Yes, the Frontline episode is dated, but contamination by foodborne pathogens is still a concern in our food supply. The question becomes who has the true lobbying power. Big meat or the media?
Superficially most people would assume the Big Meat Packers. Along with a litany of think tanks and lobbyist organizations ( North American Meat Institute) bending statistics to justify deregulation or keeping the status quo.
What is more intriguing are the interest groups that make up the pro-regulation coalition. The news media not only prospers from gaining more readers and viewers, but these organizations also reduce the informational costs of political action. Media outlets bring attention to public policy issues elevating the topic to a focal point. Individuals typically unaware of a specific problem become mobilized and more apt to seek other like-minded individuals to unify their political pursuits. In the 1990s, following the Jack-In-The-Box E.coli outbreak and several other incidences, there was a greater demand for more food regulation. Some of the literature refers to this knee-jerk reaction as “Pavlovian politics”. The meat lobby may have deep pockets, but the fear-mongering of the 24-hour news cycle provides stiff competition.
The recent blowback from consumers against Bud Light and Jack Daniels over their pro-LGBTQ+ partnerships illustrates more than just the contentions of the current culture war in the United States. Both incidents are clear demarcations of the limits of woke corporate rent-seeking. There is a clear difference from the standpoint of leverage when a firm is either on the supply side; or the demand side of the supply curve.
On the demand side, firms have much more influence over woke policies as they are the customers in this scenario. When a company employs a worker, they effectively purchase their skills and services, placing them on the demand side of the supply curve. As the consumer, the firm has significantly more latitude to expect; the prospective employee will tolerate politically correct messaging. This validates the Strategic Depth Theory of Diversity and Inclusion. Because of the strong incentives of firms to avoid litigation and the fact they purchase the labor of employees, the employees have to tolerate politically correct or woke corporate initiatives or otherwise find alternative means of employment.
However, while watching Kid Rock blast through a case of Bud Light with an AR-15 is entertaining political theater, it conveys a deeper truism about the market. Customers always have the ultimate leverage in the market! What these corporations have lost sight of when they do not have purchasing power on the supply side to ideologically virtue signal; they are the individuals that need to cater to the preferences of others. The tone-deaf appeals to the LGBTQ+ community by both Inbev (owner of Bud Light) and Brown-Forman (owner of Jack Daniels) neglect the needs of their loyal customer base. There is ample evidence that both brands have customer bases that leaned toward political conservativism. The attempt to appeal to the left-wing sensibilities of Gen-Z may have been a waste, considering they are less likely to be drinkers. Let alone prefer more macho and alcohol-forward brands like Budweiser or Jack Daniels.
However, for Inbev, it might be more an exercise in optics than it is about expanding market share (most likely the objective of Brown-Forman). Inbev is attempting to recover from the “Pride Month incident” of 2021. What better way to quell the concerns of the transgender community than to partner with Dylan Mulvaney? If most Bud Light consumers were liberals, then it would be a fine idea. But when your customers are blue-collar workers and country music fans, you might want to lean more into your support for right-wing politicians
One counteractive observation made in the paper A Note on the centralized regulatory review (1984) is to centralize the review of regulation; to a single government bureau. Most libertarians would take issue with consolidating political power into one entity. However, as Miller, Shughart, and Tollison, explains centralization may benefit the private interests that oppose the implementation of the regulation. As befuddling as this suggestion may seem, this impacts the transaction costs of opposing government action.
“…In contrast, centralized oversight enables diffuse interests to focus their lobbying against rent-creating regulation on one location rather than splitting those efforts among a variety of regulatory agencies. In effect, centralization sums the individual welfare losses created by the regulatory bodies subject to its jurisdiction. When one considers the prevalence of regulatory intervention in the economy, the overall cost to diffuse is likely to be quite substantial. Summing the individual welfare losses from rulemaking activities that create rents raises the rate of return to lobbying against such regulation. Accordingly, more opposition will be forthcoming. (p.86-87)..”
While this may incur more costs for the lobbyist who pray upon the concept of “…concentrated benefits and dispersed costs..”, reciprocally, this would reduce the costs for private parties (grassroots coalitions of average citizens) looking to defeat the pending legislation.
