Steve Teles: belief

Transcript context

…We just dive in with questions. First question, if we think about inequality in America today, how much of it is due to bad policy as opposed to people not having the right skills or there being some kind of cognitive or human capital gap? I hate to disappoint you but I don’t think there’s any way to measure that. We dug around to try and figure out for good, aggregate ways to measure the extent of rent-seeking, and its interaction with skills, and the extent in the market, and we weren’t able to find them. In some sense also, measuring rent-seeking may be simply analytically impossible. We certainly tried to figure out how you would do it. Part of it is rent-seeking is to some degree a judgmental category, rather than one that’s easily measured by some neutral measure. I think the main thing you can say, is we have evidence in the book that it’s substantial. We sure have some evidence that the distribution of rent-seeking is changing but being able to come up with any good aggregate measure of how it compares to other causes of inequalities is impossible, which is not a very desirable or satisfactory answer. But that’s about the best answer you can give. We have this thing in public choice economics, I’m sure you know it, it sometimes called the Tullock paradox. Gordon Tullock, my former colleague, he set out to measure how much was spent on lobbying, relative to how much is handed out by government. And Tullock, at least, thought that the amount spent on lobbying is actually remarkably low. It may appear large if you’re sitting in Arlington, Virginia but relative to GDP, it’s pretty tiny, and the amount of resources controlled by government is pretty significant. How is it that you think about the Tullock paradox, at least on the surface, some kind of rent-seeking costs would seem to be low?…

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