This special edition of PERC Reports uses the hit television show “Yellowstone’s” portrayals of the Rocky Mountain West to examine real-world western issues. Explore the full issue here.
“Yellowstone” is a gripping drama that has won a large audience by telling stories that stay true to human nature. Precisely for that reason, the show frequently includes scenes that capture economic concepts, because economics is ultimately about explaining human action—people making choices under conditions of limited resources and uncertainty. That’s why good television producers don’t need Ph.D. economists as story consultants.
In Season 1 of the series (Episode 6), developer Dan Jenkins confers with Melanie Prescott, a hired gun he’s brought in to deal with the Dutton family, which owns the expansive ranch next to his proposed subdivision. Earlier in the season, the Duttons used dynamite to divert a waterway away from Jenkins’s property in an effort to stymie his plans. Prescott outlines her strategy of “a thousand little cuts” to deal with family patriarch John Dutton. “I’ll reach out to environmental organizations,” she tells Jenkins, explaining that there are bound to be threatened species on his property given its proximity to Yellowstone National Park. “Was that river he moved a spawning ground for the Yellowstone cutthroat? Can we sue to place trail cameras on his property, to monitor migrating wolverines, pine martens—both endangered in this area?”
Later, Jenkins and his advisors meet with tribal chairman Thomas Rainwater (Episode 7) about joining forces against the Duttons. Rainwater offers Jenkins the chance to participate in a hotel and casino development he’s proposed. Jenkins is skeptical and steps outside to discuss the offer with Prescott, who outlines the success of her plan to ensnare the Duttons in a regulatory morass. “I have attorneys for Clean Water Resource filing a lawsuit against him for altering the flow of the waterway,” Prescott says. “Yellowstone cutthroat trout spawns in that stream, which is a food source of the grizzly bear. That’s a violation of the Endangered Species Act, and that is a felony.”
Prescott’s strategy is an example of PERC Senior Fellow Emeritus Bruce Yandle’s “Bootleggers and Baptists” theory of regulation in action. Yandle developed the theory while working as a regulatory economist at the Federal Trade Commission. He noted that regulators often chose alternatives for which there were both “Baptist” and “bootlegger” proponents. His labels came from the odd coalitions supporting Sunday bans on liquor sales in the South, where a town’s Baptists and bootleggers both supported restrictions. The Baptists’ support was easy to understand—they were morally opposed to Sunday sales. But why would the bootleggers want laws forbidding liquor sales on Sundays? The answer was that the laws reduced the competition for their product.
What Yandle noted was a phenomenon of two quite different groups supporting regulatory measures: one motivated by a moral purpose and the other by self-interest. Such Bootlegger-Baptist coalitions are often tacit ones, and the regulatory Baptists may often be unaware that they have less savory coalition partners in the regulatory bootleggers. Nonetheless, even a tacit coalition can be important because it gives cover to politicians supporting a regulatory solution. They can point to the regulatory Baptists’ overt support, while the regulatory bootleggers can be relied upon to provide campaign contributions and other forms of more discreet backing. Yandle’s theory helps us explain the form regulation takes, as gaining the support of both bootleggers and Baptists requires a regulation that meets the needs of the regulatory Baptists (often through soaring language in a purpose clause) as well as the regulatory bootleggers (typically through details hidden in dense language).
When Prescott engaged an environmental group to sue the Duttons over endangered species law, she found a group to play the role of Baptists to Jenkins’s bootlegger. While Jenkins comes across as a classic regulatory bootlegger who cares little about trout or grizzlies, the environmentalists certainly share his desire to undo the stream diversion. And having the Duttons sued for violations of the Endangered Species Act by a public interest group looks much worse for the family than simply being in a legal battle with a neighbor.
The environmental group might suspect Prescott was less than pure in her motives for encouraging them to sue, but their zeal for protecting endangered species likely helped them overcome any suspicions about her motives. The group would certainly have not been happy about Jenkins’s original plan to use the river to support a power plant—the impetus for the Duttons to divert the river—so they are not natural allies. Prescott’s cleverness in getting them to act in a way that serves Jenkins’s interests is a good example of bootleggers and Baptists in action.
Bootleggers, Baptists, and Wildlife
According to the U.S. Supreme Court, the Endangered Species Act is “the most comprehensive legislation for the preservation of species ever enacted by any nation.” The Congressional Research Service termed the act “one of this country’s most important and powerful laws.” It is also a spectacularly ineffective law, at least if measured by the number of species that have recovered after being listed under its protections. In its first 25 years, just 29 of 1,138 listed species were removed from the endangered and threatened lists. Of those, five were removed due to extinction and 14 due to data or taxonomic errors in listing them, leaving at most 10 success stories, some of which are contested.
