Bootleggers & Baptists. Bruce Yandle

who relied on steam engines to drive their machinery. Such steam-powered mills not only employed relatively fewer very young children, but were less susceptible to production interruptions than were the water-powered mills. The latter were dependent on nature to keep their reservoirs full and often had to cut hours in dry spells while working extended hours when sufficient water was available. (Marvel 1977, 387–88)

      Marvel found that industry output fell significantly more for water-driven mills than for steam-driven mills. Changing technology was thus the key to a story featuring Bootleggers (the operators of the steam-driven mills), Baptists (public interest groups that lobbied for improved working conditions), and a regulation that predictably imposed higher costs on a specific subgroup of manufacturers. As in the story of Francis Cabot Lowell, some of the law’s supporters were covert Bootleggers in Baptist clothing—enlightened industrialists who, it would seem, found a profitable way to achieve improved working conditions in England’s burgeoning cotton mill industry. Some might say they did well while doing good.

      About 50 years after the passage of the Factory Acts, another Bootlegger/Baptist episode occurred in London, where William Booth’s newly organized Salvation Army was working to improve the lives and save the souls of the city’s downtrodden (Hattersley 1999). This time, instead of Bootleggers and Baptists, Methodists and brewers formed the coalition opposing Booth’s efforts. But in this case, as we explain below, a critical element for success was missing—and the effect of the missing element is what makes this case interesting.

      A visit to the Salvation Army website provides a brief history of this Protestant church, founded by Booth in 1852. A Methodist minister, he decided to take his ministry to the streets. According to the website: “Booth abandoned the conventional concept of the church and a pulpit, instead taking his message to the people. His fervor led to disagreement with church leaders in London, who preferred traditional methods” (Salvation Army 2013). The more traditional churches felt threatened by this new competition from Booth and his unconventional methods, whereas the minister’s uncompromising attack on alcohol was too much for the brewers. Yet this seemingly potent coalition of brewers and Methodists ultimately failed.

      Booth had been a minister in good standing with the Methodists before stepping out on his own to build his unconventional movement, dedicated to helping the urban poor wherever they might be found. Delivering the movement’s message through uniformed marching bands and preaching in the streets, Booth and his noisy band of disciples began to attract huge followings wherever they traveled. Preaching against any consumption of alcoholic beverages, the Salvation Army called on sinners to repent and change their ways.

      As Booth’s effort gained momentum, the Methodists and brewers decided to take him on; yet they proved unable to gain meaningful political support for their efforts, largely by not cooperating in pursuing their common goals. Brewers in communities where the Salvation Army held services paid local beer lovers to disrupt the army’s music and preaching. Meanwhile, Methodist bishops and other religious leaders struggled to shut down the army’s successful efforts to attract members and funds for its growing enterprise. Instead of disrupting the preaching, playing, and singing in the streets, the bishops worked for the enforcement of city ordinances that would require permits for religious parades and noisy street gatherings. Though both groups were working toward the same end, they used distinct methods and strategies in doing so.

      Roy Hattersley (1999, 253–54) describes the development this way:

      And it was in 1880 that there came into existence the strange alliance which menaced The Salvation Army for the rest of the century. “Professors of religion and haters of religion,” Booth told his followers, “combined to drive you away.” A collation of intellectually fastidious bishops and frightened brewers were coming together. The whole establishment, seeing the uniforms and the banners, feared that the church militant might take on a political or military form and that William Booth, having taught the working classes to pray, would encourage them to fight. They were joined in antagonism by the people who simply thought William Booth ridiculous. (pp. 253–54)

      Opposition from brewers grew as the army experienced increasing success in converting London’s street people. The Salvation Army (2011) explains how an opposing army rose against them:

      Despite its rapid increase in numbers and growing success, The Salvation Army provoked brutal and determined opposition, attracting many enemies. Pub and brothel owners were particularly angered when many of their former customers were converted in Booth’s Army. Their profits fell rapidly and business suffered. Many persuaded their friends to join ‘The Skeleton Army’ whose main ambition was to get rid of The Salvation Army at any cost. (The Salvation Army 2011)

      Disruptions of Salvation Army activities reached such a tempo that Booth appealed to Prime Minister William Gladstone for protection. Although Booth received no official government response, his appeal captured the attention of the Times of London, which did not endorse the army’s activities but editorialized in favor of freedom of speech. Booth, prefiguring the more famous 20th-century campaigns of Gandhi and Martin Luther King Jr., instructed his people in the art of passive resistance. As a result, Booth and his Salvation Army gained national attention.

      Salvation Army preachers were jailed for disturbing the peace with their sermons and music, and mayors, especially those who were also brewers, refused to offer police protection when the army came to town (Hattersley 1999, 239). As the disruptions continued, Booth described this situation this way:

      In nearly every town where there has been any opposition we have been able to trace it more or less to the direct instigation and often the open leadership of either Brewers or Publicans or their employees. The plan adopted is by treating or otherwise inciting gangs of roughs. (Hattersley 1999, 273)

      In spite of the opposition, Booth’s strategy gained momentum—and eventually the support of wealthy philanthropists. With its coffers and membership both swelling, the army captured the attention of the Church of England, which debated how it might affiliate with William Booth’s successful program but made no official accommodation with the upstart group. The Salvation Army moved on to become a global ministry.

      Efforts to regulate the Salvation Army, supported by brewers and Methodists, were unsuccessful. One factor in that failure may have been the lack of a political broker. Most Protestant denominations, including the Methodists, were fractured over doctrinal and other issues, and the Church of England no longer enjoyed its monopoly influence over Parliament. Put another way, no real cartel existed to oppose the Salvationists. Those opposed to the army were unable to gain parliamentary action that might have effectively blocked its efforts at the national level. Instead, the opposition had to rely on desultory efforts to step up enforcement of city ordinances. A successful Bootlegger/Baptist strategy must involve effective political brokers who can deliver effective restrictions across the relevant jurisdictions. Thus, the Salvation Army prevailed despite Bootlegger/Baptist opposition.

       Cooperative Strategy

      Our third type of Bootlegger/Baptist interaction—in which private firms fund public advocacy groups—is well illustrated by a recent regulatory episode involving Walmart’s support for President Obama’s 2009 Affordable Care Act. This case also provides a convenient demonstration of how politicians can spur firms to cartelize, either formally or informally, to gain political benefits (Adamy and Zimmerman 2009).

      To understand this story, we must bear in mind that although the world’s largest retailer is routinely attacked for not providing more generous insurance to all its workers, it has actually greatly expanded opportunities for its employees to obtain company-provided health care benefits, especially when compared with its smaller competitors. In 2009, some 52 percent of Walmart’s 1.4 million U.S. employees were covered by company-provided insurance, up from 46.2 percent three years earlier (Adamy and Zimmerman 2009).

      Walmart was a crucial supporter of President Obama’s Affordable Care Act, which requires the mega-retailer’s competitors to pony up health benefits as well. A story in the Wall Street Journal summarized the company’s position with the telling headline “Wal-Mart Backs Drive to Make Companies Pay for Health Coverage” (Adamy and Zimmerman 2009). In this case, a host of groups