Podcast appearances and mentions of mike munger

Send us Fan MailWe break down how sportsbooks function as brokers that match contracts, set prices through the point spread, and earn their living through the vig. Kevin Braig joins us to explain how law, technology, and property rights shape whether sports betting markets stay clean or slide toward corruption and bad incentives. • five reasons people gamble, from dopamine to positive skewness • what a sports bet is as a contract and why a book exists as a broker • how the 11-to-10 price and the vig work in practice • why point spreads are a pricing technology and a marketing tool • how street-level enforcement and local political capture governed bookmaking • why Nevada legalized betting and how phones and smartphones changed everything • the Coasean case for clearly assigned property rights between leagues and books • how prop bets and inside information can erode trust in games • why extreme taxes and licensing fees raise transaction costs and distort markets Judge Kevin Braig's book, "Bookmakers vs. Ballowners"RH Coase, "The Problem of Social Cost"Gustavo Dudamel's opera, "Wealth of Nations"If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz 

Send us Fan MailHereditary monarchy seems like a ridiculous way to pick a leader, yet it dominates most of human political history. We argue the reason is transaction costs: succession systems survive when they settle “who rules next” cheaply enough to prevent recurring civil war. • Why hereditary monarchy is historically prevalent compared with democracy and universal suffrage • Why “divine right” stories often rationalize a choice people already find tolerable • Thomas Paine's critique of hereditary succession and what it misses • Hobbes on the state of nature as what happens when sovereignty is contested • Succession as the master coordination problem of political order • Transaction costs applied to elections, enforcement, legitimacy, and rent seeking • Why elective monarchy can become an armed auction for total power • Bright line rules versus discretionary selection and why speed can beat “better” • How constitutional design lowers the cost of leadership transition when it works • The legitimacy problem and why dynasties converge on endogamy • The genetic consequences of endogamy and the Habsburg cautionary tale • Twedges, book recommendation, and a listener letter on board game “math trades” LINKS:Thomas Paine, Common Sense, February 1776Michael Munger, The Ugly Pig, 20224A.P. Martinich, Thomas Hobbes:  A Biography, 1999.Thomas Hobbes, Leviathan, 1651.Neal Schultz, Suicide Kings: Hereditary Monarchy, 2025Tbadel Barter AppCosmos Institute, Coasian Bargaining at Scale, 2025 UPDATE: An interesting, and more clearly articulated, application of the reasoning here.... https://aminga.substack.com/p/how-transaction-cost-economics-explainsIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz 

Send us Fan MailPermits feel like “just paperwork”, until they quietly become the biggest barrier to building, investing, and even basic economic growth. We use Chile's fight with “permisologia” to show how bureaucracy creates delay, uncertainty, and political risk even when the stated goal is safety or environmental protection. • permits as transaction costs that quietly tax projects and entrepreneurship • why bureaucracy is not the same thing as government and why it crowds out market coordination • “permisologia” in Chile and how a one-stop shop becomes many counters • parallels to India's license raj and the logic of rent seeking choke points • Dominga as a case study in shifting rules, scandal, and investment held hostage • documented GDP and jobs costs from permitting delay and collapsed processing capacity • Chile's LMAS reform plan including deadlines, digitization, and sworn declarations with sanctions • Parkinson's Law, bike shedding, and why committees obsess over trivial items • listener letter on commune life and how transaction costs show up inside “one big firm” Links:What is  "Permisología"? https://comentarista.emol.com/2294117/27242033/Emol-Social-Facts.htmlFramework Law (LMAS):  https://www.bluefieldresearch.com/research/chile-takes-another-step-towards-mining-reform/Parkinson's Law and the "Law of Triviality":  https://fs.blog/parkinsons-law/Twin Oaks Community:  https://www.twinoaks.org/If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz 

Send us Fan MailA talk with Dr Anya Shortland about the economics of ransomware and the gray-zone institutions that let extortion markets function when nobody can truly enforce trust. We dig into how cyber insurance quietly becomes a form of governance, why data leaks change the game, and what national security risks emerge as everything gets connected. • criminal markets that sit between legal firms and underworld gangs • insurance as governance through protocols, repeat play, and incident response packages • why victims amplify risk when they throw money at crises • the origin story of early ransomware and the transaction costs that made it fail • step-by-step ransomware mechanics from phishing to exfiltration to encryption • how gangs price ransoms by reading cash flow and insurance certificates • leak sites, privacy regulation, and third-party liability as bargaining leverage • why cyber insurance is fragmented and slow to enforce security standards • deductibles, coverage caps, and market hardening that push better cybersecurity • AI-enabled phishing and the asymmetric arms race between attackers and defenders • state-linked ransomware, impunity jurisdictions, and critical infrastructure threats • efficiency versus resilience in smart cities and the Internet of Things Anja Shortland at Kings College LondonShortland's book, Dark Screens:  https://www.amazon.com/Dark-Screens-Hackers-Shadowy-Ransomware/dp/1541705750Shortland's first TAITC episode: "Deals with shadows"Links mentioned in podcast:Alex Danco's pirate puzzlePete Leeson's book, The Invisible HookDavid Deutsch's book, The Beginning of InfinityIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz 

Send us Fan MailWe connect Adam Smith's moral psychology to the modern idea of transaction costs and argue that the biggest frictions in markets start with the cost of understanding other people. We show how sympathy, propriety, self command, and reputation turn separate perspectives into workable cooperation and why justice is the real precondition for a stable commercial order. • why transaction costs always exist and why institutions matter when exchange is costly • a brief history of the term from Coase to an early use in Scitovsky • transaction costs as asymmetric information and the cost of social coordination • Smith's epistemic distance and why sympathy requires imaginative effort • propriety as social calibration through the impartial spectator • self command as the price of being socially intelligible • commerce as a practical school for restraint, trust, and predictability • the prudent man as a model of conduct that reduces suspicion and monitoring • Buchanan's moral community, moral order, and moral anarchy as lenses on social stability • why society can survive without beneficence but not without justice • a listener's college admissions case where interviews act as a separating equilibrium and improve aid allocation Links:Liberty Fund eBook--Theory of Moral Sentiments (PAGES DO NOT MATCH UP WITH PRINT EDITION!)TAITC with Steve Medema, on Coase and Transaction CostsDan Klein and Russ Roberts on Theory of Moral SentimentsTibor Scitovsky, 1940, Economica paperGustavo Dudamel's ‘the wealth of nations' Melds Opera and Economics - Bloomberg If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz 