From a perspective of saving species, two of the most serious flaws in the Endangered Species Act are that it focuses on species instead of habitat and that it makes finding an endangered species on one’s land a negative for the landowner. The latter is true because disturbing an endangered species can easily result in a prohibited “taking” under the statute, which can bring fines or other penalties. Despite these flaws, which are well known, the act has never been comprehensively revised and has had only relatively minor amendments since President Richard Nixon signed it into law in 1973.
The act’s focus on species reflected the importance of “charismatic megafauna” in mustering public support for the law as part of a raft of major environmental legislation passed in the early 1970s. Since that time, a greater understanding of the importance of habitat means that refocusing the statute on protecting habitat would be more effective in protecting species. Similarly, the act’s failure to consider landowner incentives promotes the “shoot, shovel, and shut up” approach to finding an endangered species on one’s land, since its presence can only produce economic losses. Research at PERC and elsewhere has documented how even small positive incentives can encourage improvements in habitat for endangered species. For example, Ducks Unlimited’s Prairie Pothole program compensates farmers along migratory bird routes for leaving small wetlands undisturbed. Similarly, International Paper successfully added revenue from hunting and recreational users to its timber revenues for forests it manages to combine tree production and habitat provision.
Despite this clear evidence that the Endangered Species Act could be made more effective, there has been no serious effort to amend the statute to address these issues. At least part of the reason is that there is a Bootlegger-Baptist coalition behind not changing the statute. For the regulatory Baptists—environmental groups—the Endangered Species Act has attained a sacred status. They fear that if it is opened for revision, an important early environmental victory will be diluted by pragmatic reforms. Even if those changes would save more species, the symbolic value of the act is too great to risk change. Thus, with a few exceptions, most major environmental groups oppose efforts to change the Endangered Species Act. A politician seeking to fix the act’s flaws without the blessing of environmental groups, therefore, might be seen as a heretic, so the idea becomes politically unpalatable to even greener members of Congress.
The regulatory bootleggers are interest groups that benefit from the restrictions the Endangered Species Act imposes on potential competitors. For example, private landowners in the Northwest benefited in the 1990s when the act reduced competitive logging on public land. Similarly, a logging-environmentalist Bootlegger-Baptist coalition supported an export ban on unprocessed timber imposed by the first Bush administration. The environmentalists hoped to preserve spotted owl habitat; the lumber industry hoped to keep the logs at home for them to process.
Storytelling Without Romance
The appearance of a classic Bootlegger-Baptist coalition in “Yellowstone” is evidence of how common such coalitions are in American environmental regulation. It is also consistent with the show’s overall depiction of politicians and political consultants, who are presented in clear-eyed, cynical terms rather than romantic ones in which they selflessly serve their constituents. It starts with John Dutton’s need to control the livestock commissioner office to protect his ranch and continues through Beth Dutton’s recommendation to her father that he appoint her brother to succeed him in an effort to retain control within the family. Another example is the stark political calculus that a developer lays out for Governor Lynelle Perry later in the series—including immense growth in tax revenue if her administration permits an airport and other developments in Paradise Valley. Recognizing that such coalitions exist and spotting specific ones is important for getting regulatory policy right, since regulatory bootleggers rarely pursue the public interest. In many instances, the regulatory Baptists have no more desire to partner, even implicitly, with regulatory bootleggers than actual Baptists do with actual bootleggers.
Understanding when Bootlegger-Baptist coalitions are operating is important for understanding policy debates. In environmental law, as in any area of complex regulatory law, the devil is in the details. Bootleggers and Baptists work together more readily where the bootleggers’ interests are concealed in the tedious details of regulations than when they are clear to see. Disrupting such coalitions by shining light on those details can limit the use of regulation for rent-seeking and focus it on genuine public purposes. In short, it can help ensure that endangered species regulation is about saving endangered species rather than smoothing the way for subdivisions or hotel-casino complexes next to wilderness areas.
In setting out to tell a story that resonates with audiences, the writers and producers of “Yellowstone” sought to stay true to human nature. The show’s portrayal of how regulations are shaped by implicit bootleggers and Baptists is appropriate because it feels real to the audience and advances the story. At its best, economics has that effect.