The idea comes from the end of Prohibition when, after the 21st Amendment was ratified, many states and even more local jurisdictions enacted laws to retain restraints on alcohol sales, including Sunday closing laws for retail locations. Reformers argued that the retention of such Puritanical laws weakened the rule of law by being often violated, rewarded an unsavory class of criminals, encouraged corruption, and deprived the community of a useful economic benefit. Moreover, it was hypocritical (since many in the community did drink) and made the locality look ridiculous.
But, almost always, an alliance to retain elements of Prohibition quickly organized, comprised of local church leaders who viewed alcohol as sinful and local bootleggers who feared the loss of their monopoly profits. The two groups had little in common save their desire to retain the current prohibition laws. Yandle was joined more recently by Adam Smith (his grandson) in developing this story further in a book published by the Cato Institute, Bootleggers and Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics. Their work develops the public choice rationale for this phenomena and documents several case studies of how it has infleunced many political debates.
Although Yandle and others have focused on the use of the B&B idea for special interest goals (lobbying for regulations that will cripple one's competition, seeking subsidies, and so forth) the concept itself is morally neutral. Political advocates in idealistic market democracies will always seek to advance both moral and economic rationales for their preferred policies – B&B alliances are as American as apple pie! Yet, the examples that have received the most attention are of the rent-seeking variety. The challenge for all seeking to defend and advance economic liberty is to challenge that historically asymmetrical application of interest group theory and explore how a virtuous, pro-economic liberty Baptist and bootlegger alliance might be organized. Absent such an alliance of capitalists and capitalist defenders, the prospects for either surviving seem dim.
So join us at CEI in wishing Bruce a very happy birthday and join him in building on his insights to form new liberty alliances. Yandle has developed the concept – it is for us to craft a virtuous alliance of capitalists and pro-market intellectuals.