Bootleggers & Baptists. Bruce Yandle

their leaders—placed the review process within the White House.

      Generally speaking, the regulatory review process has one official purpose: to reduce the cost of achieving stated regulatory goals. Put another way, the focus is on economic efficiency, reflecting a desire to serve the public interest. Very few scholars in the early 1970s and 1980s saw federal regulation as a way to serve private interests. Adam Smith’s warning was not heeded. And there was little recognition that rules promulgated in the public interest might also win support by serving far narrower private ends. The theory of Bootleggers and Baptists had not yet seen the light of day.

       Four Modes of Bootlegger/Baptist Interaction

      Now that we have documented the rise of Bootlegger/Baptist activity in the form of social regulation, let’s revisit the four modes of Bootlegger/Baptist interaction we introduced previously. These modes are listed here in order of complexity: covert, noncooperative, cooperative, and coordinated. We start with covert strategies, where Bootleggers have not quite found their Baptist and thus try to assume the role themselves, albeit “covertly.”

       Covert Strategy

      Bootleggers aren’t shy about advocating directly for their own interests, as the billions spent each year on professional lobbyists amply demonstrate. Even when Bootleggers push their interests without the help of a Baptist group, adopting Baptist rhetoric is often still to their advantage. Restrictions on trade, for instance, tend to protect domestic producers from foreign competition at the expense of consumers—but saying so overtly is a poor way to win political support for such measures. Unsurprisingly, domestic producers who lobby for higher trade barriers use a covert strategy by claiming to have just the opposite aim: protecting consumers from their foreign competitors!

      Thus, we discover Francis Cabot Lowell, founder of the U.S. textile industry in Lowell, Massachusetts, successfully petitioning the U.S. Congress in 1816 to impose an 83.5 percent tariff on Indian cotton and English imports. The items, he said, “[were] made of very inferior materials and are manufactured in a manner calculated to deceive rather than serve the consumer” (Yafa 2005, 107). Again we find a public interest justification for constraining market supply. Lowell successfully agitated for legislation that raised his rivals’ cost in the international market, and then he artfully obtained a tariff exemption for his own firm. This story’s signal element is the two-fold process that raised rivals’ costs: the U.S. industry gained a competitive advantage over India’s producers, and Lowell gained a specialized payoff within the constrained market.

      The limits of the covert strategy may be illustrated in a more recent case: the January 2012 debate over a controversial piece of legislation known as SOPA—the Stop Online Piracy Act—whose passage had been deemed a top priority by the music and movie industries, as represented by the Recording Industry Association of America and the Motion Picture Association of America (Schatz 2012). Among other things, the law would have created a streamlined process for designating foreign-based Internet sites as havens for copyright piracy, requiring Internet providers to block them and obligating search engines and certain other domestic websites to refrain from linking them. Eliminating piracy has a nice Baptist ring to it: at least that is what the Bootleggers thought when they built their argument.

      Though it was not framed in this way, SOPA can be thought of as a concealed subsidy to copyright owners. Typically, copyright claims are enforced through civil litigation by the holder of the copyright at its own expense. Many online “file lockers” have indeed been sued by content companies; yet often it was the alleged “pirate sites” that proved victorious in court, because website operators are generally not liable for infringing files uploaded by their users unless the operators actively encourage illegal conduct. The blocking process that SOPA would have established was, in essence, a mechanism for offloading the costs of enforcing content-industry copyrights onto technology companies and taxpayers.

      As might be expected, many major U.S. tech companies are not enthusiastic about being drafted into the role of copyright police, and given the government’s spotty record of accurately identifying “pirate” sites, tech investors feared that startups enabling users to upload content could too easily be cut off from U.S. users—a potential death sentence for a fledgling firm (Morath and Fowler 2012). These groups lobbied against the proposed legislation as vigorously as the content industries had lobbied for it.

      Baptist arguments were to be found on both sides. Supporters of the law condemned overseas file lockers for enriching themselves at the expense of American artists, and content-industry workers and warned that unchecked piracy would impoverish public culture by making the production of new creative works less economically viable. In addition to raising a variety of technical objections, opponents blasted the law’s domain-blocking provisions as a form of censorship without due process and argued that it would symbolically undermine the global push for Internet freedom, emboldening repressive regimes to claim that even the liberty-loving United States did not adhere to its own rhetoric of openness.

      While the pro-SOPA arguments were primarily advanced by the studios and labels themselves, covertly attempting to disguise their economic interests as a social benefit, opposition to the law was publicly spearheaded by an array of well-established civil liberties and human rights groups—real Baptists. These included the American Civil Liberties Union, the Electronic Frontier Foundation, Reporters without Borders, Human Rights Watch, the Center for Democracy and Technology, and the American Library Association (Kang 2011).

      Internet users preferred the real Baptists to the fake ones. On January 18, 2012, constituents flooded congressional switchboards in such overwhelming numbers that by the end of the day, many of the law’s own cosponsors declared they had seen the light and joined the ranks of the opposition (Kane 2012). Although many factors shaped the public’s response—not least the objective merits of the arguments on each side—it seems plausible that many were predisposed to give greater credence to moral arguments delivered by Baptist groups whose perceived raison d’être was principle rather than profit.

       Noncooperative Strategy

      Moralized calls for political action may be initiated by Bootleggers deploying Baptist rhetoric, as seen in the case of SOPA and other proposals to crack down on copyright piracy. But often the shifting sands of economic interests bring Bootleggers in as latecomers to long-standing moral crusades, thereby providing Baptists with the decisive boost they need to achieve their aims. Economist Howard Marvel (1977) tells one such story in his account of the implementation of England’s Factory Act of 1833, then known as Althorp’s Factory Act. Marvel’s analysis notes that the law was hailed as a humanitarian move that placed burgeoning textile mill operators under the authority of England’s Home Office, banned the use of child workers under 9 years of age, and restricted hours and work conditions for those under 18.

      Prominent members of England’s landed aristocracy had long sought to bring cotton mills under the protective wing of government, without success. But the political balance was changing, along with the textile industry itself. Textile districts had gained seats in Parliament, and developments in cotton-processing technology—which dramatically altered production costs—were generating differential effects across the industry.

      The effect of technology on Bootlegger/Baptist interaction is the unique feature of this story. A host of new manufacturing plants was being driven by steam engines rather than by water wheels. The newer steam-driven plants required less labor and were not affected by periods of low water flow, during which the older water-driven plants operated longer hours to catch up on production. The older plants were thus seen as abusive by some, because they employed more children to work the longer days.

      Marvel’s review tells us that the factory districts supported the new Factory Act, but the support was not monolithic. His study of the vote led him to conclude that:

      [The law] was, instead, drafted at the behest of the leading textile manufacturers who intended it to have a discernible impact on textile industry operations. Its purpose was to increase the cost of production of many of the smaller textile mills, thereby causing them to curtail their output. The legislation was designed to have differential impact on textile production, harming some manufacturers