Author: Garrett M. Petersen

Ben Powell joins the podcast today to discuss his new book, Socialism Sucks: Two Economists Drink Their Way Through the Unfree World, coauthored with Robert Lawson.

The book is a combination of economic analysis and Anthony-Bourdain-style travel diary.

Do We Have to Say It Again? Socialism Sucks!

Apparently we do. Because today millions of Americans—young and old—are flocking to the socialist banner and chanting, “What do we want? Socialism—the economic system that has impoverished people everywhere and resulted in the deaths of tens of millions! And when do we want it? Now!”

Really?

Most people seem somehow to have missed Economics 101 and don’t understand that socialism isn’t nice, cuddly government that takes care of everything for you so that you can remain an adolescent forever. No, we’ve seen it tried over and over again with catastrophic consequences.

Luckily, two semi-sober economists have toured the socialist world so you don’t have to. And they’ve come back with this stunning report: Socialism Sucks!

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Today’s guest is Edward J. Lopez of Western Carolina University. We discuss his book, Madmen, Intellectuals, and Academic Scribblers: The Economic Engine of Political Change, which was co-authored with Wayne Leighton.

Does major political reform require a crisis? When do new ideas emerge in politics? How can one person make a difference?

In short: how and when does political change happen? Madmen, Intellectuals, and Academic Scribblers tackles these big questions, arguing that ideas and entrepreneurship are the key ingredients in any episode of political change. Authors Wayne A. Leighton and Edward J. López begin with the first lesson in economics — incentives matter — and artfully explain how the lesson applies throughout political life. Incentives explain why democracies often generate policies that impose net costs on society, and why these inefficient policies persist for years.

Yet beneficial reform does sometimes occur. So Madmen goes beyond incentives to offer a framework in which political change channels its way from ideas in society, through society’s shared institutions (i.e., its rules of the game) , which in turn shape incentives. This type of change is seldom easy, because new ideas for shaping the rules of the game must overcome two forces in society: widely shared beliefs and powerfully vested interests. Yet at certain political moments – perhaps during a crisis, but not always – shared beliefs and vested interests begin to weaken, and the opportunity for reform emerges. Within this framework, Madmen shows why certain inefficient policies eventually get repealed (e.g., airline rate and route regulation), while others endure (e.g., sugar subsidies and tariffs).

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Links

In the course of the conversation, Ed mentions Thomas Hazlett’s work on the radio spectrum and Tina Rosenberg’s discussion of Iranian kidney markets on Econtalk.

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Vincent Geloso returns to the podcast today to discuss his paper, “Markets for Rebellions? The Rebellions of 1837-38 in Lower Canada”. The paper discusses the idea that political upheaval and even violent rebellion can be more likely in areas with a high degree of market access.

In 1837-38, the British colonies of Upper and Lower Canada rebelled. The rebellion was most virulent in the latter of the two colonies. Historians have argued that economic consideration were marginal in explaining the causes of the rebellions. To make this claim, they argue that the areas that rebelled in Lower Canada were among the richest in the colony, and the least likely to be motivated by economic factors. In this paper, we use the census of 1831 and databases of rebellious events to question this claim. We argue that the rich areas were more prone to rebellion because they were where markets were most developed. These well-developed markets allowed for cheaper coordination of seditious elements while also increasing the wealth (i.e. the rent) over which to fight.

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