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The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
For years, America has been plagued by slow economic growth and increasing inequality. In The Captured Economy , Brink Lindsey and Steven M. Teles identify a common factor behind these twin breakdowns in democratic governance that allow wealthy special interests to capture the policymaking process for their own benefit. They document the proliferation of regressive regulations that redistribute wealth and income up the economic scale while stifling entrepreneurship and innovation. They also detail the most important cases of regulatory barriers that have worked to shield the powerful from the rigors of competition, thereby inflating their subsidies for the financial sector's excessive risk taking, overprotection of copyrights and patents, favoritism toward incumbent businesses through occupational licensing schemes, and the NIMBY-led escalation of land use controls that drive up rents for everyone else. An original and counterintuitive interpretation of the forces
driving inequality and stagnation, The Captured Economy will be necessary reading for anyone concerned about America's mounting economic problems and how to improve the social tensions they are sparking.
driving inequality and stagnation, The Captured Economy will be necessary reading for anyone concerned about America's mounting economic problems and how to improve the social tensions they are sparking.
232 pages, Hardcover
First published January 1, 2017
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1859 people want to read
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March 28, 2018
I first heard about this book when it was mentioned on episode 829 of Planet Money. The idea that government regulations could lead to increased inequality was pretty interesting, plus the book was written by a libertarian and an American liberal, something you don't really see, so I decided to read the book to find out more.
The Captured Economy is a basically about how rent-creating policies in a variety of fields are leading to an increase in inequality in America. If you don't know what "rent" is, it's basically "the excess payment made to any factor of production (land, labor, or capital) due to scarcity. It's basically the extra money one earns for holding on to a certain factor of production. The book looks at various sectors and argues that there are policies that lead to higher rents, which in turn benefit the people with more money and lead to growing inequality. The sectors are: finance, intellectual property, occupational licensing, and land use.
Strangely enough, the first thing that struck me as very true when I read the book wasn't the rent-seeking part, but this section in the beginning:
"When people feel economically insecure, they grow more defensive, less open and generous, and more suspicious of 'the Other.' When life seems like a zero-sum struggle, gains by other groups are interpreted as losses by one's own group."
I don't think that this is the sole cause of xenophobia, but I do agree that it plays an important role, seeing as many complaints about foreigners tend to come with complaints about how they're 'stealing our jobs'.
The book makes a pretty good case that some pieces of regulation are leading to growing inequality. But, I'm not too sure where is the line to be drawn when it comes to regulation. In the podcast, they mentioned teeth-whitening as an example of excessive occupational licensing. While it may be simpler than other dental procedures, it's not without its risks - in Singapore, some home whitening kits were found to have excessively high amounts of chemicals that would result in overly-sensitive teeth. While excessive regulation is bad, no regulation seems to have the potential to harm consumers as well (especially consumers who don't understand how much of XYZ is safe and may underestimate its effect).
Overall, I thought this was an interesting and thoughtful book. The explanation of rent at the start was clear and the arguments were easy to follow. While the book focuses only on American economics, the theory behind the arguments can be applied to any economy and made me think about how much regulation is necessary in different industries.
This review was first posted at Inside the mind of a Bibliophile
The Captured Economy is a basically about how rent-creating policies in a variety of fields are leading to an increase in inequality in America. If you don't know what "rent" is, it's basically "the excess payment made to any factor of production (land, labor, or capital) due to scarcity. It's basically the extra money one earns for holding on to a certain factor of production. The book looks at various sectors and argues that there are policies that lead to higher rents, which in turn benefit the people with more money and lead to growing inequality. The sectors are: finance, intellectual property, occupational licensing, and land use.
Strangely enough, the first thing that struck me as very true when I read the book wasn't the rent-seeking part, but this section in the beginning:
"When people feel economically insecure, they grow more defensive, less open and generous, and more suspicious of 'the Other.' When life seems like a zero-sum struggle, gains by other groups are interpreted as losses by one's own group."
I don't think that this is the sole cause of xenophobia, but I do agree that it plays an important role, seeing as many complaints about foreigners tend to come with complaints about how they're 'stealing our jobs'.
The book makes a pretty good case that some pieces of regulation are leading to growing inequality. But, I'm not too sure where is the line to be drawn when it comes to regulation. In the podcast, they mentioned teeth-whitening as an example of excessive occupational licensing. While it may be simpler than other dental procedures, it's not without its risks - in Singapore, some home whitening kits were found to have excessively high amounts of chemicals that would result in overly-sensitive teeth. While excessive regulation is bad, no regulation seems to have the potential to harm consumers as well (especially consumers who don't understand how much of XYZ is safe and may underestimate its effect).
Overall, I thought this was an interesting and thoughtful book. The explanation of rent at the start was clear and the arguments were easy to follow. While the book focuses only on American economics, the theory behind the arguments can be applied to any economy and made me think about how much regulation is necessary in different industries.
This review was first posted at Inside the mind of a Bibliophile
January 14, 2018
The authors provide a nice overview of a number of government barriers to competition, such as occupational licensing and zoning, that contribute to forced income inequality and less economic prosperity.
Although the overview is done well, their solutions tend to be more government or at least minor tweaks instead of noting the importance of moving towards free markets and individual liberty by reducing the size and scope of government to really solve these major issues of the elite having too much control of politics.
It’s a good read overall, but I gave it 3 stars.
Although the overview is done well, their solutions tend to be more government or at least minor tweaks instead of noting the importance of moving towards free markets and individual liberty by reducing the size and scope of government to really solve these major issues of the elite having too much control of politics.
It’s a good read overall, but I gave it 3 stars.
October 8, 2025
Lindsey and Teles have assembled a "Liberaltarian" policy statement (this basically just means ideas the Niskanen Center likes), detailing their concerns about a "captured economy" by which they mean an economy increasingly characterized and shaped by "rent-seeking," which itself is enabled by misguided regulation, interest-group-dominated political outcomes, and winner-take-all market dynamics. Ultimately, they allege wide-spread regulatory capture distorts markets, limits competition, redistributes wealth upward, and damages dynamic economic growth; in other terms, they believe it exacerbates inequality and slows economic output.