Send a textWe assess Adam Smith's enduring ideas—moral authorization of commerce, division of labor, emergent order—and confront where his optimism breaks: how democratic politics and business fuse to create monopoly privilege. The result is a maintenance‑intensive commercial order that needs competition defended, not assumed.• presumption for markets under secure property, justice, and competition• division of labor as the main engine of productivity and growth• invisible hand reframed as emergent order, not automatic virtue• critique of mercantilism, monopoly privilege, and rent seeking• limited but real state functions: defense, justice, public works, education• motivational symmetry and public choice constraints on government• trade clarity: buy where cheaper, specialize, gains from exchange• competition as a public good that must be defendedHappy 250th birthday, Wealth of NationsIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWe walk through Book Five of The Wealth of Nations to map a state that defends, adjudicates, and builds wisely, then pays for it without killing growth. From militias to standing armies, fee-based courts to salaried judges, turnpikes to basic schooling, and taxes to debt, we test what holds up now.• defense as a professional, civilian-controlled standing army• justice as predictable law and salaried judges• public works funded by user fees where feasible• education to offset division of labor's civic costs• incentives in universities and churches• four tax maxims and ability to pay• why land taxes beat mobile capital taxes• state property and monopolies as bad revenue• debt, consols, and fiscal illusion• Smith with Hume and public choice echoesWe do have one more episode, which is a summing up and taking stock of why the Wealth of Nations still matters today. It will post Tuesday, February 24th, 2026.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textSmith closes Book IV by dismantling mercantilism through the lens of colonial policy, monopoly, and rent seeking, then weighs physiocracy against the system of natural liberty. We trace why colonies grew despite Europe, not because of it, and how “wealth as money” broke policy and fueled war.• mercantilism's definition of wealth and the balance of trade myth• monopoly and bounties as tools for concentrated gains• chapter 7 on colonies as a case study in institutional design• free ports versus exclusive companies and growth outcomes• enumeration, navigation acts, and distorted incentives• defense costs and the arithmetic of empire• the “nation of shopkeepers” argument and public choice• draconian wool laws, smuggling, and consumer losses• physiocracy's insights and errors, sector favoritism• the system of natural liberty as Smith's alternativeIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWe trace how a scholar of expressive choice built a platform that makes machines more profitable by erasing the friction between parts, service, and uptime. The rental economy, Japan's utilization model, and IoT diagnostics reveal why transaction costs, not price tags, decide who should own and who should rent.• rental vs sharing and why property rights matter• how serial-number specific data kills errors and downtime• why parts discounts matter less than service speed• Japan's high saturation rental market and long lifecycles• sensors, IoT, and AI for damage attribution and prevention• decommoditizing parts through integrated workflows• Coasean boundaries of the firm and renting incentives• why RB Global acquired SmartEquip to span the lifecycle• the back-office puzzle of bespoke systems vs SaaS“Next week: Book 4, chapters 7–9 from The Wealth of Nations”(Parts is Parts, from Wendy's)https://youtu.be/OTzLVIc-O5E?si=Mjz8JX-Sl_sdG6bCIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWe explore why money became the default middleman and how a modern platform can make barter practical by slashing the costs of search, matching, and trust. Founder Jassim Baqer shares the story behind Tbadel, what people actually trade, and how reputation, bundling, and scale (might) make swaps work.• Adam Smith's "double coincidence of wants" problem and transaction costs• Platforms as connection engines that lower search and matching costs• Tabottle's origin, goals and name meaning exchange in Arabic• How offers, counteroffers and bundles enable fair value without prices• Building trust with profiles, ratings, in‑app messaging and reporting• Local meetups versus future delivery options to cut transfer costs• Why density and subcommunities unlock multi‑party and chain trades• What trades dominate now: books, electronics, kids' gear and services• AI matching, alerts and global exchange as the growth roadmap• Two‑sided market dynamics and the path to scaleTbadel Web SiteJassim Baqer on LinkedInFrom JJ's letter: Photos of "Parklet" in San Francisco.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textTracing out Adam Smith's Book IV, chapters 1–6, to show how mercantilism mistakes money for wealth, how protection creates monopolies at home, and why free exchange raises real prosperity. Smith defends two narrow exceptions—defense and tax parity—while rejecting bounties and politicized treaties that entangle trade with war.• mercantile vs physiocratic systems and their influence• wealth as goods and industry, not specie• balance of trade as a “pestilent error”• make-or-buy logic and misallocation from tariffs• invisible hand clarified and limited• natural vs acquired advantages in specialization• two exceptions: national defense and tax parity on imports• drawbacks as refunds vs bounties as subsidies• corn bounties, higher home prices, cheaper foreign prices• specie hoards as dams that inevitably overflow• treaties of commerce, Methuen example, political risk• case for unilateral free trade over reciprocityMentioned in the podcast:Laura Williams on PineapplesPineapples in SwedenOren Cass on Adam SmithDan Klein's Law and Liberty piece on Oren Cass on Adam SmithIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWe trace how Adam Smith solves a historical puzzle: why Europe's path to prosperity inverted the “natural order,” and how commerce quietly dissolved feudal power to make room for liberty. The story follows incentives, from primogeniture and entail to charters, free towns, and the market's “silent and insensible” revolution.• institutions as congealed preferences and elite incentives• why Smith's natural order inverts in Europe• the physiocrats' growth model and Smith's critique• Solow's technology vs North's institutions vs McCloskey's ideas• feudal constraints primogeniture and entail suppressing agriculture• towns as islands of order through charters and fixed rents• the king–burgher alliance against barons• merchants as improvers of land and capital risk-takers• commerce introducing liberty and good government• Smith's “most important” passage and its modern relevanceIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textA conversation with Andrew Wagner, production and manufacturing engineer, now in aerospace, but with experience also in the auto industry.We trace how transaction costs shape production, from Adam Smith's pin factory to Toyota's SMED, and why empowering workers and redesigning tools can raise quality while cutting cost. An aerospace manufacturing engineer joins us to unpack Little's Law, line reconfiguration, and the culture that makes flexibility real.• division of labor limited by the extent of the market• sub shop and Chipotle as live line-balancing examples• Smith's three productivity drivers applied to modern factories• Little's Law guiding WIP, stations, and throughput• costly line changes and capacity planning in auto plants• meta-tools, CNC, and multi-operation automation• stamping dies, SMED, and Toyota's flexibility edge• just-in-time, early error detection, and quality economics• U.S. responses: robotics, platforms, and Deming at Ford• NUMMI proof: same workforce, new system, better output• CAD parametrics, modular design, and clay by robot• structure by design: darts, curves, and manufacturability• specialization, ergonomics, turnover, and the $5 day• worker empowerment as applied Hayekian local knowledge• letter on bureaucracy, spending, and the social order book pickSome links:Workload modeling and "Little's Law"Little on Little's Law"Just In Time" inventory and manufacturingEdwards Deming's "14 Principles for Management" Book o'da'Month:  Jacques Rueff, THE SOCIAL ORDERIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textThis episode explores Book 2 of Adam Smith's Wealth of Nations, focusing on his revolutionary concept of the "division of stock" and how capital accumulation drives economic growth.• Smith distinguishes between fixed capital (machines, buildings, land improvements) and circulating capital (money, goods in transit)• Money is described as "the great wheel of circulation" – necessary but not productive in itself• Banking allows society to economize on expensive metallic currency by substituting paper money• Smith's concept of productive versus unproductive labor helps explain which activities increase national wealth• The acquisition of skills represents "human capital" – a concept Smith pioneered centuries before Gary Becker• Interest on loans is justified as compensation for the productive use of capital, though Smith supports moderate usury laws• Smith identifies four employments of capital: agriculture (most beneficial), manufacturing, wholesale trade, and retail• Smith criticizes mercantilism for privileging foreign trade over domestic production• Division of stock and modern financial markets solve the "time travel problem" by allowing entrepreneurs to access capital without primitive accumulationIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textBook Two of Adam Smith's "The Wealth of Nations" provides the conceptual foundation for understanding how commercial society sustains growth through capital accumulation and the employment of stock. Smith challenges common misconceptions about wealth creation and offers profound insights on the role of capital in economic development.• Capital is not capitalism – Smith wrote before "capitalism" was invented, using the term "stock" to describe accumulated resources• Division of stock works alongside division of labor – capital must be accumulated before it can be employed productively• Justice (protection of person, property, and promise) is prerequisite for investment – without security, people hide rather than invest their stock• Fixed capital (tools, buildings, skills) versus circulating capital (money, wages, materials) form different branches of stock• Money serves as "the great wheel of circulation" – facilitating exchange but not itself productive• Banking allows society to operate with less precious metal – freeing resources for productive investment• Productive labor creates vendible commodities while unproductive labor (government, services) perishes in performance• Parsimony (saving) drives growth while prodigality reduces funds available for productive employment• Interest is legitimate compensation for foregone use of capital – similar to rent on land• Agriculture, manufacturing, wholesale trade, and retail are the four main employments of capital• Modern financial markets solve Marx's "primitive accumulation" problem – entrepreneurs can sell shares of future profitsLet me know your thoughts on these ideas from Adam Smith in the comments below. If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textChris Cornette, a longtime securities trader who grew up in the business, reveals how the most important innovation that made US capital markets preeminent in the world was the exchange itself.• Cornette's father worked in the P&S (Purchase and Sales) department on Wall Street, eventually becoming the controller of an American Stock Exchange specialist unit• The original Buttonwood Agreement from 1792 created exclusivity among traders that helped establish trust in the market• Exchange specialists subsidized trading in small-cap stocks using profits they made from large-cap stocks• The phrase "your word is your bond" wasn't just a saying but the foundation of the trading system. Exclusion from the exchange was enough of a threat to discipline bad actors• Specialists would ensure market liquidity and "continuity" in pricing, preventing wild price swings• The transition to electronic trading and decimal pricing in the late 1990s fundamentally changed market dynamics• High-frequency trading firms don't have the same ethical obligations that floor traders did• The number of publicly traded companies has declined significantly since the move to screen-based trading• Self-regulation through the exchange helped create trust that made markets function effectively. Not perfectly, but effectively.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

