Bootleggers and Baptists XV: Term Limits

Politicians often support policies that they indirectly benefit from. One example of this is supporting legislation or various forms of deregulation that has a populous bend to it. The kind of policies that set this individual apart from the political establishment. Typically, the politicians that support such policies tend to operate within the context of a Bootleggers and Baptist dynamic.

However,  these attempts to garner public support through supporting policies that attack the status quo are not the typical B&B dynamic. Much of the time these actors (the politicians)  economize the benefits on two fronts. Supporting their ideological agenda and securing firm endorsements from their constituency. Meaning that as economic agents in the marketplace of ideas, they operate as dual-role actors. Effectively they operate as the Bootlegger and the Baptists simultaneously. Through advocating for a specific policy position, the outspoken politician operates as a Baptist. They stress the moral and technical concerns of a specific stance on policy. Whether it is AOC advocating for the Green New Deal or Rand Paul arguing for term limits, both positions take on a moral dimension. For this very reason, both economic actors in the political sphere are Baptists.

But we would be remiss to assume that they also do not take on the role of Bootlegger concurrently. Why? I will give both Rand Paul and AOC the benefit of the doubt and assume the defense of their ideological pet projects is sincere. The economic agent’s sincere belief in the moral aspects of their advocacy is a crucial contingency for it being a true Dual-Role actor dynamic. All because some are sincere in their moral arguments for tax cuts (for example) doesn’t mean they do not stand to benefit.  Neither Dr. Paul nor AOC benefits monetarily from supporting policies that are popular among common people. The most conspicuous benefit is both political figures getting re-elected for another term. However, what they stand to gain through “pollical popularity” extends well beyond merely keeping their sear in the House or the Senate. In the age of social media, politicians now have a very different kind of relationship with their constituents. With platforms such as Twitter, there is a much higher degree of personal interaction. The days of listening to your public figure from afar as they pontific upon public policy at the podium (political pulpit) are over. The voter can now to a limited degree interact with their elected officials on social media. Many of them have amassed something of Fanclub on various social media platforms. Their social media presence has permanently shifted the dynamic between politicians and voters. Various political leaders are now being quoted, re-Twitted, and immortalized in internet memes at a mind-boggling magnitude. One only needs to remember the emergency of the Bernie Bros to see in current times the line between celebrity and political renown have been blurred. Formulating a subculture of political celebrity. That could have never existed without the on-ramp of cyberspace.

The cult of personality has morphed into a political bastardization of celebrity culture, politicians have quite a bit to gain through maintaining a positive image. These figures now carry social currency with people outside of their constituency. You have people in Hawaii following Rand Paul on Twitter and he is a senator for the state of Kentucky! Political forces such as Paul and AOC  carry enough populous clout they have mobilized political activism across the country. Their influence extends well beyond the jurisdiction of the state they represent. This is how they truly benefit! They reap the rewards of advocating for policies that concern the public. If James M. Buchanan was correct politics is a form of exchange. In most cases (except bribery, welfare programs, and subsidies) money is not being exchanged.  One of the most obvious examples of the non-monetary exchange in politics is log-rolling. Politicians trading votes in the House or Senate. However, the social currency earned through supporting policies popular among the public such as term limits is a different kind of exchange. The politician gives lips service to policies that benefit the average person. In exchange, you get the support of the people. The catallactics of this trade-off is quite salient once you give it some thought.   

Bootleggers and Baptists: XIV: Massachusetts Bans Menthol Cigarettes

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Introduction:

Legislators in Massachusetts recently passed a law prohibiting the sale of menthol cigarettes. The rationale behind this bold move, banning the sale of all flavored tobacco and vaping products. Presumably, to make tobacco products less alluring to children. The specific targeting of menthol cigarettes is slightly puzzling. This variety of cigarettes due have subtle flavoring of mint, it does not have the same degree of overt flavoring as a strawberry cigarette. In 2009, the FDA banned all flavored cigarettes excluding menthols. This prohibition was enforced under the Family Smoking Prevention and Control Act (FSPTCA). This act extended the ban to Kretek (colloquially known as a clove cigarette) cigarettes.  It is difficult to determine if methanol cigarettes were excluded from the 2009 legislation as a result of regulatory capture. Brands such as Kool, Salem, Newport, and so on have enjoyed immunity from the national ban.

All because the sale of menthol cigarettes is legal at the national level, does not mean that these products cannot be restricted at the state and local level. Case and point Massachusetts implementing a ban that included methanol cigarettes. Did the lawmakers in Massachusetts fully contemplate the consequences of this policy? Massachusetts is a relatively small state and borders several other states that still permit the sale of menthol cigarettes. Naturally, if a Massachusetts resident wants to buy a pack of Newports they just need to take a short drive to a neighboring state.  All because the Bay State’s government restricts the in-state sales through legislative fiat does not mean that smokers will not find alternatives.

Displaying the puritanical hubris of the Massachusetts state legislators. The state’s culture has long been a victim of its history. Outlawing the sale of Newports will not prevent people from smoking them. States such as New Hampshire and Rhode Island still selling menthol cigarettes will only serve to divert tax revenue away from the Bay State. Invariably, the state ended up shooting itself in the foot.  If the objective was to fill the coffers, Massachusetts provides every incentive to purchase cigarettes out-of-state. The state aggressively applies onerous taxes to tobacco products. Then takes it one step further and bars the sale of a tobacco product that is legal in every other state. Making it easy to suspect that these policies are not designed to generate state revenue. Rather operate as a confiscatory function.  A means of attempting to influence behavior through regulation and taxation. When it comes to victimless “crimes” these measures always fall short of the expected outcome.

The Baptists:

If we adhere to Bruce Yandle’s research on regulation, the Bootleggers and Baptists dynamic apply to this situation. The supposedly noble intentions of this law have created some passive beneficiaries. This benefit is obscured by the strong moral argument of banning menthol cigarettes to make smoking less appealing to kids. Regulation is never neutral or linear in its consequence. Health advocates, lawmakers, and the governor of Massachusetts are the Baptists. They obtusely champion this moral defense of this interdiction with no consideration of external consequences. Kids are not going to stop smoking cigarettes just because menthols are off the table. Only 36 percent of all brands of cigarettes are mentholated. It is highly unlikely that all underage smokers are reaching for menthols. This legislation places a burden on adults who actively choose to smoke mentholated brands. Adults are old enough to weigh the risks of smoking and should not be limited by legal restrictions. The Baptists in this scenario would claim that this is a small sacrifice for the greater good. However, shouldn’t it be the responsibility of the parents to thwart their teenager’s attempts to engage in the rebellious behavior of tobacco consumption?