The authors explore this thesis through four case studies in which they simultaneously identify specific policy failures that create rents and then outline some ways that better policy could be remedy these issues. These four areas of interest are finance, IP law, occupational licensing and land use/zoning regulations. In finance, they argue that the industry has been misregulated into a system of malign incentives, especially concerning reliance on highly leveraged strategies. On intellectual property, the authors present evidence that such laws almost show no evidence of any benefit to creators/inventors or innovation generally but have obvious costs (i.e. a diffusion penalty). The occupational licensing section shows how various professional cartels operate in order to extract unduly high incomes; law and medicine are of course the big offenders here. Finally, the authors try to wrangle the issues affecting housing costs, arguing that zoning and land use policy is mostly responsible for sky high property cost and slow development.
I'm friendly to much of the general policy agenda here, but I think there is a perfect rationale for most of these reforms using only basic assumptions/principles from (neo)classical economics. In other words, it is hard to see what their analysis adds beyond typical critiques of governmental interference in markets. In this way, the "Liberaltarian" gloss and gestures at bipartisanship are simply a branding exercise attempting to convince left-liberals and progressives that markets are the best available price-setting mechanism and that competition among those with private capital is the only way to sustainably drive growth. This really won't be effective, and politically shrewd Liberaltarians should do everything they can to disrupt power centers with anti-market commitments instead of trying to trick these centers into an embrace of markets.
This isn't to say the entirely book is useless. I found some of the primary research cited interesting. For those with only the coldest technocratic and pragmatic commitments, the research itself should persuade all readers that government regulation in markets usually functions regressively and entrenches those with existing advantages. It is perhaps a bit confusing that Progressives do not embrace a Coasian accelerationism (i.e. speed up creative destruction cycles since the acme of Progressivism came after a financial crisis). Nonetheless, I did appreciate that Teles and Lindsey pulled together the primary literature they did.
The primary weakness of the book is that there is no clear methodology outlined for identifying what rents are, when rents have been or will be created, and what system can be used for pre-emptively designing regulations that won't create other rents or will be ungameable by special-interest and existing power players. They simply aren't able to refute the basic liberal (now considered conservative premise) that increased governmental action inevitably comes at a tradeoff against economic liberty. The authors are generally fine with this tradeoff (i.e. they aren't advocating for the repeal of the New Deal, Great Society, or CRA), but they still persist in a complaint about the progeny and consequences of this legal superstructure. Lindsey and Teles have yet to realize that their real political enemies are largely on "their" side and their actual political friends are largely on the "other" side. Even if their arguments succeed in forging a new consensus among elite left-of-center pols, it would not move the base the party led by those individuals.
This debate is also somewhat quaint given that other structural trends are clearly asserting themselves as more important than marginal policy tweaks. An aging demography, the global market, the technological landscape, and other geographic and population parameters are likely as or much more important to the broad shape of the major outcomes the authors lament, and these are mostly ignored by this work (i.e. there is one brief mention of assortative mating on income driving inequality). In this way, any policy entertained here, while likely salutary, will be able to deliver only marginal improvements at best.
The authors explore this thesis through four case studies in which they simultaneously identify specific policy failures that create rents and then outline some ways that better policy could be remedy these issues. These four areas of interest are finance, IP law, occupational licensing and land use/zoning regulations. In finance, they argue that the industry has been misregulated into a system of malign incentives, especially concerning reliance on highly leveraged strategies. On intellectual property, the authors present evidence that such laws almost show no evidence of any benefit to creators/inventors or innovation generally but have obvious costs (i.e. a diffusion penalty). The occupational licensing section shows how various professional cartels operate in order to extract unduly high incomes; law and medicine are of course the big offenders here. Finally, the authors try to wrangle the issues affecting housing costs, arguing that zoning and land use policy is mostly responsible for sky high property cost and slow development.
I'm friendly to much of the general policy agenda here, but I think there is a perfect rationale for most of these reforms using only basic assumptions/principles from (neo)classical economics. In other words, it is hard to see what their analysis adds beyond typical critiques of governmental interference in markets. In this way, the "Liberaltarian" gloss and gestures at bipartisanship are simply a branding exercise attempting to convince left-liberals and progressives that markets are the best available price-setting mechanism and that competition among those with private capital is the only way to sustainably drive growth. This really won't be effective, and politically shrewd Liberaltarians should do everything they can to disrupt power centers with anti-market commitments instead of trying to trick these centers into an embrace of markets.
This isn't to say the entirely book is useless. I found some of the primary research cited interesting. For those with only the coldest technocratic and pragmatic commitments, the research itself should persuade all readers that government regulation in markets usually functions regressively and entrenches those with existing advantages. It is perhaps a bit confusing that Progressives do not embrace a Coasian accelerationism (i.e. speed up creative destruction cycles since the acme of Progressivism came after a financial crisis). Nonetheless, I did appreciate that Teles and Lindsey pulled together the primary literature they did.
The primary weakness of the book is that there is no clear methodology outlined for identifying what rents are, when rents have been or will be created, and what system can be used for pre-emptively designing regulations that won't create other rents or will be ungameable by special-interest and existing power players. They simply aren't able to refute the basic liberal (now considered conservative premise) that increased governmental action inevitably comes at a tradeoff against economic liberty. The authors are generally fine with this tradeoff (i.e. they aren't advocating for the repeal of the New Deal, Great Society, or CRA), but they still persist in a complaint about the progeny and consequences of this legal superstructure. Lindsey and Teles have yet to realize that their real political enemies are largely on "their" side and their actual political friends are largely on the "other" side. Even if their arguments succeed in forging a new consensus among elite left-of-center pols, it would not move the base the party led by those individuals.
This debate is also somewhat quaint given that other structural trends are clearly asserting themselves as more important than marginal policy tweaks. An aging demography, the global market, the technological landscape, and other geographic and population parameters are likely as or much more important to the broad shape of the major outcomes the authors lament, and these are mostly ignored by this work (i.e. there is one brief mention of assortative mating on income driving inequality). In this way, any policy entertained here, while likely salutary, will be able to deliver only marginal improvements at best.
March 30, 2022
“The need for liberaltarian politics has never been greater.”
Lindsey and Teles provide a clear critique of specific government policies that enrich wealthy special interests at the expense of the lower classes through rent-seeking. The book ends with a series of bi-partisan policies to increase economic growth and reduce income inequality, although I suspect the non-partisan prescriptions make the audience for the book narrow in the current climate.
