The Captured Economy

How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality

[Amazon Link]

Looks like this will be my last "serious" book read this year. (I have one on request from UNH Interlibrary Loan, but they won't be back in business until January.) But it's a pretty good one, recommended.

One would think that this book is a big hunk of red meat tossed to the tribal acolytes of Bernie Sanders and Elizabeth Warren. Just look at the subtitle: "How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality". The freakin' system is rigged, I tell ya! Buy our book for the deets!

Indeed, it's easy to speculate that the marketing wizards at Oxford University Press may have slyly titled this book to appeal to that crowd. Maybe the authors (Brink Lindsey and Steven M. Teles) had a hand in that too.

But there's very little left-wing nourishment here. It is self-dubbed (near the end) advocacy of a "liberaltarian" approach to public policy. And the libertarian part of that unholy word means that the book is basically on target when it describes current problems.

Overall: in a number of areas, public policy, laws, and regulations are formulated to work to the advantage of the already well-off, and thereby make them more well-off. In a (hyphenated) word: rent-seeking. I (personally) don't consider to be "increasing inequality" per se to be an important issue; but, yes, this does increase inequality. Even given that apathy, I consider it to be an outrage when there's an overall wealth transfer from the less-well-off upwards, when it's due to the governmental thumb (and an occasional fist) on the scale.

And there's an added factor: Such government efforts also tend to make the overall economy less competitive and less efficient. Which makes us all poorer.

Lindsay and Teles concentrate their fire on four broad areas that demonstrate their thesis: (1) financial regulations; (2) intellectual property (copyrights and patents); (3) occupational licensing (not just the "easy" targets, like cosmetologists, but also the sacred cows: doctors, dentists, lawyers); (4) land use regulation (mainly zoning). The coverage is detailed and you might want to stock up on your blood pressure meds before reading.

Final chapters detail the politics involved in putting these "rigged" policies into place, and some mild pointers for reform.

The book's examples aren't complete (as the authors admit). One of my bêtes noires, the Export-Import Bank, is only mentioned as an aside. Other areas are absent: higher-ed, energy, trade protectionism (other than the intellectual-property regime imposed by "trade agreements"). But perhaps the book concentrates on the areas where the authors could agree completely. (Teles is, I take it, a liberal; Lindsay is more toward the libertarian side.)

A weakness for me was the "what to do about all this" bits. The conservative/libertarian remedy, which can be summarized briefly as "shrink the scope of government regulation" is belittled as a political non-starter. OK, but the Lindsay/Teles proposed fixes seem (to me) to be vague, hand-waving, and not particularly convincing. See what you think.