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.


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.
Dennis Coates | Oct 20, 2015
A new empirical study for the Mercatus Center at George Mason University finds that there is still little evidence that building stadiums or arenas for professional sports franchises leads to significant economic benefits. Sports-initiated development is unlikely to make a community wealthier, and subsidizing professional sports teams may actually reduce economic growth. If a local government is considering adopting economic growth policies, there are far better candidates than subsidizing professional sports franchises.
Robert L. Beekman, Brian T. Kench | Aug 27, 2015
Authorization for the Export-Import Bank of the United States recently lapsed for the first time in more than 80 years, though it may be reestablished at any time. We present an economic efficiency analysis of bank’s activities in a simple open-economy model. This analysis brings clarity to the ongoing political debate regarding this institution. We discuss key arguments in support of and against the bank’s continued activities. We highlight the special privileges that the bank offers to a few domestic businesses, negatively distorting the private market opportunities in the markets in which these favored businesses operate and widely distributing the economic costs across nonfavored constituencies.
John E. Anderson, Seth H. Giertz, Shafiun N. Shimul | Aug 24, 2015
A new study for the Mercatus Center at George Mason University analyzes the spread of use-value assessment as applied to agricultural and rural lands across the 50 states and finds that while the spread of UVA was driven in part by concern over urbanization, the diffusion of UVA as a tax policy across the United States is best explained by effective political lobbying by agricultural interests.
G. P. Manish, Daniel Sutter | Aug 18, 2015
A new study published by the Mercatus Center at George Mason University synthesizes psychologists’ research on intrinsic motivations with research on the motives of entrepreneurs and shows that entrepreneurs are often motivated by a desire to succeed in competition with others. Consumer choice in markets provides validation to entrepreneurs about who provides the “best” product, so government intervention that results in disruption of choices in markets can make entrepreneurs who care about mastery worse off and harm economic growth.
Timothy Sandefur | Jul 09, 2015
Occupational licensing is a major burden on economic liberty. It raises prices, restricts consumer choice, and deprives countless Americans of their right to earn a living for themselves and their families—often for no better reason than to enrich existing, politically influential firms. Among the worst of such abuses is the certificate of public convenience and necessity law, which does not even purport to protect the consumer against dangerous business practices or against incompetent or dishonest practitioners, but is explicitly designed to prevent economic competition.

Testimony & Comments

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.
Veronique de Rugy | Jul 18, 2012
The Department of Energy’s loan guarantee programs have been the focus of much public attention since energy companies Solyndra, Beacon Power, and Abound went bankrupt, leaving taxpayers to shoulder hundreds of mil- lions of dollars in loan guarantees. The evidence strongly suggests that these programs fall short of their stated goals of developing clean energy and creating jobs.

Research Summaries & Toolkits

Speeches & Presentations

Expert Commentary

Nov 19, 2015

Since Uber's launch in San Francisco five years ago, government officials have wrestled with how to address this new type of transportation service. Meanwhile, taxi drivers have cried foul over the unequal regulatory environment. They face a mountain of rules, ranging from sensible to comical and even bizarre, while ride-share upstarts Uber and Lyft operate outside most taxi laws. Policymakers across the nation could learn from their peers in Florida, who may have found a way to level the playing field and still make way for innovation.
Nov 16, 2015

Last week, New York State attorney general Eric Schneiderman issued cease-and-desist letters to DraftKings and FanDuel, the two largest daily-fantasy-sports (DFS) companies, claiming that the games they offer constitute illegal gambling under New York law. The companies have responded with legal action of their own, putting the decision in the hands of the New York court system. While this is just the latest in a series of confrontations playing out across the country over the status of daily fantasy sports, it is perhaps the highest-profile one. It also raises important questions about how the law is applied to innovative products and firms, such as DraftKings and FanDuel, as well as who is in the best position to protect consumers.
Oct 26, 2015

Late last month France's Constitutional Council upheld a ban on UberPop, the budget version of Uber's transportation service. The following day, a court in Brussels also ordered UberPop to shut down. Italy and Germany had previously banned UberPop, and Spain completely banned Uber's transport of passengers last year. Meanwhile, in the United Kingdom and across the United States, Uber, Lyft and other ride-hailing companies are being integrated – albeit gradually and grudgingly – into the existing transportation services market. What drives this difference?
Oct 25, 2015

Broward County recently joined Gainesville and Sarasota by allowing ridesharing companies like Uber and Lyft to operate without fear of reprisal. This is a remarkable turnaround less than three months after Uber left the county in response to overly restrictive regulations. Now Miami-Dade County faces a similar choice.
Oct 21, 2015

There are valid reasons for supporting professional sports subsidies. Millions of people enjoy watching, reading about and discussing their team. For them, the enjoyment of following a team is undoubtedly greater than the costs they bear. Good public policy, however, requires a comparison between the costs and benefits of supporting the franchise. In the economics of both sports and public policy, resources are scarce and must be put to their best use. Not all subsidies will make the cut.
Oct 13, 2015

Ex-Im boosters are pushing another tactic, a rare legislative procedure known as a "discharge petition." It allows them to bypass the normal committee process and bring an Ex-Im vote to the House floor. Like so much in politics, the procedure takes advantage of what the political economist Anthony Downs called voters' "rational ignorance." Since most voters have very little influence over political outcomes, it makes no sense for them to invest time and effort in studying policy. Thus, 218 members of Congress can be expected to support a measure that will do more harm than good for their unsuspecting constituents.


When state governments favor in-state businesses over more affordable out-of-state businesses, taxpayers are forced to pay more for government projects. So-called “preference policies” give politicians a politically valuable opportunity to buy goods from, and support employment for, a narrow set of producers within their state, but these policies increase the cost of government. This increase in the cost of government requires extra dollars from taxpayers, taking resources that could be put toward other uses.


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.


Christopher Koopman | November 06, 2015
Christopher Koopman discusses the new Mercatus website that tracks the legality of daily fantasy sports in each state on WPTF radio (North Carolina).

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.


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.
' '