Political Entrepreneurs

The Economic Engine of Political Change

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. Fuller nicely links this evolution to his concept of political entrepreneurship (which differs somewhat from ours, but is worth a look). And he provides a summary, which includes a reference to our work.

Traditionally in politics, just a few large organizations have managed the money, grassroots, and influence necessary to win elections or pass legislation. Anyone interested in getting involved politically with any effectiveness needed to join one of these large entities and work their way up, just as a young employee would climb the corporate ladder. For instance, anyone interested in Republican politics was advised to get active in their precinct and then become a precinct captain, a district captain, a county chairman, and potentially a state party chairman.

As campaign finance laws have limited the power of traditional organizations like the parties, however, and technology has given individuals more of a voice in politics and government, individual advocacy has become more impactful. Never before has an individual had such an opportunity to make their voice heard, and many people are now starting organizations to do exactly that. These innovators are a new breed of entrepreneurs – Political Entrepreneurs.

Political entrepreneurs are starting everything from blogs to block parties and taking their message to the masses in new and creative ways. In the tradition of Ed Feulner at the Heritage Foundation and William Buckley at National Review, these new political startups are developing innovative ideas to impact elections and policy, then building business models around them. The concept is emerging so rapidly that two economic professors have just released a new book about social change and economics titled Madmen, Intellectuals, & Academic Scribblers (Stanford University Press, 2013). Their blog? PoliticalEntrepreneurs.com.

 

 

 

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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