Baptists, Bootleggers, and Balderdash

By Zac Nickerson

George Will recently wrote an article for the Washington Post entitled “When Bootleggers and Baptists Converge”. In the article he discusses how the State has become both sides of the Bootleggers and Baptists economic relationship in the regulation debate between the tobacco industry and the emerging electronic cigarette market.

“E-cigarettes raise public health issues but also illustrate the unhealthy process by which public policy often is made. They illustrate a familiar phenomenon, the cooperation between “bootleggers and Baptists,” meaning merchants and moralists — those motivated by profits and those motivated by social improvement.

In 1983, Bruce Yandle, then a Clemson University economist who now is at George Mason University’s Mercatus Center, had an epiphany: Regulations often come from a counterintuitive convergence of pressures from two groups, the earnestness of one providing cover for the other’s avarice. In his example, Baptists wanted laws closing liquor stores on Sundays to promote piety, and bootleggers wanted such laws to create an unserved market.

Today, New York has the highest state cigarette tax ($4.35 per pack — plus a $1.50 New York City tax) and North Carolina has the sixth-lowest (45 cents), so naturally Interstate 95 is a corridor for smuggled cigarettes, which in 2013 were nearly 60 percent of New York’s cigarette market. Proclaiming morality while practicing cupidity, states have tried to hit the sweet spot of cigarette taxes — high enough to maximize revenue without excessively discouraging smoking.

This is not only a great example of how authoritarianism unifies some otherwise unlikely partnerships, but also shows once again how trying to get the government to play favorites with your side of an issue never serves your end goal. Will goes on to say;

 “States addicted to tobacco taxes need a large and renewable supply of smokers, so they wince whenever an e-cigarette displaces a traditional cigarette…state governments are now bootleggers masquerading as Baptists, and many are in a bind… cigarettes are one of the most heavily taxed consumer products, and one in three smokers who begin the habit in childhood dies prematurely, before fully collecting government medical, pension and nursing home entitlements…”

Sadly, these actions of the State are not just limited to the tobacco industry, but can be seen everywhere in the market that government over-regulation has crept into. Another current example of this would be the impending “H.R.707 - Restoration of America’s Wire Act” (RAWA) that seeks to federally ban online gambling. Not only is RAWA yet another proposed restriction on the free market but it would also regulate the otherwise free and open internet. And while the “Baptists” (anti-gambling crowd) seek to use it to impose their morals on society, the “Bootleggers” (brick-and-mortar gambling establishments) seek to use RAWA to force gamblers out to their casinos. All the while the State is more than happy to reap the monitoring and internet restricting “benefits” that would no-doubt arise to implement the bill.

All of this teaches us that less government and more Freedom is better for everybody. Except maybe the statists.

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