In this conversation from 2023, Alex and Mike Munger discuss two strains of thought within the liberty movement - one concerned with philosophical purity and cohesion, the other with advancement towards a common ideal of greater freedom for all.  Episode Notes: Mike's article "The Right Kind of Nothing": https://www.chronicle.com/article/the-right-kind-of-nothing/ An introduction to Coasian bargaining: http://www.ejolt.org/2015/09/coasian-bargaining-2/  The Piece commissioned by Leonard Read by Milton Friedman and George Stigler on Rent Control: https://fee.org/resources/roofs-or-ceilings-the-current-housing-problem/  Mike Munger's piece "This Is Why We Can't Have Nice Things" https://www.aier.org/article/this-is-why-we-cant-have-nice-things-directionalists-vs-destinationists/  James Buchanan on Relatively Absolute Absolutes https://link.springer.com/article/10.1007/s11127-021-00883-0 

Send us a textCorruption persists not because people like it, but because it becomes embedded in the incentive structure of the state, creating feedback loops that reinforce themselves and resist reform. • A prebend is a type of benefice historically given to clergymen, now a useful concept for understanding corruption in developing nations• Douglas North extended Coase's concept of transaction costs to explain why institutions matter in economics and politics• Bad institutions create feedback loops through rent-seeking, patronage, and corruption that redistribute resources to entrench elites• Mental models - our imperfect cognitive frameworks - resist change because belief systems are costly to abandon• Lock-in occurs when early institutional choices create path dependencies that make reform nearly impossible• Officials in corrupt systems treat public offices as prebends (sources of personal income) rather than public service positions• In Nigeria, prebendalism meant officials used positions to enrich themselves and distribute benefits to their ethnic communities• Russian corruption intensified post-Soviet era when state salaries plummeted and bribes became survival mechanisms• Reform typically requires massive shocks, external enforcement, or exceptional leadership willing to impose significant costs on corrupt officialsThe schedule is changing, because summer is over. Going forward, we'll have two episodes each month until January - one on Wealth of Nations and one interview. The next interview will be Tuesday, September 9th, and the next Wealth of Nations episode will be Tuesday, September 23rd.Some links:Previous episode on corruption:  Shruti RajagopalanRichard Joseph and "Prebendal" Nigeria Douglass North and transaction costs/lock-inDouglass North on InstitutionsDenzau and North, "Shared Mental Models" (Kyklos)Books o'da'week:Johan Norberg Peak Human: What We Can Learn from the Rise and Fall of Golden AgesGuy Gavriel Kay A Brightness Long Ago California's gigantic political theft of money for "High Speed Rail"If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textAdam Smith's "The Wealth of Nations" developed from decades of lectures on jurisprudence, examining how market exchange creates prosperity through division of labor and specialized skills.• Two core observations drive Smith's thinking: humans seek approval from others and have a propensity to "truck, barter and exchange"• Exchange is Smith's key concept—not just for goods but for ideas, sentiments and social coordination• Division of labor dramatically increases productivity through specialization, increased dexterity, and tool development• Smith's famous pin factory example shows how 18 specialized workers produce thousands of times more than individuals working separately• The extent of the market limits division of labor—larger markets allow greater specialization• Smith argues that differences between philosophers and street porters arise from "habit, custom, and education" not innate capacity• While profit is legitimate, Smith criticizes how powerful interests manipulate government to restrict competition• Justice (respecting person, property, and promises) forms the essential foundation for any functioning commercial society• Smith's work intended as a handbook for lawmakers, not ideological advocacy• The Wealth of Nations represents applied moral philosophy addressing how societies become prosperousJoin us next time when we'll examine Book Two of Smith's masterpiece.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textThe ancient tradition of Il Palio in Siena showcases a complex system of strategic corruption, neighborhood rivalries, and high-stakes horse racing that has endured for centuries. This 90-second race around Siena's central piazza involves extensive bribery, intense negotiations, and centuries-old vendettas that make speed secondary to political maneuvering.• Horse assignments determined by lottery prevent wealthy neighborhoods from buying fastest horses but create opportunities for strategic corruption• Jockeys accept bribes up to €80,000 to impede rivals or assist allies, with reputation determining future employment• The "rincorsa" (starter horse) wields extraordinary power in determining when the race begins• Enforcement of bribe agreements relies on reputation, trust, and fear rather than formal contracts• Coming in second place is considered worse than finishing last, leading to public ridicule that can last generations• Neighborhood identities and rivalries date back to medieval times, with memories of betrayals lasting decadesBook o'da'week:  Okay, it's a film.  But it's great!Book o da week:  Il Palio documentary, 2015. Cosimo Spender, director and writer. https://www.imdb.com/title/tt3669520/ If you enjoy learning about the economics of unusual institutions, join us next week for the third installment of our Adam Smith podcast series with Adam Smith Works.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textMike Munger explores insurance economics through the lens of transaction costs and risk management, culminating in an amusing case study about "bat-in-mouth disease."Insurance transfers risk from individuals to larger pools, reducing the expected variance of outcomesThe fair price of insurance equals expected value (probability × potential loss) plus transaction costsInformation asymmetry, subjective risk valuation, and strategic behavior complicate insurance marketsInsurance faces two major challenges: adverse selection (who buys insurance) and moral hazard (behavior changes after getting insurance)Deductibles and co-pays help align incentives between insurers and insuredInsurance history dates back 5,000 years to ancient China, Mesopotamia, Greece, and RomeThe "bat-in-mouth disease" case study shows what happens when someone tries to purchase insurance after an incidentTransaction costs explain why dogs sometimes stop climbing stairs and why freezing credit cards--ie, transaction costs--might prevent impulse spending. The piano player in a brothel story, and its history.The book o'da'month is Daniel Flynn, The Man Who Invented Conservatism. Bat in mouth story:  