“…In consequence, centralization will result in more speeches being made against rent- creating rulemaking, more articles written on the subject of regulatory reform, more letters and telephone calls to Congress from concerned consumers, more campaign contributions to politicians advocating deregulation in the economic area (and more and improved regulation in the social area), more consumer lobbying groups being formed, and so forth. The argument we have presented applies to any situation in which rent-seeking opportunities exist within a decentralized administrative framework. Centralization alters the relative rates of return to lobbying for various coalitions, generally in favor of groups having diffuse interests…” (p.87).
The “…diffused interests…” referred to by Miller, Shughart, and Tollison would be the coalitions of regular voters. Potentially, rallying against divisive “wedge issues” such as the Second Amendment or Abortion. Usually, grassroots political movements will not have the capital to petition multiple bureaus the way entrenched interest groups (lobbyists) influence government action. The centralization may seem like an institutional drive to expand the scope of government, but it may have the opposite effect on lobbying. Realigning the incentives of grassroots activities by reducing the costs of devoting resources towards political action.
Gordon Tullock’s, paper The Transitional Gains Trap (1975)reveals some counterintuitive insights into government programs. Most Libertarians, Classical Liberals, and some Conservatives would surmise that one of the reasons why government programs have prolonged longevity is that the “..entrenched interests..” continue to gain from the policy. However, much like any other entrepreneurial endeavor, the early entrants reap the rewards of the government initiative (think of the consequences of creative destruction). Tullock concludes that individuals that hop on the bandwagon later fare about as well as they would have in the private sector.
The clearest example Tullock articulates in this paper is the example of civil service examinations. Why? Generally, public sector jobs provide higher compensation than their private sector counterparts (p.675). The higher wages would attract more job candidates requiring hiring managers within government bureaus to devise more rigorous validation methods for selecting competent employees. But considering how extensive the test is (including many difficult questions that have little pertinence to the job), effectively, the successful candidates would be overqualified. (p.676). Per Tullock:
“…As a result, the employees are overqualified for the job itself, although not for the examination. In equilibrium, individuals choosing to take a civil service job would expect about the same discounted lifetime earnings as if they had taken a job in private industry which had an inherent requirement for higher quality labor than in the civil service job. There is a significant social cost in the sense that the jobs are held by people whose native capacity is such that they could hold better jobs equally well. For example, the private post offices that are now so successfully competing with the government Postal Service, in those areas where they are legal, normally hire much lower quality labor and pay a much lower wage than the Postal Service. It should be emphasized that, although this is true, they also get much more work from their employees. A custom of working only part of the day has developed in the Postal Service, and many letter carriers are done with their day’s work in much less than an eight-hour stint..” (p.676).
Tullock also likens this to the job stability of trade union members, senior union members capitalize on the initial benefits, and the public sector market of jobs stabilizes the returns even out and ends up being no better than the private sector (p. 675). This paper also mentions how policies that favor specific industries (notably unions and public sector jobs) would yield more direct benefits from pure transfers. Such a privilege is direct monetary allocation versus the implementation of disparate rules that favor the economic success of a specific sector in the American economy. The best example of this cited by Tullock is agricultural subsidies (p. 676) which directly distribute money to farmers rather than enacting laws making it more onerous to become a farmer. One of the most salient examples is the subsidies provided for a farmer for cultivating corn.
The irony of a transition strategy (creating barriers to entry versus direct handouts) is that it is less efficient. The question has become, why would political actors choose the more circuitous and less profitable route? Tullock being the exquisite scholar he was, provides several explanations for this perplexing phenomenon. As we all know, prima facie, the political process makes everything more complex, and that even goes for the interest groups attempting to game the system. Essentially, erecting legislative barriers may be less lucrative, but are easier to pass through because not to incite the ire of voters (being more subtle than a direct handout); such measures side-step annual budgetary reviews of congress and are scrutinized at less frequent intervals than earmarked subsidies (p.677).
There is much we can do about the existing measures that favor select industries; one only needs to look at the Public Choice literature on inertia to understand that the status quo reigns supreme. Even outside of the Public Choice tradition, free-market economists have long acknowledged this truism of government intervention. Nobel-prize winner Milton Friedman summed it up best by stating “… Nothing is so permanent as a temporary government program..”. The only wisdom Tullock imparts upon us to prevent the Transitional Gains Trap is “..I can recommend very strongly that we try to avoid getting into such traps in the future..” (p.678). His response nearly fifty years ago illustrates the futility of attempting to prevent interest groups from influencing public policy.
