Study of American Capitalism

Study of American Capitalism

Created in the wake of the 2008 financial crisis, and the government’s subsequent responses, the Project for the Study of American Capitalism at The Mercatus Center is a research program responding to the increased concern about the role of political favoritism in American business. The project explores the implications of this emerging character of the economy, examining the effects it has on the standard of living in the United States and public perceptions of the legitimacy of government and business. Does it make any difference to average Americans whether ours is a more or less free market? And what can policymakers do to ensure competition and to commit in a credible way to equality of opportunity?

Drawing on hundreds of academics from around the world, the Project for the Study of American Capitalism helps scholars and policymakers investigate the nature of these problems and identify real and sustainable solutions.

Research

Christopher Koopman, Thomas Stratmann, Scott Eastman | May 16, 2016
Certificate-of-need (CON) programs are state laws that require government permission for healthcare providers to open or expand a practice or to invest in certain devices or technology. These programs have been justified on the basis of achieving several public policy goals, including controlling costs and increasing access to healthcare services in rural areas. Little work has been done, however, to measure what effects CON programs have on access and distribution of healthcare services. Two recent studies that examined the relationship between a state’s CON program and access to care found that these laws failed to achieve their stated goals.
Thomas Stratmann, Christopher Koopman | Feb 18, 2016
We examine the effect of entry regulation on ambulatory surgical centers and community hospitals and find that there are both more rural hospitals and more rural ambulatory surgical centers per capita in states without a certificate-of-need program regulating the opening of an ambulatory surgical center. This finding indicates that certificate-of-need laws may not be protecting access to rural health care, but are instead correlated with decreases in rural access.
Jason Sorens | Feb 09, 2016
When local governments in the United States and other developed nations become more dependent on the central government’s grants, they tend to become less efficient, spending more and taxing more for the same level of services. Voters can also find it difficult to understand which level of government is responsible for which policy.
Edward J. Timmons | Jan 26, 2016
Increasing licensing requirements for healthcare professionals is often promoted as a measure to improve the quality of care, but its main effect may be to raise costs for patients.
Patrick McLaughlin, Laura Stanley | Jan 20, 2016
A new study for the Mercatus Center at George Mason University examines the relationship between income inequality and the number of regulatory steps necessary to start a business. Looking at 175 countries and multiple variables, the study finds that there is a positive relationship between entry regulations and income inequality.
Thomas Stratmann, Matthew C. Baker | Jan 12, 2016
Certificate of need (CON) laws in 21 states restrict acquisition of imaging equipment, including magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) scans. We compare the effect of CON regulations for imaging services provided by hospitals and other providers to determine whether CON laws affect use of imaging services across provider types. We find that services by nonhospital providers, but not by hospital providers, are negatively associated with CON laws. We also find that CON laws reduce the overall number of medical providers, suggesting less availability of imaging services in CON states. We provide evidence consistent with this result showing that residents of CON states are more likely to travel out of state to obtain imaging services than are residents of non-CON states. These results imply that the effect of CON is heterogeneous on hospitals and nonhospitals, affecting the market structure for imaging services.

Testimony & Comments

Christopher Koopman | Mar 16, 2016
Whatever the justification behind licensing in the past, its rationale is disappearing as technology provides new solutions to old problems. This meeting is an opportunity for policymakers to reevaluate traditional regulations aimed at addressing information deficiencies and allow technological innovation to do what regulation could not: improve consumer welfare while encouraging innovation and economic growth.
Jerry Ellig | Jan 12, 2016
Virtually all states require auto manufacturers to sell new vehicles through local franchised dealers, protect dealers from competition in Relevant Market Areas, and terminate franchises with existing dealers only after proving they have a “good cause” to do so. In 1979, fewer than half of all states regulated all three of these aspects of the manufacturer-dealer relationship. By 2014, all but one state regulated every single one of these aspects. These state laws harm consumers by insulating dealers from competition and forestalling experimentation with new business models for auto retailing in the twenty-first century.
Christopher Koopman, Thomas Stratmann, Mohamad Elbarasse | Jun 12, 2015
There is little evidence to support the claim that certificates of need are an effective cost-control measure; and Stratmann and Russ have found that these programs have no effect on the level of charity care provided to the poor. While controlling health care costs and increasing care for the poor may be laudable public policy goals, the evidence strongly suggests that CON regulations are not an effective mechanism for achieving them. Instead, these programs simply decrease the supply and availability of health care services by limiting entry and competition.
Veronique de Rugy | Jun 02, 2015
Contrary to what you will hear from its supporters and beneficiaries, the Ex-Im Bank plays a marginal role in export financing—backing a mere 2 percent of US exports each year. The vast majority of exporters secure financing from a wide variety of private banks and other financial institutions without government interference or assistance. With US exports hitting record high levels, it is obvious that such financing is abundant and government assistance is superfluous.
Christopher Koopman, Matthew Mitchell, Adam Thierer | May 26, 2015
The commission should shift enforcement efforts away from stopping private restraint of trade and toward stopping public restraint of trade. In light of George Stigler’s observation that “the state has one basic resource which in pure principle is not shared with even the mightiest of its citizens: the power to coerce,” the commission would be wise to adopt Commissioner Wright’s approach and shift resources toward fighting public restraint of trade.
Veronique de Rugy | Mar 24, 2015
Policymakers who are interested in supporting the entrepreneurs and companies that will deliver the next generation of energy supplies and products should focus their attention on correcting the federal government’s hostile tax climate and dispense with the futile hopes of outsmarting the marketplace.