https://www.nbcnews.com/news/us-news/bat-flies-womans-mouth-arizona-costing-nearly-21000-medical-bills-rcna222463Some background on insurance:Kenneth Arrow on the Uncertainty & Welfare Economics of Medical CareAnja Shortland on Kidnap: Inside the Ransom Business"Piano player in a brothel" story origins:https://www.goodreads.com/quotes/93559-my-choice-early-in-life-was-either-to-be-ahttps://barrypopik.com/blog/dont_tell_my_mother_im_a_banker_she_thinks_i_play_piano_in_a_whorehouse Daniel Flynn book:  The Man Who Invented ConservatismIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textTransaction costs provide the key to understanding Adam Smith's complete philosophical system and how his two great works form an integrated whole. • Smith's two essential claims: humans desire to learn proper behavior and have an innate propensity to truck, barter, and exchange• Sympathy in Smith's view means synchronizing feelings with others—not perfect emotional matching but sufficient "concords" for social harmony• Three core principles guide proper behavior: justice (respecting others' person, property, and promises), beneficence (proper use of what's ours), and prudence (sacrificing present comfort for future well-being)• Self-command turns virtuous intentions into actual proper behavior• Four sources of moral judgment: motive, reaction, convention, and consequence• As societies scale up, we move from moral community (acting from love) to moral order (following rules from their utility)• Smith's "Chinese earthquake" example anticipates the modern trolley problem by revealing how moral agency affects our decisions• The "man of system" tries to impose ideal plans without regard for human nature or gradual change• Smith's egalitarian views positioned economics against slavery and hierarchical social structuresAlso posted, with resources for teaching and learning, at Adam Smith Works, thanks to Amy Willis. If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a text(N.B.:  This episode is cross-posted at our partner site, Adam Smith Works. There are lots of resources and background material there, if you want to delve deeper)The Scottish Enlightenment emerged as a remarkable intellectual movement that shaped modern economics, philosophy, and social science, with Adam Smith at its center developing a dual theory of human nature through his two masterworks.• Scottish Presbyterian education fostered literacy and critical inquiry despite doctrinal rigidity• The 1707 Act of Union created unique conditions where Scots pursued intellectual achievement rather than political power• Scottish universities thrived through student-funded education while Oxford professors "gave up even the pretense of teaching"• Thinkers like David Hume, Francis Hutchison, and Thomas Reid established key intellectual foundations• Smith's concept of sympathy involves synchronizing sentiments with others, not just feeling pity• Justice protects "person, property and promise" as the foundation of social order• Beneficence is "the ornament" of society while justice is essential to its existence• Smith was strongly anti-slavery, describing enslaved Africans as "nations of heroes" superior to their captors• The Theory of Moral Sentiments and Wealth of Nations form a unified system, not contradictory works• Commercial society requires both moral foundations and economic understanding to function properlyFor the complete series on Adam Smith's Wealth of Nations and additional resources, you can also visit Liberty Fund's Adam Smith Works website.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textMike Munger explores how Monty Python brilliantly illustrated transaction cost economics through their legendary comedy sketches. The British comedy troupe's most famous routines provide perfect, hilarious examples of the frictions that make economic interactions costly and complicated in the real world.• Three definitions of transaction costs from Ronald Coase, Douglas North, and Oliver Williamson• The Dead Parrot sketch as an illustration of ex-post recontracting problems and contract enforcement• Ministry of Silly Walks demonstrating how inefficient institutions persist due to high reform costs• The Argument Clinic depicting problems with contract scope and definition• Monty Python and the Holy Grail showing barriers to entry and communication costs• Spanish Inquisition sketch revealing coordination failuresThe five MP sketches mentioned here:Dead Parrot Sketch:  https://youtu.be/4vuW6tQ0218?si=hHfu07sgQeCgxUxx Ministry of Silly Walks:  https://youtu.be/iV2ViNJFZC8?si=U5QxzDeYXeT3UhIq Argument Clinic:  https://youtu.be/uLlv_aZjHXc?si=aU14dFjwnJeDvRf7 Holy Grail—Anarcho-Syndicalist Peasant:  https://youtu.be/_EMZ1u__LUc?si=C9z8e4NAQDRkU8q7 Spanish Inquisition:  https://www.youtube.com/watch?v=D5Df191WJ3o   Letter:  Swiss Air's efficient window-seat-first boarding policyBook'o'da'week: To Overthrow the World: The Rise and Fall and Rise of Communism, by Sean McMeekinNext episode releases July 22nd, beginning the co-produced series on Adam Smith's "Wealth of Nations" with an overview of the Scottish Enlightenment.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textMiddlemen are not parasites but essential "engineers of exchange" who create value by connecting buyers and sellers who might never find each other otherwise.• The word "monger" (and Munger) comes from a Saxon root--Mancgere-- meaning trader or merchant• Middlemen historically seen as parasites for buying cheap and selling dear without improving products• 11th-century "mancgere" traders defended their value despite not changing the goods they sold• RA Radford's 1945 POW camp study shows how middlemen increase beneficial exchanges• The prison camp padre who traded his way to wealth, while making everyone else better off!!• Arbitrage improves market efficiency by exploiting price differences, and reducing differences in price so that people can rely on the price they are offered rather than having to bargain or comparison shop. • Middlemen only become problematic when they control exclusive information or "rents"The first "middleman" episode of TAITC:  May 2023....R.A. Radford, "The Economics of a POW Camp." M.C. Munger, "Market Makers or Parasites."Book'o'da'week: Country Music USA by Bill C. Malone, published by University of Texas Press.Bonus: a great example of a middleman, from a listener in Oz!If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

What is capitalism, really? Drawing on Adam Smith, Douglass North, and his own experience as a teacher and economist, economist Michael Munger of Duke University discusses three stages of economic development with EconTalk's Russ Roberts: voluntary exchange, markets, and capitalism. Along the way, the conversation explores the moral and institutional foundations that make impersonal exchange possible, the transformative power of the division of labor, and how capitalism uniquely enables "time travel" through liquidity and equity finance. The conversation closes with a discussion of human needs beyond material well-being.

