A great example of Bootleggers and Baptists

I finished reading David Zetland's End of Abundance a couple of weeks ago. A review of his book will come shortly. I first wanted to share an instructive example David uses to illustrate the Bootleggers and Baptists problem (also referred to as "Baptists and Bootleggers").  David refers to this term in different parts of his book.

Bootleggers and Baptists defined:  a slang term for an unholy alliance that combines moral righteousness with selfish greed to stop a reform that would benefit degenerates (according to Baptists) and/or the competition (according to the Bootleggers). A Baptists and Bootleggers coalition may also support a harmful change; one example is the coalition of environmentalists and corn-processors that supported a requirement that gasoline contain a minimum share of corn ethanol.

The definition above is derived from the glossary of his book. Using the example of U.S. corn ethanol, here is an excerpt from his book:

"The US corn ethanol program offers a useful example of a Baptists and Bootlegger confluence of greed, corruption and moral superiority. Greed can be traced to big agro-processing companies (ADM, Cargill and others) that make money by trading corn and ethanol. Corruption is connection to congressman who want campaign donations (legal bribes) from these companies and farmers benefit from congressionally induced demand, via per gallon subsidies, mandated corn ethanol fuel blends and tariff barriers that block imports of cheaper, sustainable sugarcane ethanol from Brazil.

The moral superiority component comes from the environmentalists who demand that Americans use more renewable  fuels and patriots who want energy independence from dodgy foreigners. Their clamor for renewables gave farmers, processors and politicians the cover they needed to start another program designed to transfer money from taxpayers and car drivers to the agricultural and political sectors. The worst irony is that this "green fuel" may have done nothing to reduce C02 emissions.

In this Baptists and Bootleggers alliance, environmentalists are happy to have more renewable fuel. Farmers and agro-businesses are happy to sell more fuel in the gasoline market. Taxpayers lose and drivers get lower-quality fuel. Politicians win twice, since they can claim to protect the environment at the same time as they collect brides from the corn industry. But there's an additional twist: corn ethanol uses a lot of free water, simultaneously increasing scarcity and pollution. Ethanol production would fall if we priced water for scarcity and purity".

Interpret the example above however you would like, I think it is instructive and insightful because it reveals how groups with potentially different opinions, perspectives and values can lobby for the same end goal and think that the outcome has served their mandate. Unfortunately, this may be a case of unintended consequences not least for the volatility it has brought to the price of corn, but worse yet, to the egregious overuse of cheap and in some cases, free water. Corn ethanol does have its problems and I have become more neutral about its merits as an alternative fuel. But the very fact that it does use copious amounts of cheap water for production is worrisome in an era of increased scarcity.

There are many examples where one can apply the Baptists and Bootlegger model. I think it's pretty fascinating in the case of corn-based ethanol and gets you to think about how and why we advocate for policies that seem to be good on the surface, but can be disastrous in reality.