The moral imperative of reducing teen smoking at all costs has a major blind spot.  If a child’s parents are willing to drive out-of-state to purchase mentholated cigarettes, couldn’t they just steal them from their mother or father?  The legal barrier of age restriction should pose enough of a bulwark to accessing tobacco products. If a minor opts to steal cigarettes or coax an adult to buy them a pack, what can you do? Any further action is either futile or unjustly punishes adults who possess the right to smoke. Adults also have the right to smoke whatever kind of cigarettes they desire, including flavored cigarettes. Investing tax dollars to enforce such an initiative is downright wasteful. Serves to penalize smokers and nonsmokers alike through a misallocation of their taxed income. The Baptist may be sincere in their efforts to curb youth smoking. Unfortunately, kids are still going to continue to smoke. Believing that this restriction is going to have any measurable impact is laughable. Everyone else pays the price for a policy that will not remedy the issue of youth smoking.

The Bootleggers:

There are two categories of bootleggers in this policy dynamic. On the microlevel, you have the state-line convenience stores that will see an influx in business. Even the grasp of the legislative body of Massachusetts cannot stifle the Invisible Hand! This operates on a similar principle as tribal smoke-shops. Since many do not apply state taxes to cigarettes, many non-Indians flock to the reservation to buy cheap-smokes. If Massachusetts bans, Newports, people will simple patronize establishments in New Hampshire and Rhode Island. Lawmakers such be all too aware of this phenomenon.  Considering  Rhode Islanders come in droves to Massachusetts towns on the state board to purchase alcohol. For the unacquainted among us,  Massachusetts does not have a sales tax on liquor.

I would never be one to advocate for taxation. However, if you are going to tax something you might as well do so in a manner that will generate some revenue. The true parties that benefit from this ill-advised law are the state governments of New Hampshire and Rhode Island.  In 2019, Massachusetts collected  $553 million in tax revenue from cigarette sales. That number is down by 9.7 percent as of the fiscal year 2020. The Department of Revenue projects that tax revenue will be down by  $93 Million in “FY 2021”. This large sum of money is filling the coffers of neighboring states.

Image courtesy of Tax Foundation

Why Are They Urging Us to Vote?

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The 2020 Election season will be historically noteworthy for several reasons. One characteristic that cannot be underscored is the aggressive voting campaigns. Celebrities have been demanding we all vote. Internet advertisements have been hounding us to vote. Campaigns at the state and national level have been emphasizing the accommodations made to enable near-effortless voting. Which is perceived as being particularly important with the looming specter of COVID-19 threatening to reduce voter turnout. Historically, voting rights and “get out and vote” initiatives have been the enterprise of left-wing political interests. Not that conservatives are inherently anti-voting, but due to the fact, right-wing populism is a new phenomenon.

Voter empowerment has always been a thinly-veiled attempt to pander to the average constituent. The aptitude of an individual vote holds little sway over the actual outcome of elections. Making the overall influence of a solitary vote is near-zero (P.603). The advocates urging the every-day citizen to vote side-step this issue through embellishing upon the impact of a single vote. One vote will not sway the overall aggregate electoral vote. That one vote is numerically inconsequential. Even on the microscopic scale of a small village of two-hundred residents, a single vote only 0.5 percent of the vote. Exemplifying the fact that the ruling power of voting comes from the aggregate voting power of various political coalitions. The collective-decision making power of organized political interest proves to be more effective than a single disorganized voter (p.54-56). The attempts to summon all eligible voters to do so serves as circuitous means of forming a like-minded voting bloc. The paradox being those who have an invested interest in promoting the institution of nominally democratic elections need to prey upon the illusion of every voting carrying weight in the polls.

Generally, the promotion of participation in the “democratic” process is purported to be for the “common good”. A profoundly ambiguous statement that could be applied in a litany of various subjective interpretations. What is advantageous for one person may be detrimental to another. Making claims of initiatives being in the name of the common good board-line spurious.  There is something of a gulf between the best interest of the individual versus that of society (p.284). Without a clear and concise criterion of what constitutes public interest, political pressure groups are enabled to take the reins and divert the cause for their purposes (p.283). The utilization of powerful imagery helps the invested interests mold public perception like clay. Conjuring apocalyptic images of a world with health care, social security, and other entitlements brought forth by a tyrannical despot. Allusions to tyranny captive the imagination of the American voter quite vividly due to the context of the nascent years leading to the Revolutionary War. Most of these claims are hyperbolic and are intended to urge the viewer to vote.  The foreboding catastrophe resulting from not casting your one measly vote may result in the demise of the republic.  Such tactics are nothing more than providing misinformation that is tantamount to psychological manipulation.

Aside from this exaggerated claim being cartoonish, they do not consider informal checks on power. By virtue of the median voter theorem, a true contender in a political race would not dare commit the cardinal sin of outright eliminating such programs. Some may discredit this argument as our current president is somewhat unorthodox. Even if the pressure of government agencies or constituencies does not hold, the pressure of lobbying groups will.  For example, the hyperbolic bombastic rhetoric of the Republican party overturns social security is laughable. Equal to political suicide. Seniors organizations such as AARP weld a significant amount of lobbying power. Could effortlessly embark upon a rapturous counter-campaign against the GOP. Potentially leading to a drastic drop in the senior vote, arguable one of the most active voter demographics in the country. The dystopian tone of these advertisements reflects a sensationalized depiction of political reality. A fabricated reality was political pressure groups have surrendered all of their political purchasing power to the voter. Which is a highly unlikely scenario. Especially when confronted with the fact that there is a plethora of perks and money to be made by lobbying. Only serving to solidify the fact that the myth of “every vote counts” is a pure illusion.

If the consequences of not voting are not as desirable as perpetuated by the media and the voter has next to no control over the result, what is the point in trying to mobilize voters? Stressing the moral imperative of arriving at the polls over hell or high water?  The observant reader probably notes how it was previously mentioned that voter empowerment was an enterprise of the left. Coupled with the storied history of left-wing media bias, the motives of the “get out and vote” campaigns become much more salient (p.49). There is a tightly woven network of celebrities, musicians, actors, and media personnel who operate as the mouthpiece for the moral imperative of voting. These de facto “Baptists” help paint the grisly picture of an America where the interests of the common person have not been represented. Doing all of the heavy lifting for the true beneficiaries. Those who stand to benefit politically from such initiatives. Democratic politicians, trade associations, administrators for entitlement programs, the community organizers who host and plan voting drives, and so on. Most of these interested parties stand to benefit through career advancement, increased job security, increases in social clout, etc.  All of these concentrated benefits were acquired without productively contributing to society. Textbook definition of rent-seeking. The morally suspect part of these unearned benefits is that isn’t obvious that these self-interested individuals truly haven’t contributed to society.  Due to the virtuous choir of the media mouthpieces creating the smoke-screen for the beneficiaries to hide behind, we are deceived into the belief they are working for our benefit.