Lindsey and Teles provide a clear critique of specific government policies that enrich wealthy special interests at the expense of the lower classes through rent-seeking. The book ends with a series of bi-partisan policies to increase economic growth and reduce income inequality, although I suspect the non-partisan prescriptions make the audience for the book narrow in the current climate.
September 19, 2018
This is the longest 180-page book you'll read.
And not because it was densely packed with complex, thought-provoking passages. The authors can't seem break free of their tedious academic writing style and instead dryly recite conclusions reached elsewhere.
Their thesis was perfectly defensible and almost self-evidently correct. The wealthy use governmental regulations to protect their status (e.g. onerous IP laws, occupational licensing, financial bailouts, etc.) through their ability to more effectively lobby than average citizens.
But they don't add much novelty to our understanding of the issue. Their "case studies" were simple summaries of complex problems plenty of others have written about in much more depth. Like most academic books, they presented several implausible or ineffectual solutions to the problem that seemed mostly designed to pad out the length of the book (and it was a very short book!).
The real novelty of the book is that it was co-written by a libertarian and a progressive, and they presented their thesis as an issue that could bridge ideological divides. Maybe. Probably not. But they could have made this case in a magazine article or on a website and it would have had more reach.
At the end of the day, there were a few interesting tidbits in here and it serves some food for thought. But it wasn't breaking any new ground and felt like a chore to finish for such a short, straightforward book.
And not because it was densely packed with complex, thought-provoking passages. The authors can't seem break free of their tedious academic writing style and instead dryly recite conclusions reached elsewhere.
Their thesis was perfectly defensible and almost self-evidently correct. The wealthy use governmental regulations to protect their status (e.g. onerous IP laws, occupational licensing, financial bailouts, etc.) through their ability to more effectively lobby than average citizens.
But they don't add much novelty to our understanding of the issue. Their "case studies" were simple summaries of complex problems plenty of others have written about in much more depth. Like most academic books, they presented several implausible or ineffectual solutions to the problem that seemed mostly designed to pad out the length of the book (and it was a very short book!).
The real novelty of the book is that it was co-written by a libertarian and a progressive, and they presented their thesis as an issue that could bridge ideological divides. Maybe. Probably not. But they could have made this case in a magazine article or on a website and it would have had more reach.
At the end of the day, there were a few interesting tidbits in here and it serves some food for thought. But it wasn't breaking any new ground and felt like a chore to finish for such a short, straightforward book.
November 14, 2018
The Captured Economy discusses four broad areas where the rules have been written to protect the advantaged at the expense of everyone else, especially the poor and marginalized. The four areas are finance, intellectual property, housing regulation and zoning, and occupational licensing. In each case, legislators and regulators are informed primarily by incumbents (big financial institutions, IP-intensive firms like major studios and drug makers, homeowners, and professionals, respectively). Resistance to this regulatory (and legislative) capture is difficult to organize because the costs to the losers are so diffuse.
This much is old hat to those familiar with public choice reasoning, though the massive evidence of the deleterious effects of this capture the authors marshal is impressive even to the well-versed reader. A few considerations make the Captured Economy especially valuable.
Unlike many public choice scholars, Teles and Lindsey resist the libertarian temptations to take these insights as condemnations of democracy or to argue against regulation generally because all regulation will just be gamed. One way the government can address these sorts of problems is by bringing more policy research and expertise "in house." Legislatures should run their own independent policy shops. Similarly, independent government agencies (like the federal reserve) could be set up to oversee regulatory areas like IP or housing, with a charter to both protect economic growth and limit the inegalitarian effects of regulation.
This work is especially well timed. The ideological alignments in America are in flux, with the salient divide moving from traditional left-right to the open versus the closed society. This makes fertile ground for new coalitions. The four policy areas the authors discuss were chosen not only because they have the potential to unleash economic growth, but because there are also strong social justice grounds for liberalization. The book offers rich terrain on which to build a neoliberal (or liberaltarian) coalition of social democrats concerned about economic growth and market liberals who understand the importance of social justice.
This much is old hat to those familiar with public choice reasoning, though the massive evidence of the deleterious effects of this capture the authors marshal is impressive even to the well-versed reader. A few considerations make the Captured Economy especially valuable.
Unlike many public choice scholars, Teles and Lindsey resist the libertarian temptations to take these insights as condemnations of democracy or to argue against regulation generally because all regulation will just be gamed. One way the government can address these sorts of problems is by bringing more policy research and expertise "in house." Legislatures should run their own independent policy shops. Similarly, independent government agencies (like the federal reserve) could be set up to oversee regulatory areas like IP or housing, with a charter to both protect economic growth and limit the inegalitarian effects of regulation.
This work is especially well timed. The ideological alignments in America are in flux, with the salient divide moving from traditional left-right to the open versus the closed society. This makes fertile ground for new coalitions. The four policy areas the authors discuss were chosen not only because they have the potential to unleash economic growth, but because there are also strong social justice grounds for liberalization. The book offers rich terrain on which to build a neoliberal (or liberaltarian) coalition of social democrats concerned about economic growth and market liberals who understand the importance of social justice.
January 25, 2018
I read a lot of economics books and articles, but this one presented maybe the clearest and most densely researched perspective on how post-WWII neoliberalism morphed into a “rentier” economy, resulting in both runaway inequality and sluggish growth. (I borrowed the term “rentier” from elsewhere. The authors don’t use it.) The authors are a pair of political science professors at Johns Hopkins who are also associated with the Niskanen Center, a libertarian think tank. Brink Lindsey is a libertarian in his outlook, Steven M. Teles is a liberal, and together they offer an excellent mix of perspectives that is heartening evidence that not everybody is so entirely polarized that they can’t talk to each other. They express their common ground in four case studies of “regressive regulation” that make up the heart of the book: “(1) subsidies for financial institutions that lead to too much risk-taking in both borrowing and lending; (2)excessive monopoly privileges granted under copyright and patent law; (3) the protection of incumbent service providers under occupational licensing; and (4) artificial housing scarcity created by land-use regulations.” Well researched and written, and even relatively short.
