Transcript of my Conversation with Brink Lindsey and Steve Teles

by on November 3, 2017 at 7:59 am in Books, Current Affairs, Economics, Education, History, Law, Philosophy, Political Science, Television, Uncategorized | Permalink

Due to popular demand, we are releasing a transcript of the Conversation with Lindsey and Teles.

We talk about liberaltarianism, how bad is crony capitalism really, whether government affects the distribution of wealth much, universities as part of the problem, whether IP law is too lax or too tough, why Steve didn’t do better in high school, the British system of government, Charles Murray, the Federalist Society, Karl Marx, Thailand, the Coase Theorem, and Star Trek, among other topics.  Here is one bit:

COWEN: What’s the most important idea in the book that you understand better than he [Brink Lindsey] does?

TELES: Well, so there is a division of labor here. Brink did a lot more work on the cases than I did, although we talked about them all and I did a lot more work on the political analysis. We draw a lot on great, really seminal article by Rick Hall at University of Michigan called “Lobbying as Legislative Subsidy.” And I think that idea is dramatically under appreciated. 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 Brink understands that, but this is my wheelhouse so I think probably if you were gonna push me, I’d say I understood it better that he did.

And this:

LINDSEY: One can see the whole sort of second wave feminist movement since the 60s as an anti rent-seeking movement, that white men were accumulating a lot of rents because of the way society was structured, that they were the breadwinner and there was a sexual division of labor, and they received higher pay than they would have otherwise because they were assumed to be the breadwinner, and women were just sort of kept out of the workforce in direct competition with men in many roles. The last half century has been an ongoing anti rent-seeking campaign and the dissipation of those rents especially by less skilled white men has been a cause of a great deal of angst and frustration and political acting out in recent years.

Here is a link to the podcast version of the chat, plus further explanation of my interview method for the two.  Better yet, you can order their new book The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality.

1 Slocum November 3, 2017 at 8:16 am

“The last half century has been an ongoing anti rent-seeking campaign and the dissipation of those rents especially by less skilled white men has been a cause of a great deal of angst and frustration and political acting out in recent years.”

Hmmm. I don’t see that women have made many inroads at all into the job occupations of less-skilled white men (manufacturing, mining, farming, building trades, truck-drivers — all of Mike Rowe’s ‘dirty jobs’, etc). What *has* happened, though, is that the number of jobs in some of these categories has declined significantly, mostly due to automation. And to the extent these workers were previously enjoying rents, it wasn’t because they were keeping women out (women don’t want these jobs anyway), it was due to unionization (whose main purpose is rent-seeking) as well as regulation (the federal civil aeronautics board and interstate trucking commission previously kept wages in those industries high).

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2 JK Brown November 3, 2017 at 11:36 am

The limitation of women in the workforce was on the whole an upper middle class problem, driven by upper class societal conventions. Yes, laws were imposed that drove this down in to the working class, but as my now elderly (working class) aunt said, she had all the equality she could hand, she went to work every day just like her husband.

Feminism is an upper middle class drive. Mostly against the up until the 1920s, social pressure that a successful man supported the females in his family. A daughter working was shameful, oddly even in the professions. A wife working was scandalous. The upper class, where work wasn’t tied so intimately to financial status, women could get around these restrictions.

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3 mulp November 3, 2017 at 3:02 pm

“due to unionization (whose main purpose is rent-seeking) ”

In your view, solid middle class worker customers for businesses like car dealers, home builders, recreation, dining and undesirable rent seekers?

Should all hundred thousand per year customers be eliminated from today’s economy, replaced by 90% with incomes of under $40k and the rest over a million per year?

I remember Milton Friedman making your argument circa 1970, but he also saw high income consumers as a a problem because they drove too much demand, too much pressure on prices, too much investment which then meant paying workers to build new businesses and factories, (not buying and shutting down businesses as it does today), which only created more high income consumers as higher wages were required to increase worker supply.

He learned to not point out the thing most people consider a benefit: high income consumers.

Thus he stopped complaining high profit tax rates resulted in too many high income consumers because profits fell and wages increased. He stopped complaining that regulations resulted in too many high income utility workers and too many utility services being consumed by high income worker consumers, stopped complaining that heavily subsidized education tied to research resulted in too much innovation creating too many jobs and high income consumers forcing too much change in consumer preferences.

He argued regulations capping returns to profits plus unions had very bad effects in telephone service.