It can be surmised that the reason for the upsurge in a panic regarding this election is based on the motive to oust Donald Trump out of office. I disagree with his politics. After all, I am a steadfast and unwavering free trader. The magnitude of moral indignation facing the president is unjustifiable. To genuinely believe that Joe Biden is the white knight who is going to save the United States from uncertain cataclysm, is comical. Neither man ideologically represents the correct direction for this country. Then again, that may precisely be the reason both are the premier candidates for the job.  Lobbyists and bureaucrats need elected officials they can bend for their purposes. Needless to say, the droves and networks of various spokespeople urging us to vote are not truly working in our interest. Despite whatever flimsy claims they make. Voting does have a valuable quality as a form of self-express, but that is about it. The odds of your vote deciding the next election is nothing more than pure fantasy.

Bootleggers and Baptists XIII: The Dawes Act of 1887

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Frequently in public policy regulations that have nefarious intentions are obscured in a cloak of beneficence. Generally, the deeper you explore the history and the context behind the regulation or law its true purpose is eventually exposed. This is particularly true of many of the laws passed by the federal government intended to “help” Native Americans. Many of these paternal laws have done nothing more than subordinate the voluntary associate of tribal members to the authority of the federal government. I am not necessarily a proponent of the lofty, wide-eyed, and quixotic brand of social justice espoused by the contemporary left. But many of these laws impose notable restrictions on the natural rights of tribal members. Such as violating property rights, free association, contract enforcement, and even the right to self-determination. Regardless of the ethnicity of an individual, these rights should be upheld to all people. This isn’t so much a plea for equality of outcome, but rather a firmly held moral concern.  When the law is weaponized to legalize crimes against persons and property, the law has failed to achieve its ends.

One such act that codified a gross injustice against the native people of the United States was the Dawes Act of 1887. Colloquially known as the General Allotment Act. The legislation was sponsored by Massachusetts Senator Henry L. Dawes and was enacted in February 1887. The act provided the authority to the executive branch to allocate “.. portions of Reservation land to individual Indians..” for agricultural purposes. (p. 19-20) 160 acres would be provided to head-of-household and 80 acres to other individual tribe members.  The acreage was doubled if the land was only suitable for grazing (p.20). The aloof Baptists in this scenario justified this act on the moral grounds that this would help the native tribes in the long run. Alleviating the poverty tribal members experienced. Through providing land for cultivation the natives could be elevated to being a middle-class farmer and better assimilate to American society (p.19). If history is any indicator, good intentions and legislation have the propensity to result in tragic consequences for American Indians. Unwittingly, the good intentions of these nineteenth-century social justice warriors provided a moral smokescreen that allowed less sympathetic individuals to utilize the law for their callous benefit.

Land disputes between Natives and European settlers are nothing new. These disagreements date back to the early colonial period of America. Typically, the Native tribes received protection from the aggressive advances on tribal land by colonists from Britain. This is why during the revolution most tribes aligned themselves with the crown (p.10).  Then after the new republic was formed, the Articles of Confederation delegated the power of addressing Indian affairs with the federal government. This was done to preemptively avoid military conflicts with the tribes over land. Due to the financial stresses of the Revolutionary War (p.10). Under U.S. Const. Art I, Sec 8, Cl 3.  and Art II, Sec 2, Cl 2  congress was provided with the power to regulate tribal commerce and the President with the ability to make treaties with the tribes (p.11). All done in the name of stability. Placing the federal government in the precarious situation of balancing the interests of the Natives and settlers. Otherwise, the demise of the young republic may have been inevitable.

Fast-forwarding approximately a century, it clear there has been a long-established that many Caucasian Americans perceived tribal people as more of an obstacle than their indigenous neighbors. Making these individuals the proverbial bootleggers of the Dawes Act. Why?  What do the Americans vying with the Natives for land have to gain from this law?  The act was enacted in the absence of any consent requirements (p.21). Making it easy for the federal government to divide up the land without any tribal input.  To get the legislation to pass the law was amended to allow whites to purchase any remaining land. The result of the law being a drastic decrease in land ownership among tribal people. (p.21). Even worst, the land was not distributed in a manner that was logical to the needs of farming and grazing. Creating a  “checkerboard” pattern of “alternating white and tribal-owned land”. Making it impossible to utilize the land for grazing or farming (p.22).

 In the end, putting aside any good intentions, this policy only made matters worse. The policy not only was poorly implemented but was manipulated to benefit non-tribal members. Legislative rent-seeking at its finest!  Only provides further evidence that quite often all the downstream repercussions of regulations can rarely be considered. For a policy originally intended to lift Native Americans out of poverty did the exact opposite! Making this abject policy failure a shining example of what is referred to in the public policy as a cobra-effect. The Dawes Act only further deteriorated the economic quality of life of America’s Native people.  

Bootleggers and Baptists Part XII: Dual-Role Actors on Both Sides of Proposition 205 (Arizona, 2016)

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Back in 2016, election cycle Proposition 205 (Arizona) sought to establish a regulated market for recreational Marijuana. The measure failed to pass by a slim margin. Expounding upon the strategic flaws of the ballot question has already been thoroughly exhausted by local commentators.  What truly is interesting in retrospectively analyzing this failed legalization campaign was the coalition building. These strategic alliances were forged on both sides of the aisle.  Everyone from puritanical prohibitionists to cannabis aficionados teamed up with orthogonal allies to hedge their bets on achieving their desired policy outcome. Naturally the formulation of such coalitions invariable leads to Bootlegger and Baptists policy dynamics. By the very nature of regulations and policy decisions, someone stands to gain and someone stands to lose. Government action is never neutral. Even inadvertently a policy can provide a downstream benefit to an invested interest group. Sometimes these concentrated benefits are nontangible. Such as a positive public image or gaining notoriety. As the great moral philosopher, Adam Smith reminds social incentives to present us with powerful motives.

One of the more predictable opponents of legalization would be manufactures of prescription painkillers. Insys Therapeutic donated $500,000.00 to the 2016 opposition campaign in Arizona. Insys is a well-known producer of opioid-based medications. Their true motivations are somewhat puzzling.  Medical Marijuana was legalized back in 2010 which would have been a golden opportunity time for funding opposition. This could potentially be a strategic form of revenge. A thinly veiled attempt at settling a score with the Marijuana dispensaries that cost them business.  Why? Because the medical dispensaries would be among the first economic actors to enter the recreational market. It would take much in the way of resources to make a transition to selling both medical and recreational cannabis. In theory, this institutional form of retaliation would provide the benefit of instinct satisfaction to upper management within Insys. This theory assumes little to no economic benefit from this action.

An alternate theory could be Insys does finically benefit from keeping recreational Marijuana illegal. This move could signify a circuitous acknowledgment of the black-market for prescription painkillers. Whether big pharma wants to admit or not, recreational users do make up a portion of their profits. Their main customers need to operate as mid-level distribution. Either through an unscrupulous physician prescribing opioid narcotics to recreational users or through patients reselling the medications on the secondary market. Through going attacking recreational Marijuana they can protect their indirect profits made through the demand on the illicit secondary market.  Opioids are already in competition with alcohol, tobacco, kratom, Salvia Divinorum, and potentially marijuana. By eliminating a whole category of legal and accessible options they gain a slightly larger share of the quasi-legal American intoxicant market.