In February, the California legislature introduced Assembly Bill No. 418 (AB-418), legislation that seeks to expand the state Health and Safety Code. The amendment would ban the sale and production of edible goods containing Brominated vegetable oil, Potassium bromate, Propylparaben, Red dye 3, and Titanium dioxide; by January 2025.
This bill has gained national attention for prohibiting one of the constituents (Titanium Dioxide) in the popular candy, Skittles. Mars’s use of the ingredient sparked controversy last year. In Thames v. Mars, Inc, the U.S. District Court of Northern California dismissed the complaint. Mars claimed they would stop using Titanium Dioxide in their Skittles candies in 2016. The proposed consumer protection measure is likely a response to candy manufacturers not following through on their publicized commitment.
AB-418, like all consumer protection legislation, is well-intentioned but misguided. Prohibiting certain chemicals in food products is unnecessary when market mechanisms can guide producers accordingly. If consumers are concerned about the hazards of ingesting compounds targeted in the bill, they will choose not to purchase these products. In turn, companies like Mars will respond accordingly to market pressures.
Consumer Sovereignty Can Lead the Way
Consumer Sovereignty is the concept that “…consumer preferences determine the production of goods and services..”; any competitive firm will be responsive to the needs and wants of its customers. If candy consumers are truly troubled by Skittles containing Titanium Dioxide, they will stop purchasing Skittles (other brands impacted by AB-418). Mars will then respond to the dip in sales by accommodating the preferences of their customer base by removing this substance from their products. If consumers are still buying Skittles, we can assume that they are not bothered by the fact, Skittles contains this chemical. Therefore, the implementation of a law banning this ingredient is unnecessary.
But beyond such a law is unnecessary, it also infringes upon the right to choose. An individual should be able to purchase and eat any variety of candy they so wish, even if it is injurious to their health. California’s prospective law could ruin the skittles recipe and impact the flavor. Why should companies manufacturing processed foods be forced to meet such requirements if most consumers are indifferent to these health concerns?
Product Differentiation Can Voluntarily Steer Consumers
Product differentiation is where a firm highlights the attributes of its products or services that set them apart from its competitors. Mars’s failure to fulfill its 2016 commitment is not a reason for more regulation; but a golden opportunity for competing companies to acquire more business. Competitors can either emphasize in their branding that they do not use Titanium Dioxide or voluntarily reformulate their products. Firms placing such a focus on product quality will provide a signal to health-conscious customers; such tactics can persuade candy consumers to switch brands.
The process of product differentiation can also present an opportunity for mainstream candy companies to create multitiered product lines. They may have products containing the same artificial ingredients that compose the Skittles recipe but also offer an ultra-premium line of candies made with more natural ingredients. Such an offering accommodates concerned customers by providing a “healthier” alternative to the original mass-market product, creating a niche market for consumers willing to pay more for quality.
Government Intervention Will Only Lead to Moral Hazard
The state of California banning specific food additives will give the producers and consumers the impression that the ultimate responsibility of ensuring safety will be on the government. This perception can create perverse incentives for firms and customers alike.
This situation will generate what is known as a moral hazard. Moral hazard is the phenomenon where “..people tend to take more risks when they do not bear the full potential negative consequence..”. Since the government took full responsibility for determining what substances are safe to consume in food products, both parties are willing to take more risks. Producers will be little incentive to provide above-average safety quality with their edible products because California will be the ultimate authority making this determination. Because government safety standards only provide minimum standards, they will only meet the bare minimum. Firms may hold higher safety and cleanliness standards when subject to profits guided by consumer preferences. Why? Because companies may want to increase customer loyalty by aiming to exceed their current food safety expectations. In contrast, the minimum mandated criteria imposed by California, firms will have no reason to adopt more stringent standards because there is no profit incentive to exceed government standards. Consumers will credulously accept the lackluster effort on the part of candy producers simply because they have the government seal of approval.
The government prohibiting certain food additives also generates moral hazards for consumers. If the government parentally informs you what substances are safe through legal restrictions, why do you need to do any additional research? Many people believe that products are wholesome because they are legal. But do local, state, and federal government base these determinations on sound medical research? Not always. Health and safety legislation, like other policies, can be subject to the influence of various interest groups hoping to shape regulations to their advantage (regulatory capture). One analogous example is the labeling requirements for genetically modified food because these mandates have little scientific justification. Yet, these requirements continue to be aggressively supported by coalitions that stand to gain from this regulation.