Every attempt to cut profits to cut prices ended up with too much consumption of telephone services. Too many private lines instead of party lines. Touch tone instead of dial phones. Direct long distance dial. Cheaper long distance rates at night and evenings. Unlimited calling areas. Call waiting, multiparty calls, messaging, … 800 toll free calling. The government regulation and union incentives were to get people to buy too many new telephone services to pay too many workers too much! And a huge tax dodge and regulation loophole was the funding of too much research in places like Bell Labs and Western Electric, the latter in developing the hardware that changed telephone calls from connecting microphone-speakers together to switching data which was much more complicated annd required higher education and higher income workers and CUSTOMERS.

Since 1980, the policies have moved to slashing the number of high income customers by cutting the number of high income workers.

Trump has tapped into the anger of half of Americans who have not benefitted from the high profits flowing to capital by slashing the number of high income consumers.

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4 rayward November 3, 2017 at 8:19 am

Feminist movement: by joining the labor force in large numbers, women added to the labor supply and thus depressed labors’ wages. Of course, men, being self-serving (as they were taught by economists), did what they could to prevent women from competing in the labor market. Business, being managed by men, was in a quandary: does business support women in the labor market and thus get the benefit of lower wages or does business, managed by men, resist women in the labor market and thus allow men to continue to receive “rents”. To further complicate matters, do women, who are married to men, resist women in the labor market and thus continue to enjoy the “rents” received by their husbands or do women, rather than being self-serving, support women in the labor market even though it means they will no longer enjoy the benefit of the “rents” received by their husbands; or do women, being self-serving (as they were taught by economists), avoid marrying men altogether, and thus enjoy the benefit of a life without having to put up with the brutes, who are more trouble than they are worth anyway.

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5 Ryan November 3, 2017 at 11:38 am

I think it was a particularly bad question. Lindsey was hesitant to answer it and therefore deserves some slack.

Feminists did not set out with the goal of lowering wages for men, it was just an unavoidable consequence of expanding the labor supply. I don’t think it makes sense to claim that feminisim was primarily motivated by anti-rent-seeking sentiment.

Some of Cowen’s questions in this set of interviews seemed unusually leading, possibly because this interview fell under his area of expertise.

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6 AnonFrogger November 3, 2017 at 12:15 pm

“women added to the labor supply and thus depressed labors’ wages”

But did that actually happen? Between 1950 and 1970, the number of total hours worked per person(not per worker) fell, and did not reach its 1950 value until sometime in the 1980s. Between 1950 and 2000 in total the number of hours worked per person increased by 7.18%, with most of the increase occurring in the 1980s. Why?

1. The folk memory where middle class women choose to stay home and therefore all women were forced to do so is not true.

2. Women’s increase in the labor force coincided with a fall of labor force participation among young people, old people, and men of all age groups.(The latter caused in large part by feminism itself.)

3. Population aging.

The data only goes until 2000, I couldn’t find more recent data, but given the decline of both men’s and women’s labor force participation since that time, and the aging of the population, I wouldn’t be surprised if it’s lower today than it was in 1950. In addition, when the women weren’t working they weren’t doing nothing, and women’s entry into the workforce no doubt led to greater demand on restaurants, childcare, ect. Thus, I would doubt that it had any negative effect on total wages. De-unionization, immigration, automation, and soaring executive compensation are responsible.

Source:

https://pseudoerasmus.files.wordpress.com/2014/06/labforce.pdf

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7 AnonFrogger November 3, 2017 at 12:17 pm

Also, I don’t think that was Tyler’s point. He chose to except the “feminism is an anti-rent seeking movement” paragraph to signal his piety while allowing the comment section to mock it.

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8 mulp November 3, 2017 at 3:09 pm

“Between 1950 and 1970, the number of total hours worked per person(not per worker) fell, and did not reach its 1950 value until sometime in the 1980s.”

However, incomes increased.

Since 1980, hours worked increased, but incomes for those with the highest increases in hours fell.

That fall in incomes caused problems for businesses which has been addressed by creating and increasing government welfare programs to create consumer demand for businesses who cut the incomes of their customers by cutting wages. Note how conservatives promote the EITC as a way to boost consumer spending at no cost to businesses. The EITC increases hours worked while helping drive down worker incomes and business labor costs.

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9 rayward November 3, 2017 at 2:52 pm

If only everyone could read, and think, the world would be a better informed and safer place. Alas, it’s not to be.

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10 Brent Reynolds November 3, 2017 at 8:44 am

Patents are as much about risk taking as they are about innovation.

