My esteemed Berean colleague, Marc Clauson, and astute reader Jonathan are carrying on a discussion for which Walmart’s business practices are a touch point. I posted a response to one of Jonathan’s comments several days ago. Jonathan asked my thoughts on the accusation that Walmart is the nation’s biggest “welfare queen”. I am working through a response to this accusation which I hope to post early next week. Walmart’s Business practices are an excellent starting point for an ethical discussion about our economy.

In my preparatory reading for my planned post on Walmart and welfare I was reminded of a theory of regulation that I think is relevant in this discussion. In 1983 Bruce Yandle published a short five-page article in the May June issue of Regulation. The idea behind what Yandle called “bootleggers and Baptists” is that frequently when regulation is passed by Congress there are two disparate groups that support the regulation. One group has definitive moral reasons for the desired regulation and the other group’s motivations are more monetary.

Bootleggers, you will remember, support Sunday closing laws that shut down all the local bars and liquor stores. Baptists support the same laws and lobby vigorously for them.  Both parties gain, while the regulators are content because the law is easy to administer. Of course, this theory is not new. In a democratic society, economic forces will always play through the political mechanism in ways determined by the voting mechanism employed. Politicians need resources in order to get elected. Selected members of the public can gain resources through the political process, and highly organized groups can do that quite handily. The most successful ventures of this sort occur where there is an overarching public concern to be addressed (like the problem of alcohol) whose “solution” allows resources to be distributed from the public purse to particular groups or from one group to another (as from bartenders to bootleggers).

Professor Yandle explains his theory in this short video from Learn Liberty.

So the “Baptists” in this theory believe they are doing a good work to curtail alcohol consumption. While this may very well be the case, they are unwittingly working with the “bootleggers” to increase bootlegger income – something which the Baptists would not like.

The application I see to our discussion on Walmart, is that there is a moral argument made (“Baptists”) that Walmart should increase their wages (I personally do not believe this is the case – I plan to comment in some detail next week) while unions (” bootleggers”) would like to see wages increased. Increasing the wages of the least well remunerated in the economy makes it easier for unions to negotiate their wage levels higher. So, this is a bootlegger-Baptist coalition that is anti-Walmart.