The Stigler Center at the University of Chicago now has a blog

by on March 12, 2016 at 10:04 am in Current Affairs, Economics, Political Science, Weblogs | Permalink

https://promarket.org/

Here is a Luigi Zingales post, “Why this blog?”:

By gathering information on the nature and cost of this subversion of competition, by distributing this information among the public at large, and by making this information salient, media outlets can reduce the power of vested interests. By exposing the distortions created by special interests, they can create the political demand for a competitive capitalism.

This is the goal of our Pro-Market blog: to educate the public about the many ways competition can be subverted. In this exercise our only goal is to make the market system work better. In the finest University of Chicago tradition, we will do it with data. We will try to do it with the rigor of the best academic work, but without the pedantry that often accompanies it. This blog will collect opinions, summarize work, and report on relevant research by Chicago faculty and Stigler fellows. We will use every medium at our disposal, because the message is our medium.

Self-recommending…

1 dearieme March 12, 2016 at 10:33 am

“media outlets can reduce the power of vested interests”: media outlets are vested interests.

2 prior_test2 March 12, 2016 at 12:04 pm

And in the finest American tradition, the media will do its best to ensure that there will be no exposing of the distortions created by special interests, helping to stifle the political demand for a competitive capitalism.

Because really, the only thing that capitalism cares about is the richer getting richer, a message that requires a lot of distortion to justify it being part of those small steps to a much better world.

3 Ray Lopez March 12, 2016 at 10:39 am

Wow, nice blog, bookmarked. Look at this article, and I just read the rather boring “House of Debt” by Seru though it had some good factoids.

“Study: 7 percent of financial advisers have misconduct records – 44 percent are hired within a year. A new paper by Mark Egan, Gregor Matvos and Amit Seru reveals that misconduct within the financial industry is much more prevalent than previously thought. The study finds that 7.56 percent of financial advisers in the US today have a misconduct disclosure in their record, meaning they engaged in misconduct (such as misrepresentation, omission of key facts, or fraudulent behavior) at least once during their career. Of those, 38 percent are “repeat offenders,” with two or more disclosures of misconduct in their records”

4 Ray Lopez March 12, 2016 at 10:49 am

I left a test post, innocuous, and got this ‘moderation’ notice below.
I don’t like this promarket.org site. If they don’t let trolls freely post, then you’re not going to get the robust diversity of opinion that only trolls can provide, and anonymous posters. Sorry but that’s the way the world works.

RayLopez says: March 12, 2016 at 3:46 pm Your comment is awaiting moderation.

5 Alain March 12, 2016 at 11:18 am

Hey, if it keep the Libs out I’m ok with it,

6 Nathan W March 12, 2016 at 12:25 pm

I agree in a sense. But he has a specific advocacy objective so I can see why he might like to exercise control over the nature of the dialogue permitted. That having been said, exposing himself to all the trolls may help to target his advocacy in a way that appeals to a greater diversity of audiences.

7 Sam Gardner (@samwgardner) March 12, 2016 at 8:18 pm

I see it posted now. Perhaps their spam defenses are weak?

8 spencer March 12, 2016 at 11:39 am

Alain — I assume Libs is short for libertarians.

Right?

9 Enrique March 12, 2016 at 11:47 am

There is a paradox (or contradiction) in saying that x blog or y book is “self-recommending.” It’s not really self-recommending if you have to say it’s self-recommending …

10 prior_test2 March 12, 2016 at 12:09 pm

The Straussian reading is that the only things ‘self-recommending’ are those things that Prof. Cowen recommends – nah, that is the simple reading.

The Straussian reading is self-recommending, though.

11 Nathan W March 12, 2016 at 12:35 pm

Much to be applauded, but it sounds a little idealistic. Won’t media prefer to have deep pocketed companies that benefit from superprofits and which will then spend lots and lots of money to push their overpriced goods onto the free market?

Good journalism and good business are not always natural partners. But, then, some media outlets will increase their appeal to target audiences in making use of such information. Do not expect this to be the norm.

12 chuck martel March 12, 2016 at 12:57 pm

” What happens when the political reason is intoxicated by vested interests and corrupt campaign financing?” Politics, and the elections that attend them, are the grist for a huge mill. Money gathered by political organizations isn’t burned in campfires, it’s used to purchase goods and services from PR firms, newspapers and other media outlets, and on and on. Elections are themselves a significant industry that employs thousands. That’s one reason why electioneering seems to go on nonstop, year in and year out. Guys like David Axelrod have a profession, which is managing political campaigns, and they do it internationally on a continuous basis.

13 Jon March 12, 2016 at 4:35 pm

But will these particular professors show data that contradicts their politics or their theories?

14 Nathan W March 13, 2016 at 1:22 am

This is a big deal. Someone’s gotta be hiding loads of data which proves that companies are in fact highly altruistic and would never try to manipulate a system which allows them to legally do such things, because companies are altruistic and always have the broader public interest at heart. Especially shareholders, they are always like that. They will definitely have to strive hard to suppress such data, because clearly there will be lots of it.

