Political Entrepreneurs

The Economic Engine of Political Change

Good example of changes in public beliefs

June 4th, 2015 by Edward Lopez

The Seismic Shift in Irish Values, and One Reason It Happened ” Huffington Post 5/24/2015 James Peron Historically, the more market-oriented the economy, the more the well-being of LGBT people increases. Politicized markets require political power, something sexual minorities rarely have, but depoliticized economies only need an entrepreneur willing to cater to a minority. Soviet-style, top-down economies would never allocate paper for books on gay issues, let alone for a thriving gay media. That required a bottom-up, depoliticized or less-politicized economy, where entrepreneurs only had…
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Diane Coyle reviews Madmen, Intellectuals, and Academic Scribblers

April 1st, 2015 by Edward Lopez

Diane Coyle, author of provocative and deep books including Sex, Drugs, and Economics: An Unconventional Introduction to Economics (2002), The Soulful Science: What Economists Really Do and Why it Matters (2009), and GDP: An Affectionate History (2012), has posted her review of Madmen over at The Enlightened Economist . She appreciates pairing the goal of the book (to understand political change, as we define that term ) with a “clear and concise history of thought”, and she concludes favorably: The book is very clearly written and an accessible…
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The Italian Immigrant Who Saved the Game of Basketball — From Dean Smith

February 9th, 2015 by Edward Lopez

It was March 7, 1982, and the cold drizzle falling on Greensboro, North Carolina, was no match for college basketball fever. The hottest ticket in the country was the Atlantic Coast Conference (ACC) men’s basketball championship, with nationally ranked number-one North Carolina taking on number-three Virginia, in a rematch of their two-game split of the regular season. This game had it all. Both teams had come in with only two losses all year. A total…
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Spotted: Political Change Analysis on the Streets of San Francisco

December 8th, 2014 by Edward Lopez

A delightful story , “Our night as an Uber driver — Using a $500,000 Rolls-Royce,” appears in the current issue of Car and Driver. One passage, in particular, reveals that the writer may have read Madmen. Either that, or the writer has arrived at sound public choice and political change analysis through reasoned examination: In Uber’s mind, the company is Doing Good. In the eyes of the cabbies, their lunch is being eaten by a bunch of amateurs not subject…
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When the Rules of Sports Change

September 11th, 2014 by Edward Lopez

Over at the Sports Economics blog, Madmen has attracted some interest. John Considine recently pointed to some high profile examples of when a soccer referee changes the outcome of the match because of how much stoppage time is added. In most such instances, there’s a strong perception of unfairness. Arguably no one, including referees but especially teams and fans, wants matches decided arbitrarily. In response, momentum builds for a change in the rules. Considine likens the soccer scenario to the…
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My Review of The Elgar Companion to Public Choice

August 25th, 2014 by Edward Lopez

Chris Coyne, the book review editor at Public Choice, asked me to write a review of the new Elgar Companion to Public Choice, Second Edition , edited by Michael Reksulak, Laura Razollini, and William Shughart. This book is a second edition of the first version that came out in 2003. It consists of 29 chapters The published version of the review is gated, but below I offer a link to the pre-publication version. Here are the first few paragraphs:           Co-Editors…
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Banning In-Flight Phone Calls: Choosing Government over Market Institutions

August 4th, 2014 by Edward Lopez

The U.S. Department of Transportation is pushing for an in-flight ban on mobile phone calls, saying they are disruptive and unpopular with passengers and flight crews, according to this Wall Street Journal story . The airlines are pushing to keep control. They would presumably experiment with different rules and situations, converging on the best solution for them and their passengers. It’s interesting to bear in mind what the valuable good in question is. It’s the audio frequency (i.e.,  sound that’s audible to most people ) within close proximity…
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Why We Need the Madmen in Authority

July 31st, 2014 by Edward Lopez

Did you know that Oklahoma is ranked 28th in population but in 2011 had one of the nation’s largest unfunded pension liabilities? The Reason Foundation’s Pension Reform Newletter carries  an interview  with Oklahoma state legislator Randy McDaniel, who explains: OPERS is the state’s second largest retirement system. In 2010, the system had a $3.3 billion unfunded liability, … The big picture is the state had over $16 billion in total unfunded liabilities. In a reform process entering its fifth…
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Why License a Tour Guide? Some Final Thoughts on the Economics of Political Change

July 8th, 2014 by Gary McDonnell

I have discussed in some detail airline deregulation as a case study of political change within the economic framework laid out in Madmen. Interstate trucking, long-distance telecommunications, railroads, banking, stock brokerage, oil and gas, are additional cases where deregulation occurred.  Future research into these cases may suggest ways in which political entrepreneurs were able to “arbitrage between academic ideas and political inefficiencies.”  But political change– or at least the potential– is in the here and the…
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Airline Deregulation: Political Entrepreneurs at Work

July 7th, 2014 by Gary McDonnell

Policy ideas do not always bear fruit in the real world. What was different with 1970s transportation deregulation? In a previous post I noted that political entrepreneurs find ways to use ideas to break down resistance to change, to overcome “structure-induced stability”. Ed and Wayne write in Madmen  that, “political change happens when entrepreneurs notice and exploit those loose spots in the structure of ideas, institutions, and incentives” (134). As noted by Rodrik , political entrepreneurs will…
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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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