Research Summaries & Toolkits

Speeches & Presentations

Expert Commentary

Jul 12, 2016

The effect of the overtime-pay mandate on these workers will be to raise employers' costs of employing them. With the cost of employing these workers forced higher by the government, some of these workers will simply lose their jobs.
Jun 30, 2016

Cronyism is the ugly marriage between special interest groups and politicians, which results in an abuse of the government's power to grant special privileges to a few winners — for example, unfairly preventing competition or doling out subsidies and bailouts at the expense of taxpayers.
Jun 24, 2016

Disregarding the role of state and local governments will leave much of the problem unchanged. Only when Washington takes fundamental reform at a state-level seriously will everyone have a genuine chance to go out and succeed in the manner that Ryan has suggested.
Jun 03, 2016

For now, would-be entrepreneurs who are banned from the job market until further notice may have to rely on the courts to relieve them from these seemingly arbitrary barriers to employment. Hopefully, shampooers all across the United States will soon be free to lather without a license.
Jun 01, 2016

Competition guarantees that the borrowers will receive loans at the lowest possible cost and highest possible customer service—in both large- and small-dollar loan markets.
May 23, 2016

While raising the question of Puerto Rican independence might seem quaint, its prominent place in the news is at least an occasion to recognize that big government abroad and big government at home are two sides of the same coin.

Charts

CON programs do not promote access to rural care in the form of more rural hospitals. Instead, CON laws are associated with a decrease, not an increase, in the number of hospitals and ASCs, rural or otherwise. CON laws should not be the tool of choice for policymakers seeking to protect access to health care in rural areas.

Experts

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist. Her primary research interests include the U.S. economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.
Matthew Mitchell is a senior research fellow at the Mercatus Center at George Mason University, where he is the director of the Project for the Study of American Capitalism. He is also an adjunct professor of economics at Mason. In his writing and research, he specializes in economic freedom and economic growth, public-choice economics, and the economics of government favoritism toward particular businesses.
Eileen Norcross is a senior research fellow and director for the State and Local Policy Project at the Mercatus Center at George Mason University.
Adam Thierer is a senior research fellow with the Technology Policy Program at the Mercatus Center at George Mason University. He specializes in technology, media, Internet, and free-speech policies, with a particular focus on online safety and digital privacy. His writings have appeared in the Wall Street Journal, the Economist, the Washington Post, the Atlantic, and Forbes, and he has appeared on national television and radio. Thierer is a frequent guest lecturer and has testified numerous times on Capitol Hill.

Podcasts

Thomas Stratmann | February 05, 2016
Thomas Stratmann discusses his newest research on certificate of need laws on WDEV Radio (Vermont).

Recent Events

Join us for a discussion with Mercatus Research Fellow Christopher Koopman, who will explain the greatest threats to capitalism today and what reforms could put us on the path to the next Industrial Revolution.

Books

Randall G. Holcombe, Andrea Castillo | Apr 23, 2013
By examining how real governments have operated, this book demonstrates why—despite their diverse designs—in practice all political and economic systems are variants of either liberalism or cronyism.

Media Clippings

Adam Thierer, Christopher Koopman | Jan 25, 2015
This excerpt originally appeared in Wall Street Journal.
Veronique de Rugy | Aug 24, 2014
This excerpt originally appeared in Wall Street Journal.
Veronique de Rugy | Jun 25, 2014
This excerpt originally appeared in The Washington Post.
| Jun 15, 2014
This excerpt originally appeared in The Wall Street Journal.
Veronique de Rugy | Jun 08, 2014
This excerpt originally appeared in The Wall Street Journal.
' '