Belmont Club

A Fistful of Dollars

Herschel Smith sent a link to his post on the gun manufacturer boycott of states that are considering various bans on weapons. Smith describes the recommended strategy:

In Gun Companies Holding The States Accountable we discussed a two pronged approach to addressing the anti-gun legislation that is brewing in certain states, New York, Illinois and Colorado being three key locations. The first of the two prongs involves a refusal to sell to law enforcement when the weapons being sought are prohibited to non-law enforcement. At the time, LaRue Tactical, Olympic Arms, Templar Custom and Extreme Firepower had enacted policies against selling to law enforcement in New York.

The companies who’ve showed a willingness to join the boycott are mostly medium sized. Everyone is still waiting to see how the big manufacturers jump. If Smith and Wesson, Glock, Ruger, or Remington join the boycott it will have a dramatic effect. But by the same token if the government can convince the major companies openly declare against the rebels the hand of the gun-ban states will be strengthened.

Assuming you wanted the boycott to succeed how would one do it?

What is going for the boycotters and the boycott breakers is the relative substitutability of firearms. Superficially it seems easy to break the boycott, since if Company A refuses to sell to State X, then State X can buy from Company B, since firearms are to some extent substitutes for each other.

But the public can punish company B for breaking the embargo by transferring their purchases from Company B to Company A. Each side can employ dollars or the threat of witholding dollars to modify the behavior of the gun firms. The key question is whether the rewards to a company of selling to a gun control state is worth the relative loss in market share it may endure from public wrath.

It all depends on market power doesn’t it?

Ironically gun controllers have may have boosted the demand of the public relative to law enforcement by creating a panic buying surge. Forbes reports that after tighter gun control legislation was proposed the sales of firearms went through the roof.

Incredibly, last November the Federal Bureau of Investigation says there were about two million background checks called into The National Instant Criminal Background Check System (NICS). This was the highest number of prospective gun buyers ever recorded in any single month. The number is up from about 1.5 million in November 2011. Now reports are that gun sales have been brisk since the Sandy Hook murder spree, after which December could be another record month.

Human psychology is a funny thing. You may not be interested in traveling overseas on a vacation, and may never in fact do so left to yourself. But if someone says that you can never travel abroad again, many people will dip into their savings to travel to some foreign destination just because it’s their last chance.

The fear that guns will be banned works the same way.

That increases the bargaining power of the gun buyers vis a vis the state. At high sales volumes, unless the states are planning massive gun buys then a manufacturer could lose much more by incurring the ire of the public than could be offset by any sale to law enforcement. Ironically the challenge to the boycott movement is to use the very fear created by the regulators against them.

But gun sales cannot keep climbing forever (or can they?) thus it becomes important for the boycotters to ‘close’ on their protest while sales to the public are strong. That’s another way of saying boycotts must succeed while they have momentum.

But what is success? Game theorists regard a boycott as successful when it has forced the withdrawal of the ‘egregious act’ which caused it in the first place. Successful boycotts will define their goals so that they are reasonably attainable. The idea would be to get New York State, for example, to back down, but not to the point of humiliation which they may resist. Crafting an acceptable surrender is often the best way to obtain it.

That brings up the point of how to get “Smith and Wesson, Glock, Ruger, or Remington” to join the boycott. One strategy would be to convince them to send a message to the states via a back channel. It is probably easier to convince a company to send a confidential letter to government saying “we are concerned that if we sell your police departments guns it will impact our sales to the public” than to get them to declare in the open that they’ll never sell New York state a gun again. Still the effect of even a confidential letter from one or several major gun companies would be almost the same as taking an ad out in the Washington Post announcing participation in a boycott.

The politicians would know that a major could join the protest. And politicians being who they are would have to weigh whether they could take the chance of screwing up big time by going forward.  Convincing a company to signal the possibility of joining a boycott lowers the cost of a major participating in it  (by making it deniable). It can even be cast as prudential. But at any rate it makes joining much more do-able and increases the likelihood the rebels can enlist the support of a major company.

And it just might work. The Obama administration has a lot of targets in its engagement queue. Gun control was the flavor of the month.  February’s almost over.

The Three Conjectures at Amazon Kindle for $1.99
Storming the Castle at Amazon Kindle for $3.99
No Way In at Amazon Kindle $8.95, print $9.99

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