The company under fire (Mars) is the true beneficiary of the soon-to-be California law. Why? A company like Mars (arguably the largest candy company in the world) has the resources to accommodate the regulatory requirements imposed by California lawmakers. Mars can (at little cost to their profits) substitute Titanium dioxide for a legal ingredient. But smaller candy producers may not be flexible and will go out of business due to these new requirements. Therefore, Mars a silent Bootlegger in this scenario.
Florida Governor Ron DeSantis of Florida has recently drummed up some controversy last week when he revoked the liquor licenseof Hyatt Regency Miami for hosting a Christmas drag show displaying sexually explicit performances. So, what was the controversy? Not all of the attendees, were over the age of 18 (per the State Florida Department of Business and Professional Regulation complaint). . The DeSantis administration in Florida has expressed normative concern about insulating children from “lewd” content. Per the State of Florida’s grievance:
“…As a result, minors attended and were knowingly admitted into the Show by Respondent, including children appearing less than 16 years of age. See Exhibit 5. 9. During the Show and in the presence of persons less than 16 years of age, performers appeared on stage wearing sexually suggestive clothing and prosthetic female genitalia…”
However, viewing this situation through the prism of Bruce Yandle’s Bootleggers and Baptists (1983) framework, who benefits from this decision? Anyone familiar with the city of Miami knows that the city has no shortage of bars and restaurants licensed to serve alcoholic beverages. While DeSantis and those working for the state of Florida may be our Baptists; it is evident that bars throughout Miami are the Bootleggers of the Hyatt having its liquor license pulled. Why? Because alcohol sales equal more revenue and business. Some patrons might even avoid venues that do not serve alcohol. Other local venues stand to profit handsomely from the loss in the competition since alcohol has the highest markup of any item on a restaurant or bar’s menu.
1.) We cannot rule out the possibility of partisanship in this policy decision. It is not evident that if a father brought his 16-year-old son to a female strip club (colloquially known as a “Titty Bar”) DeSantis would have reacted with the same amount of gusto. However, considering the implicit partisanship of the American “culture war” it would be fair to suggest that California Governor Newsom would more harshly penalize the “Titty Bar” over the Drag Show. The inequitable application of the law based on the ideological leanings of elected officials is an unfortunate excess of the current American political climate.
The current controversy surrounding Tennessee Lt. governor Randall McNally is a boon to the Left-wingers in this political climate amid America’s “Culture War”. He has tacitly supported several laws that the Human Rights Campaign believes targets the LGBTQ+ community . Notably, SB0003 (2023) which places restrictions on drag performances, has been a hotly debated topic on editorial pages coast to coast. Why has McNally’s stance on Anti-LGBTQ+ legislation recently come under fire? McNally has recently interacted with a gay social media figure liking several sexually provocative posts, creating a gap between his political positions and his personal opinions. The TN Lt. Governor has expressed; that his replies were misinterpreted and did repudiate the perception that he was anti-LGBTQ, but never stated that he wasn’t a homosexual .
In the context of Bruce Yandle’s Bootleggers and Baptists (1983) framework, who benefits from these laws regulating sexuality and gender? We don’t need to look too far to see who the Baptists are, clearly the Conservative (most likely religious) lawmakers, because they are enacting these laws in the name of morality and the wellbeing of the youth. McNally himself is probably the most salient beneficiary of these laws. Why? Since he either sympathizes with the LGBTQ community or is a closeted member, he can easily refute any association with this enclave of sexual minorities within the state by pointing (free-riding) to the laws he implicitly endorsed. The optics of McNally not appearing to be openly pro-LGBTQ is imperative in a staunchly conservative state like Tennessee. If his open support is off-putting to state voters, he might as well kiss his cushy seat in the state house goodbye.
This essay is merely an application of Bruce Yandle’s coalition model and is not a commentary on Tennessee state laws, McNally, or the LGBTQ+ community.
Interesting observation, but speculating about the nature of McNally’s sexual orientation is slightly outside the bounds of my analysis.
The debate on reforming Section 230 of the Communication Decency Act (1996) is one of the few issues in US public policy that has bipartisan support. Both parties have different objectives for abolishing or amending the law. Conservatives want social media platforms to be regulated as common carriers, to avoid the “censorship” of conservative users. There may be some veracity to the claim of social media bias towards conservatives, since 35 % (the highest percentage of any other ideology polled) of participants identifying as “strong conservatives”, in a survey conducted by researchers at the Cato Institute, have experience having content penalized by social media companies. On the other hand, liberals challenge the status quo of Section 230 on grounds that social media firms are not sufficiently blocking the dissemination of misinformation. Despite their conflicting interests in reforming the law, both parties form an “odd bedfellow” coalition for Section 230 reforming. Making the bipartisan zeal for change an example of a Bootleggers and Baptists (1983) coalition.