Send us a textThe price system solves a profound coordination problem by communicating dispersed knowledge that no central planner could ever fully access or comprehend. We explore Hayek's insight about how prices serve as both information and incentives, allowing self-interested actions to inadvertently benefit society.• The "knowledge problem" – why information needed for economic decisions is dispersed among millions of individuals• Tale of two farmers – how profit-seeking Mo unknowingly serves society better than altruistic Al• Markets generate information through commercial processes that otherwise wouldn't exist• Goodhart's Law – when measures become targets, they cease to be good measures• Soviet planning failures – absurd outcomes like factories producing single giant nails to meet weight quotas• Recycling pennies – potential approaches as the US phases out penny productionMentioned in the podcast:FA Hayek, "Use of Knowledge in Society" (AER, 1945) Michael Munger, Socialist Generation Debate"Goodhart's Law""What Do Prices Know That You Don't?"Ross Kaminsky, of KOA:iHeart RadioSegments with RossRoss on X (@rossputin)My Duke colleague Bruce Caldwell, on the intellectual history of Hayek's 1945 AER paperBook'o'da'week! Three suggestions (but mostly Red Plenty!)Paul Craig Roberts' "Alienation and the Soviet Economy" Alec Nove's "The Economics of Feasible Socialism"Francis Spufford's "Red Plenty"If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textThe make-or-buy decision is a fundamental aspect of economics that applies to businesses, households, and nations, with the U.S. penny providing a fascinating case study in economic inefficiency.• It costs 2.72 cents to manufacture one penny, representing a loss of 1.7 cents per coin to taxpayers• The U.S. Treasury loses between $85-120 million annually due to penny production costs• There are approximately 130 billion pennies in existence, but only 5-10% actively circulate• Most pennies end up sitting idle in jars, drawers, and coin collections after minimal use• Arguments against pennies include production costs, inflation reducing value, transaction inefficiency, and environmental impact• Canada successfully eliminated the penny in 2012, rounding cash transactions to the nearest five cents• A potential alternative: buying back existing pennies at a price below manufacturing cost• The Federal Reserve could implement a system paying $1.50 for 100 pennies, still saving over the $2.72 production cost• This system would utilize the billions of idle pennies while maintaining the existing distribution infrastructureGrass seed:  Expensive!Book'o'da'week: Abortion, Baseball, and Weed Join us next week on Tuesday, July 1st for a new episode with a fresh topic, letters from listeners, and of course, a hilarious new TWEJ.If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textHow should we decide which political-economic systems are best for organizing society? Let's peer through the lens of the "Pretty Pig Problem," which highlights the flaws in comparing the actual implementation of systems we dislike with idealized versions of systems we prefer.  The PPP shows that we must compare real-world options rather than theoretical ideals.Some details:• Only three social systems are viable at scale: authoritarianism, capitalism, and democratic socialism• Every system has both an ideal form and a corrupted form that must be considered• The "Pretty Pig Problem" highlights our tendency to unfairly compare real systems to idealized alternatives• People on the left note market problems and conclude state intervention is necessary without examining real state actions• People on the right highlight state problems and assume markets are better without considering actual market performanceAnd....TWEJ!  And Book'o'da'week!Listen next Tuesday, June 24th, for a new episode of Tidy C with a new topic, letters, and another hilarious TWEJ.LINKS:Peter Boettke on EconTalk and a "Living Economics"Brooks' Law of Software EngineeringIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Mike Munger is a professor of political science at Duke University. Much of his teaching and his great podcast, The Answer is Transaction Costs, involves political economy (the intersection of politics and economics) rather than just politics. We'll discuss the nature of bureaucracy.

Send us a textTransaction costs are the friction in the gears of society, but the worst transaction costs are the ones that reflect government failure. You can see it in ever cliche about government, from the dreaded DMV lines to the passport control bottleneck. Drawing on Milton Friedman's "Barking Cats" essay from 1973, I explore why bureaucracy remains fundamentally immune to reform efforts, regardless of which political party holds power.The frustrating reality is that bureaucracies operate with completely different incentives than private businesses. While companies balance money costs against convenience to attract customers, government agencies focus solely on their budgets while taxing citizens with enormous "trouble costs." North Carolina's DMV perfectly illustrates this dysfunction—appointments require six-month waits while the state proudly touts its budget savings. Most maddening is that these aren't even genuine services, but rather artificial permission requirements the government imposes before allowing us to live our lives.This represents a textbook government failure—what economists call a Pareto inferior outcome. Most citizens would gladly pay slightly more in fees or taxes to avoid wasting hours (or months) of their lives in bureaucratic purgatory. That additional revenue could easily fund more staff and faster service. Yet the system has no mechanism to capture these preferences or respond to them.The problem isn't partisan, and it can't be fixed by shuffling leadership or staff. As Chris Rock might say about bureaucracy—"that tiger ain't go crazy, that tiger went tiger." Bureaucracy simply acts according to its nature. Reformers who believe they can fundamentally change how these institutions function are like people who want cats that bark—they fundamentally misunderstand the beast they're dealing with.Listen in for insights on why bureaucratic inefficiency persists despite our best efforts, complete with revealing (but not really funny) quotes from political thinkers ranging from Schumpeter to Trotsky. Have your own bureaucratic horror story to share? Let me know in the comments or on social media.Links:Friedman article 1973Keech and Munger article 2015Chris Rock, "Tiger!"Parkinson's LawMichael Munger: The "Trouble Tax"If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textAdam Smith's pin factory example from "The Wealth of Nations" demonstrates how dividing labor into specialized tasks dramatically increases productivity. Ten workers specializing in different aspects of pin-making could produce 48,000 pins daily, while individually they might struggle to make even 20 pins each—a productivity increase of at least 240 times. This division of labor, Smith argued, is limited by the extent of the market.Transaction costs—expenses associated with exchanging goods across distances—determine this market extent. As railroads, steamships, and eventually air freight reduced these costs, pin manufacturing evolved from numerous small local producers to global consolidation. The largest pin producer today, Prim-Dritz Corporation (headquartered in South Carolina), conducts most manufacturing in Asia. Modern pin factory workers now produce approximately 800,000 pins daily—200 times more than in Smith's era.This transformation wasn't about "exporting jobs" but rather the natural evolution of specialized production. Multiple attempts to form price cartels in the pin industry failed as producers leveraging greater division of labor could always undercut competitors. The pattern we see in pins repeats across countless industries: as transaction costs fall, markets expand, allowing for increased specialization and productivity.Understanding this relationship between division of labor and market size helps explain why some manufacturing concentrates geographically, why attempting to "bring back" certain industries is economically challenging, and why consumer prices have fallen for many goods. Smith's insight continues to provide a framework for understanding economic trends in our increasingly interconnected global economy. Links:Dutton, H. I., and S. R. H. Jones.  “Invention and Innovation in the British Pin Industry, 1790-1850.”  British Business History.  57 (1983):  175-193. Jones, S. R. H.  “Price Associations and Competition in the British Pin Industry, 1814-40.”  Economic History Review.  26 (1973):  237-253.   Jones, S. R. H.  “Hall, English, and Co., 1813-41:  A Study of Entrepreneurial Response in the Gloucester Pin Industry.”  Business History.  18 (1976): 35-65.  Liberty Fund: Adam Smith's Pin Factory. McNulty, Mary.  “How Straight Pins are Made.”  How Products are Made.   ENotes.  Pratten, Clifford J.  “The Manufacture of Pins.”  Journal of Economic Literature.  18 (1980):  93-96. Stigler, George J.  “The Division of Labor is Limited by the Extent of the Market.” Journal of Political Economy, 59(1951): 185-193. If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWhat happens when we stop seeing politics and markets as separate spheres and start recognizing their deep entanglement? Mikayla Novak, senior fellow at the Mercatus Center, challenges conventional economic thinking in favor of Dick Wager's "entangled political economy."Drawing from her fascinating career path through Australia's Treasury, free market think tanks, and her pursuit of multiple courses of study, Novak offers unique insights into institutional economics and political networks. Her background bridges disciplines in ways that embody Hayek's wisdom that "you can't be a good economist by just being an economist."We consider Boettke's distinction between "mainstream" economics—with its equilibrium models and market failure diagnoses—and the "mainline" tradition that views economies as dynamic processes shaped by institutions. This conversation reveals how Richard Wagner's entangled political economy theory helps understand policy failures. When government and markets form complex networks rather than separate spheres, simplistic reform attempts like "just cut spending" are disastrously unsuccessful.The discussion vividly illustrates why transaction costs matter deeply for institutional analysis. We examine how political networks form with elites enjoying low-cost access while ordinary citizens remain at the periphery. This structural understanding helps explain why some inefficient policies persist despite their obvious flaws—they benefit the well-connected core of our political-economic system.Mikayla Novak's page linkRichard Wagner: Entangled Political Economy Research NetworkBuchanan's Liberal TheoryPolitics as a Peculiar BusinessPrevious TAITC Episodes of Relevance:Randall Holcombe and Political CapitalismDonald Boudreaux on Law and LegislationLate Bloomers book, by Rich KarlgaardMunger on tariffs and costsIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

