Bootleggers, Baptists and baggage: who benefits from plastic bag bans?
The State of Queensland recently instituted a ban on single-use plastic bags at retail outlets. Woolworths is a first mover in removing all plastic bags from its own shops. Unsurprisingly many Queenslanders are frustrated with this move, and yet few Queenslanders are surprised that the State government has done yet another stupid thing.
But why do things like this happen in the first place? Why do widely unpopular, stupid regulations seem to get through the political process that is meant to represent the populace at large?
The first thing that must be noted is that many of these regulations impose diffuse costs (a small cost on absolutely everyone) yet have concentrated benefits (a few big winners). This means that there is less incentive for individuals who have to bear the costs to lobby against such regulations, and more incentive for those few big winners to lobby for them.
But another thing is the role that “noble causes” have in justifying these regulations. The economist Bruce Yandle made the observation that often regulations were lobbied for by coalitions composed of two groups; the first group supported the regulation for public-spirited and “moral” reasons whilst the latter group funded the lobbying because they stood to benefit from the economic impacts of the regulation. Yandle described these groups as the Baptists and the Bootleggers; in the United States, “blue laws” preventing the sales of liquor on Sundays were lobbied for by religious preachers, yet at the same time were supported by those who could benefit from one day a week of the elevated profits they could make from the black market.
This pattern is not rare; environmentalist groups and renewable energy businesses typically have a lot of investors in common and support regulations to disadvantage competitors. Public nutrition’s advice for people to follow low fat, low salt diets was based on research funded by the sugar industry. Technology-based pollution-control laws benefitted not only environmentalists but those who made the specific pollution-control technology. Obamacare in the form it ultimately took was supported by both those who wanted to expand coverage and by the healthcare companies (who’s stocks rose in the aftermath of the PPACA’s passage), who liked the idea of a captive market compelled to buy their products.
This law in Queensland is simply the Baptists and Bootleggers pattern repeating itself. The Baptists are of course the environmentalists, but who are the Bootleggers?
The obvious example is manufacturers of reusable bags, who will experience an increase in business from this regulation. However the supermarkets will also benefit; even if, like Woolworths, they plan to donate “all profits” to environmental causes. They no longer have to buy single-use plastic bags and instead are able to sell reusable bags at cost. Finally, manufacturers of garbage bags will benefit; those who used their shopping bags as garbage bags for light waste will have to buy (more) garbage bags (and this in turn benefits supermarkets further).
In reality, “single use” plastic bags were often re-used in the home rather than just thrown out. A ban on these bags simply means consumers will have to buy more stuff, in particular more specialised bags, for tasks for which a free bag was formerly used. Whilst this move is being justified as a kind of environmentalism, domestic recyclers are the ones losing out.
Yet again, we see Yandle’s pattern emerge; the use of public-spirited and altruistic motivations is often concealment for a rather predatory and ignoble kind of self-interest held by those backstage. Environmentalists speak of a cleaner world, and private interests gleefully engage in a public relations cost-cutting exercise which is baptised into moral virtue through the process of “greenwashing.”
Of course we cannot pretend the government is somehow a disinterested party here; governments make GST on the sales of reuseable bags, which they didn’t make when free ‘single use’ plastic bags were used instead. They also make GST on any sale at the supermarket, so the extra garbage bags (and other specialised bags) being purchased which otherwise would not have been also contributes to public revenues. A final aspect of the government’s political interest is related to the partisan affiliation of the current government. The Australian Labor Party, which currently governs, is conscious of losing some of its votes to the Greens. Even though Labor and the Greens generally form an unofficial coalition Labor still does not want to lose its market share; signalling their willingness to pursue Green priorities helps them keep the Greens as a second-tier player.
Would this regulation have passed under an LNP government? Since the LNP generally doesn’t have much appeal to those strongly interested in environmentalism, perhaps not (unless plastic bag manufacturers and supermarkets made large campaign contributions). That said, they too may have been tempted by potential GST revenues.
But let us put aside partisan bickering and mourn the loss of a freedom. The more stuff which is prohibited, the more freedom is taken away. The Queensland government has now decided that it has the right to decide the kind of shopping bags stores may offer to customers. The nanny state has grown just that little bit more intrusive, that little bit more frustrating and that little bit more bossy for those of us in the Sunshine State. Perhaps the “single use” plastic shopping bag will join the cigarette and the alco-pop drink in the pantheon of Everyday Symbols Of Civil Disobedience.
The road to hell is paved with good intentions. Baptists propose a law which restricts liberty and manufacture a moralistic justification, and Bootleggers wait in the wings to profit from the destruction of our freedom. As Ayn Rand correctly pointed out, both of the great 20th century totalitarianisms were justified in altruistic, public-spirited terms, yet were ultimately motivated by and ended up enabling the reign of extractive elites and self-aggrandising madmen. It is time we took the advice of Yandle and Rand seriously; we must stop allowing tyrants and thieves to wear the cloak of virtue. When someone promotes the reduction of freedom in the name of some “greater good,” know that this someone is speaking to you of slaves and masters.