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The "Bootleggers and Baptists" of the Coronavirus Crisis

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President Donald Trump declared a state of emergency on Friday, March 13, due to the coronavirus disease (COVID-19). This comes about six weeks after the World Health Organization (WHO) did so on January 31. During that period, lower levels of government in the US and governments around the world have also been making such declarations. In addition, a plethora of colleges, schools, and other institutions have temporarily closed their doors and many high-profile events and professional sports competitions have been canceled.

This writer is old enough to recall various health scares from the 1977 Russian flu and HIV/AIDS in the 1980s through to SARS in 2002–03 and the swine flu in 2009–10, not to mention other scares such as 9/11 and the 2007–08 GFC (Great Financial Crisis). Yet I have never seen a greater, and more unjustified, panic and overreaction by governments (e.g., New Rochelle, NY), institutions (e.g., NCAA), and even businesses (e.g., NBA). And not just in the on-air and online "public squares," but even among my family, friends, and broader personal network, including normally "cool-headed" economists, doctors, and other "highly educated" professionals. Why is that, and is it justified? Let’s start with the latter.

Coronavirus Crisis

I was fortuitously sent a March 14 article that is quite typical of others in recent weeks, both in traditional and social media, which blur the lines between news and commentary as well as between analysis and activism. In it the “longtime health reporter” for “an independent, non-profit newsroom” with a mission to “expose abuses of power and betrayals of the public trust” wrote the following with “the moral force of investigative journalism to spur reform”:

I have been caught off guard by the pushback from top elected officials [e.g., Trump] and even some friends and acquaintances who keep comparing [coronavirus] to the flu….In the meantime, not one public health expert I trust—not one—has said this flu comparison is valid or that we’re overdoing it….If 1 in 12 people age 70–79 who get the virus and 1 in 7 people age 80 or older who get the virus die, and the virus spreads to 20%, 40% or 70% of the population, we’re talking massive death tolls, the likes of which we have never seen before in our lives.

According to Nobel laureate physicist Niels Bohr: "Prediction is very difficult, especially if it's about the future." History is an imperfect guide to the future, but, along with logic, it is all we have. Farr’s law is the opposite of the exponential growth "model" implied in the article above. This law of epidemiology was described in a March 2018 Infectious Disease Modelling journal article as follows:

In the mid-19th century, Dr. William Farr made the observation that epidemic events rise and fall in a roughly symmetrical pattern that can be approximated by a bell-shaped curve. He noticed that this time-evolution behavior could be captured by a single mathematical formula (“Farr's law”) that could be used for epidemic forecasting….He used this approach to predict that [smallpox mortality in England from 1837–39] would decline rapidly. His predictions were close to what subsequently happened.

Comparing the coronavirus's death toll to that of related pandemics over the past one hundred years provides much-needed historical context for the outbreak. As of March 15, the death toll for coronavirus was 63 in the US and nearly 6,500 globally. However, death rates are unreliably high at 1.9 and 3.8 percent, respectively, because testing has so far been relatively low (and thus the denominator is unreliably small). By contrast, in America and the world the 2009 swine flu killed 12,000 and 300,000, respectively; the 1968 Hong Kong flu killed 100,000 and 1,000,000; and the 1918 Spanish Flu, 600,000 and 40,000,000. The dramatic decline in deaths over the past century is a very good reason for optimism. In this context, Dr. Brian Joondeph and the famous Dr. Drew Pinsky, both physicians, made the following points each:

Big Media are all about ratings, view, and clicks, hence their axiom: "If it bleeds, it leads." A viral outbreak is the perfect story….The added bonus is that any negative news can be laid at the feet of a president loathed by [this same] media, who just so happens to be running for reelection….Numbers are inconvenient to the media. [Instead] you will be inundated with fear [and a] constant barrage of coronavirus codswallop. (Joondeph)

When I saw excessive corona coverage in the press, I had to respond. The weird part on social media is that people are angry with me for trying to get them to see reality and calm down….If you put corona and the flu together, it’s still a moderate flu season. Wash your hands, take precautions, do what you’re supposed to do….What I have a problem with is the panic and that businesses are getting destroyed and people’s lives are getting upended. Not by the virus, but by the panic. (Pinsky)

Bootleggers and Baptists

In "Coronacrisis and Leviathan," Austrian school economist Peter Klein recently referred to Robert Higgs's seminal book Crisis and Leviathan, reminding us that:

The expanded role taken on by the state during [a crisis] remain[s] largely in place once the crisis passe[s], leading to a "ratchet effect."

Only time will tell whether history will repeat itself here and to what extent. Before anything can get ratcheted up and locked in, the alarm must be sounded and a crisis sold to the public by what public choice school economist Bruce Yandle called the "Baptists and Bootleggers." Yandle originally wrote about this in 1983 and then wrote a retrospect in 1999:

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….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). (1983)

Baptists point to the moral high ground and give vital and vocal endorsement of laudable public benefits promised by a desired regulation. Baptists flourish when their moral message forms a visible foundation for political action. Bootleggers are much less visible but no less vital. Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds. (1999)

Conclusion

So, paraphrasing Yandle in the context of this "coronacrisis":

1. The most successful ventures of this sort (i.e., this coronacrisis) occur where there is an overarching public concern to be addressed (like the problem of coronavirus pandemic), whose "solution" allows resources to be distributed from the public purse to particular groups, such as the public-private partnership, or P3, that was a large part of the announced Trump national emergency response, or from one group to another (e.g., profit opportunities from skeptical to alarmist media).

2. Baptists virtue signal and give vital and vocal endorsement (through traditional and social media) of the laudable public benefits promised by a desired government intervention. Baptists such as those in the mainstream media flourish when their moral message (against selfish individualism and choice) forms a visible foundation for political action (by allegedly unselfish and public-spirited officials and woke corporates).

3. Bootleggers are much less visible but no less vital (and often publicly play the part of Baptists as well, most notably in the media). Bootleggers expect to profit from the very restrictions (and favors or handouts) desired by Baptists both ex ante, as those in the media do, and ex post, as those in the health bureaucracy do. Those in the worlds of anticapitalistic academia, activism, elections, and politics will benefit handsomely as well.

Author:

Contact Darren Brady Nelson

Darren Brady Nelson is an Austrian School economist and evangelion as well as C.S. Lewis and Hillsong style Christian. He is currently the Chief Economist at LibertyWorks in Brisbane, QLD, Australia and Associate Scholar of the Center for Freedom and Prosperity in Washington, DC. He is also a regular commentator in the Australian and American print, radio, and TV media.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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