Subscribe to Read
Sign up today to enjoy a complimentary trial and begin exploring the world of books! You have the freedom to cancel at your convenience.
The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
| Title | The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality |
| Writer | |
| Date | 2025-06-10 10:07:16 |
| Type | |
| Link | Listen Read |
Desciption
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 ills: 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 incomes: 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. Read more
Review
The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality, the joint product of Teles (a liberal) and Lindsey (a libertarian), advocates reducing upward distributive rent-seeking. Rent-seeking is the zero-sum contest for excess payments to any factor of production (land, labor, or capital). Reducing this rent-seeking both increases economic growth and makes the distribution of income more equitable, core tenets of their "liberaltarian" philosophy, by lessening the economic distortion of wealthy special interests seeking special favors for themselves instead of engaging in productive activities that spur growth. The book covers four case studies that capture the severity of upward redistribution in the United States: "(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 regulation." Then, the book explains how to "rent-proof" American politics through (1) public mobilization to bring issues to the attention of policymakers such as through civil society organizations advocating for environmental issues or school reform that challenge the special interests of polluters and teachers' unions, (2) empowering government officials with policy knowledge independent of lobbyists such as through Congressional staffs being chosen through a merit-based civil service system, and (3) selecting institutional venues that do not give preferential access to special interests such as the creation of state-level regulatory review agencies modeled on the Office of Information and Regulatory Affairs. The book covers all of this ground in only about 200 pages of lucid writing accessible to all and edifying even for specialists. I would also recommend Tyler Cowen's interview with the authors on his podcast "Conversations with Tyler." The book is essential reading to understand how the government at the federal, state, and local levels currently exacerbate inequality and how to get out of this mess.
