Political Entrepreneurs

The Economic Engine of Political Change

April 2013

And Lo! The Social Costs of Rent Seeking

April 30th, 2013 by Edward Lopez

Page 96 of Madmen offers a practical definition of that commonly misused term: The investment of valuable resources into activities that are counterproductive is what economists call “rent seeking.” Theft is a particularly vivid example. So is much of politics. This morning Tyler Cowen, via Mark Thorson, points to a vivid example in a Guardian news article, “ The Vending Machine Robot that Can Steal Free Sodas .” An enterprising young French man, however, has solved the problems of anyone who has encountered a malfunctioning vending…
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More Reviews of Madmen

April 27th, 2013 by Edward Lopez

Here are a few pointers to, and summaries of, recent reviews of Madmen, Intellectuals, and Academic Scribblers. First, a review by Isaac Morehouse , who is a development officer at the Institute for Humane Studies . Madmen is, in many ways, a clear articulation of many of the ideas I’ve come to hold about social change. It details how  Public Choice Theory reveals  that governments have all the wrong incentives for positive change. It discusses the role of ideas, and how they are  able to overcome the vested interests  that Public Choice makes seem…
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The Rise of the Political Entrepreneur

April 22nd, 2013 by Wayne Leighton

RootsHQ, an online resource for the conservative movement, recently published an article with a title we use for this post: “ The Rise of the Political Entrepreneur .” The article is by Allen Fuller, the group’s managing partner. You don’t have to be a conservative to appreciate his observations on shifting influences in politics. In short, how people influence the process of political change has evolved tremendously over the last few decades. It’s an argument that Ed and I make in Madmen….
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“I change the world—with thought.”

April 8th, 2013 by Edward Lopez

Probably the most common reaction to our book has been people’s curiosity about the title. Who are these “madmen” and “academic scribblers”? What do you mean by intellectuals? That’s why whenever we give a talk on the book, we use this slide to offer up some examples: “Intellectuals” are middlemen of ideas who influence (deliberately or not) the way large numbers of people view the world around them. These worldviews find their way into individual…
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Margaret Thatcher: Revolutionary “Madman in Authority”

April 8th, 2013 by Edward Lopez

Margaret Thatcher has died at the age of 87. The New York Times posts an obituary . The Guardian lists some of her most well-known quotations . The “Iron Lady” leads off Chapter 5 of  Madmen (“How Ideas Matter for Political Change”). We recount a story of Thatcher that we found in John Blundell’s writings. Thatcher is one of the revolutionaries discussed under the heading “Maggie, Mart, and the Madmen,” which are the opening words of Chapter 5: It happened with Lenin rousing the…
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NY Times Book Review on Texas, Its People and Institutions

April 6th, 2013 by Wayne Leighton

Today’s NY Times has a book review of  Big, Hot, Cheap and Right : What America Can Learn from the Strange Genius of Texas, by Erica Greider. Since Ed and I are Texans, we think the state has a lot to offer. The NY Times review argues that this book has a lot to offer, too, including analysis of an evolving political economy. Such as this: I tend to look askance at an analysis that attributes a company’s or a…
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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.189, ch.7)

The most successful entrepreneurs know what they do well, they know the market and the opportunities within it, and they choose those activities that create the most value. This is true in economic as well as political markets.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.178, ch.7)

[W]hen the right elements come together at the right time and place and overwhelm the status quo, it is because special people make it happen. We call them political entrepreneurs.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.176. ch.7)

While we started this book with Danny Biasone saving basketball, we end it with Norman Borlaug saving a billion lives. These stories are not that different. Both faced vested interests, which were reinforced by popular beliefs that things should be a certain way—that is, until a better idea came along.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.174, ch.6)

Because there was a general belief that homeownership was a good thing, politicians found the public with open arms.... Everybody was winning—except Alfred Marshall, whose supply and demand curves were difficult to see through the haze of excitement at the time, and except Friedrich Hayek, whose competition as a discovery procedure was befuddled... In short, once politicians started getting credit for homeownership rates, the housing market was doomed.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.166, ch.6)

Everyone responded rationally to the incentives before them. In short, the rules that guided homeownership changed over time, which in turn changed the incentives of these actors. And bad things happened.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.153, ch.6)

They understood the economics. The ideas had already won in ... the regulatory agency itself. All that remained to be overcome were some vested interests and a handful of madmen in authority.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.146, ch.6)

If the idea for auctions of spectrum use rights had been part of the public debate since at least 1959, why didn’t the relevant institutions change sooner? What interests stood in the way?

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.121, ch.5)

When an academic scribbler comes up with a new idea, it has to resonate well with widely shared beliefs, which in turn must overcome the vested interests at the table. Many forces come together to explain political change, even though it may seem like coincidence of time and place.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.120, ch.5)

It’s the rules of the political game that deserve our focus, not politicians’ personalities or party affiliations.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.119, ch.5)

In short, ideas are a type of higher-order capital in society. Like a society that is poor in capital and therefore produces little consumer value, a society that is poor in ideas and institutions will have bad incentives and therefore few of the desirable outcomes that people want.

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