippery slope logic expressed by Second Amendment proponents. The fear of prohibitively strict gun regulations or outright bans weighs on the minds of gun owners. A point substantiated by the fact that 59 % of polled gun owners indicated that gun control advocates desire to outlaw private ownership of firearms. Many gun enthusiasts view this right as sacrosanct and a vital component of living in a free society.
Number of Mass Shootings in the United States 1982-2022. Courtesy of Statista.
How do the reactionary sentiments of slow and grinding decline to an outright gun grab correlate with patterns in gun sales? There does seem to be a connection between precipitating events and increases in transactions related to procuring firearms (including background checks). Analogous to how macroeconomic events impact trading on the stock market, the prospect of regulation after events such as mass shootings results in abnormally high gun sales. For example, gun sales in California soared by 168 % between 1996-2015. 50 % of all mass shootings within the past 50 years transpired after 2000. 20 % of the mass shootings in this timeframe occurred within the past five years.
Gun control proposals; are often formulated in the wake of a mass shooting; there does seem to be at least a superficial correlation between mass shootings, gun control proposals, and gun sales. But, are politicians and political activists concerned with decreasing the number of guns in the hands of the citizenry shooting themselves in the foot? It is inherently human for people to purchase large quantities of a commodity facing a ban. A clear example of this was before JFK enacted the Cuban Trade Embargo; he stocked up on his favorite brand of Cuban cigars. It isn’t outlandish to believe that gun owners would seek to stock up on accessories, ammunition, and firearms after a mass killing or the announcement of gun control legislation. In effect, this would encourage people to obtain more guns. Rendering the bluster of tough-on-guns rhetoric to being counterproductive. Unwittingly, when politicians like Beto O’Rourke are telling us that he is coming after our AR-15s he’s saying “.. Everyone run to the gun shop now!..”. O’Rourke is blinded by political gamesmanship; he overlooks that his firebrand comments have only created a cobra effect; people panic and buy more guns.
If progressive politicians are inadvertently increasing the number of guns owned by the American public, who benefits from gun-grab-mania? Gun store owners. In applying the logic of Bruce Yandle’s Bootleggers and Baptists (1983) model, it becomes clear that gun control advocates are indirectly helping the proprietors of gun stores. By sending all of their patrons into a frenzy, the moral arguments of the anti-gun crowd end up drumming up more business for gun vendors. While neither party is intentionally working together and does not even share the same goals, they have a synergistic relationship. Beto is waving the flag of the gun shops without even knowing it.
In an age of digital banking, physical cash has become a cumbersome relic of a bygone era in the eyes of most Americans. It is easy to assume that we would all be better off in a cashless society, taking the lead of nations such as Sweden. The belief is that we would be better off in a digital monetary regime that would facilitate tax collection and tracking of criminal activity (p.2). Only demonstrating the tensions between law enforcement interests and the Fourth Amendment rights regarding financial crimes (p.3). Does the question become who benefits from the United States eliminating the use of money? It should be abundantly clear that it is axiomatically true that every policy selects winners and losers. The decision to abolish physical cash transactions is no different.
In the fashion of Bruce Yandle’s Bootleggers and Baptists (1983) theory of political coalitions, for every policy prescription; there is a moralizing agent and a beneficiary. In his 2018 paper, Norbert J. Michel, Special Interest Politics Could Save Cash or Kill It, details the parties that stand to benefit from the relinquishment of cash transactions. Some of the most conspicuous parties that prosper from a cashless society would be law enforcement, with a digital record of every economic transaction, it is hard to obscure illicit conduct. There are parities in the private sector that would find the move to electronic transactions advantageous. The credit card companies are likely one of the most salient groups of Bootleggers of anti-cash policies. The CEO of Mastercard has been a vocal exponent of getting rid of cash; it was even the first company to openly lobby on “… the behalf of bitcoin..” (p. 8). Any move towards digital payments over tangible currency would fatten the pockets of creditors. All credit card transactions are digital; it is not that farfetched to suspect that individuals who use cash would be more apt to use their Mastercard.
Other than law enforcement officials, who are the holy rollers of killing the dollar? One needs to look no further than the late Arizona senator John McCain, as he was an advocate of the COINS Act. This was a measure that was purposed to suspend production of the penny for approximately a decade. McCain defended this policy because it cost more than the actual monetary value of a penny to produce the coin. Very few American consumers would miss the penny; only twenty-six percent of transactions in 2018 patrons used pennies. Why would anyone miss a burdensome form of currency that cost more than what was worth to produce? It is important to note that McCain’s COINS bill did not dispense with copper coinage.
“ In addition, the bill provides for: (1) modifications to the composition of the five-cent coin; and (2) the replacement, in circulation, of $1 notes with $1 coins.”
The legislation would merely shift production towards the presumably more lucrative seigniorage of dollar coins. It would be naïve to not consider the local business interests in McCain’s home state of Arizona. Arizona has long held the reputation as a top copper producer and is the second-highest producer of natural minerals of any of the states. For a state that constitutes seventy percent of all cooper output, the COINS Act provides these firms with concentrated benefits. The COINS Act and the Arizona cooper industry are even Bootlegger and Baptists dynamic outside of the cashless society debate.