The question becomes whether this specific economic agent is a Bootlegger or a Baptist. They are unquestionably both. The company possesses some sort of murky incentive for keeping recreational marijuana illegal. Making them a Bootlegger. They assume the role Baptist when publicly justifying their generous donation to the counter-campaign. Citing the danger of marijuana to children. Also, expounding upon the dangers of ingesting substances that do not have FDA approval. All of these are arguments are laughable when you think about the pharmacological risks of the products Insys manufactures. Regardless, assuming good faith on the part of the firm, it is still a moral argument. Which may or may not be factually accurate. For this reason, they are a Dual-Role Actor.

In this scenario, there is another Dual-Role Actor that is on the other side of the fence. That would be the media. Numerous publications pick-up with this story and ran with it. Function as a Baptist through exposing the callous self-interest of pharmaceutical companies. This provides the appearance of a moral crusader who is attempting to reveal how big business attempts to manipulate the system. However, this public service is not done out of pure altruism. Media organizations are frequently willing to dispense with accuracy to be the first outlet to break a news story. Editors often do not focus on important stories but rather those that captivate their viewers/readers. Making news outlets more of a vehicle for entertainment than obtaining information. The best means of gaining and retaining viewership in an age where mainstream media is currently on life support is through sowing outrage.  Exploiting the public’s salient bias against corporations is a great means of generating click-bait worthy headlines.  Utilizing this tactic becomes much more imperative when your industry is presently clinging to life on a shoddy ventilator. The Schumpeterian gales are presently gusting. The creative destruction of alternative media is drawing many viewers away from FOX News and CNN.

Bootleggers & Baptists Part: XI: CVS and Tobacco

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Back when I was a broke college kid and was still a tobacco consumer, few tobacco products provided a better value than Parodi cigars. Yes, they were machine-made. However, they were mechanically bunched and wrap with robust and smokey fire-cured Kentucky/Tennesse broadleaf tobacco. These rugged little stoogies wouldn’t get too far in a beauty contest, but they were solidly constructed. Mimicked the rustic tuscano cigars smoked in Spaghetti Westerns. There was only one brick-and-mortar locational locally that sold these drug-store treasures happen to be CVS. This all changed in 2014 when CVS elected to stop selling tobacco products altogether in the name of promoting health. Sure there was still the internet, with the complexities of shipping cigars across state lines (tax-wise and legally) it was far from an ideal option. I was far from the only one frustrated with this decision made by corporate. In 2015, CVS speculated a slight drop in sales was connected to the corporate ban on tobacco sales.

It is understandable for a firm to strive to convey a consistent message. There is a fair amount of hypocrisy in a healthcare store selling tobacco. Eliminating tobacco makes sense, only if you stop selling all the other unhealthy products sold at CVS locations. Examples ranging from soda, energy drinks, candy, and liquor. Also, one cannot forget powerful opioid narcotics. Granted, there is purportedly “safe” way to ingest such medications. Why not take a stand against the addiction crisis currently plaguing America if the company is so concerned about public health? Needless to say, there is certainly an asymmetry in CVS as a corporation’s advocacy for public health. Bringing the whole rhetoric of voluntarily choosing to stop selling tobacco into question. Even leading the incredulous skeptics among us to question the organization’s true intentions.

The murky intentions of CVS once again bring us back to the economist Bruce Yandle’s famous Bootleggers and Baptists hypothesis. In instances of this coalition-building dynamic, there are always the virtue signalers that provide us with the moral argument for a policy. The silent beneficiaries are known as the bootleggers. Individuals that purely advocate for the policy out of self-interest. Our Baptists in this scenario become apparent when you review the various organizations that provided praise to CVS for this move. Establishments such as the Massachusetts Medical Society and The Harvard School of Public Health. The Bootleggers benefiting from this shift in CVS’s business practices is clear as day, companies producing smoking cessation products. One of the most prevalent examples being Nicorette.

Where does CVS fall in the equation? Surely they either benefit from this change in-store policy or are expressing concern for public health?  I would argue CVS is an example of a dual-role actor. A dual-role actor in Bootleggers and Baptists coalitions are an economic agent or collective of economic agents that fill the role of Bootlegger and Baptist. They may have a genuine concern for the more implications of policy. However, they also simultaneously stand to gain from the purposed or implemented policy. For the sake of being charitable, let’s assume the initiative to improve “wellness” is sincere. Inconsistent, yet sincere. By exalting the virtues of not selling harmful products such as chewing tobacco, cigars, pipe tobacco, cigarettes, etc CVS claims the moral high ground, making them a Baptist. However, they also at the same time gain through accumulating social currency. From the standpoint of publicity, this is gold. The detrimental effects of tobacco use have been well documented and overall public perception of tobacco consumption is quite negative. These factors make tobacco low-hanging fruit in terms of formulating policy. Whether it is the internal policies of a private company or the stroke of a legislator’s pen, tobacco is an easy target. There is no quicker way to look like a hero than to stick it to Phillip Morris. However, why continue to sell soda and candy if you are concerned about fostering public health? Would the customer backlash be too strong? That said, it is difficult to quell my continued skepticism of CVS’s motives for this move. There is a high probability that CVS is operating as an advocate and a beneficiary.

Bootleggers and Baptists: Part XI: Workplace Diversity

Diversity awareness programs on their surface appear to be noble endeavors designed to provide equal opportunity employment to historically disadvantaged groups.  Over the years, there has been some controversy over the conclusive impact and application of workplace diversity programs. Due to claims of only marginal success in increasing the diversity of the workforce. One major shift has been to couple diversity with “inclusion”, having a diverse workforce is not enough. The company now needs to also provide a welcoming environment.  This is a profoundly difficult task considering the subjective evaluations of what is defined as “welcoming” may vary wildly depending upon the perspective of the individual employee. There is a growing prevalence of what is known as “diversity fatigue”. Many managers and H.R. personnel succumb to the stress of attempting to fulfill lofty and unstandardized goals.  Making the achieving the goals of diversity and inclusion an ever-present uphill battle. Especially with the hyper-dynamic and ever-changing trends in what is deemed as being politically correct by the intellectual upper crust.

The move for diversity for its very sake is not without adverse consequences. Beyond merely making aimless strides towards an arbitrary and idealistic goal. If mismanaged minority employees may feel alienated or there may be an increase in the incidence of conflicts between employees. Two downsides are often not accounted for in the application of diversity programs. Neglecting these variables not only determines the purported objectives of diversity programs but the inevitable flaws of human nature.  The old expression “… you can bring a horse to water, but you can’t make him drink…” comes to mind. Prejudice cannot be eradicated by the edict of corporate policy nor by the stroke of a lawmaker’s pen. Freewill and personal perception have a massive role in fostering and maintain prejudice. A naively wide-eyed and idealistic diversity awareness program provided by an employer will not inculcate the virtue of tolerance into their employees. These are conclusions that the individual must independently arrive at deep introspection.