“…(c) PROTECTION FOR GOOD SAMARITAN’ BLOCKING AND SCREENING OF OFFENSIVE MATERIAL- (1) TREATMENT OF PUBLISHER OR SPEAKER- No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider…” (p.101).
This section of the law insulates platforms from being liable for the content created by users. Effectively, there is a certain degree of rent-seeking implied; by this immunity, this privileged separation between the platform and the user is the proverbial glue that holds the internet together. Message boards, social media platforms, pornography, video-sharing websites (YouTube), and even blog-hosting websites would not exist without 230. These protections provide platforms with the incentive to be more permissive with what they allow users to post. If users find the content moderation from current social media applications restrictive, a world with this section nullified would be even worse. Freely allowing users to post any content they wish; would be a costly risk.
Gonzales v. Google (2023)
The public debate over Section 230 is now coming to fruition in the form of two twins (based on the same facts) in Supreme Court cases. The first case Gonzales v. Google concluded the oral argument on February 21st,2023. The facts detail how the father of Nohemi Gonzales, Reynaldo Gonzalez, a U.S. citizen killed in a terrorist attack (2015) orchestrated by Isis in Paris filed a lawsuit against Google. Gonzalez asserts that Google (the parent company of YouTube) was complicit in the attack for YouTube’s algorithms leading users to terrorist recruitment videos posted on the platform. The next day after the attack, ISIS claimed responsibility for the attack in a YouTube video. The district court dismissed Gonzales’s claim against Google based on Section 230 and the court of appeals affirmed. The U.S. Supreme court granted certiorari on October 3rd, 2022.
In the oral argument, the attorney on the side of Gonzales, Eric Schnapper, argued (p.17) that Google so much didn’t fail to take down the content, but actively encouraged it through their algorithms. Schnapper implies that driving viewers to such content is outside of the scope of Section 230. However, in the process of questioning Schnapper, the Court was seeking to determine if Section 230(c)(1) applies when platforms utilize “targeted recommendations” predicated on “..information provided by another information content provider..” The verdict is still pending on the case; only time will tell what the fate of Section 230 will be.
Twitter, Inc. v. Taamneh (2023)
In the twin case for Gonzales, Twitter, Inc. v. Taamneh, was only argued a day apart from Gonzales (02/22/23). The facts of the case were a copy-and-paste of Gonzales, but the scope of the argument was to determine if Google, Facebook, and Twitter were liable in the context of anti-terrorism statutes. Per Oyez:
“…The district court dismissed the claims based on aiding-and-abetting liability under the Anti-Terrorism Act, and the U.S. Court of Appeals for the Ninth Circuit reversed…”
While the SCOTUS deliberates on the future of Section 230, it is still worthwhile to evaluate who truly benefits from reforming this law. The bipartisan support for amendment/abolishment of this law; makes this determination a close call. The assignment of the role of Bootlegger and Baptist can be determined by ideological preferences, like in the scenario of Qualified Immunity reform. In the name of objectivity (for the sake of positive analysis), one faction within this coalition has more to gain than the other. While liberals get to cloak themselves in the robes of the white knight saving us from misinformation, this pales in comparison to what conservatives have to gain from overturning or revising this law. Social media platforms have an obvious left-leaning bias; conservatives are disproportionately penalized for their content. If social media companies block conservative content, right-wingers gain substantially through having more forums for disseminating their ideological message.
However, it would be shrewd to warn conservatives about pursuing this end too aggressively. This is the conservative version of the Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission. Why? In the Masterpiece case liberals were hoping the court would rule in favor of violating the rights of the bake shop owners by legally forcing them to bake the gay wedding cake. Thankfully, the court ruled in favor of the bake shop; but making liberal social media platforms host conservative posts is just as transgressive as forcing right-wing Christian bakers to make gay wedding cakes. Firms operating in the private sector; have the right to exclude users for any reason they deem fit. It is frequently unwise to discriminate against platform users, but that is the Firm’s prerogative. If conservatives cannot see the irony of this inverted scenario, I am at a loss for words and can only believe that such obtusity is the byproduct of partisanship.