August 9, 2020
This is both too thin of an analysis and too dull. I understand why the authors wanted to bring together "Two sides" of the issue, but these two are not really that far apart and their shared space is pretty standard neoliberal narrative of markets
November 20, 2019
Well. I had a lapse. It's an interesting phenomenon: I was reading at such a good clip, then I got sick (just a normal cold) and my rhythm was interrupted. When I look back on my reading life, I can see this same thing happening again and again. I get motivated, devour a handful of books, then something halts my momentum and I'm out of the game for months, sometimes much longer. It's amazing how a pause like that, once it takes hold, can last.
But I'm back (!) with a little help from Steve Teles and Brink Lindsay. Teles is a thinker I've been following for a little while now. The form of my enthusiasm for politics oscillates between idealistic and pragmatic, as I'm sure is the case for many others, and when I get in a pragmatic mood I'm drawn to Teles' nuts-and-bolts analysis of governance. Left-leaning but by no means a radical, he has a talent for illustrating the significance of issues that get little attention. In fact, when reading him I sometimes get the sense that the conventional wisdom of Apocalyptic Polarization In Which We All Hate One Another is nothing but a manufactured smokescreen to distract the public while elites left, right and middle happily enrich themselves in the fog.
In The Captured Economy, Teles teams up with libertarian Brink Lindsay to shine some much-needed light on neglected yet impactful dynamics of the American economy. The general thesis is that rents (excess profits acquired via politics rather than adding value to customers) are being extracted from various industries in a way that redistributes upward, exacerbating inequality and ultimately slowing economic growth. They argue that the already advantaged have "captured" the regulatory system to achieve this end. A better word might be "rigged."
The authors zero in on four areas where this problem of capture is bad and getting worse: finance, intellectual property, occupational licensing and land use (or zoning). In all these cases, entrenched interests inhibit competition to the benefit of a shrinking few.
The success of these efforts is not only down to the money its representatives have, though that plays a big part. As Teles and Lindsay point out, it's much easier to fight to keep something you already have than to create something new. Plus, these issues question don't really get that much oxygen in the national conversation -- partly because it's not good for ratings, partly because people don't care -- which makes collective action difficult. This gets to a general feeling I have about governance, which is that it's necessarily boring. So many important topics will never be able to rise to the level of interest (let alone entertainment) for the general public, so pressures that could cause change don't materialize. Teles and Lindsay are certainly aware of this.
But they're not hopeless. Their proposed solution is to create a more "deliberative politics," one that actively helps counter-arguments see the light of day. Lobbying, they point out, isn't handshakes in smoky backrooms. It's an asymmetrical information war, in which special interests produce reams of data that can't be matched by poorly-organized opponents. Teles and Lindsay suggest funding more independent government bodies to correct this imbalance, like the CBO. They also argue that the staff of lawmakers should be paid more, since they're the ones tasked with providing their bosses with relevant information on a given issue. Too often these staffers cycle out of government quickly, only to land in lobbyists' arms, who pay much, much better.
It's nice to see two thinkers on different sides of the political spectrum agree that an unequal society fueled by upward redistribution is a bad thing. Maybe that's a low bar. As they freely admit, their's isn't a silver bullet analysis of all the economy's woes. And there is an implicit faith in markets here that goes somewhat against the grain of recent activism on the Left. But if what you want is a substantive book about the inner-workings of the economy, look no further. The Captured Economy is so substantive it's almost boring, which I guess is part of the problem.
But I'm back (!) with a little help from Steve Teles and Brink Lindsay. Teles is a thinker I've been following for a little while now. The form of my enthusiasm for politics oscillates between idealistic and pragmatic, as I'm sure is the case for many others, and when I get in a pragmatic mood I'm drawn to Teles' nuts-and-bolts analysis of governance. Left-leaning but by no means a radical, he has a talent for illustrating the significance of issues that get little attention. In fact, when reading him I sometimes get the sense that the conventional wisdom of Apocalyptic Polarization In Which We All Hate One Another is nothing but a manufactured smokescreen to distract the public while elites left, right and middle happily enrich themselves in the fog.
In The Captured Economy, Teles teams up with libertarian Brink Lindsay to shine some much-needed light on neglected yet impactful dynamics of the American economy. The general thesis is that rents (excess profits acquired via politics rather than adding value to customers) are being extracted from various industries in a way that redistributes upward, exacerbating inequality and ultimately slowing economic growth. They argue that the already advantaged have "captured" the regulatory system to achieve this end. A better word might be "rigged."
The authors zero in on four areas where this problem of capture is bad and getting worse: finance, intellectual property, occupational licensing and land use (or zoning). In all these cases, entrenched interests inhibit competition to the benefit of a shrinking few.
The success of these efforts is not only down to the money its representatives have, though that plays a big part. As Teles and Lindsay point out, it's much easier to fight to keep something you already have than to create something new. Plus, these issues question don't really get that much oxygen in the national conversation -- partly because it's not good for ratings, partly because people don't care -- which makes collective action difficult. This gets to a general feeling I have about governance, which is that it's necessarily boring. So many important topics will never be able to rise to the level of interest (let alone entertainment) for the general public, so pressures that could cause change don't materialize. Teles and Lindsay are certainly aware of this.
But they're not hopeless. Their proposed solution is to create a more "deliberative politics," one that actively helps counter-arguments see the light of day. Lobbying, they point out, isn't handshakes in smoky backrooms. It's an asymmetrical information war, in which special interests produce reams of data that can't be matched by poorly-organized opponents. Teles and Lindsay suggest funding more independent government bodies to correct this imbalance, like the CBO. They also argue that the staff of lawmakers should be paid more, since they're the ones tasked with providing their bosses with relevant information on a given issue. Too often these staffers cycle out of government quickly, only to land in lobbyists' arms, who pay much, much better.
It's nice to see two thinkers on different sides of the political spectrum agree that an unequal society fueled by upward redistribution is a bad thing. Maybe that's a low bar. As they freely admit, their's isn't a silver bullet analysis of all the economy's woes. And there is an implicit faith in markets here that goes somewhat against the grain of recent activism on the Left. But if what you want is a substantive book about the inner-workings of the economy, look no further. The Captured Economy is so substantive it's almost boring, which I guess is part of the problem.
