Friday, December 05, 2014

'Bootleggers and Baptists': An Interview with Adam Smith

Over on Book Reviews by Rick Sincere is a recent interview with economist Adam Smith of Johnson & Wales University.

Smith is the coauthor, with his grandfather Bruce Yandle, of Bootleggers & Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics, which was published by the Cato Institute in September.

The two authors gave a presentation about their book at Cato in October. Afterward, I spoke to Smith about the book and its title. Here is an excerpt:

Smith explained that the term “bootleggers and Baptists” originated during alcohol Prohibition in the 1920s, when “you had bootleggers and Baptists with aligned interests” even if they did not realize it.

Baptists, he explained, proclaimed “Down with legalized distribution of alcohol!” because they saw drinking as morally detrimental. Bootleggers, too, proclaimed “Down with legalized distribution of alcohol!” because Prohibition raised the price of illegal liquor and fed more profits to the bootleggers.

“It was a boon to the bootleggers,” Smith explained, “and the Baptists were kind of oblivious to that situation.”

Broadening the concept to include other kinds of regulations, Smith said, “what we see today in our modern political economy [are] many, many manifestations of the same kinds of strange bedfellows.”

More and more, he said, “we're seeing that those bedfellows are recognizing one another and coming together to form even more powerful would-be bootlegger/Baptist coalitions.”

There is also a relationship between “bootleggers and Baptists” and “crony capitalism,” when government grants preferential treatment to certain, well-connected businesses.

Smith said that, in the book “we call it 'bootlegger/Baptist' capitalism instead of crony capitalism.”
Read the whole thing here.

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