These lofty expectations mirror the Holier-than-thou virtue signally exposited by contemporary Progressives. Modern Progressive has firm ideological roots dating back to the early 20th century. A careful examination of history will lead any thoughtful observer incredulous of the true aims of the diversity movement. Many of the moral objectives of the Progressive Era were nothing more than circuitous means of rent-seeking. Making the whole notion of workplace diversity truly about diversity dubious at best. Few employees ever question how their employer benefits from promoting diversity programs. A business enterprise exists to provide a product or service not to proliferate the virtues of tolerance. What do they stand to gain through attempting to cultivate a culture of hyper-tolerance?

What emerges from this situation is a potential example of  Bootleggers and Baptist coalition.  An internal coalition between the human resources department and upper-management. Typically, the individual representing the moral argument for a diverse workplace is the “Diversity Ambassador”.  A role within the company that carries quite a bit of prestige, yet how this position direct benefits day-to-day operations is questionable at best. Even when employees who are crucial to daily business are laid-off the Diversity Ambassador gets to keep his job.  Although such a role is nothing more than a luxury. This actor is undoubtedly our Baptist due to his incessant persistence in exalting the values of diversity and inclusion. His rhetoric comes just short of mirroring a political propaganda campaign. Boldly asserting that everyone possesses some degree of prejudice or implicit bias. His obtuse repudiations make countering his claims (regardless of the accuracy of his claims)  a futile endeavor. Below details a scenario witnessed by the author that demonstrates the zero-sum nature of the accusatory discourse of the typical Diversity Ambassador:

Diversity Ambassador:

“ I have conducted this exercise for over twenty years and not once has anyone ever mentioned that I was black. I told you all to list the inferences you can make from just looking at me. No one even mentioned the most obvious characteristic of me. I am black. Why is this? None of you have followed my instructions! Why?!

Audience Member (Attempting to answer his question):

“ Because none of us see color.”

Diversity Ambassador:

“ Don’t ever tell a diversity and inclusion coach that you don’t see color!!”

The above conversation between a corporate Diversity Ambassador and an hourly employee exhibits the perverse quiddity of this wanton advocating for diversity. This is not the tone of a man who wants to educate, but rather who wishes to indoctrinate. Pedagogically and condescendingly force-feeding us the moral imperative of admitting our own biases. Versus attempting to foster understanding or attempting to provide us with the genuine precepts for being more tolerant. The man was simply describing our sins without truly prescribing a means of reconciling them. Paralleling the fervor of an Evangelical preacher, we can do no right. We must fully accept that we are in the wrong with no hope of ever being right. Presenting a situation where the participant can only lose. Generating such a compelling moral narrative for the imperative to proselytize the virtue of diversity that it also doubles as an impenetrable smoke-screen that insulates the company from accusations of discrimination.

The Bootleggers in this dynamic are the individuals in upper-management.  There are two main benefits of this variety of moral rent-seeking are deflecting the possibility of having a hostile work environment and social currency for appearing to be forward-looking. Over the years the United States has become quite a litigious society. Considering the increased sensitivity towards various minority groups, the opportunities for discrimination lawsuits have only become expanded. Providing a sizable incentive for those at the helm of the company to avoid any transgressions against their employees that could be viewed as discriminating in nature. By painting the opposite picture, even if this image is illusory, diverts, or weakens claims of discrimination. Not only does promoting diversity and inclusion have monetary incentives, but it also fosters a positive image for the company. It creates the facade of being open, progressive, modern, and may lead to the company to earn accolades for their culture. All of which will benefit the company and make the jobs of the CEO, CFO, etc. more secure. The reputation of the company for inclusive will attract talented young professionals that will only add value to the organization. One only needs to look at the example of Google to see how company image matters when it comes to acquiring skilled employees. Work culture almost operates as a form of non-monetary compensation. It is another variable that may sway top-notch young professionals towards one company versus another. Merely operating to the benefit of those in the top-tiers of management.

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My Response to Bruce Yandle

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Dr. Yandle,

 

I greatly appreciate your quick reply to my previous e-mail.  I apologize for taking so long to get back to you. As an amateur blogger, I will most likely continue to explore novel applications of the B&B dynamic, both in regulation and in the mundane day to day examples. Not only will this provide me with an endless array of topics to write about, but it will also increase my understand of the B &B theory. I have to say there is something about framing behavior in the Bootleggers and Baptists context that never gets stagnant.  It will make writing about regulation to be dynamic for years to come.

 

Above all I appreciate your encouragement, I will proceed to navigate my way through the murky and convoluted world of regulation. Fully acknowledging that most regulation (if any) does not benefit the general public. Rather, it serves as a form of rent-seeking that is barely noticed by the average voter/ taxpayer due to the costs being distributed through higher consumer prices or taxes. Before familiarizing myself with Public Choice Theory I was already skeptical of regulation. Through theories like the Bootleggers and Baptists dynamic, I now have better precepts for refuting the validity of ineffective and self-serving regulations.

 

Again, Dr. Yandle, I appreciate you taking the time to respond to me. I will continue to expand my understanding of the political decision-making process. An election year is a prime time to do so! There will be a multitude of living examples of Public Choice concepts coming to life.  Animated by the all too human and fallible nature of politicians and interest groups.  I just wish I had been aware of this economic school of thought back in 2016. Considering the impending cataclysm that many pundits were speculating in the wake of the Trump Presidency. Which I can only see as being a form of rent-seeking either from the standpoint of increasing viewership ratings or maintaining the credibility of political factions that the mass media finds to be more favorable. Then again, Trump is awful on trade. However, I am still waiting for the apocalyptic dystopian future many of our friends in the media predicted nearly four years ago. It would be nice to have a more economically laissez-faire president that holds individual rights in high esteem. However, due to invested interests, current public opinion, and the nature of American politics such wishes seem likely a lofty pipedream.

 

P.S.: I also enjoyed your essay The Next Fifty Years: Optimistic or Pessimistic?, published in The Independent Review. Working from home has eliminated my 45-minute commute back and forth from work. Leaving me with more time for reading and research, last quarter I subscribed to the print edition of  TIR. That was a novel and interesting study you conducted. I am not sure if I have the faith to say the next fifty-years will be promising. I certainly believe that material comfort and convenience will only continue to exponentially improve with innovation. In terms of moral development, it is difficult to say. While technology has provided us with a lot of positive developments it has also been correlated with social decay. A steady decline in civility and decorum. Then again, correlation does not necessarily equal causation, having the third-variable problem rearing its ugly head. I could potentially be unfairly singling out the technology. The COVID-19 epidemic seems to have only compounded this issue as people are staying home and becoming more atomized. Don’t get me wrong, as a Classical Liberal/ Libertarian  I am all for individual rights. However, the paradox becomes as people become more individualistic they drift away from the private institutions that previously held communities together (such as church, I am personally not religious, but I have nothing against religious observance). The surrogate that fills this vacuum almost always ends up being government.  As we become more individualistic our affairs end up becoming more collectivistic. I want to remain hopeful that the human species flourishes not only materially but morally and socially. As a society, we need to figure out how to reconnect again.

