Bruce Yandle’s “Bootleggers and Baptists–The Education of a Regulatory Economist” appeared 28 years ago in Cato Institute’s Regulation (vol 7, no. 3). Yandle explains how he came to the evocative phrase “Bootleggers and Baptists”:
I joined the Council on Wage and Price Stability in 1976. There my assignment was to review proposed regulations from the Environmental Protection Agency (EPA), the Federal Trade Commission (FTC), the Department of Transportation (DOT), and parts of the Department of Health, Education, and Welfare (HEW)…. I was ready to educate the regulators. But then I began to talk with some of them, and I began to hear from people in the industries affected by the rules. To my surprise, many regulators knew quite a bit about economics. Even more surprising was that industry representatives were not always opposed to the costly rules and occasionally were even fearful that we would succeed in getting rid of some of them. It was in considerable confusion that I returned later to my university post, still unable to explain what I had observed and square it with the economics I thought I understood.
That marked the beginning of a new approach to my research on regulation. First, instead of assuming that regulators really intended to minimize costs but somehow proceeded to make crazy mistakes, I began to assume that they were not trying to minimize costs at all — at least not the costs I had been concerned with. They were trying to minimize their costs, just as most sensible people do….
Second, I asked myself, what do industry and labor want from the regulators? They want protection from competition, from technological change, and from losses that threaten profits and jobs. A carefully constructed regulation can accomplish all kinds of anticompetitive goals of this sort, while giving the citizenry the impression that the only goal is to serve the public interest.
Indeed, the pages of history are full of episodes best explained by a theory of regulation I call “bootleggers and Baptists.” Bootleggers, you will remember, support Sunday closing laws that shut down all the local bars and liquor stores. Baptists support the same laws and lobby vigorously for them. Both parties gain, while the regulators are content because the law is easy to administer. Of course, this theory is not new. In a democratic society, economic forces will always play through the political mechanism in ways determined by the voting mechanism employed. Politicians need resources in order to get elected. Selected members of the public can gain resources through the political process, and highly organized groups can do that quite handily. The most successful ventures of this sort occur where there is an overarching public concern to be addressed (like the problem of alcohol) whose “solution” allows resources to be distributed from the public purse to particular groups or from one group to another (as from bartenders to bootleggers).-
Where does pornography come in? For a long time, pornography was prohibited, just as alcoholic beverages were (for the most part) during Prohibition. That didn’t stop the production of pornography, of course, but it did reduce the flow of output, making pornography more lucrative — for those willing to buck the law — than it would have been in the absence of prohibition.
It should come as no surprise that — even in this day of government-approved licentiousness — there are members of the port industry who are critical of the approval of the .xxx domain. According to NewsLime.com,
Internet Corp. for Assigned Names and Numbers (ICNN), the group that supervises the naming system of the Internet, approved .xxx domain for use in pornographic sites. This decision was made amid opposition from porn stars and other people in the industry who contended that the approval will just lead to censorship.
Religious groups also argued that web content of pornographic sites will be legitimized when they are given their own corner of the Internet….
Critics that [sic] include Vivid Entertainment, producer of adult video, and Free Speech Coalition contended that the triple x suffix of the domain would make a virtual section of the Internet that would undermine speech and would eventually lead to censorship.
What the “bootleggers” in the porn industry mean, of course, is that their commercial products will lose value because the .xxx domain will encourage entry into the porn market. Some of the entrants undoubtedly will provide “free samples” in the hope of getting viewers to pay for the more “tantalizing” material that is locked behind paywalls.
The “Baptists” are the religious groups, of course. And they are sincere in their opposition to .xxx, whereas the “bootleggers” are merely cynical in their opposition.
So, there you have it. Another case study in “Bootleggers and Baptists.” For more, read Yandle’s article in its entirety. Also, read Yandle’s “Bootleggers and Baptists in Retrospect (Regulation, vol. 22, no. 3),” which appeared 15 years later.