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The Captured Economy: How the Powerful Become Richer, Slow Down Growth, and Increase Inequality

Author

Listed:
  • Lindsey, Brink

    (Cato Institute)

  • Teles, Steven

    (Johns Hopkins University)

Abstract

The relentless increase of inequality in twenty-first century America has confounded analysts from both ends of the political spectrum. While many can point to particular contributing causes, so far none of the policies that have been enacted-not just in the United States but in other advanced countries-have been able to lessen the wealth and income gaps between the top decile and the rest. Critics on the left are more forceful critics of rising inequality, and they tend to blame capitalism and the private sector. Predictably, they see solutions in government action. Many on the right worry about the issue, too, but they come from a position that is more sanguine about corporations and more suspicious of government. But as the libertarian Brink Lindsey and the liberal Steve Teles argue in The Captured Economy, perhaps all of us-left, right, and center-are looking in the wrong places for culprits and solutions. They hone in on the government-corporate sector nexus, apportioning blame not only to both forces but also to the distorted form of governance that this partnership has created. Through armies of lobbyists, corporations and the wealthy have become remarkably adept at shaping policy-even ostensibly progressive policies-so that the field is tilted in their favor. Corporations have become classic 'rentiers,' using their monopoly power of influence over highly complicated legislative and regulatory processes to shift resources in their direction. FCC policy, health care regulation, banking regulation, labor policy, defense spending, and much more: in all of these arenas, well-resourced corporate rentiers have combined to ensure that the government favors them over everyone else. The perverse result is a state that shifts more and more wealth to the already-rich-even if that was never the initial intent of Congress, the President, or the electorate itself. Transforming this misshapen alliance will be difficult, and Lindsey and Teles are realistic about the chances for reform. To that end, they close with a set of reasonable policy proposals that can help to reduce corporate rentiers' scope and power to extract excessive rents via government policy. A powerful, original, and genuinely counterintuitive interpretation of the forces driving the increase in inequality, The Captured Economy will be necessary reading for anyone concerned about the rising social and economic divisions in contemporary America.

Suggested Citation

  • Lindsey, Brink & Teles, Steven, 2017. "The Captured Economy: How the Powerful Become Richer, Slow Down Growth, and Increase Inequality," OUP Catalogue, Oxford University Press, number 9780190627768.
  • Handle: RePEc:oxp:obooks:9780190627768
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    Cited by:

    1. François Haas, 2017. "Growing inequalities in the American model," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 48, pages 61-72, Winter.
    2. Slama, S. & Toubon, H., 2017. "Les organismes d’assurance en France : évolution des placements en 2016," Bulletin de la Banque de France, Banque de France, issue 214, pages 23-34.
    3. Samuel Slama & Hector Toubon, 2017. "Insurance undertakings in France: investment developments in 2016," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 48, pages 23-34, Winter.
    4. Émilie Candus & Christian Pfister & Franck Sédillot, 2017. "Where do French people invest their savings?," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 48, pages 5-22, Winter.
    5. Michael Trebilcock & Kanksha Ghimire, 2019. "Regulating Alternative Medicines: Disorder in the Borderlands," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 541, April.
    6. Aránzazu Guillán Montero & David Le Blanc, 2019. "Lessons for Today from Past Periods of Rapid Technological Change," Working Papers 158, United Nations, Department of Economics and Social Affairs.
    7. Philip Cooke, 2019. "World Turned Upside Down: Entrepreneurial Decline, Its Reluctant Myths and Troubling Realities," JOItmC, MDPI, vol. 5(2), pages 1-16, April.
    8. Parasmo, A. & Cayssials, J.-L., 2017. "Le solde des flux d’investissements directs de la France à nouveau excédentaire en 2016," Bulletin de la Banque de France, Banque de France, issue 214, pages 35-44.
    9. Vlad Tarko & Andrew Farrant, 2019. "The efficiency of regulatory arbitrage," Public Choice, Springer, vol. 181(1), pages 141-166, October.
    10. Ariane Hautcoeur & Jean-Luc Cayssials, 2017. "French direct investment stocks - French holdings of foreign equity increased in 2015 and 2016," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 48, pages 45-60, Winter.
    11. Balard, M. & Boileau, A., 2017. "Des résultats semestriels 2017 très solides pour les principaux groupes industriels et commerciaux français," Bulletin de la Banque de France, Banque de France, issue 214, pages 57-71.
    12. Alexandra Köves & Tamás Veress & Judit Gáspár & Réka Matolay, 2021. "Conceptualizing Cuvée Organizations: Characteristics Leading towards Sustainable Decision-Making Practices," Sustainability, MDPI, vol. 13(24), pages 1-24, December.
    13. Haas, F., 2017. "Les inégalités croissantes du modèle américain," Bulletin de la Banque de France, Banque de France, issue 214, pages 45-55.
    14. Johnson, Clark, 2018. "Supply-Side Economics and the 2017 Tax Act," Studies in Applied Economics 98, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    15. Hélène Charasson-Jasson, 2017. "The debt of major French groups: changes and financing choices," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 48, pages 73-90, Winter.
    16. Beinhocker, Eric, 2022. "Fair Social Contracts and the Foundations of Large-Scale Collaboration," INET Oxford Working Papers 2022-26, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    17. Charasson-Jasson, H., 2017. "L’endettement des grands groupes français : comment évolue-t-il ? Que finance-t-il ?," Bulletin de la Banque de France, Banque de France, issue 214, pages 73-83.
    18. Andréa Parasmo & Jean-Luc Cayssials, 2017. "French net direct investment flows were back in surplus in 2016," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 48, pages 35-44, Winter.
    19. Kate Ward, 2020. "Universal Basic Income and Work in Catholic Social Thought," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(4), pages 1271-1306, September.
    20. Ilya Somin, 2021. "Freedom through foot voting," Economic Affairs, Wiley Blackwell, vol. 41(1), pages 141-152, February.
    21. G. P. Manish & Colin O’Reilly, 2019. "Banking regulation, regulatory capture and inequality," Public Choice, Springer, vol. 180(1), pages 145-164, July.
    22. Candus, E. & Pfister, C. & Sédillot, F., 2017. "Où s’investit l’épargne des Français ?," Bulletin de la Banque de France, Banque de France, issue 214, pages 5-21.
    23. Lee, Nathan R., 2020. "When competition plays clean: How electricity market liberalization facilitated state-level climate policies in the United States," Energy Policy, Elsevier, vol. 139(C).

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