Bootleggers & Baptists- Part I- Gun Control Act of 1968

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Introduction:

 

There is a tendency to implement regulation for the betterment of society. Purportedly, consumer protection advocates claim that regulation insulates the public from harm. Safety regulations typically require costly design alterations as a harm reduction measure. Ironically, there are some unlikely beneficiaries of safety regulations.

Economist Bruce Yandle came to this realization while working for the Federal Trade Commission. To his surprise, many industry representatives were on board with these regulations. They were even concerned that government agencies would abolish these laws. Yandle was shocked by this counter-intuitive revelation as most safety regulations impede efficiency (Yandle, 1983, p.2) [1]. The true benefit of these restrictions was the artificial barriers to entry that effectively reduced competition (Yandle, 1983, p.2) [2]. Large corporations possess the resources to invest in research and development to accommodate new regulatory requirements. Smaller companies cannot afford to comply with the new mandates, effectively putting them out of business. Regulations can put severe hardships on small businesses that mimic a cartelization effect [3]. Large companies can achieve these advantages without even violating any antitrust laws!

These consequences are the byproduct of what Dr. Yandle has dubbed the Bootleggers and Baptists effect. It is the phenomenon in public policy where unlikely coalitions form to achieve common goals. The analogy used by Yandle, Baptists wanting to prohibit liquor sales on Sundays for moral reasons. In tandem, the Bootleggers support this restriction since this will eliminate the competition of legitimately licensed bars and liquor stores (Yandle, 1983, P. 2-3) [4]. Bootleggers can advocate for their self-interest under the aegis of the moral concerns of the Baptists. Shielding invested interest groups from public scrutiny. As the Bootleggers are criminals and laws are not a deterrent for them. A law banning liquor sales on Sundays will deter law-abiding alcohol vendors. Leading us to question whom the beneficiaries are of any zealously petitioned regulation.

 

This essay will be the first installment of a continuous series of real-life applications of this theory. The first essay will focus on the coalitions supporting the 1968 Gun Control Act passed in the United States.

 

The Bootleggers and Baptists

Baptists: Gun control Baptists

Bootleggers: Domestic gun manufacturers

 

Parameters of the 1968 Gun Control Act: 

This specific gun control legislation is believed by many to be a direct reaction to the civil unrest of the turbulent 1960s. The political pressure mounted after the assassinations of high-profile political figures. Including president John F. Kennedy and civil rights activist Martin Luther King Jr [5]. Inner-city riots only intensified the fervor to pass gun control laws [6]. Some commentators have even hinted towards gun control measures in the 1960’s being racial bias [7]. More extreme civil rights advocates such as the Black Panthers were well known for regularly carrying semi-automatic rifles.

 

The combination of slain public figures and the raucous carnage of urban riots created the context for restrictions on gun ownership. After all, the outcry for gun control laws came out of concern for public safety. However, was the 1968 law evenly applied to all gun makers and vendors? Not exactly. The legislation tended to skew in favor of domestic gun manufactures. Dating back to the late-1950’s domestic gun companies in New England’s “gun valley” expressed to local politicians concerns over foreign competition (Newhard, 2015, P.2) [8]. The interests of domestic gun manufacturers become apparent, the desire to stifle competition from foreign producers. Most of the gun control measures of the 1960s; directed restrictions towards imported guns. The emphasis is that Lee Harvey used an Italian mail-order purchased rifle to kill JFK (Newhard, 2015, P.4) [12]. Complaints of “surging” numbers of cheap guns imported into the United States. The line between genuine concern for public safety and protectionism becomes blurred.

 

Beyond the salient nature of the protectionist proclivities of U.S. gun makers, there is also evidence that the legislation was unequally enforced against foreign gun producers. There were some asymmetries in the enforcement parameters of the 1968 bill; vendor licensing, mail-order arms purchases, and the sale and transportation of imported weapons became highly regulated (p.4-8) [9]. The bill mandated heavier licensing fees for mail-order gun vendors (Newhard, 2015, P.2) [10]. Many may argue that placing such restrictions on mail-order sales was worth the price of keeping firearms out of the hands of children. Such an argument ignores the implicit benefit of domestic producers. Before the internet, mail-order categories were the primary source for obtaining European rifles and pistols. Making it more difficult to purchase anything from Beretta, but guns made by Ruger could still be readily available for sale from brick-and-mortar retailers.

 

Shortly before the bill went into effect, many pundits speculate that may have been deliberate delays in the approvals of gun importation licenses. The legislation went into effect in October 1968; gun dealers had a deadline of December 15th (Newhard, 2015, P.5)[11]. Anyone versed in economic-behavioral patterns or just plain common sense could foresee the litany of vendors racing to get their licenses before the law passed. Despite the upsurge in requests for licenses, government officials dragged their heels when it came to approving them. It is surmised that the delay in approvals was a means of preventing a “flood of foreign handguns” from coming into the country before the law was enacted. This circuitous form of bureaucratic activism did more to hurt small firearms dealers than did promote public safety. Small-time foreign gun dealers found it easier to stop selling guns than continue to comply with the new laws (Newhard, 2015, P.4) [13].

 

Final Thoughts on the Dynamics of this B&B Dynamic:

This example is a classic example of ignoring the incentives of invested interests. I would argue that this is a defining feature of most Baptists and Bootleggers relationships. On one side, you have the advocates compelled by moral convictions. Who unwittingly provides the veiling moral cover for the self-interested bootleggers. If the bootleggers ever directly advocated for the policies that benefited them without the moral smoke-screen they would be derided by the average voter. Passively cloaking their interests under the veil of the public interest, the story changes.

The example of the 1968 Gun Control Act touches upon a point made by Bruce Yandle back in 1983; that there is a demand for regulation. There is an economic dimension of the promulgation of rules. Competition fosters the demand for more regulations; Yandle cites technological changes, demographic changes, significant changes in factor costs, and new information as factors for generating new laws(Yandle, 1983, p.3-4) [14]. Often there are anti-competitive consequences of imposing new safety regulations. Time and money are required to adapt business practices to the contingencies of compliance.