15 EB March 12, 2016 at 4:48 pm

If Zingales & Co were really interested in the subversion of competition by special interests, they would have attempted some reverse engineering. First, they should have identified the types of regulations that subvert competition. Second, how those types of regulation were enacted and are enforced. Third, which organizations control the reform of the enacted regulations and their enforcement. Fourth, how politicians and bureaucrats control each of those organizations. Fifth, how the politicians and bureaucrats are elected or appointed, how they can be removed, and to whom they are responsible (the judiciary and others). Sixth, at what point of the whole process private special interests attempt to subvert government regulation and how. Seventh, under what conditions private special interests attempt to subvert future government intervention by approaching candidates. Eight, under what conditions private special interests may think that bribing candidates that may be a critical part of a future government is the best way to donate to their campaigns.

In addition, anyone interested in political and campaign financing should pay attention to ALL potential sources of funds, not just donations from special-interest individuals or organizations.

Thus, Luigi is wrong in his post “Why this blog?”. There is no simple way to relate donations to campaign financing with future government interventions (yes, some donors may buy positions as ambassadors or similar positions but they are hardly involved in public policy). Also, the empirical work is terrible because they should have taken into account the special interests behind each dollar the candidate needs to finance his campaign, not just one source (how relevant is the distinction between incumbents and new candidates to the financing of their campaigns?). The final sentence of the post says “Large political donations to a specific candidate are rarely made to promote the public good. If that was the donors’ only purpose, they will be happy to remain anonymous. But this is hardly the case.” I think that if the donor´s intention is to bribe the candidate for a personal or special-interest benefit, the donor will prefer to be anonymous and that rules requiring the reporting of donations are intended to break this preference.

Indeed, to celebrate the legacies of Stigler and Olson, I hope they stop this research.

16 Pasquale March 12, 2016 at 6:44 pm

yeah, Luigi seems confused or chooses not to speak plainly.
Ergo no more visits to his blog– he’s poorly competing with many other blogs and web sources for eyeballs.

Luigi strongly indicts “subversion of competition by special interests” but quickly dodges any specifics as to who these evil special interest might be or how they achieve their wide subversions.

Apparently he means businesses with “powerful lobbies” and something about campaign contributions. Can businesses have strong lobbies and make campaign contributions without subverting competition? Why aren’t government officials the villains in responding to lobbyists and campaign money to thwart competition?

Don’t ask Luigi, he prefers to be obtuse.

Luigi is obviously hinting at plain old corporatism and crony capitalism.
That’s an important and interesting topic to which Luigi adds nothing.

17 Nathan W March 13, 2016 at 1:53 am

He doesn’t seem to single out either lobbies or politicians as the villains. His language is mostly neutral, and I think the facts plainly speak for themselves. So … who do you think is the villain, the powerful lobbies via campaign finance or the politicians who accept those large donations and then follow through on favours? Both? Or … the system itself which enables those things to happen? The current behaviour is entirely predictable given the legal structure at present. So long as lots of plausible deniability exists, it’s hard to prove EXPLICIT corruption exists, even when everyone basically knows exactly what’s happening.

Since it is hard to prove explicit corruption in an individual case, broader data which basically demonstrates to a reasonably not-naive or unblinded person that there is obviously some corruption going on helps to make the case that something’s gotta change.

18 Nathan W March 13, 2016 at 1:49 am

I think they want to make the case that it is a problem before getting into looking at the regulatory structure. You could say “we need to change regulation X because it could (is) causing problem X”. To which corrupted folks or others who thinks it’s OK to buy influence might say “what problem, what on earth are you talking about?”

It seems that they need to prove that there is a problem before anyone can get into the specifics of how to address it.

Observe their success: in response to this evidence, you’re proposing all sorts of things that would like contribute to ameliorating such problems. I believe this is precisely their objective, and ideally that journalists will do such things. We should not expect them to perform the entire Herculean task themselves, given that there are such broad stakes in the matter.

These are just a handful of early posts, none of which purport to be say, of the rigour require for journal publication. I think you are holding your expectations too high, although surely critical feedback/input would also be useful.

19 EB March 13, 2016 at 9:35 am

We learnt that competition had been subverted by special interests via regulation AND taxation a long time ago, and by 1970 there was already enough research to advance some general ideas as Stigler, Olson and many others had done it. For the past 45 years I have been asking myself why their research and the research done since then have not translated into a “general theory” of government intervention of markets (other than the failed “market failure” theory on which most economists still rely to justify government intervention and also to explain past and present intervention). My answer is that such a theory would have to recognize limits to government that most economists reject because of other reasons (in other words, a view of government totally different from the one underlying welfare economics). Other answer is the one you suggest: by focusing on “very narrow” issues, economists can help to ameliorate the subversion of markets by special interests. Given the terrible record of government intervention since 1970 your suggestion has to argue that the increasing complexity of the global economy (or some other force) has prevented governments everywhere to limit and improve their intervention (I acknowledge that there have been important changes in the global economy but I’m ready to argue that these changes should have accelerated the reform of regulation and taxation to limit and improve them rather than to block reforms to old intervention and to expand it into new markets).

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