The majority of innovation that is happening today is either:
1) happening in large corporations, that are going to do boring, incremental R&D and file a lot of patents on those; or
2) being funded by VCs trying to catch a highly leveragable business model in the internet / app space, without doing any real R&D.

In the mean time, the real technology that is being built in the “tech” space, the faster wireless communications, better glass, better microchips, haptic technology, better cloud infrastructure, all of the hard science that goes into these products are being misappropriated by technology packagers that are paying big money to reduce the returns to patented inventions.

Is there any wonder why we don’t have as many STEM scientists, and entrepreneurship is taking such a hit? Why compete with the big guys when they have rigged the game so that they can take all of the rewards for the risks that you took?

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11 mulp November 3, 2017 at 3:38 pm

Before the 80s, R&D had no risk. Get a job at Bell Labs or a chemical company or electronics company doing research and you got paid a high income for a long long time.

High tax rates on profits made the IRS the biggest contributor to labor costs for looking for ways to grow your business with new products and methods.

Innovation comes 99% from tens or hundreds or thousands of man years of work. So much work is required today, no one can do it in his free time, and so it all depends on someone paying lots of workers.

Making a new Amazon is simple. Pay for maybe a million man years of workers figuring out how to get people to buy more stuff from your employer. Making a new SpaceX is simple. Pay for ten thousand man years of work to duplicate what NASA did in the 60s, and Elon did in the 00s, but using the existing materials of the 20s – Elon pushing product manufacturing innovation is mostly driving suppliers you can use yourself to start from a higher innovation starting point.

Need batteries for your idea? Well, Elon does not design or make batteries. Instead, he drives a battery maker to increase production by 100 times. That in turn has forced it’s peers to grow their production by 100 times as Elon inspires others to want and build products requiring lots of batteries.

Not that Elon invented electric vehicles. GM had a really innovative electric car in production years before Elon started working on building cars. GM just saw paying profits to workers to innovate electric cars as too costly to profits because shareholders had to pay 65% of labor cost minimum. And probably 90% to 100%. Trump, Ryan, Reagan, the GOP argue that businesses should never pay workers. The high cost of paying workers kills jobs. That’s why the new tax cuts make paying workers so much more costly to shareholders, labor costs will be slashed to increase profits that killing jobs will create jobs.

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12 Jeff R November 3, 2017 at 8:44 am

My primary takeaway from that podcast was that Brink Lindsey is one sharp guy.

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13 So Much For Subtlety November 3, 2017 at 9:49 am

One can see the whole sort of second wave feminist movement since the 60s as an anti rent-seeking movement, that white men were accumulating a lot of rents because of the way society was structured, that they were the breadwinner and there was a sexual division of labor, and they received higher pay than they would have otherwise because they were assumed to be the breadwinner, and women were just sort of kept out of the workforce in direct competition with men in many roles.

One could see things that way but it would be unusual. As the important issue is not who earns the money but who spends it. Something like 80% of spending decisions are made by women in most marriages.

In other words what has changed has been that men used to work themselves to an early death in order to give their wives a life of idle luxury in exchange for a fairly satisfying sexual life for both. Now they work themselves to an early death in order to give their wives a life of luxury while those wives also do some pointless make-work office job that gives them spending money and a chance to meet even more accomplished and powerful men. While turning the State into a collection agency to make sure said men continue to work when said wives withdraw their half of the bargain by refusing to sleep with their husbands.

The rent seeking has not been from men from what I can see.

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14 Hua Wei November 3, 2017 at 10:13 am

“While turning the State into a collection agency to make sure said men continue to work when said wives withdraw their half of the bargain by refusing to sleep with their husbands.”

Be strong, I feel your pain…

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15 Anonymous November 3, 2017 at 10:25 am

You didn’t address his point.

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16 Hua Wei November 3, 2017 at 11:08 am

About women not making sex with their masters?

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17 So Much For Subtlety November 3, 2017 at 11:45 am

Oddly enough conservative women are much happier with their sex lives, and orgasm more, than liberal women. I would normally quietly point out this proves that John Norman was correct about all that Gorean stuff, but I think there is a more plausible explanation – liberal women have noticed their liberal male friends (well, “friends” and “male” and perhaps even “liberal”) are creepy sex offenders who only pretend to sympathize in order to get into their pants.

Chalk one up for the masters and their handmaidens.