September 6, 2018
This book is really two books and that is part of the problem. Brink Lindsey and Steve Teles are a libertarian and a liberal who come to similar conclusions about the problem of rent seeking in various venues. Rent Seeking came into prominence when I was doing my doctoral work - perhaps the first book I read was Toward a Theory of a Rent Seeking Society by James Buchanan. A simple definition of rent seeking is trying to increase one's share of existing wealth without creating new wealth. That is most often done by rigging the system so that a small group benefits at the expense of the rest of us.
The book focuses on four areas of the economy - finance, intellectual property, occupational licensing and land use (zoning). In the course of the book there are some surprising statistics of the benefits (to some) for rent seeking. For example, the intricacy of financial regulation in society provides a disproportionate share of income to groups like hedge fund managers (the book claims that the top 25 hedge fund managers make more in compensation that the total compensation for the Fortune 500 CEOs; or finance professionals account for 14% of the top 1% of wage earners or 18% of the top .1%).
They also highlight the costs of zoning - noting that if a house cost is 1/3 Land, 1/3 construction and 1/3 regulatory costs - that the last third has been growing disproportionally in the last few decades and that in a place like San Francisco - regulatory costs amount to 50% of the housing price. Those concentrated costs impose a high barrier on mobility - especially for low income people. The authors speculate that if regulatory land use costs were reduced to the average in just three cities (San Jose, San Francisco and New York) that GDP might grow by 3%.
In the area of Intellectual Property - they explain how the definitions of intellectual property have been increasingly extended and made more complex. Those trends raise costs for all of us and don't necessarily add income to producers. Defenses against patent trolls (who go through patent records and scoop up obscure patents and then sue to enforce the patent) cost $29 billion or about 10% of the total R&D spent by US companies.
Finally there is occupational licensing where California leads the way with required licensing in 177 professions. Their point is clear, if we could reduce the regulatory thicket, we would be better off. Many of these decisions come in obscure venues - if you have ever been to a planning commission meeting at a local government you know what I mean.
Unfortunately, the last few chapters of the book present, IMHO, a wholly unrealistic set of proposals to solve the problems. Ultimately the authors place a lot of faith in a class of experts who could be hired by government and could analyze dispassionately the places where rent seeking is present. They believe that objective analysis would reduce the possibility of the rent seekers being able to impose their narrow objectives. But take on case the fights on "net neutrality" that have seesawed around state and federal agencies and legislatures for the last several years. The arguments pro and con for net neutrality are based not on objective facts but on assumptions about how technology develops.
In spite of the flaws at the end the book is a good concise treatment of regulatory capture and the hazards present for the country.
The book focuses on four areas of the economy - finance, intellectual property, occupational licensing and land use (zoning). In the course of the book there are some surprising statistics of the benefits (to some) for rent seeking. For example, the intricacy of financial regulation in society provides a disproportionate share of income to groups like hedge fund managers (the book claims that the top 25 hedge fund managers make more in compensation that the total compensation for the Fortune 500 CEOs; or finance professionals account for 14% of the top 1% of wage earners or 18% of the top .1%).
They also highlight the costs of zoning - noting that if a house cost is 1/3 Land, 1/3 construction and 1/3 regulatory costs - that the last third has been growing disproportionally in the last few decades and that in a place like San Francisco - regulatory costs amount to 50% of the housing price. Those concentrated costs impose a high barrier on mobility - especially for low income people. The authors speculate that if regulatory land use costs were reduced to the average in just three cities (San Jose, San Francisco and New York) that GDP might grow by 3%.
In the area of Intellectual Property - they explain how the definitions of intellectual property have been increasingly extended and made more complex. Those trends raise costs for all of us and don't necessarily add income to producers. Defenses against patent trolls (who go through patent records and scoop up obscure patents and then sue to enforce the patent) cost $29 billion or about 10% of the total R&D spent by US companies.
Finally there is occupational licensing where California leads the way with required licensing in 177 professions. Their point is clear, if we could reduce the regulatory thicket, we would be better off. Many of these decisions come in obscure venues - if you have ever been to a planning commission meeting at a local government you know what I mean.
Unfortunately, the last few chapters of the book present, IMHO, a wholly unrealistic set of proposals to solve the problems. Ultimately the authors place a lot of faith in a class of experts who could be hired by government and could analyze dispassionately the places where rent seeking is present. They believe that objective analysis would reduce the possibility of the rent seekers being able to impose their narrow objectives. But take on case the fights on "net neutrality" that have seesawed around state and federal agencies and legislatures for the last several years. The arguments pro and con for net neutrality are based not on objective facts but on assumptions about how technology develops.
In spite of the flaws at the end the book is a good concise treatment of regulatory capture and the hazards present for the country.
May 16, 2021
[Imported automatically from my blog. Some formatting there may not have translated here.]
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.
June 27, 2018
Interesting bipartisan (nonpartisan?) perspective on the driving factors of upward redistribution in the US. I agree with most of the arguments presented and am glad to see an attempt to bring capture-related rent-seeking to a broader audience through a book.
My biggest complaint is that the writing itself gets too close to academic literature at many points to make the narrative engaging. I found myself re-reading lines numerous times to be able to understand certain points and it took away from the enjoyment of the discussion.
My biggest complaint is that the writing itself gets too close to academic literature at many points to make the narrative engaging. I found myself re-reading lines numerous times to be able to understand certain points and it took away from the enjoyment of the discussion.
December 27, 2021
“If you can't explain it to a six year old, you don't understand it yourself.”
- Albert Einstein
The authors of this title should take note of the above quote before writing additional works intended for public consumption. I picked up this title from my local library, finding the subject matter engaging, while seeming like an easy kill to close out my 2021 reading year. Thinking it could be cleared in 2, 3 days tops. Instead, it took over 2 weeks to polish off!
And I hated every second of those 2 weeks.
This is a classic case of "being so smart that they're dumb", as is typical amongst academic circles. The language employed is not complex, but it is incredibly dry. It almost made me wonder if this was intended to be a textbook. The methods used to convey ideas where confusing, likely failing to connect with the average reader. Often, I found myself having to read, re-read, and re-re-read various passages just to get the gist of the argument(s) being presented. Other times, it seemed as though the authors would contradict their point within the same paragraph, but it's hard to tell since I was so twisted around most of the time. Getting bored and frustrated, I'd just move on.