1.) There is a wide variety of views from conservatives on how they desire to reform Section 230 reform. Ranging from a tear-it-down methodology to a moderate approach to amending it. In his article Section 230—Mend It, Don’t End It, Klon Kitchen, former Director at the Heritage Foundation recommends an amendment strategy over abolishment.
2.) At many points in the oral argument, it appears that Schnapper fails to convey a convincing argument upon further scrutiny from the Justices. Schnapper obtusely justified culpability peripherally through JASTA. Justice Sotomayor calls him out on deviating from the initial complaint of YouTube being derelict for failing to remove ISIS videos when at oral argument, he shifted to claiming the algorithms were the issue (p.19-20). She further prods at the veracity of the claims of YouTube aiding and abetting ISIS; when the algorithms on their face are neutral and not tailored to support explicitly pro-ISIS videos (p.25). Justice Thomas also struggled to see how “inaction” ultimately led to “aiding and abetting” (p.33).
The below corporate communication only validates The Strategic Depth Theory of Diversity and Inclusion. Why? Superficially, this does appear to be a sincere effort to address the Gender Pay Gap (I am not entirely sure this does exist because several confounding variables are muddying the relationship in this perceived correlation) between men and women. To critique the below screenshot, let’s assume there is a notable difference in compensation by gender and that it is a systemic issue. This may be merely a thinly veiled attempt by the executives to engage in social rent-seeking (Tullock, 1967).
It may appear on the surface that the firm that produced this below electronic message, companywide, is socially conscious. However, it may be cheaper, in the long run, to articulate this messaging and implement corporate initiatives to increase compensation for female employees than to grapple with ligation and bad publicity. The costs of both are difficult to calculate but can have a devastating effect on the company’s bottom line.
D&I measures can be labeled as a form of rent-seeking because these programs shield the firm from ligation without any direct benefit to their customers (analogous to lobbying). Instead of improving the products and services (R&D, employee training) offered to the customers, these programs reallocate resources to internal initiatives that yield little external economic productivity. D&I programs are merely the new façade of what was previously known colloquial speak as C.Y.A policies. Corporations use these programs to discredit ligation or to deflect accusations that they condone a hostile work environment.
“…The fate of the latest measure is still uncertain and faces significant hurdles before it can become law. The bill would need to be passed by the full House and U.S. Senate, which is controlled by Democrats before it can go to Biden…”.
The bill still has a few bulwarks to clear before becoming law. The content of H.R. 1153 justifies the prohibition of social media applications on the grounds of national security concerns. The bill cites “..espionage action..” from data collection, election interference, and the use of algorithms to target content to promote the interests of the Chinese government. There may or may not be any veracity to these concerns.
In the context of a Bootleggers & Baptists (1983) coalition, who truly benefits from the United States restricting TikTok? Our Baptists in the effort to ban TikTok are the Republicans. This is not an endorsement of the political party; but an objective acknowledgment that a national security argument could be considered moralistic.
Now, this begs the question, who are the Bootleggers? The most obvious answer would be competing social media platforms, but these firms are tangential actors in this scenario. If American-based social media companies conspired with Republicans in the house to propose this bill, that is next-level four-dimensional chess. A more likely situation would be that the Democrats are the real beneficiaries of the nascent stages of outlawing TikTok. Why? If a politician’s objective is to retain their seat in office, then Democrats have a lot to gain; because Gen-Z is the largest constituency of voters who use TikTok. An estimated 60% of all TikTok users are members of Generation Z. Only to up the stakes, the fact that Gen-Z is more likely to vote for Democratic candidates. Since Gen-Z also is the majority of TikTok users, pandering to this patch of voters through opposition to the ban is imperative.
Outside of Democratic politicians, there is an additional agent(s) that could stand to benefit from the direct fallout from H.R. 1153, and that is the ACLU. There is the possibility that the organization spoke out against the bill for reasons of ideological leanings (left-wing proclivities), but it is more likely the ACLU desired positive publicity. The ACLU is an organization that defends civil rights, publicly denouncing the proposed law as a threat to the First Amendment and perpetuating its public image. More positive publicity may entice donators to give more to the nonprofit and assist them in furthering the ACLU’s advocacy goals.
