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Steve Teles and Brink Lindsey on *The Captured Economy* (BONUS)

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Mercatus Center
Nov 3, 2017 · 40 min read
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I think even including both the tax and benefits system and the regulatory system, there’s pretty substantial evidence that the policy regime has re-distributed upward.

The idea that what lobbyists are essentially doing is providing information, that information is scarce, it is a source of power. And one thing that we add is, if the state isn’t providing information itself, it essentially has to get it from outside. And when they get it from outside, it imports the overall inequality and information gathering and processing that’s in civil society. And that can be a very strong source of inequality in policy outcomes.

I think when universities were extracting rent and putting it into research, there was an argument that that was generally a socially productive equilibrium, but now that they’re putting it into administration, which has a lot but very complicated explanation from that, I think that rent extraction has certainly not been producing these spillover effects for society.

I think I learned the thing that would allow me to be successful was one, talking across ideological or other boundaries. And that’s still possible and it’s less possible than it used to be, but it’s still possible. We wrote this book in part to prove that it’s possible to other people.

People often have an experience in college where they first pick up, or in high school where they first pick up Ayn Rand and then they’re like, “Oh, this is it. I figured it out.” I first picked up Ayn Rand and thought it was awful but wanted to know why and wanted to argue with it. So I was attracted to people who had these ideas and I wanted to have it out and I wanted to figure it out rather than just dismiss ideas like that.

I think the focus on rent-seeking I think people on the left tend to focus a lot on what government can do to solve problems, not enough on where government actually produces it… and that’s even true in areas like finance or taxation.

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Trying to quantify anything about regulation is devilishly difficult, and you immediately have to get into the weeds of this regulation or that regulation, so I think it’s much harder to police insider abuses in the regulatory sphere than it is in the fiscal sphere.

We currently have a kind of two-track human capital development system. Track one is complete a four-year degree at a university and enter the meritocracy. Track two is you’re a failure. This seems to me to really be a terrible way to go about things.

But given how universal patent law is now and how long it’s been around, the actual empirical basis for having this affirmative policy is shockingly weak. In general, my predisposition is, don’t make laws unless you’ve got a really good reason for doing something, and we don’t really have a very good reason yet [chuckle] for having patents or copyright laws if the purpose is to encourage innovation.

I’ve never read anything that conveys the intense raw creative power of capitalism that matches the first few pages of the Communist Manifesto. I find reading Marx bracing and interesting. Even when he is profoundly wrong, he’s often framing questions in very interesting ways. I’ve gotten a good deal out of him and taken concepts from him, and turned them in ways that he would have thought horrible but useful for me.

Conversations with Tyler

A podcast in which esteemed economist Tyler Cowen engages…

Mercatus Center

Written by

The Mercatus Center at George Mason University is the world’s premier university source for market-oriented ideas.

Conversations with Tyler

A podcast in which esteemed economist Tyler Cowen engages with today's most underrated thinkers in wide-ranging explorations of their work, the world, and everything in between.

Mercatus Center

Written by

The Mercatus Center at George Mason University is the world’s premier university source for market-oriented ideas.

Conversations with Tyler

A podcast in which esteemed economist Tyler Cowen engages with today's most underrated thinkers in wide-ranging explorations of their work, the world, and everything in between.

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