Creative Destruction in Popular Culture

9 March 2011 at 12:37 pm 2 comments

| Peter Klein |

Thanks to Thomas B. for forwarding links to US Sen. Rand Paul’s Monday-night appearance on the Daily Show (part 1, part 2, part 3). At the start of part 3, while discussing government bailouts, Paul uses the words “creative destruction,” and Jon Stewart bursts out laughing, apparently hearing the term for the first time. I guess Schumpeter is not as culturally relevant as I thought!

The show had some interesting moments, but I found the discussions (in the parts I watched) pretty shallow. Stewart was grilling Paul on his “free-market” views, focusing on health, safety, and environmental regulation. Both Paul and Stewart took the milquetoast position that sure, some of this type of regulation is needed, but it shouldn’t be “too much.” They didn’t get into a serious discussion of theory or evidence, however, or explore specific trade-offs. There are huge political economy and public-choice literatures on the FDA, EPA, OSHA, etc., showing that these organizations are easily captured, tend to retard innovation, fail to weigh marginal benefits and costs, and so on. The Journal of Law and Economics under Coase’s leadership made its bones on these kinds of studies in the 1970s. The FDA has been a particular target. The Stewart view also ignores comparative institutional analysis — e.g., the role of private ordering (third-party certification, reputation, etc. ) in the protection of health and safety.

At least Paul didn’t say he intended to become the best Senator, horseman, and lover in all Washington!

Entry filed under: - Klein -, Austrian Economics, Bailout / Financial Crisis, Business/Economic History, Classical Liberalism, Myths and Realities, New Institutional Economics, People, Public Policy / Political Economy.

Kuhn’s Ashtray Something to Ruin Your Weekend

2 Comments Add your own

  • 1. Thomas  |  11 March 2011 at 1:16 pm

    I also thought is was a pretty luke warm discussion. But isn’t it sad that you need a comedy show to even raise the questions?

    Paul’s problem is that whenever he speaks his mind he says stuff like the Civil Rights Act was a good idea except… at which point people stop listening and imagine he’s against civil rights. But he does say that the CRA traded won certain rights for minorities at the cost of property rights for, say, lunch-counter owners.

    Paul’s position (or perhaps I’m assuming he thinks like his dad) is something like: shut down the Fed, close the CIA, pull back the imperial armies, legalize pot (he should have used that one with Stewart’s audience!), and just generally stop being a nuisance, nay, menace in the world. But that can’t be said even on the Daily Show.

  • 2. Michael E. Marotta  |  11 March 2011 at 4:15 pm

    It is pretty easy to sit here and think of the things Sen. Rand Paul should have said. Being interviewed is not easy; and in most cases the interviewer has the advantage. In this case:
    … Paul has been a practicing ophthalmologist in Bowling Green, Kentucky, since 1993, and established his own clinic in December 2007.
    Stewart started as a stand-up comedian, but branched into television as host of Short Attention Span Theater for Comedy Central. [1989–1994.] He went on to host his own show on MTV … Stewart became the host of The Daily Show on Comedy Central in early 1999.

    At my leisure, I am free to say for Sen. Paul that 19th century pollution was allowed by judges who found for “social utility” over property rights. I would point out that the EPA was created by President Nixon and that like Bernard Madoff, Kenneth Lay had been a regulator himself, undersecretary of the Department of the Interior. But, I am not being interviewed by a master of entertainment playing to picked audience of supporters, asking questions of my own choosing, and steering the conversation to my points.

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