18 Hua Wei November 3, 2017 at 12:14 pm

“liberal women have noticed their liberal male friends (well, “friends” and “male” and perhaps even “liberal”) are creepy sex offenders who only pretend to sympathize in order to get into their pants.”
As opposed to “grabbing them by the p***, you mean? Anyway, don’t worry about having to symphatize with women. Supermario will always be there for you.

19 So Much For Subtlety November 3, 2017 at 7:43 pm

Well Supermario is pretty cool. There is no denying it. But there is also no denying that he is a two-timing cheating b!tch. So no comfort there.

Trump has lived among Democrats in Democratic strong holds all his life. New York. Hollywood. The Clintons even came to his wedding. So yes, he knows how it goes down in Bluetown. He didn’t say he did it. He just pointed out how life was among our Betters. As the close friend of the Clintons, Harvey Weinstein, showed how it works.

20 Anonymous November 3, 2017 at 9:49 am

>feminist movement

>anti rent-seeking

LOL Tyler. Great trolling.

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21 ʕ•ᴥ•ʔ November 3, 2017 at 10:54 am

I liked this podcast, I do think it was a good integration of an economically informed politics It would be a good read, especially for someone who hasn’t been stewing in the economic and behavioral blogs for the last few years

That said, I do view it with a certain sadness. It is too far from “politics as unusual” to have much currency.

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22 A Truth Seeker November 3, 2017 at 11:05 am

Let’s be blunt: In America, a desperate populace, simultaneously lacking ownership of the means of production and of deprived of gainful employment and meaningful existence, has rebelled against its “betters” and voted for Trump. Einstein said that Hitler was a product of German’s empty stomach. Mutatis mutandis, so is Trump. Hitler’s solution was applying Keynesian stimulation avant la lettre and establishing a conquest-based economy, which depended on external and internal looting.

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23 peri November 3, 2017 at 11:15 am

I think then it is not rent-seeking, when the paid-workforce-entering women, having abandoned housework and childcare, hire undocumented women from Mexico or Central America to do it in their stead? I am easily confused by the term rent-seeking.

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24 ʕ•ᴥ•ʔ November 3, 2017 at 11:19 am

As I hear it, they are speaking broadly about “rent seeking” in a society, rather than specifically with government. When a society has expectations that men work and women stay home that has the net effect of lowering the labor supply and increasing the income for men. The “feminist movement since the 60s” has been concerned with getting women into the labor force, increasing the labor supply, and decreasing wages (for men and women, I suppose).

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25 peri November 3, 2017 at 11:33 am

Thanks for clarifying. If rent-seeking may equal “social expectations leading to the capture of do-re-mi,” that suggests lots of new uses for the term, for me at least.

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26 Harun November 3, 2017 at 3:19 pm

Don’t forget when government contracts or Fortune 500 firms attempt to get higher “women-owned” business content.

Its always fun when they try to force you to sell through a special “women-owned” business to pad those numbers.

No rent seeking there.

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27 derek November 3, 2017 at 4:47 pm

It wasn’t ‘society having expectations’. It was reality. Women had more children due to lack of birth control. Someone had to care for them. They weren’t on the farm where the family enterprise included everyone.

With readily available and reliable birth control women had the opportunity. My grandmother started law school shortly after WW1 and then had 5 kids. All my sisters had children when they wanted to and had jobs as well.

It wasn’t ‘rent’. It was a mutually agreed upon arrangement dealing with some very nasty and hard realities.

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28 Brian Donohue November 3, 2017 at 12:16 pm

Welcome to the rat race ladies. Enjoy.

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29 AnonFrogger November 3, 2017 at 12:18 pm

If they aren’t enjoying it it’s your fault.

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30 Anon. November 3, 2017 at 12:25 pm

I like how you grilled them a bit in this one Tyler, usually you’re too kind to your guests.

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31 Donald Pretari November 3, 2017 at 1:50 pm

Excellent.

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32 Bob November 3, 2017 at 3:26 pm

“Rent seeking” has turned into a meaningless polemical term used to label political opponents.

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33 Tanturn November 3, 2017 at 5:37 pm

+1

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34 jorod November 3, 2017 at 5:45 pm

The US is corrupt and causes all the problems in the world… blah, blah, blah…

“Feminist animus is doubtless part of the story, as is what our friend and contributor James Piereson once called “punitive liberalism.” At the end of the day, helping girls is incidental. Punishing boys is the more immediate goal….” – New Criterion

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35 shan November 4, 2017 at 2:56 am

Hi, I really like how you grilled them a bit in this one Tyler, usually you’re too kind to your guests.

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