But if you look past all that, the "solutions" presented in the final chapter are proportionate time-wasters. Once again typical of academics, these two gentlemen live in an alternate, pie in the sky world where no one behaves selfishly and we would all do the right thing if we just had the right information available.
Meaning, it is implied (in the book) that our legislative body is crafting and enacting crappy economic policy out of shear ignorance due to receiving information from one source (lobbyists with vested interests in said policies). This would all change if countervailing forces, in the form of philanthropic foundations established by the same super-rich that the book demonizes, presented information that counteracted this rent-seeking legislation. Out of the goodness of their hearts, Congress would see the light, enacting and enforcing egalitarian legislation. This argument falls flat on its face when you wake up to reality and take into account the human condition. Many "public servants" go on to be lobbyists themselves, or have vested interests in the companies they are supposed to cut off at the knees in the form of shareholders.
Even more befuddling, despite government getting us into this economic mess, the answer to all our problems is more government in the form of committees, and, consequently, more spending. The title promotes that we "stop digging a hole", and then goes on to argue that we should dig a bigger hole. What?
In summary, this is a drag of a title that I dreaded reaching for at the end of a long day, with ideas that seem nice in a perfect world. Sadly, they don't hold water here in the real one.
- Albert Einstein
The authors of this title should take note of the above quote before writing additional works intended for public consumption. I picked up this title from my local library, finding the subject matter engaging, while seeming like an easy kill to close out my 2021 reading year. Thinking it could be cleared in 2, 3 days tops. Instead, it took over 2 weeks to polish off!
And I hated every second of those 2 weeks.
This is a classic case of "being so smart that they're dumb", as is typical amongst academic circles. The language employed is not complex, but it is incredibly dry. It almost made me wonder if this was intended to be a textbook. The methods used to convey ideas where confusing, likely failing to connect with the average reader. Often, I found myself having to read, re-read, and re-re-read various passages just to get the gist of the argument(s) being presented. Other times, it seemed as though the authors would contradict their point within the same paragraph, but it's hard to tell since I was so twisted around most of the time. Getting bored and frustrated, I'd just move on.
But if you look past all that, the "solutions" presented in the final chapter are proportionate time-wasters. Once again typical of academics, these two gentlemen live in an alternate, pie in the sky world where no one behaves selfishly and we would all do the right thing if we just had the right information available.
Meaning, it is implied (in the book) that our legislative body is crafting and enacting crappy economic policy out of shear ignorance due to receiving information from one source (lobbyists with vested interests in said policies). This would all change if countervailing forces, in the form of philanthropic foundations established by the same super-rich that the book demonizes, presented information that counteracted this rent-seeking legislation. Out of the goodness of their hearts, Congress would see the light, enacting and enforcing egalitarian legislation. This argument falls flat on its face when you wake up to reality and take into account the human condition. Many "public servants" go on to be lobbyists themselves, or have vested interests in the companies they are supposed to cut off at the knees in the form of shareholders.
Even more befuddling, despite government getting us into this economic mess, the answer to all our problems is more government in the form of committees, and, consequently, more spending. The title promotes that we "stop digging a hole", and then goes on to argue that we should dig a bigger hole. What?
In summary, this is a drag of a title that I dreaded reaching for at the end of a long day, with ideas that seem nice in a perfect world. Sadly, they don't hold water here in the real one.
November 27, 2019
A relatively unimaginative work that falls short of my expectations – given that it was a work by a libertarian and a progressive, especially when it comes to offering solutions.
The authors’ main point is that the government has contributed to the inequality, not just by failing to restrain naturally inegalitarian market forces but by distorting market forces in an egalitarian direction through i.e. falling prey to narrow interest groups that use governmental regulations to protect their status (e.g. onerous IP laws, occupational licensing, financial bailouts, etc.) through their ability to more effectively lobby than average citizens. This then sets of a vicious cycle with more regulatory capture, less deliberative politics and even more rent seeking activities that reduce competition.
They also argue that the common-held view of trade-off between growth and equality is not necessarily true.
Both hardly earth-shattering, and pretty straightforward points indeed.
Their analyses on the 4 cases (finance, intellectual property, licensing, and land reform) provide valuable pieces of information yet remain confusing at best. They explain some concepts well (such as the capital banks have to “set aside” – they actually don’t, so kudos to them on that..), but utterly fail to understand how the reduction of leverage would make a healthier economy overall.
The authors’ main point is that the government has contributed to the inequality, not just by failing to restrain naturally inegalitarian market forces but by distorting market forces in an egalitarian direction through i.e. falling prey to narrow interest groups that use governmental regulations to protect their status (e.g. onerous IP laws, occupational licensing, financial bailouts, etc.) through their ability to more effectively lobby than average citizens. This then sets of a vicious cycle with more regulatory capture, less deliberative politics and even more rent seeking activities that reduce competition.
They also argue that the common-held view of trade-off between growth and equality is not necessarily true.
Both hardly earth-shattering, and pretty straightforward points indeed.
Their analyses on the 4 cases (finance, intellectual property, licensing, and land reform) provide valuable pieces of information yet remain confusing at best. They explain some concepts well (such as the capital banks have to “set aside” – they actually don’t, so kudos to them on that..), but utterly fail to understand how the reduction of leverage would make a healthier economy overall.
May 12, 2018
Makes a powerful case for liberaltarianism.
July 27, 2020
This book identifies and addresses the problem of the wealthy in the US maintaining financial dominance through methods of rent seeking. Rent seeking is when a special interest uses the government to pass regulations that will be financially favorable to them. One of the most effective ways of doing this is by creating barriers to entry for potential competitors. For example- patents prevent others from using intellectual property unless they pay a fee, several professions require licensing in order to practice- like doctors/lawyers, Zoning in cities raises certain property values by limiting housing supply. There is a good argument for and against all these regulations, this book convincingly argues that in the Unites States these barriers are not efficient.
Licensing can limit the supply of doctors resulting in raising prices for patients-high medical prices are a major problem in the US. Doctors should be licensed- but physicians assistants and nurse practitioners are just as capable of many of the duties doctors perform, but are sometimes prohibited form performing those duties. Patent trolls are clearly economically inefficient. The greatest asset for most people in the US is their house. Limiting supply in coveted locations through zoning by present home owners that want their home values to go up is the easiest way to artificially inflate home prices and create barriers to people that would otherwise move there because of higher salaries in that area. Exhibit A- san Fransisco.
