TCS Daily

Baptists, Bootleggers and Wind Power

By Neil Hrab - March 22, 2004 12:00 AM

Have you ever heard of Baptists allying themselves with bootleggers? It actually happened in the early 20th century, when temperance activists in parts of the South struck political bargains with moonshiners and alcohol smugglers. The temperance activists, guided by their religious beliefs, wanted to reduce the number of legal opportunities for consumers to buy liquor. (This campaign culminated in what we remember as Prohibition.) These activists' arguments provided cover for their bootlegging brethren, who wanted to limit those opportunities to purchase booze as well -- but not for religious reasons. The bootleggers supported sales restrictions in order to force consumers to purchase home-made fire water, instead of the legal stuff brewed by their (legal) competitors. Fewer chances to legally buy alcohol meant higher profits for the bootleggers, who would become the vendor of last resort for the South's parched throats.

This odd pairing inspired Bruce Yandle, a professor of economics at Clemson University, to coin the phrase "Baptist-bootlegger alliance." This expression refers to political bargains struck by special interest groups to advance some shared goal, usually at the expense of average consumers. The Baptists enter into the alliance for moral reasons, the bootleggers join out of practical self-interest.

You can observe a latter-day Baptist-bootlegger alliance by studying America's pro-wind power movement. This lobby wants all levels of government to give the wind power industry various forms of assistance, including subsidies and special tax treatment.

Let's get clear on how wind power works. First, you need to set up a series of massive turbines -- often stretching 300 feet in height. (That's taller than the US Capitol building, which is 288 feet high.) The turbine's blades spin as the wind blows, capturing the wind's energy and using it to create electricity.

Who are the Baptists in this alliance? They are not hard to identify -- most of them hail from tax-exempt environmentalist organizations. With all the faith and passion of the temperance activists of yore, greens believe the promotion of wind power will lead the United States towards a better, purer, cleaner future.

The Sierra Club backs wind power, for example, because it represents an alternative to fossil fuels. It also claims that wind power is good for rural America, because it will create jobs there. The Natural Resources Defense Council says wind power is one way to wean America off foreign supplies of oil and improve national security.

For its part, Environmental Defense thinks that the US is in danger of being left behind, technologically speaking, if it does not invest more resources in wind power. It says that the European Union annually produces "more than four times as much energy through wind as the USA, and experts predict that within 10 years at least 10 percent of Europe's electrical energy needs will be supplied by giant wind turbines hooked up to main power grids."

The bootlegger side of the equation is easy to decipher. There are many companies that see wind power as a highly profitable opportunity. These companies are open about the fact that in order for wind power to really catch on, they believe it (i.e., their companies) needs a lot of grants and non-monetary forms of assistance from local, state and federal governments. The arguments circulated by pro-wind-power greens provide seemingly objective justifications and rationalizations for this special pleading by the wind power industry.

The pro-wind power movement posits that since European countries have sunk lots of money into building up their wind power capacity, the U.S. should do the same. But some Europeans think the giveaways enjoyed by their wind power industry are wasteful. The European branch of the International Federation of Industrial Energy Consumers claims in a recent paper that the subsidies given to wind power are not helping wind power become more competitive with fossil fuels -- all they do is "simply guarantee revenues over an extensive period" to wind power companies with money taken from taxpayers. The subsidies sound less like a way to help the wind industry perfect its technology, and more like a free taxpayer-subsidized lunch for well-connected entrepreneurs.

The IFIEC makes one more important point. It questions whether it is fair that European companies should have to pay more for electricity thanks to the special taxes and fees governments impose to support wind power. This translates into higher energy costs for European firms. Some Europeans worry that these extra costs put their companies at a comparative disadvantage with their competitors in Asia and North America. As the IFIEC paper puts it: "For European industry it is vital not to increase the price for an essential industrial product -- power -- to support a single technology [i.e., wind power] otherwise far from being marketable." If European industry leaders think wind power subsidies are sapping their economic strength, maybe that means American companies should think twice before jumping on the wind power bandwagon.

As calls to increase subsidies to wind power increase in the United States, electricity consumers in this country may want to take some lessons from the European experience -- especially when they read the sort of pro-wind-power manifestos reviewed above. Perhaps the day will come when wind power technology becomes efficient enough that its widespread use makes sense. In light of the IFIEC report, American taxpayers should press wind power backers to show how subsidies to their industry would be used for something other than the construction of a comfortable, publicly-funded financial hammock (as seems to be the case in Europe).

And if they can't, then the pro-wind power bluster spread by enviro-Baptists can be dismissed as a bunch of hot air.

Neil Hrab is Warren T. Brookes Fellow at the Competitive Enterprise Institute. He last wrote for TCS about UN control of the Internet.


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