In this conversation from 2023, Alex speaks with Mike Munger about the state of classical liberalism in an era in which conservatism seems intent on wielding the tools of central planning and the left prefers the term "progressive" to "liberal". Episode Notes: The Classical Liberal Diaspora by Mike Munger: https://t.co/xoRnPIUXXi  The Articles of Confederation: https://www.britannica.com/topic/Articles-of-Confederation  Preamble to the United States constitution: https://www.uscourts.gov/about-federal-courts/educational-resources/about-educational-outreach/activity-resources/us  Fusionism: https://en.wikipedia.org/wiki/Fusionism  Albert Jay Nock and The Remnant: https://mises.org/library/isaiahs-job  Chile rewriting its constitution: https://www.reuters.com/world/americas/chilean-congressional-council-finalizes-new-draft-constitution-again-2023-10-30/ 

Send us a textWhy do harmful policies like tariffs keep coming back despite universal condemnation from economists? The answer lies in the dynamics of collective action and concentrated interests.In this eye-opening conversation with G. Patrick Lynch, Senior Fellow at Liberty Fund, Mike Munger explores the fascinating world of public choice theory and how it explains some of democracy's most persistent puzzles. Lynch, a self-described "popularizer of public choice," breaks down complex economic principles into digestible insights about political behavior.The discussion begins with the foundations of public choice theory—the application of economic reasoning to political decisions. Far from portraying politicians as uniquely self-interested, public choice simply acknowledges that all humans respond to incentives, whether in markets or politics. As Lynch explains, "It's a mistake to characterize public choice as people being just materially self-interested." Even Mother Teresa was pursuing her goals single-mindedly—the definition of self-interest properly understood.When the conversation turns to tariffs, Lynch delivers a masterclass in why bad policies persist. Manufacturing interests receive concentrated benefits and organize effectively, while consumers bear diffuse costs. "That $70,000 job costs consumers $210,000 to $250,000 in increased prices," Munger notes. But since an individual consumer might pay just pennies more per purchase, they won't mobilize political opposition.Perhaps most fascinating is the exploration of Elinor Ostrom's Nobel Prize-winning work on common-pool resources. Conventional wisdom suggested that without government intervention, shared resources face inevitable destruction through overuse. Yet Ostrom discovered countless examples worldwide where communities developed sophisticated management systems to sustain resources over generations.If you've ever wondered why policies that economists universally condemn keep returning, or why small groups seem to dominate our politics despite majority rule, this conversation offers profound and sometimes unsettling answers. Subscribe now for more insights that will transform how you understand politics, economics, and collective decision-making.LINKS:G. Patrick Lynch:https://www.econlib.org/author/plynch/ https://www.civitasinstitute.org/research/the-young-americas-need-each-other https://lawliberty.org/author/patrick-lynch/https://lawliberty.org/book-review/public-choice-with-chinese-characteristics/ Shaggy Dog story: https://www.phrases.org.uk/meanings/shaggy-dog-story.html The ORIGINAL Shaggy Dog story:  https://stephengreensted.wordpress.com/2011/01/20/the-original-shaggy-dog-joke/Book'o'da Month:    Two Books, both by William Bernstein. The Birth of Plenty: How the Prosperity of the Modern World was Created. McGraw-Hill, New York, 2004, If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWhat happens when we no longer consume scarce information through trusted, verified institutions, but instead through an abundance of unbundled content without context or curation? John Green, rising star in political science from Duke University, takes us on a tour of the rapidly evolving  landscape of political information.Green challenges conventional wisdom about how ideologies function, arguing they're not so much coherent philosophical systems as they are socially shared belief networks. In these networks, most people specialize in just one or two issues they deeply care about, while adopting their coalition's positions on everything else. This creates an environment where signaling group loyalty becomes crucial—explaining why people sometimes make outrageous claims not despite their falsity, but precisely because the willingness to say something costly signals authentic commitment.The conversation takes an illuminating turn when Green unpacks his groundbreaking research on "curation bubbles." Unlike echo chambers or filter bubbles, these environments emerge when people strategically share content based on its utility for their side, regardless of source. A conservative might enthusiastically share a New York Times article criticizing Democrats, while generally dismissing the publication as biased. This selective curation creates information environments that are neither completely closed nor genuinely diverse.Perhaps most troubling is Green's insight about misinformation in the digital age. The real danger isn't simply false claims from unreliable sources, but rather the strategic repurposing of true information to create misleading narratives. When accurate statistics or facts are stripped of context and woven into deceptive frameworks, traditional fact-checking approaches fall short.As we navigate this unbundled media landscape, the question remains: can we rebuild institutions that verify and curate information effectively? The answer may determine the future of our shared reality and democratic discourse.Jon Green at Duke"Curation Bubbles" in APSRConverse on Belief SystemsMunger on "Direction of Causation"Letter Response:Sweden is NOT socialist!  (If you don't believe me, believe Andreas Bergh...)Book'o'da Month:  Alexander Kirshner, Legitimate Opposition, 2022, Yale University Press.  ISBN:  9780300243468. https://yalebooks.yale.edu/book/9780300243468/legitimate-opposition/Excellent podcast with Kirshner on the book. If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Michael Munger is an American economist and a former chair of the political science department at Duke University, In this episode, we talked about:•⁠  ⁠Michael's Bio & Background•⁠  ⁠Housing Rights•⁠  ⁠Rent Control•⁠  ⁠Corporate Income Tax•⁠  ⁠Line LegislationUseful links:Podcast: The Answer Is Transaction Costshttps://podcasts.apple.com/us/podcast/the-answer-is-transaction-costs/id1687215430

