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 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.

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.