The last chapter suggests some solutions to these problems- it gets wonky and i zoned out a little, but overall an interesting read. I should read the last chapter again...
Licensing can limit the supply of doctors resulting in raising prices for patients-high medical prices are a major problem in the US. Doctors should be licensed- but physicians assistants and nurse practitioners are just as capable of many of the duties doctors perform, but are sometimes prohibited form performing those duties. Patent trolls are clearly economically inefficient. The greatest asset for most people in the US is their house. Limiting supply in coveted locations through zoning by present home owners that want their home values to go up is the easiest way to artificially inflate home prices and create barriers to people that would otherwise move there because of higher salaries in that area. Exhibit A- san Fransisco.
The last chapter suggests some solutions to these problems- it gets wonky and i zoned out a little, but overall an interesting read. I should read the last chapter again...
May 14, 2021
What does it say about my consumption habits that little of this was new to me? I think this book does a pretty good job laying out the arguments that regulatory capture is a fundamental problem. The evidence they marshal, on licensing requirements, on zoning, on patent protection, on banking, is pretty compelling. The raw honestly they have that traditional small government libertarianism is not an option is refreshing. Overall, its clear that poorly written laws are a problem and that rent seeking driven by regulatory capture is self-perpetuating in a democracy.
I'm torn by the end of the book. First, theres a naive approach to the implications of the Trump presidency. Obviously in 2016/17 they couldn't have seen what would happen. The political science they mention about how polarization on certain aspects can open up legislatures to new methods of compromise has been shown to be misguided (IIRC either Not Another Politics Podcast or Capitalisnt [both of which are hosted by academics who are mentioned in this book] covered this point).
The ideas around stronger incentives and better structures for congressional staffers make sense in the abstract, but I think one major learning of the Obama presidency was that you need pork to make congress run. Technocratic law writing, especially as they suggest if it is driven by the Executive, cannot work in a Presidential system where there can be split government.
Overall worth a read especially if you're not already exposed to the mix of Cass Sunstein, Matt Yglesias, Strong Towns/New Urbanism, the two podcasts I mentioned above, among others. Oh and Elizabeth Warren fits VERY nicely into this camp.
I'm torn by the end of the book. First, theres a naive approach to the implications of the Trump presidency. Obviously in 2016/17 they couldn't have seen what would happen. The political science they mention about how polarization on certain aspects can open up legislatures to new methods of compromise has been shown to be misguided (IIRC either Not Another Politics Podcast or Capitalisnt [both of which are hosted by academics who are mentioned in this book] covered this point).
The ideas around stronger incentives and better structures for congressional staffers make sense in the abstract, but I think one major learning of the Obama presidency was that you need pork to make congress run. Technocratic law writing, especially as they suggest if it is driven by the Executive, cannot work in a Presidential system where there can be split government.
Overall worth a read especially if you're not already exposed to the mix of Cass Sunstein, Matt Yglesias, Strong Towns/New Urbanism, the two podcasts I mentioned above, among others. Oh and Elizabeth Warren fits VERY nicely into this camp.
May 30, 2024
Andrew (another one star reviewer of this book) has already covered the very same reason why I have rated this book one star. For clarity I'll just share the paragraph that made me finally put the book down (at 160 out of 180 pages), which Andrew's succinct review referred to:
"The problem of undue special-interest influence over policy-makers has long been the subject of political reform efforts, but the conventional approach has been to try to disarm the lobbyists by restricting their use of money to influence elections. An alternative approach is to focus on the other side of the equation, namely making policymakers resistant to lobbyists' self-serving claims. The best way to do that is to make policymakers less dependent on lobbyists for policy-relevant expertise and information."
I would have thrown this book across the room if it didn't belong to my local library.
I have many more complaints about the writing and the content, but the one that sticks out the most besides the laughably out-of-touch suggestion above, is the authors' oft-repeated claim that the presence of women in the workforce is at least partly to blame for myriad economic problems. Almost any time they listed circumstances to blame for an issue, women in the workforce was on the list. They never expanded upon this claim, at any length. I realize it was not the subject of their research and to expand upon it at all might have required going much further beyond the scope. But still, it seemed a bit "sus."
"The problem of undue special-interest influence over policy-makers has long been the subject of political reform efforts, but the conventional approach has been to try to disarm the lobbyists by restricting their use of money to influence elections. An alternative approach is to focus on the other side of the equation, namely making policymakers resistant to lobbyists' self-serving claims. The best way to do that is to make policymakers less dependent on lobbyists for policy-relevant expertise and information."
I would have thrown this book across the room if it didn't belong to my local library.
I have many more complaints about the writing and the content, but the one that sticks out the most besides the laughably out-of-touch suggestion above, is the authors' oft-repeated claim that the presence of women in the workforce is at least partly to blame for myriad economic problems. Almost any time they listed circumstances to blame for an issue, women in the workforce was on the list. They never expanded upon this claim, at any length. I realize it was not the subject of their research and to expand upon it at all might have required going much further beyond the scope. But still, it seemed a bit "sus."
February 14, 2022
Came to this from a Planet Money episode; would have been better off sticking with Planet Money episodes. Much of the information presented here is stuff I've heard at at least surface level from that or other similar podcasts, and the detail beyond surface level is at once too detailed and not detailed enough - many numbers and results from other studies are quoted to support their claims, enough to glaze your eyes over, but little detail is given about the methodology of the studies to judge the validity of the conclusions. To be fair, they are footnoted, so if I were committed enough I could go look up the studies myself. But, there are a LOT of citations -- credit for a lot of data! -- so to do so would balloon this 180-page book into a substantial undertaking to fully absorb.
Perhaps I'm just not the target audience. It seems that the book would be a much more worthwhile read for serious students or professionals of public policy and economics, who could actually act on the proposals for improvement at the end of the book, or whose jobs would benefit from keeping the risks of regulatory capture front-of-mind.
