Bootleggers and Baptists 2.0

This new FCC regulation has Bruce Yandle's Bootleggers and Baptists Theory written all over it.

The story that best exemplifies the Bootleggers and Baptists Theory concerns the Clean Air Act of the 1970s (forgive me if I leave out details as I'm not an expert on this event). The Act was lobbied for by numerous large energy/coal/car companies. One such company was GM. An amendment that passed during this time was a regulation that required all vehicles driven in the United States to be equipped with catalytic converters, a mechanism that limited vehicular emissions. It seemed strange that a company like GM would lobby for such requirement, which would no doubt increase costs.

Nonetheless, the regulation went into effect. What was even stranger though was that Honda, whom had developed an engine that reduced emissions more than a GM engine with the catalytic converter, was still required to install said coverter in all of its vehicles if sold in the US.

No big deal, it would be unfair and unreasonable to preclude some from the regulation. Maybe. But here's the real kicker.

GM owned the patent to the catalytic converter required by law to be installed in all cars.

So what's my point? Regulations, at face value, are simply clever, if not deceptive, pieces of marketing. They appeal to emotions. Health care reform to save the uninsured. Cap and Trade to save the planet. Financial reform to protect the middle class. And maybe there truly are noble intentions behind such legislation (though I have my doubts). Either way, it doesn't matter. Massive, sweeping pieces of legislation like this will attract special interests from every corner of the globe. They want an edge, and the best business edge in history is to ally with Big Government.

This isn't new what I'm talking about, and I don't wish to come across as naive. My only desire is that people would look beyond the face value of laws, bills and regulations and challenge themself (and their representatives) by asking the question "but what happens next?"

The faster people realize that self-interest is not absent from the political process but is in fact far more damaging to the public because it lacks the checks the market provides, the better.

Here's Russ Roberts on the issue (he also illustrates why I stopped going to CNN for my more general news coverage).