Grant Bosse: Bootleggers and Baptists against Northern PassBy GRANT BOSSE
October 16. 2017 10:02PM
WHO IS YOUR FAVORITE economics professor?
Everyone has one, right?
That’s not weird. I’m not a nerd.
Anyway, mine is Bruce Yandle, Dean Emeritus at Clemson’s College of Business and Behavioral Science. For decades, he has researched public choice and free-market environmentalism. I was taken by his story of the bootlegger and the Baptist.
Yandle observed that incentives are why politics make strange bedfellows. For instance, Yandle posited that two groups supported Prohibition for two entirely different reasons. There were those with moral or religious convictions opposed to alcohol (Baptists) and those who profited from the high margins of selling alcohol on the black market (bootleggers). They had nothing in common, other than an interest in keeping Prohibition in place.
More generally, any given idea may face opposition from a united front of those who oppose it on principle and those who don’t want the competition.
This is one of the most powerful and counter-intuitive economic principles since David Ricardo described comparative advantage.
Once you’ve internalized this concept, you’ll start seeing it everywhere.
Large corporations often partner with environmental groups in support of tougher regulations. The big boys are better able to navigate the maze they help build than smaller competitors. The barriers also deter new competitors from ever coming into being.
Incumbent politicians join with campaign finance groups to support limits on donations that hamper would-be challengers far more than themselves.
The Northern Pass project has brought together an odd coalition of coal burners and tree huggers.
Bringing more than 1,000 megawatts of hydropower into the New England grid would shift the electricity market greatly. Even marginal changes can have dramatic effects, both in the capacity payments that power generators receive in order to ensure their plants will be available, and to the clearing price on the spot market that drives fluctuations in electric rates.
Owners of New England’s existing power plants have huge incentives to join with those driven by environmental and aesthetic objections to Northern Pass.
We don’t really know how much the power producers are spending against Northern Pass. A mysterious group called Protect the Granite State is heading up the high-profile public relations work against the project. But since Northern Pass is neither a bill nor a ballot measure, Protect the Granite State has not filed lobbying disclosures or campaign finance reports.
Protect the Granite State has declined to respond to my questions.
Regulatory matters are not subject to the same public disclosure rules as electoral politics. And that’s fine by me. I’m a First Amendment zealot, and have no objection to anonymous speech.
But if someone is speaking anonymously, you retain the right to question their motives, or ignore them entirely. When Judy Reardon, Jeanne Shaheen’s former legal counsel, speaks for Protect the Granite State, we can rightfully question if she’s really speaking for a power plant in Connecticut.
As you weigh the pros and cons of Northern Pass, remember that those pushing hardest against the project may have much stronger reasons for doing so than they are willing to tell us.
Grant Bosse is editorial page editor of the New Hampshire Union Leader and Sunday News.