Raiders of the Entrepreneurial State: A Baptist and Bootlegger Analysis

Rather than producing productive entrepreneurship, the entrepreneurial state creates opportunities for plunder by well-connected insiders. These insiders exploit the entrepreneurial state to rent-seek, to enrich themselves without producing anything of value to society. We argue that these opportunists behave according to the Bootlegger and Baptist theory of Public Choice. The opportunists attempt to legitimize their ill-gotten wealth by hiding in the shadows of perceived socially virtuous actors. The opportunistic actor (the Bootlegger) will partner with an idealistic, true believing party (the Baptist) to form a coalition which enables the latter party to correct a wrong that they believe needs righting, while providing the Bootlegger an opportunity to rent-seek and transfer wealth. We examine this scenario in terms of how these counter-intuitive coalitions form in environmental policy and extract wealth under the guise of protecting the environment. We will examine this behavior by analyzing the adoption of LED lightbulbs, the slowing of nuclear power development, and the incentives created in the Paris Agreement.