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

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.
Eli Dourado, Christopher Koopman | Dec 10, 2015
We report on new data received from the Internal Revenue Service that sheds light on the changes in independent contracting. Our data support the claim that there has been an increase in nontraditional employment, but the data refute the idea that this increase is caused by the sharing-economy firms that have arisen since 2008. Instead, we view the rise of sharing-economy firms as a response to a stagnant traditional labor sector and a product of the growing independent workforce.
Adam J. Hoffer, Russell Sobel | Oct 27, 2015
A new study for the Mercatus Center at George Mason University is the first to look at broad-based government bidding preferences. It finds that in-state preference policies are associated with a $148 increase per capita in state construction costs and a $158 increase per capita in capital expenditures, which translates to an increase of more than $600 million for the median state in each type of cost.

Testimony & Comments

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.
Veronique de Rugy | Jun 25, 2014
The Bank has long outlived its purpose and cannot manage to meet the standards of the new missions that have been developed to validate its existence. For policymakers who have the facts, the choice is clear: the Export-Import Bank must go.

Research Summaries & Toolkits

Speeches & Presentations

Expert Commentary

Feb 12, 2016

At both the state and federal levels, sharing economy apps and platforms do not fit easily within existing labor laws. As it grows, the sharing economy repeatedly challenges the status quo of government regulation.
Jan 26, 2016

Occupational licensing laws are ubiquitous in the health care labor market. A recent report from the White House suggests that more than 80 percent of all health care practitioners are licensed. Occupational licensing laws require workers in a particular health care field to pass exams, complete minimum levels of schooling and pay fees before they're eligible to practice.
By Christopher Coyne, Rachel L. Coyne |
Jan 21, 2016

The call for new regulations on Uber offers the opportunity to consider two very different views of regulation.
Jan 12, 2016

With his last State of the Union address tonight, President Barack Obama has much to look back on over his past 8 years in office. Our experts have taken this time to reflect on some of the highlights he might bring up in his speech tonight.
Jan 11, 2016

An important but overlooked debate is unfolding in several states: When governments restrict market forces in health care, who benefits? Legislative majorities in 36 states believe that consumers benefit, because restrictions help control health-care costs. But new research confirms what should be common sense: Preventing qualified health-care providers from freely plying their trade results in less access to care.
Jan 07, 2016

Benjamin Franklin said there are only two things certain in life: death and taxes. But I'd like to add a third: cronies coming back for more after Washington gives them a handout. Case in point, the merchants and retailers who got a juicy morsel from Dodd-Frank are now clamoring for more.

Charts

The spending bill, which is more than 2,000 pages long, contains funding for numerous programs that largely benefit particular interest groups at the expense of taxpayers and the broader economy. This week’s holiday-themed graphic singles out 12 examples, but it by no means represents all of the gifts for special interests contained in the bill. Although the individual sums are not large relative to the overall spending contained in the bill, the examples highlight the problem with a federal government that faces few limits on how it can spend taxpayer money.

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 at the Mercatus Center at George Mason University. As director for the Mercatus Center’s State and Local Policy Project, she focuses on questions of public finance and how economic institutions support or hamper economic resiliency and civil society. She specializes in fiscal federalism and institutions, state and local governments and finance, pensions, public administration, and economic development.
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

The U.S. health care system is as complex as it is crucial. Some of that complexity stems from a little known and less understood regulation, common in many states. Known as “certificate of need” (CON) laws these regulations require providers to obtain permission from a state board before they may open a new facility, expand an existing facility, offer a new service, or purchase a new piece of equipment.

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.
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