One of the main arguments in Madmen is that ideas don’t become implemented on their own; instead, multiple modes and levels of political entrepreneurship are needed for a different idea to defeat the twin forces that support any particular status quo: the power of vested interests on the one hand, and widespread, ingrained beliefs on the other hand.
Many years of studying economics will convince someone that a litany of better ideas is readily available. But what about people who don’t study economics for years on end? How does it become possible for non-experts to appreciate abstract ideas?
This, of course, introduces the “intellectuals” (as we use the term) and their use of film, music, and other entertaining mediums to make abstract ideas simpler and more engaging. It also introduces my former colleague Edward Stringham, who I was fortunate to work with for several years at San Jose State University before we both moved to universities in North Carolina.
One of Stringham’s ideas is to get students and the public interested in economic ideas through the use of song — and economic incentives! In the spirit of Russ Roberts’ and John Papola’s excellent music videos on Keynes vs. Hayek, Stringham is sponsoring the second annual Economics Music Video Contest, with cash prizes to the winners. He writes:
The goal is to encourage students to make videos that convey economic concepts in an interesting way. The first year’s contest asked students to make videos on Supply and Demand and the theme of this year’s contest is: “Economic Value is Subjective. The contest is open to all students and entries are due May 15, 2013. The winners gets $2,500 and the professor of the winner gets $500. To see past entries and more details about how to enter visit: hackleychair.wordpress.com
You can watch the growing list of current entries at:
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.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.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.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.