Perhaps I'm just not the target audience. It seems that the book would be a much more worthwhile read for serious students or professionals of public policy and economics, who could actually act on the proposals for improvement at the end of the book, or whose jobs would benefit from keeping the risks of regulatory capture front-of-mind.
March 29, 2020
Though a decent primer on four overlooked policy issues (IP reform, financial regulation, occupational licensing, zoning reform), this book suffers from its short length. Each issue is only given a skim, and many technical concepts lack explanation. Once the issue is explained, little legwork is done to link the issue to the main argument (rent-seeking in these policy domains exacerbates inequality). The reader is left to feel that the main point is underdeveloped.
The focus on rent-seeking as a purely economic phenomenon also limits the book. For example, in the section on zoning, zoning restrictions are explained as the policy preference of self-interested homeowners who seek to maximize the value of their home. Leaving aside the questionable assumption of whether single family zoning maximizes property values, this perspective does not consider that homeowners may have may have non-economic interests at heart.
The focus on rent-seeking as a purely economic phenomenon also limits the book. For example, in the section on zoning, zoning restrictions are explained as the policy preference of self-interested homeowners who seek to maximize the value of their home. Leaving aside the questionable assumption of whether single family zoning maximizes property values, this perspective does not consider that homeowners may have may have non-economic interests at heart.
January 16, 2020
This is a very interesting book, because it challenges the patent laws, which were originally intended to spur innovation, but have instead served to suppress innovation. In 1776 in "The Nature and Causes of the Wealth of Nations" Adam Smith assured us that with sufficient competition (and other necessary conditions) free enterprise can provide high quality products at low prices. But patent laws are government enforced monopolies which violate this free enterprise competition condition. Their justification is that restricting competition long enough to allow an innovator to recoup the initial investment in time, effort and expense will spur innovation. Lindsey cites evidence that this has not worked and has had the effect of suppressing innovation. This is a great book, well worth reading.
September 6, 2020
An excellent and practical short book about how to end (or at least limit) rent seeking in finance, intellectual property, occupational licensing, and land use. The combo of liberal Teles and a libertarian Lindsey share a disdain for the way that government regulations create “upward redistribution” through concentrated gains and diffuse losses. Their proposed solution is to create more “deliberative democracy” on the effects of government regulations by (a) changing the venues in which these regulations get created so that they are subject to more democratic daylight, (b) subsidizing the creation of information about the effects of the regulations so that lobbyists don’t control the discourse, and (c) investing heavily to increase the intellectual capacity of committee staffers, which they refer to as “giving the government its brain back.”
November 9, 2018
The book was informative, but very one-sided and pretty dry. Good thing it's a short book, so I was able to finish it! Book discusses how government regulations restrict the economy. Topics include intellectual property, professional licensing, politicians promoting self interests, land use, government intervention rigging the economy, etc. I didn't really realize this would be such a one-sided political discussion. There's good and bad for all the regulations and practices, but the book focuses mainly on the bad. However, these are good to know so that we can keep the government in check when it comes to excessively restricting the economy without any benefits. Recommended for anyone looking for a negative perspective of government regulations that "capture" and influence the economy.
February 4, 2019
This book took a decidedly different direction than I originally thought. Good! It had a lot in common with The Future of Capitalism, both functioning as thoughtful, pragmatic responses and expansions upon Pickettey's Capital (note: haven't read that yet. I had it on my shelf, borrowed, for a year, and didn't crack it open once. I will get to it eventually). I think I liked TCE's summary of the ills and ails of modern liberal democracy a little better than TFOC, but I think TFOC presented more robust and interesting solutions. If I could read them (both) again, I'd do so concurrently, physically, and skip between sections for correlating data/POV and then compile the big ideas/major takeaways into a single notebook.
Maybe later?
Maybe later?
September 5, 2022
I’m super late to the party reading Brink Lindsey’s books, but I’m a major fan and have been getting caught up. This book is so damned good, and everyone should read it. We’re made to believe that capitalism means a free market, but this market is anything but free. Teles and Lindsey explain what economists call “rent-seeking” and how the ultra-rich stay in power while not giving opportunities to the lower classes. This book opened my eyes to so many things I was unaware of like the truth behind licensing for different careers as well as intellectual property and patent trolls.
May 17, 2018
This takes a libertarian point of view saying economic inequity is due to too much government regulation, rather than too little. Regulations shield the powerful and prevent newcomers from challenging those established. For instance, why do we need to license and regulate hairdressers. This makes things more expensive by denying choice. I agree with a little of this, but I think this is more a problem of the wrong regulations rather than too much.
August 21, 2018
Many libertarians and fiscal conservatives are drawn to free-market solutions and are wary of policies that aim at addressing allegedly unoptimal outcomes such as income inequality. The argument you usually here is that the proposed policies would have the opposite of the intended effect. Rent control makes housing more expensive, minimum wage laws raise unemployment, etc. These arguments are often correct, but the knee-jerk reaction to trot them out blinds these well intentioned people to the existing instances where their own principles are failing to be applied. Lindsey and Teles do an excellent job of casting light on these failures in four areas: finance, housing, intellectual property, and occupational licensing. What's nice about this book is that is's arguments are compelling regardless of where you fall on the political spectrum. Those more concerned about equality of outcome are probably already aware that inequality is increasing, housing less affordable in the highest productivity cities, and social mobility declining. Those more concerned by equality of opportunity learn that in many parts of the economy the opportunity to compete is not available to all because incumbents have raised the barriers to entry or increased the costs of competition. I hope this book is widely read and it's ideas taken to heart by those able to make and implement policy.
April 26, 2019
This was an interesting and brief discussion of the rent-seeking behavior that is becoming commonplace in modern business. The authors discuss the over-, under-, and mis-regulation associated with finance, intellectual property, and professional licensing. While the material was generally accessible, the text was a bit dense in sections.
July 2, 2021
Too brief to truly analyse the how people have captured economy and a bit reductive when assessing others works on economics. Whilst the authors seem to be able to rattle off correctly the issues in bad policy, rigged systems, rent-seeking and poor regulations they have moments of Rick James like muddy boots behavior.
July 13, 2025
The idea that government policy has directly led to increased inequality in the country is an interesting discussion and one I have never thought about before in this context. But the authors make a pretty substantive case backed by research and data. Enjoyed the read but definitely one I had to set aside time for.
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