Send us a text Join economist Peter Bettke as he discusses how transaction costs impact market efficiency and our everyday decisions. We delve deep into historical examples, particularly the Soviet Union, to highlight the consequences of centralized planning versus individual market actions.Through engaging anecdotes and rigorous analysis, Bettke reveals why understanding transaction costs is essential for navigating the complexities of modern economies. We also explore the evolving discourse surrounding socialism, questioning whether new technologies, such as AI, could revolutionize planning efforts. This episode is not just for economists; it's a critical discussion for anyone seeking to understand the interplay between institutions, information, and human behavior in shaping societal outcomes.Our conversation unravels the myths surrounding economic models and their real-world applications, encouraging listeners to think critically about the institutions that govern our economy. Don't miss out on this thought-provoking discussion that could reshape your perception of economics.Peter Boettke:  Web page:  https://economics.gmu.edu/people/pboettkeRecent book: Socialist Calculation Debate (Cambridge U Press) https://www.cambridge.org/core/elements/abs/socialist-calculation-debate/5E63749F9D34D065193DCF77FC9FD8A9Recent Econtalk: https://www.youtube.com/watch?v=5NVocBZ8S7U Munger papers on “Status Quo” and James Buchanan:   (with G. Vanberg) https://scholars.duke.edu/publication/1475073 https://link.springer.com/chapter/10.1007/978-3-030-03080-3_3 The "Socialist Generation Debate," at AIERMainline Economics Resources: Living Economics Six Nobel Lectures Applied Mainline Economics Book'o'da'month:  Bill Mauldin, BRASS RING: A SORT OF MEMOIR. 1973, WW Norton.  If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWhat if transaction costs could shape entire political and economic systems? Join us for an insightful discussion with Shruti Rajagopalan, a senior research fellow at the Mercatus Center, as she takes us through her fascinating journey from the University of Delhi to George Mason University. Her research on India's economic liberalization shaped her understanding of economics and public choice theory, and now she is looking at the Indian Constitution as a subject of study. She shares how India's socialist elements and frequent amendments navigate the balance between democracy and central planning.Explore the contrasting worlds of constitutional amendments in the United States and India, where transaction costs play a pivotal role. We unravel the philosophical differences in how these two nations interpret their constitutions, impacting citizens' rights and governance in uniquely distinct ways. Through metaphors like the Ship of Theseus, we evaluate the stability and adaptability of these constitutions, shedding light on how they sustain their respective democratic frameworks amid evolving societal needs.Adding a dose of humor, we recount a satirical tale of international contractors bidding for a White House fence and explore the complexities of voting systems influenced by transaction costs. The episode takes a reflective turn as we discuss Ulysses S. Grant's memoirs, highlighting themes of personal sacrifice and political intricacies. This conversation promises to enrich your understanding of how economics, law, and political systems intricately intertwine, offering both serious insights and light-hearted moments to ponder.Links:Dr. Shruti Rajagopalan's web site at Mercatus and her personal web siteDr. Rajagopalan's podcast, "Ideas of India" and publicationsBook o'da'month: U.S. Grant, Personal Memoirs, Modern Library, 1999. A note on the TWEJ: Some listeners may find the joke racist. But in fact each of the three stereotypes captures a kind of "excellence," though the three kinds of excellence might not all be equally socially admirable. Gordon Tullock, who was discussed in this episode, made some observations about corruption that are worth keeping in mind: Western nations abhor, or pretend to abhor, corruption, though in fact there is plenty of it in the West. Tullock's point was that, in a nation with dysfunctional institutions, corruption can be efficiency enhancing. Institutions matter. The point is not that Germans are inherently organized and methodical, nor that Mexicans are inherently hard-working and efficient, and certainly not that Indians are all corrupt. But the political and economic systems of those nations create a setting where such actions are "rational," and even expected.  I wrote a piece for Public Choice on Tullock's insight, and the problem of India, and that's why I enjoyed this joke!If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textThis episode explores the intersection of democracy and capitalism, focusing on the concept of political capitalism and its relation to cronyism. Randall Holcomb discusses transaction costs, charismatic leadership, and critiques the idea that democracy and separation of powers inherently checks coercion, stressing the need for competing elites to foster accountability.• Transaction costs hinder citizen engagement in political processes • Political capitalism defined as capitalism influenced by political motives • Dynamic of cronyism within democratic systems • Buchanan's notion of "politics as exchange" explored • Political elites dominant in shaping policy and public preferences • Charismatic leadership affects political beliefs and decisions • Importance of competing elites for maintaining a balanced political landscape • Reasons for optimism surrounding innovation in capitalism despite political challenges • Upcoming book discusses further aspects of political exchangeLinks!Randy Holcombe's web site at FSU Political Capitalism bookFollowing Their Leaders bookMichael Giberson blog post at Knowledge Problem, on Price Gouging. Book'o'da Month:  Peter Boettke, Rosolino A. Candela and Tegan Lindstrom Truitt, The Socialist Calculation Debate: Theory, History, and Contemporary Relevance   https://www.cambridge.org/core/elements/socialist-calculation-debate/5E63749F9D34D065193DCF77FC9FD8A9If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textCurious about how the world of prison economics operates? Get ready to uncover a hidden universe with our guest, David Skarbek, a leading voice in political economy. David takes us on a captivating journey from his early days in construction to his groundbreaking research at George Mason University, where he was inspired to explore the economics of unconventional spaces. His insights reveal the sophisticated systems of governance designed by prison gangs to maintain order and manage illicit economies. Whether you're fascinated by how these groups mimic pirate crews or intrigued by their ability to regulate harm in a high-stakes environment, this episode promises to reshape your understanding of extra-legal cooperation.David Skarbek, Michael Targoff Professor of Political Economy at Brown University. David Skarbek's Amazon Author PageBook'o'da'Month:  Shattered: Inside Hillary Clinton's Doomed Campaign  – Crown Publishers, April 18, 2017. by Jonathan Allen  Amie Parnes.Club Random: Bill Maher talks to William ShatnerIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textTodd Zwicky, professor at George Mason's Scalia Law School, challenges some conventional legal doctrine, taking up the views of Bruno Leone and Friedrich Hayek. What if the legal world has underestimated the power of spontaneous order? Todd's intellectual journey sheds light on how these groundbreaking ideas contrast sharply with the dominant constructivist views shaping contemporary legal thought. Todd offers perspectives on the role of intuition and reasonableness in the courtroom, inspired by the legacies of Leone and Hayek. Uncover the hidden parallels between market dynamics and legal systems, emphasizing the fluidity of Roman law as a process of discovery. Links:Todd Zywicki's Faculty PageZywicki's published work on Leoni, and the Common LawThe Rise and Fall of Efficiency in the Common Law: A Supply-Side Analysis, 97 NORTHWESTERN L. REV. 1551 (2003). Common Law and Economic Efficiency (with Edward Stringham), in 7 ENCYCLOPEDIA OF LAW AND ECONOMICS: THE PRODUCTION OF LEGAL RULES (2d ed., Francesco Parisi, ed., 2012). Bruno Leoni's Legacy and Continued Relevance, 30(1) J. OF PRIVATE ENTERPRISE 131-41 (2015).Austrian Law and Economics and Efficiency in the Common Law (with Edward Stringham), in RESEARCH HANDBOOK ON AUSTRIAN LAW AND ECONOMICS 192 (Todd J. Zywicki and Peter J. Boettke, eds. 2017). The Loper Bright SCOTUS Decision (And the Gorsuch concurrence!)If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