Walmart has decided to raise its starting wage to $14 per hour. This seems contrary to conventional wisdom, as firms strive to minimize labor costs. Walmart may appear to be the proverbial white knight in this scenario. By the end of 2023, less than ten states will have minimum wage requirements that exceed Walmarts starting wage. In the context of a Bootleggers and Baptist (1983), is Walmart the Baptist? Is Walmart meeting Progressive politicians and the American public (51 % support a $15/hr. minimum wage) halfway? By offering slightly less than what the left-wing populists want, are they providing voluntary compromise?
Not so fast. On a superficial level, Progressive politicians would be the Baptists for championing the moral concern of the quality of life experienced by low-skill workers. It is important to note that their normative position does not account for the potential negative consequences of raising the minimum wage. Walmart is most likely not enacting this new corporate policy out of the kindness of its own heart. It is important to remember the insights made by Adam Smith (the butcher, the baker, and the brewer) in The Wealth of Nations (1776), business is not charity, Walmart executives need to act in the interests of the firm to survive in the marketplace. Walmart might be upping wages to retain employees, which would be the best-case scenario.
However, there may be a more oblique strategy the firm is circuitously implementing. This is purely speculative and not a conspiratorial claim. The following statements are merely conjecture. If a firm seeks to reduce labor costs; why would the company voluntarily increase wages? Indirectly, such a policy could assist in reducing labor costs. How? Through urging companies to automate operations. The St. Louis Federal Reserve even notes; when the minimum wage increases, the greater the potential for worker displacement.
“… Increasing the minimum wage is a controversial issue. Although a higher minimum wage can provide higher income for low-wage workers, it can also reduce the number of job opportunities for those workers. Some of the reduction in jobs occurs because a higher minimum wage increases production costs, causing firms to shift away from, or stop, production of some goods…”
While the public would be disgusted by this realization, reviling such business tactics ignores the role of incentives in decision-making. If you were a Walmart executive, you would take the same measures to reduce operational costs.
The War on Drugs waged by the United States since the 1970s has created a myriad of Bootlegger and Baptists (1983) dynamics. Few people question who stands to benefit from the legalization of currently prohibited drugs. This question becomes more prominent as more jurisdictions globally legalize recreational Marijuana. What happens when the most evident Bootlegger of the illicit drug trade (the Sinaloa Cartel) works to legitimatize commercial Marijuana sales? Does this strategic move shift their position in the coalition to that of the Baptists?
This essay will examine this point to determine if the bad boys of the illegal dope game have turned over a new leaf. The legal status of Marijuana in Mexico is not as loose as the laws of their northern neighbors, California and Arizona. Medical cannabis has been legal in Mexico since 2017, but what about the recreational consumption of pot? Mexico has decriminalized possession of up to 28 grams of Marijuana; recreational cannabis is still not legal. The staunch competition from the United States has caught the attention of various cannabis vendors in Mexico.
American dispensaries have achieved immense success considering sales for recreational weed are projected to hit “.. $25.1 billion in sales in 2025, with an average yearly growth of %23.60 from 2019 to 2025…”. It is self-evident that the illicit drug cartels would want a piece of the action. Yes, the most infamous cartel in Mexico has been watching. In the city of Culiacan, those left in charge since the incarceration of “El Chapo” Guzman, the “Narcosjuniors”, have established quasi-legal dispensaries. Selling various products ranging from edibles to best-sellers(manufacturing around 1,200 to 1,500 a week); pre-rolled joints. However, the cartel creating formal business networks, does this mean they are making sincere inroads to legalizing a drug with relatively few societal externalities? The transparent motive profit, leading them to create a commercial channel transitioning to a legal market.
If Sinaloa is once again the proverbial Bootlegger, who are our Baptists? We need to look at whom the cartel is employing to ensure quality control. After all, the cartels do not have the best reputation; when it comes to producing primo Marijuana. El Chapo’s successors will not be the Baptists, but they have enough sense to enlist the help of the passionate pot aficionados to cultivate higher-quality weed. They have hired weed-loving growers who have previously lived in California. Their love for cannabis urges them to:
“..We only have the permit to produce. The organization is giving us their money, their trust, and the green light to make the best product. But we can only sell to one client: the organization. We get good pay for our job, not in the millions, but enough to live off well, but more than that, the opportunity to develop top-notch weed,” one of the producers said..”
As usual, the cartel is still chasing profits, but the growers they employ want to grow the best pot in the world. Because of their love for the product, they want to dominate the global market (Canada, United States, and the Netherlands being the current movers and shakers). Only time will tell; once legalization takes full effect, if Mexico can overtake the California market. It would be nice to see an aggressive resurgence of high-caliber Acapulco Gold as a result of market competition.
Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, once masqueraded as the regulation-friendly face of the crypto markets. SBF was known for his openness to regulation and willingness to work with lawmakers; he not only wanted to graciously assist our elected officials in Washington with guiding policy but was also “socially conscious”. Sam was a vocal proponent of effective altruism and possessed a Benthamite concern for maximizing social benefits to help the most people. This wunderkind 30-year-old was too good to be true
Whether it was Bankman-Fried donating large sums of money to the Democratic party (the purported political advocate for the economically disadvantaged) or his views on veganism and charity, it was all a façade, a thin veneer masking his actual conduct. Per Reuters:
“… The turmoil at FTX has seen at least $1 billion of customer funds vanish from the platform, sources told Reuters on Friday. Bankman-Fried had transferred $10 billion of customer funds to his trading company, Alameda Research, the sources said.
New problems emerged on Saturday when FTX’s U.S. general counsel Ryne Miller said in a Twitter post that the firm’s digital assets were being moved into so-called cold storage “to mitigate damage upon observing unauthorized transactions.”
Cold storage refers to crypto wallets that are not connected to the internet to guard against hackers…”
As investors fled the platform and Binance pulled the plug on bailing out FTX, it is clear that SBF misrepresented the financial health of the exchange and its business practices. All of these developments are reminiscent of the Enron scandal. A corporation rubbing elbows with congress to engage in regulatory capture and foster a positive public image. While concurrently; creating a smoke screen obscuring the company’s off-color conduct.
The economist Bruce Yandle’s theory of Bootleggers and Baptist (1983) coalitions perfectly describes the Machiavellian tactics utilized by Mr. Bankman-Fried. After all, perception is what matters. If investors were not distracted by his social advocacy and success, they might have spotted the red flags. As observed by Yandle, there is often a demand for regulation. Often from parties that prima facie would oppose such measures (p.13). Why? This gives industry elites the to help shape rules that will benefit their bottom line and yield good publicity. Frequently, these scenarios are win-win for the firms involved. SBF proposed a licensing system for Defi (decentralized financial technology); per Erik Vorhees:
“..self-enforced rules and blacklists would only serve established exchanges that could afford to pay for compliance…”
SBF simultaneously worked to craft regulation that FTX would benefit from while appearing to share some of the concerns of crypto-phobic politicians like Elizabeth Warren. Progressive politicians are the Baptists in this scenario. SBF’s arrogance ended up being his own Achilles Heel, ultimately revealing his true colors, those of a covert Bootlegger (p.190).
In recent Arizona election news, Libertarian senate candidate Marc Victor has withdrawn from the race and openly endorsed Republican Blake Masters. Much like other circumstances in politics, there is a moralizing rationale for Victor’s capitulation and an obvious beneficiary of his exiting the race. There is a Bootlegger and Baptists (1983) dynamic in this development in the Arizona mid-term election.
Victor left the race and lent his support to Master to avoid a spoiler effect; a phenomenon where third-party siphons off votes from a major party candidate. This is an enduring problem for Arizona Republicans for a while, hence the passage of HB 2608 (2015). This has only been exacerbated; by the fact that the Democratic party made numerous donations to Marc Victor’s campaign. By any metric, Victor calling it quits to avoid a spoiler effect has the normative underpinning of moralistic reasoning .; he is a Baptist in this scenario.
The Bootlegger in this situation is indisputably clear, Blake Masters. One less candidate in the race means more votes for Blake. Masters has been after the Libertarian vote before Victor even dropped out of the race. He has been dog-whistling and pandering to certain Libertarian sensibilities that are still congruent with the new strain of right-wing populism (no one will accuse him of being soft for wanting to “End the Fed”). Even leaning on his ties to the Ron Paul movement back in college. His strategy to capture the voters of a right-wing leaning third-party is a shrewd move on his part; if the polls are accurate, this will be a tight race. Per Five-Thirty-Eight, Mark Kelly currently holds a meager lead over Masters, Kelly polling in at 48.4 % and Masters trailing behind at 46.8%.
Victor may have been concerned about the effect of his third-party campaign on the election results, he may only be a superficial Baptist. Why? Per Reason, Victor did receive threats from supporters of his opposition. This fact cannot be dispensed with when evaluating his decision to exit the Arizona senate race.
2. Data source Five-Thirty-Eight. Figure A.
3. Figure B. data was processed in Microsoft Excel.