Arizona senate candidate Blake Masters is signaling that he wants to double down on the rhetoric of the draft of the Dobbs decision. Per Business Insider, stated that Masters does not want to ban contraceptives outright; but believes that Griswold v. Connecticut was flawed. His response to the publication lacks any substantive explanation. He will have plenty of time on the campaign trail to elucidate his position on Griswold. When I first heard about Masters’ position, it was framed as a “condom ban”. The words of a politician tend to be hollow, but only time will tell if his policy scope will veer into prohibiting contraceptives. As we all know, like dishonesty, political figures also have a penchant for engaging in policy mission creep.
If we were to apply the Bootleggers and Baptists (1983) lens to Masters stance on Griswold, the question arises, who benefits? Masters is a Baptist for advancing the normative objective of supporting a Pro-life platform. Arguably, this hard-right political candidate is also Bootlegger for pandering to the highly religious populous right. It is entirely possible that he has gone too socially conservative.
The undisputable Bootleggers are Democratic candidates in Arizona. Why? Independent voters and moderate Republicans might be turned-off by Masters’ social policies. Especially, considering the vagueness of his explanation for wanting Griswold overturned lends itself to misinterpretation. Leading many to assume that his position is equal to a contraceptive ban. Condom bans in the works? Not 100% sure at this point, but it seems like many people are jumping the gun. In the meantime, it will make for some great political theater. For those in Texas, never fear; Ted Cruz has vigorously defended the use of prophylactics; needless to say, 2022 will make for an intriguing midterm cycle.
The Dobbsdraft leak has seemingly added more fuel to the abortion debate over the past week. The real point of contention stilting the embers of the current renaissance in the commentary on Roe v. Wade was the passage of the Texas Heartbeat Bill (Senate Bill 8) last year. The state legislature passed a law that would effectively operate as an informal ban that skirts judicial review; since enforcement was being handled through the deputization of private citizens. Senate Bill 8 is a spectacle of legislative ingenuity; even knowledgeable detractors must admit this point. The design of the Bill is particularly pernicious and could be manipulated for partisan retaliation. For example, last year, California Governor Gavin Newsom talked of engineering his variant of SB 8 tailored to target ghost guns and semi-automatic rifles. The only thing gun owners have going for them in defense against such an action is that the Second Amendment is an enumerated right, meaning they do not need to only rely on stare decisis.
An unlikely coalition formed in 2021 to combat the passage of Senate Bill 8. The kind of coincidental political union that only further justifies the utility of Bruce Yandle’s concept of Bootlegger and Baptist (1983) coalitions. The California-based Firearms Policy Coalition joined the Texas pro-choice faction to oppose the legislation. Even going so far as to author an amicus brief critical of SB 8. Per Statista, of the Republicans, polled 50% owned a gun; 61% lived with a gun owner. Odds are, members of the Firearms Policy Coalitions are right-wingers that would not typically work with the pro-Roe camp. The flawed structure, logic, and versatility of SB 8 could put gun rights in jeopardy. Who would be the Bootleggers and the Baptists in this scenario? Anytime there is a collaboration between different stripes of political activists, these roles are interchangeable depending on the observer’s ideological proclivities. A more even assessment would be that both merging factions are Dual Role Actors (2020). As the pro-gun and the pro-Roe camps, both are defending moral arguments but simultaneously benefit from achieving their own separate policy goals.
The enduring brilliance of Bruce Yandle’s concept of Bootlegger and Baptists (1983) coalition dynamics cannot be overstated. Often the policies supported by the “Baptists” end up benefiting various interest groups. The nature of this self-propelled relationship is steeped in irony. Superficially, many of the proposed initiatives would be detrimental to the interests of the “Bootleggers”, but frequently have consequences contrary to the aims of the morally motived activists. Carelessly crafted remedies to social ills can result in gapping loopholes or anti-competitive advantages to established firms producing goods that are injurious to public wellbeing.
An excellent example of this phenomenon was the FTC’s 1971 ban on televised cigarette commercials. This example seems to be timely considering the finalization of President Biden’s national prohibition on mentholated cigarettes. The impact of the 1971 advertising restrictions is detailed in Baptists, Bootleggers & Electronic Cigarettes (2016):
“….The tobacco industry was not as enamored with these regulatory initiatives as were some health-oriented groups. Congress reacted to such concerns with new legislation that weakened the FTC’s proposed label language while banning TV advertising starting in 1971.53 Far from a loss for the industry, this legislation erected a substantial entry barrier for potential competitors 54 The established brands enjoyed widespread name recognition, and new entrants would be unable to use television to establish their brands. 55 The elimination of television ads for cigarettes also brought an end to the offsetting public interest messages that attacked tobacco products and reduced cigarette company advertising costs. 56 The tobacco Bootleggers gained ground, and innovation took the back seat in what began to look like a comfortable cartel. Meanwhile, the health-care Baptists may have unwittingly cheered the new strictures that seemed to penalize bad Bootlegger behavior but actually protected their profits…” (p.325-326).
Based on the prima facie impressions of most people, it is easy to assume that the limitations on advertising would harm the tobacco industry; to a certain extent, it did. Cigarette consumption did decrease in the period after advertisements; were pulled from the airwaves. However, the magnitude of the impact is difficult to measure as other factors can also account for the lower smoking rates in the United States. This policy truly harmed the up-and-coming cigarette companies more so than the titans of the American tobacco market. Why would Marlboro need to advertise its products? The brand already had significant brand recognition by the early 1970s. Companies like Philip Morris and RJ Reynolds could comfortably rest on their laurels while the newcomers could flounder in their attempts to gain a little piece of the market share. Effectively, this ban significantly increased market concentration among the established firms.
Inverted logic 