 

Thank you again for your time Dr. Yandle,

 

Peter C. Clark.

 

 

Bruce Yandle’s Reply

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Yesterday, I received a response from the legendary Public Choice scholar, Dr. Bruce Yandle. There were three main takeaways from his response to my e-mail. Even through e-mail communications, Dr. Yandle exhibits all of the decorum and humility you would expect from a southern gentleman. It truly is a privilege as a nonacademic to be able to have such an exchange with one of my intellectual heroes.

 

 

Takeaway #1- He was Humbled by the Fact that His Theory Was So Influential Upon My Thinking

 

I was slightly surprised that he was humbled by the impact his theory has had on my thinking. He was particularly humbled by the fact that I find his theory to be a powerful means for explaining the world. I could not agree more. The Bootleggers and Baptists’ paradigm is not relegated purely to the sphere of politics and regulation. As he mentioned in his response you start to notice examples everywhere once you are familiar with the concept. That speaks volumes of the conceptual transcendents of the theory. Making all the more brilliant observations. Above all, I am glad that Dr. Yandle was able to see that his theory has influenced others. That it is a “living idea” not just a sterile postulation that is confined to dusty economic textbooks. But a profound theory that explains the world how it is. Not imposing value judgments of what should be.

 

It should also be noted that he did see some sound reasoning in equating  Bootleggers and Baptists to the Id and Superego. He also alluded to Adam Smith’s Theory of Moral Sentiment, citing that both roles also paralleled Smith’s” the man within the breast” and the “impartial spectator”.

 

 

Takeaway #2- Dr. Yandle conceptually finds the prospect of a Dual-Role Actor to be valid.

 

Dr. Yandle stated that he like the term “Dual-Role Actor” and agrees with it as a premise. Using the example of how Donald Trump as addressed immigration policy for how many times politicians fall into this category. Utilizing arguments around reducing crime from the standpoint of the moral high road. Then in the next breathe stressing the point of how immigrants take jobs from American citizens. Simultaneously appeasing the Bootleggers and Baptists  Making Trump’s clumsy balancing act a pure example of a “Dual-Actor” paradigm. He assures me that I am correct in my assumption that the B&B dynamic does not explain the origin of these coalitions, but rather the details of the occurrence.

 

Takeaway #3- Keep Writing and Thinking About Regulation.

 

Dr. Yandle also encouraged me by stating “I wish you well and hope that you will keep thinking and writing about regulation”. That is a suggestion I will certainly follow!

Letter to Bruce Yandle: Dual Role Actor Dynamic: Bootleggers and Baptists

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Dear Dr. Yandle,

 

Throughout the pandemic, I have been reading more journal articles on Public Choice Theory.  I would have to say that now I am a convert. Previously being a layperson who was fond of the Austrian School. While there are many captivating concepts expressed in the Public Choice literature, the concept of Bootleggers and Baptists has so far been my favorite. In my opinion, the depth of your observations in this conceptualization extends beyond oddball coalitions and the transactional aspects of regulation. The Bootlegger and Baptists dynamic provides us with candid commentary on the nature of regulation.  Raising the important question of who stands to benefit from this law passing? Making the moral considerations for advocacy of specific law questionable. Does the benefit secured by implementing more safety regulations outweigh the decrease in market competition? As you have mentioned in previous interviews and podcasts, many of these costly measures end up acting as means for established producers to gain greater market share while circumventing anti-trust laws. The smaller businesses simply cannot afford to comply with the new and onerous requirements.

 

The insights into the self-serving quiddity of regulation aside, conceptually the Bootleggers and Baptists dynamic has been proven to be very versatile. It can be applied to just about any policy position and is applicable even outside the realm of political decision-making. I have seen countless examples of unlikely bedfellows teaming for a shared objective at work. The possibilities for application are seemingly endless and can even be applied to traditionally apolitical institutions.

 

It is the very versatility of the Bootleggers and Baptists concept that entices me to come up with novel applications of the theory. Leading me to the question why cannot the Bootlegger and Baptist be the same individual or group? An actor can possess multiple motives for the same action, the same could be true for advocacy of various regulations.  An individual actor or a group of actors could have a sincere moral concern but also simultaneously stand to gain from the regulation. This is not to say that the ratio of moral concern and self-interest is equal. For the individual actor or group self-interest or moral concern may take primacy over the other set of incentives and motives. If the individual or group provides a moral argument and is concurrently a silent beneficiary, they are both a Bootlegger and a Baptist. Regardless of the degree to which they qualify for either category.

 

I adorn this potentially novel observation with the title of a “Dual-Role Actor Dynamic”. Whether we examine the advocacy of a single economic agent or the collective action of a group there is the potential of Dual-Role dynamic. Even getting as granular as the level of an individual actor there is the potential for alignment of incentives and motives. In a sense, the individual is combining their self-interest and moral concerns into one action. Expressing an internal agreement between their moral convictions and self-interest. The best analogy that can be made is if the psychoanalytical stratifications of consciousness, the ID and Superego,  wherein complete unison. The proverbial devil and angel on our shoulders decided to shake hands signifying a truce. All because our selfish and moral motives are in agreement. In a group setting, the collective action is merely an aggregate of each group member’s own moralistic and selfish inclinations.

 

Recently, I believe to have found a real-life example of a “Dual-Role Actor Dynamic” in the domain of ballot access laws. After reviewing a few legal papers detailing the issue, I began to realize many of the moral arguments for stringent requirements also were silent beneficiaries. In theory, moral arguments such as shielding voters from frivolous candidacies, confusion, and political instability may be sincere. However, they are being made almost entirely by legislators, bureaucrats, and public officials affiliated with one of the major parties in the United States. Their moral concerns may be merely a thinly veiled-cloak to obscure blatant self-interest. Due to my inability to test the veracity of the sincerity of the invested interests advocating for stricter laws, I will have to take their claims at face value. While these invested interests purportedly feel a duty to protect the voter and maintain the integrity of democracy they still stand to gain. By imposing heavier burdens upon third-party candidates it redirects votes that would go to minor party candidates towards the two major parties. Effectively leaving the political duopoly in the United States intact. Making these advocates potentially Dual-Role Actors.

 

Dr. Yandle, I am aware you are very busy and most likely have a lot of other projects in the works. That being said, I appreciate you taking the time to read my letter. I understand that I am a far cry from a professional economist, however, any constructive feedback would be greatly appreciated. Even if my expansion of the Bootleggers and Baptists dynamic is conceptually flawed it was still an engaging intellectual exercise to grapple with this idea conceptually.

 

 

Thank you again, professor, for your innovative contribution to political economy,

 

Sincerely,

 

Peter C. Clark.