In 2020, Alex spoke with Mike Munger about the sustainability of capitalism. We're republishing that very important conversation today. --- Alex Aragona talks with Mike Munger as he explores his views on the sustainability of capitalism and the factors that contribute to it. References from Episode 23 with Michael Munger You can order Michael Munger's book Is Capitalism Sustainable on Amazon Canada here You can order his book Tomorrow 3.0 on Amazon Canada here

Send us a textHave you ever wondered how common law rules and market prices both "emerge"? Inspired by the works of James Buchanan, F.A. Hayek, and Bruno Leoni, Donald Boudreaux explains how decentralized processes can lead to the emergence of effective norms, such as queuing and speeding rules, without the need for top-down legislation. We discuss the significance of individuals spending their own money versus others' and how these incentives impact societal outcomes, highlighting the deep wisdom embedded in traditionally evolved rules.We also venture into the nuanced distinction between law and legislation, drawing on insights from Buchanan and Hayek. We elaborate on Buchanan's concept of "relatively absolute absolutes," and on Hayek's emergence process, emphasizing the continuous generation of information through human action and preferences. Discover the natural process behind the emergence of common law, its role in establishing predictable rules, and the challenges presented by the unpredictable nature of parliamentary law. Guest: Donald Boudreaux at George Mason UniversitySome Links: Econtalk, Sept 30, 2024: “The Underrated Bruno Leoni”Econtalk, Dec 11, 2006:  "Law and Legislation"Michael Munger and Georg Vanberg, 2023, Contractarianism, Constitutionalism, and the Status Quo. Public Choice. Michael Munger, 2023, “The Socialist Generation Debate,” AIER. Book o'da'month: Bruno Leoni, FREEDOM AND THE LAWIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Welcome back! In this week's show, Larson and Rich are joined by Mike Munger for a chat about all things economics. Watch the YouTube version here: https://www.youtube.com/watch?v=I3Y3v6qr0WI Subscribe on your favorite podcast app! https://gotaminute.podbean.com/

Ever wondered why firms exist in a market-driven economy? This month's episode promises to unravel this question by diving deep into Ronald Coase's seminal 1937 paper, "The Nature of the Firm." Join me, Mike Munger, as I reflect on our first 16 months of podcasting and share the insights and wisdom that have shaped our journey. You'll gain a thorough understanding of how transaction costs influence economic behaviors and organizational structures, with fascinating examples from Richard Langlois' analysis of the American Midwest's agricultural sector before the railroad era.Ronald Harry Coase, The Nature of the Firm (1937)Michael Munger, Why Bosses Don't Wear Bunny SlippersIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Can high prices during emergencies actually save lives?  Using North Carolina as an example, we dissect the economic and legal implications of these laws, exploring the ambiguities in terms like "unreasonably excessive" and the chilling effect on commerce. Discover how artificially low prices can lead to resource misallocation, discourage stockpiling, and hinder the transportation of vital supplies during crises. Allowing higher prices is, perhaps surprisingly, the only way to get low prices soon. Links on Price Gouging:Videos:https://www.youtube.com/watch?v=HFXYO1W_JXwhttps://www.facebook.com/watch/?v=1227582290607127Articles:https://www.econlib.org/library/Columns/y2007/Mungergouging.htmlhttps://www.aier.org/article/three-undeniable-problems-with-anti-gouging-laws/https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1099567#:~:text=Matt%20Zwolinski,-University%20of%20San&text=Price%20gouging%20occurs%20when%2C%20in,needed%20to%20cover%20increased%20costs.Book o'da Week:  https://www.simonandschuster.com/books/What-Went-Wrong-with-Capitalism/Ruchir-Sharma/9781668008263If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Are housing regulations making affordable homes a pipe dream? We promise you'll gain a deeper understanding of how transaction costs and regulatory hurdles impede new housing development, frustrating both market responses and the dreams of potential homeowners. We'll explore how the very laws intended to protect affordable housing often backfire, pushing developers toward luxury projects instead.Vicki Been; Ingrid Gould Ellen; Katherine O'Regan, 2018. "Supply Skepticism," https://furmancenter.org/research/publication/supply-skepticismnbsp-housing-supply-and-affordabilityMichael Munger, "All Housing is Affordable Housing: Seen and Unseen Edition." AIER. Credit to Biden/Harris: Trying to Make It Legal to Build Housing: https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/13/fact-sheet-biden-harris-administration-takes-new-actions-to-lower-housing-costs-by-cutting-red-tape-to-build-more-housing/Building "luxury" housing reduces rents on lower-cost units! https://x.com/jayparsons/status/1823352715852103697Javier Milei Got Rid of Rent Control: Housing Supply Skyrocketed!Q  https://www.newsweek.com/javier-milei-rent-control-argentina-us-election-kamala-harris-housing-affordability-1938127Cans v. Bottles: https://twinmonkeys.net/an-advantage-to-canning-vs-bottling-lower-shipping-costs/#:~:text=Aluminum%20cans%20are%20cheaper%20to,space%20and%20reducing%20packaging%20wasteThe Theban Plays: https://www.amazon.com/Sophocles-Oedipus-Colonus-Antigone-Editions/dp/B00HTJUCLW/ref=monarch_sidesheet_titleIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz