Luigi Zingales is the Robert C. McCormack Professor of Entrepreneurship
and Finance at the University of Chicago’s Booth School of Business...MORE
From Project Syndicate:
Since the United States Supreme Court’s “Citizens United” decision, which prohibited the government from restricting independent political expenditures by corporations and unions, concern about business interests’ influence over US elections has been growing. But political contributions are only one reason why business interests have so much power. When it comes to lobbying, money is not everything: ideas play a big role, too. Unfortunately, rather than leveling the playing field, the battle of ideas may skew US politics even further in favor of big business.HT: Points and Figures
The importance of ideas can be seen from the simplest things. Congressional bills aimed at benefiting powerful constituencies are generally given appealing (and misleading) names. For example, a tax holiday to repatriate foreign earnings was called the “American Job Creation Act.” It is easier to sell a bill that (allegedly) benefits everyone in society, not just a small group of its most privileged members.
CommentsMore importantly, the lobbying of the quasi-governmental mortgage lenders Fannie Mae and Freddie Mac would not have been so successful without the idea of the “ownership society.” How could anyone oppose turning every American into an owner? It is precisely the appeal of such ideas that can make them so dangerous politically.CommentsIf ideas are like weapons in lobbying, it is important to appreciate the possible distortions in the market for their creation and diffusion. New ideas are like new drugs. While some pharmacologists dedicate their lives to searching for the cure for cancer, regardless of any monetary incentives, many are driven by the hope of securing a lucrative patent.Even if researchers themselves are motivated by only the noblest of goals, their need for funding forces them to take into account profitability. That is why we have so-called “orphan drugs,” from which not enough money can be made because they cure rare diseases or diseases (like malaria) that affect people who cannot afford to pay for them.CommentsThe process of creating new economic ideas (or new evidence about old ideas) is not that different. Researchers do not get patents, but they get citations, recognition, and promotions. While some researchers dedicate their lives to the search for truth, regardless of any personal gain, many are driven by the hope of academic stardom and the money that comes with it....MORE