 

 

Bootleggers and Baptists IX: Ballot Access Laws- An Example of A Dual Role Actor

 

 

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Introduction:

 

Many Americans have expressed their displeasure with our current two-party political system. Back in 2016, opinion polls suggested that the majority of young voters were unhappy with the established political parties. Some experts even suggest that the days of the Republican-Democratic duopoly may be numbered. Such conjecture ignores the incentives of the self-interest legislators to maintain the status quo. Legislators are generally affiliated with one of the major parties that monopolize American politics. By any realistic estimate, the Republican-Democrat paradigm in the U.S. is here to stay.

 

The irony is that prior to the 1930s third-party candidacies were quite common.  The Republican party started as a minor party focused on the abolition movement of the 19th century. In the 1930’s the trepidation surrounding the potential growth of the Communist party in the United States laid down the substrate for stricter ballot access laws. Per the research of the political scientist, Richard Winger, the requisites to appear on the ballot have only increased over the years. Typically presenting an asymmetrical burden upon independents and third-party candidates. Unfortunately, previous case precedence has shown that the Supreme court seldom takes these insurmountable barriers to entry seriously. Presenting notable threats to the First and Fourteenth Amendment rights of minor party candidates in elections. The courts typically skirt over these considerations through loose technicalities making it impossible for the underdog to have a favorable ruling. This is particularly alarming when presented with the fact that ballot access laws are typically utilized to exert political control and maintaining dominance.

 

There are several core arguments for maintaining the status quo of the two-party system. One of the standard points is a state interest to look out for the best interests of the voters. By eliminating voter confusion, ballot overcrowding, and eliminating frivolous campaigns. While many proponents of stricter ballot access requirements provide lips service to the concern of ballot overcrowding it has never been a serious issue in American elections. The other category of concern expressed by ballot access law advocates is that of keeping political stability.  Although per attorney Oliver Hall of the Center for Competitive Democracy there is little evidence to suggest that the absence of stringent requirements would result in instability.

 

Bootleggers and Baptists:

 

Bruce Yandle’s examination of coalition-building in his conceptualization of Bootleggers and Baptists tends to have two acting parties. The Bootleggers that stand to benefit from the policy position, action, or regulation. On the other side of the alliance are the Baptists who provide the moral justification for the suggested course of action. The Baptists provide the moral smoke-screen that enables the Bootleggers to obscure their self-interested motives.

 

Ballot access laws like most policies have their moral proponents and silent beneficiaries. However, it can be argued that the instance of American ballot access laws the moral advocates, and the beneficiaries are the same. Presenting a scenario of a “dual-role” actor coalition advocating for these policies. Dual-role actor coalitions can be found in a wide array of social organizations the actions of a solitary economic agent to the aggregated motives of a group. The event of a dual-role actor coalition is more than just a coincidental alignment of motives within a single group or person. It is the unification of self-interest and moral goals. If an individual can hold multiple motives simultaneously, there is the possibility of an agent to be both a Bootlegger and a Baptist. Even if the moral element is being subverted and the self-interest is taking primacy in the individual’s advocacy. Moral concerns and the allure of potential benefits may not necessarily be equal in the decision-making process. If an actor or group provides a moral argument for policy and stands to benefit, then they are a dual-role actor.

 

Ballot access laws exemplify the previously described dynamic of coalition building.  Most legislators fall into either one of the dominant camps in the bipartisan divide. Making their self-interest quite salient. Placing a great burden on third-parties will help retain the power of Democrats and Republicans in American political life. Especially when the Supreme court has marginalized the Constitutional concerns of ballot access laws for third-party candidates. Reinforcing the institutional barriers imposed by the legislator. The same self-interested lawmakers also voice concern over political stability,  voter confusion, and weeding out frivolously campaigns. These objectives may or may not be laudable, but are moralistic in tone making them the rhetoric of a Baptist.

 

The legislator making itself the white knight that saves the common voter from confusion, joke candidates, ballot overcrowding, and political chaos is unnecessary.  Many of these issues can be remedied at the ballot box rather than through passing bills. Often pro-market economists will expound upon the concept of consumer sovereignty.  I would like to suggest that matters of voting are best resolved by voter sovereignty.  Meaning that voters and the electoral college will ultimately determine whether it is permissible for satirical political parties to be on the ballot.  There isn’t an ever-present moral duty to shield society from such issues.  Weak third-parties rise and fall on their own merits.

The notion of this creating instability is laughable at best. Third-parties have next to no electoral representation in the United States. The platitude of voting third-party squandering votes is so pervasive throughout American society, the oddball candidate doesn’t stand a chance. Political candidacies mirror advertising campaigns. There are voter demographics, candidate/party branding, and behind the scenes marketing. As with any consumer product, brand recognition is important. Most of the ideologies supported by minor parties tend to be conceptually foreign to the average voter. Making the probability that even in the absence of strict ballot access laws the two major parties would still be in power.

Bootleggers & Baptists VIII: Can The Bootlegger and The Baptist Be The Same Person: A Drive-Thru Revelation

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This morning I felt particularly stir crazy from being cooped up in the house, so I decided to go to pick up some coffee. When I finally reached the drive-thru window, I was met by one of the employees. He began to detail to me how several local restaurants had employees who had contracted COVID-19. Even blatantly pointing out the window to the adjacent establishment. Claiming that the franchisee owner was going so far to cover it up to prevent a loss in business.  Naturally, I was initially shocked by this individual’s candor. However, he made one fatal error which led me to start questioning the integrity of his accusations. He revealed the fact that he was a former employee of the adjacent building.  Informing me that he knew both the owner and the manager well. It doesn’t take a rocket scientist to understand why this individual would have the incentives to levy such claims against the other business. For anyone out there that has been fired or layoff, you aren’t going to have too many kind words for the former employer that released you.

 

The employee I was conversing with stated he obtained this information from speaking with the present manager of the neighboring eatery. As implausible it may seem for the manager to disclose such information to an employee of a competitor will have to be dispensed with. It degenerates into nothing more than he said/ she said scenario. There isn’t enough evidence on either side to make a definite claim. So I will be charitable and give him the benefit of the doubt. Let’s assume that his statement about the other establishment was true. There may have been multiple motives for him informing me of this development in the local culinary scene. He may have felt some unbridled compulsion to inform of the potential hazard of dining at the other restaurant.  He may have had personal moral code that would not allow him to withhold such information from innocent parties. Such as adhering to Kantian morality or having strong religious beliefs. Perhaps he is an admirer of George Washington. The conviction to want to shield innocent parties from exposure to COVID-19 is certainly a laudable objective. I would perceive this as the behavior of a Baptist.

 

Assuming the information was true and he possesses pure intentions for proliferating this news, he can be considered a Baptist. However, it is also possible for him to simultaneously be the Bootlegger as well? I would argue yes. As individuals, we can have multiple motives for engaging in an action. It isn’t outlandish to assume that he had subordinate motives for detailing to me that the neighboring establishment’s staff had tested positive for COVID-19. How does he benefit from disclosing knowledge to me? What are his incentives for doing so?

