Brink Lindsey: observation

Transcript context

…Let me ask you about the Gordon Tullock paradox, which I’m sure you know of. But Tullock pointed out that government seems to hand out so many goodies, and yet the amount of resources spent on lobbying, although it doesn’t seem that way here in Arlington, it’s actually quite small relative to GDP. Doesn’t that imply that rent-seeking costs are low and thus the share of rent income going to the top 1% is gonna be low as well? It’s an interesting puzzle. I don’t think anyone has completely, satisfactorily solved it. But I don’t think that’s the only way to answer the question that is, yes, you could infer from that, that there shouldn’t be much rent-seeking if the amount of money spent on it is so relatively trivial. But if we look at the distortions in the economy, we see massive ones, and those are, in some cases, artifacts of policy that had insider influence all over them. I say the facts deepen Tullock’s paradox rather than resolving it in the favor of rent-seeking not being a problem. Let me play devil’s advocate for a moment and try to defend crony capitalism. If I ask, what are the two greatest growth miracles in the last 50 years of history? It seems plausible candidates would be South Korea and China. And both of those places, there crony capitalism run amok. Maybe isn’t the distinction between forms of crony capitalism that encourage infrastructure and education, and those work out fine, and forms of crony capitalism that thwart infrastructure and education. But crony capitalism itself really isn’t so bad at all, maybe at some margins we even should have more of it, because it helps get things done, gets us of the Kludgeocracy, as your friend Steve would say.…

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