Political Entrepreneurs

The Economic Engine of Political Change

Category: Competition in Ideas

In Memory of Charles K. Rowley: Entrepreneur of Ideas

August 5th, 2013 by Edward Lopez

Our former professor, Charles K. Rowley , passed away this weekend after a long and prolific career as a scholar and teacher. Professor Rowley was a passionate teacher, as anyone who sat in his classroom will attest. He was also a deep scholar of public choice, and he worked tirelessly to shape the contours of the field, to advance those frontiers, and to stake claims to this work in the name of Virginia School scholars, particularly Jim Buchanan…
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Better Living Through Political Entrepreneurship

June 27th, 2013 by Edward Lopez

Today I discovered a book the old fashioned way: while browsing the stacks at a brick-and-mortar library . Published in 2010, Better Living Through Economics is a collection of essays that documents the impact of basic economic research on improving public policies. The collection is edited by John J. Siegfried, who is Professor of Economics at Vanderbilt University and the Secretary-Treasurer of the American Economic Association. All the contributors to the volume are top economists in the profession. Better Living has a…
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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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Institute of Economic Affairs on Case Study on Reform: Telecom Privatization in Guatemala

March 29th, 2013 by Wayne Leighton

The IEA generously offered me the opportunity to contribute a blog post on the Guatemalan telecom reform. This is a slightly different introduction to the case study produced by the Antigua Forum, which Ed and I previously highlighted here . The IEA blog post provides a nice summary of the Guatemala experience, one of the most market-liberal telecom reforms in the world. Worry not, I will not be changing my regular blogging affiliations. Of course the IEA website is…
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Ranking Think Tanks: The Challenge of Specialization

March 19th, 2013 by Edward Lopez

I argued last time that an ideal measure of a think tank’s effectiveness would be its marginal effect on the marketplace of ideas. I also argued that, while conceptually simple, this ideal measure is impractical for a number of reasons. A simpler measure? A simpler measure would be funds raised through non-politicized (usually private) donations. This has the feel of a market test, in the sense that a donation indicates value created for the donor (otherwise, they…
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Richard Nixon as a Madman in Authority

March 14th, 2013 by Wayne Leighton

This year marks the 100th anniversary of Richard Nixon’s birth, so it’s not surprising that the 37th President of the United States has been in the press. This post argues that Nixon is interesting and relevant as a madman in authority — that is, as a political leader who was both brilliant and deeply flawed. His influence continues to permeate American politics. Recent additions to the Nixon genre focus relatively early in this politician’s career,…
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Ranking Think Tanks: The Measurement Problem

March 1st, 2013 by Edward Lopez

In an initial post last week , I argued that the proliferation of think tanks over the past 50 years is likely to be a good influence on human affairs, and so is the emerging competition to measure (rank) the performance of think tanks. In this follow-up post and a planned third, I will question the usefulness of the measures used in these rankings. Why measure think tank effectiveness with data like social network impact, web traffic, publication counts, and…
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Intellectuals in Action: Reason‘s Jesse Walker on Survivalists (a.k.a. “Preppers”)

February 21st, 2013 by Edward Lopez

This is the inaugural installment of a category we’ll call “Intellectuals in Action.” Keeping in mind that the book and this blog mean “intellectuals” in the Hayekian sense as traders in ideas — that is, people whose activities influence (whether deliberately or not) the way that other people view the world. To drill down, readers can go to Hayek’s 1949 essay, “ The Intellectuals and Socialism ,” and the introduction to his 1954 edited volume,  Capitalism and the Historians . The point of this…
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Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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?

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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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