Political Entrepreneurs

The Economic Engine of Political Change

Reading recommendations on luxury goods markets

January 11th, 2019 by Edward Lopez

A RL and FB friend writes: “A friend is looking for books/articles on markets for luxury goods. Can anyone suggest some reading? I know you were working on IP and fashion. Have you published that work? Might it be appropriate?”   My post on his FB thread: There’s an economics literature on status goods that your friend can investigate. Some of it is pure theory of consumer behavior. Some of it involves counterfeiting and by implication…
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Dear Asheville: Embrace Your Growing Economy

January 10th, 2019 by Edward Lopez

In the past three years I have focused heavily on launching and directing a new center at my university. The downside has been less scholarly output. The upside has been new opportunities to analyze and comment on the regional economy in Western North Carolina (WNC). As a case in point, take a look at the new issue of Capital at Play, an impressive new magazine that focuses on entrepreneurs and economics in greater Asheville and…
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Paul Krugman, Wiliam Baumol, Bob Tollison, and the economics of economics

November 27th, 2018 by Edward Lopez

A few years ago Paul Krugman argued that the economics blogosphere had become the main forum for debate and discussion of economics. It’s the instant blogs, he said, not the circuitous peer-reviewed journals, where the action is. Actually, Krugman continued, the academic journals “ceased being a means of communication a long time ago – more than 20 years ago for sure.” Instead, scholars began circulating papers in advance of publication, and serious papers started gaining discussion…
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What they are saying about Madmen!

June 9th, 2018 by Tyler Tarbet

“Ideas matter. Madmen, with its engaging stories, is perfect for anyone interested in public policy, or how our world could be a better place. Read it, and assign it to your students.” — Tyler Cowen, George Mason University, blogger at Marginal Revolution, and author of Discover Your Inner Economist “There’s no shortage of writing about bad government policies, but Leighton and López go several steps deeper, by exploring the incentives that foster bad policies, the…
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Teaching with Humor

January 16th, 2018 by Edward Lopez

Today is the first day of class at WCU. I’m not teaching this semester, and I know that I’ll miss it in some ways even though I will make good use of the time off. Recently I was asked to submit a file for the Liberal Studies Teaching Award. The LS program is the core of WCU’s curriculum. There is a list of classes across most of the disciplines on campus (although it’s heavy on…
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Bill McGowan, MCI’s Political Entrepreneur

October 27th, 2017 by Arthur Diamond

AT&T was one of the most powerful and long-lived monopolies in U.S. history. Tim Wu has documented in The Master Switch how AT&T suppressed innovations, big and small, even some that were generated within AT&T’s own Bell Labs. The advocates of AT&T were articulate and well-connected politically. AT&T was a paradigm case of the seeming invulnerability of crony capitalism. How entrepreneurial capitalism eventually, and partially, won against crony capitalism is of interest, not just for…
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Behavioral Political Economy

October 17th, 2017 by Edward Lopez

Richard Thaler is the 2017 Nobel laureate in economics for his work in behavioral economics. This comes 15 years after the prize was awarded jointly to Daniel Kahneman for pioneering economic psychology and Vernon Smith for pioneering experimental economics. As the discussion unfolds, we should remember that “people are rational” is a starting point — a simplifying assumption for building models of human interaction. It is not a description of human interaction. So when lab…
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Leaders, Your Choice of Words Matters

September 25th, 2017 by Edward Lopez

I’ve been teaching college economics for a little over two decades now. Years ago I learned that I need to watch very closely my choice of language in the classroom. For example, early in my teaching days I would lace a “hell” and a “damn” or two into my lectures. I can’t say I pondered the reasons very carefully. I suppose I was just trying to be relatable and have an effect. But soon I…
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Should Checks and Balances be Removed from the U.S. Constitution? Part 2 on Nancy MacLean’s Democracy in Chains

July 15th, 2017 by Edward Lopez

NB: Part 1 of this series can be found here . The concluding chapter of Democracy in Chains is titled “Get Ready”. Here MacLean gathers all of her implications together and portrays the arc of influence that I summarized in Part 1 of my responses . Readers absorb details of just what the cause is capable of doing. I won’t recount the chapter. Instead, I would like to focus on pages 225-228, where MacLean argues that constitutional checks and balances should be removed because they…
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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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