 

There are two potential self-seeking motives for his actions. The first reason would be attempting to enact vengeance on a former employer. Doing so by creating a rumor that damages their credibility in the community.  If the purported facts are completely fictitious the Bootleggers and Baptists dynamic dissolves. Any pure intention is no longer present. The second reason for his shocking candor that sways into the territory of defamation would be increased job security. The pandemic has likely chewed into the profits of his current employer. To avoid getting laid off for budgetary reasons, he is attempting to divert business to his restaurant. Done out of self-interest and exhibiting behavior that is in line with that of a bootlegger.

 

Bruce Yandle’s concept of Bootleggers and Baptists was intended to demonstrate how unlikely coalitions are formed in the political arena. Considering we as humans can have multiple reasons for advocating for a policy or engaging in various forms of rent-seeking, it is possible for an act to severe in both roles. Providing they are being honest about their moralistic motives, but also stand to benefit from their attempt to influence public opinion.  For instance, I could advocate for a ban on smoking in public parks. Truly feel that I am attempting to save others from the health effects of secondhand smoke. At the same time also be advocating for a smoking ban because I dislike cigarette smoke.  The roles of Bootleggers and Baptists are not always mutually exclusive.

 

It is analogous to the ID and Superego allying. Both are satisfied with the cause and both are the deep-rooted psychoanalytical manifestations of the Baptists and the Bootlegger. When an individual strikes a balance between their hyper-moralistic inclinations and darker impulses they can assume both roles. When avarice and morality align themselves in the intentions of one person this phenomenon becomes possible. Yes, this application of Yandle’s trope does exercise a bit of artistic license. However, Yandle never said that individuals couldn’t form coalitions within themselves.  Doing so by combining various rationals for advocacy and then vocalizing them. Typically under the guise of concern for the moral imperative of the situation.

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 & Baptists Part VI: Unlikely Foes of Universal Medicine

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Introduction:

 

I have just recently started reading Matthew Miller’s book The 2% SolutionThe book aims to provide solutions to social problems that both Democrats and Republicans could compromise on. As Miller put it “using conservative means for liberal social ends”. The work in this book is slightly dated due to being published in 2003. Despite the references to the bygone era of the Bush administration many of the problems detailed today still have not been solved. Reforms in the arenas of health care and education are to this day hotly contested issues.  Maybe if more people had read this modern political treatise written by a self-proclaimed “radical centrist” perhaps we would have more clarity on these issues today? Then again, this might be wishful thinking. It is highly likely that the apparatus of the state is too marred with vested interests to adequately administer educational and medical services. Regardless, it is a thought-provoking read.

I would have to agree with The Hill’s 2003 review of the book. One of the most notable chapters so far was Chapter 5: Universal  Coverage, American Style. Why? Because it details a rare instance of bipartisan compromise on the emotionally charged topic of healthcare. The chapter focuses on a discussion that Miller had with than members of the Ways and Means Committee Jim McCrery (R) and Jim Mc Dermott (D) back in the early 2000s. Diving into intricacies such as the utilization of vouchers, tax write-offs, and even a cash-out system for employees who receive insurance from a private enterprise (p.104).  Even entertaining the notion of allowing participants to choose between several state-approved health insurance carriers with their allocation of funds allocated for healthcare (p. 98-99). Kind of riff on the School Choice voucher system, only for health care.

 

These intriguing suggestions are not what I found to be the most surprising. Nor was it the civil and serious tone of the discourse. It was a comment made by McCrery about potential opposition to this proposal:

” The Union boss will not like it because we are essentially taking away one of the goodies that they claim to provide to their members” (p.107).

 

Pardon my ignorance, I wasn’t aware that the traditionally Democratic-leaning labor unions opposed government-funded healthcare! The majority of polled Democratic voters tend to perceive the decline in union membership as being negative. It is interesting to see that certain segments of the labor movement are not in lock-step with the DNC’s platform. I was thinking that the democratic-union coalition was impenetrable. However, this counter-initiative political position by unions is quite rational.  One of the largest labor unions in the state of Nevada is the Culinary Workers Union of Nevada, UNITE HERE Local 226. Many of the members present have excellent healthcare. Fear that if they were mandated to take a government healthcare plan they would experience a decline in the quality of care.  Putting aside my issues with the labor movement, I have to admit that is a valid concern. Union members even heckled Sen. Sanders ( a labor-friendly politician) demonstrating their concern with a universal system.

 

Bootleggers: 

 

Labor Unions that oppose government health care (E.g. Local 226 of Nevada)

 

Baptists: 

Organizations  (coalitions, think tanks) that advocate for fiscal responsibility ( E.g. National Taxpayers Union)

 

The Unlikely Bedfellows:

 

The concept of the Bootleggers and Baptists troupe is derived from a 1983 paper written by economist Bruce Yandle. Yandle observed that often you have seemingly opposing interests coming together on a certain issue. One group providing a “moral” justification for their policy position and the other side is mainly concerned with self-interest. The National Taxpayer’s Union is advocates of limited government and fiscal conservatism. They have been longstanding opponents of any kind of government involvement in health care. The organization even is willing to praise incremental alterations to the healthcare system to veer towards a more free-market approach. Typically all in the name of consumer choice and fiscal virtue signaling. Then again, if you were to look at America’s present deficit, NTU certainly has a point. The fact that they assume the moral highroad of proper economic stewardship, the organization falls into the category of the Baptists.

 

In terms of addressing the labor unions on this topic, it prudent not to paint with a broad brush. Not all unions oppose universal medicine. Particularly nursing unions and teacher’s unions generally support universal medicine initiatives. For the unions that do not endorse such measures, their rationale is quite salient. They are concerned about receiving healthcare that is inferior to their current plan. This is a valid concern. One that many individuals employed in private industries shares in common when faced with the prospect of handing over this service to the state. There is good reason to suspect that there is potential for the level of care to decline. There are countless examples of government mismanaging healthcare. For example, the Phoenix VA hospital controversy. Citing such examples is far from a conclusive indictment, but enough to raise reasonable concerns. Labeling union workshops such as local 226 the proverbial “bootleggers” is not a value judgment.  Rather, they fall into this category due to their justification being based on the benefit of the union members. Versus striding for a moralistic argument, like  NTU.

 

The irony is certainly rich. It is mind-boggling that unions and the conservative National Taxpayers Union could ever come together on an issue. Health care happens to be the quirky impetus for this usual alignment of political interests.

 

 

 

 

 

 

 

 

 

 

 

Bootleggers and Baptists Part V: Occupational Licensing- Arizona Edition

 

therapist giving advice
Photo by Polina Zimmerman on Pexels.com

 

 

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.

crime scene do not cross signage
Photo by kat wilcox on Pexels.com

 

 

 

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.