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Thursday, July 05, 2012

Affordable Care Act (ACA) as example of The Bootlegger and the Baptist phenomenon

In 1993, economist Bruce Yandle wrote a noteworthy commentary in the journal Regulation.
In it he coined the term "Baptist and the Bootlegger" ( B and B) which explicates the marriage of high sounding values with narrow self interest to bring about regulation.

The B and B theory takes its name to instances in which Baptists were opposed to alcohol consumption on Sunday and were joined in their promotional and lobbying efforts by the bootleggers realizing that they, being skilled in criminal acts, would enjoy a comparative advantage in illegal alcohol sales.Of course, they urged prohibition of the sale and not the consumption of alcohol. With regulations passed the Baptists were happy about the incremental decrease in sin and the bootleggers enjoyed a Baptist originated cartel ( if only for one day a week).

Years later, Yandle offers this retrospective assessment of the "B and B"theory with discussion of the spotted owl episode of the 1990s leading to increased profits for timber growers and how the 1977 Clean Air Act's mandating scrubbers on newly constructed coal fired electrical plant favored the eastern coal companies and their high sulfur coal at the expense of the low sulfur coal producers in the west. In each instance the special interests joined forces with the environmentalist organizations to urge for regulations that were to ostensibly (or actually) further the public interest.

B and B theory is not just of historical interest.It was alive and well in the run up to the Affordable Care Act (ACA).

Candidate Obama distinguished himself from his rivals in the democratic primaries by opposing an individual mandate to purchase health insurance and favoring ultimately a health care system with a single payer.

Ron Williams , then the CEO of Aetna, met on numerous occasions with the President Obama and testified to a number of congressional committees.Others in the health insurance industry played less visible but still active roles in lobbying for the individual mandate. So here we have health insurance carriers lobbying for a law that would require people to buy their product. It is clear who plays the role of the bootlegger here. The Baptists are various spokes people who adhere to the progressive vision,favor redistribution and believe that health care is a right that should be provided by the government.Many are sincere,though in my opinion misguided,but some are likely bootleggers in Baptist robes as in astro turf advocacy groups.

See here for further details about the antics of Mr. Williams in lobbying for ACA as well as his intriguing and perhaps ill advised recanting of his position just prior to the SCOTUS decision.

The outrageous length and complexity of ACA makes it likely that the insurance industry was not the only bootlegger at work in planning and promotion of the bill. Big Pharma and Big Hospital comes to mind. Question: Should AMA in its role in supporting ACA be considered a bootlegger?

Professor Yandle has the following subtitle on his retrospective:

"The marriage of high flowing values and narrow interests continue to thrive"


Michel Accad said...

Hi James,

Have you read Gabriel Kolko's "Triumph of Conservatism?"


james gaulte said...

Thanks for the reminder.I have not looked at Triumph for years.