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.


Matthew Mitchell | Jan 06, 2014
In recent years, food stamps have constituted about 80 percent of farm bill spending, which may be why nearly 100 percent of public debate has focused there. Unfortunately, with all of the attention on food stamps, both political parties have missed the opportunity for reform that lies in the remaining 20 percent of the farm bill.
Adam Thierer, Brent Skorup | Jul 01, 2013
The danger of creeping cronyism in the high-tech field is that it will dull entrepreneurialism and competition in this highly innovative sector. The opportunity costs of pursuing favors are significant.
Adriana Cordis, Jeff Milyo | Apr 24, 2013
The Supreme Court has long held that campaign finance regulations are permissible for preventing corruption or the appearance of corruption. Yet the implied hypothesis that campaign finance reforms are effective tools for combating public corruption has gone essentially untested. We conduct the first systematic evaluation of the effects of campaign finance laws on actual corruption rates in the states. We examine the effects of state reforms on both convictions and filings in public corruption cases over the last 25 years.
Matthew Mitchell | Feb 01, 2013
In the end, he endorses a “zero tolerance” approach to subsidies and tax loopholes while he is more comfortable with regulatory interventions. This is curious. The regulatory process is opaque and complex, arguably making the code of federal regu- lations an easier place to hide a targeted privilege than the federal budget or the tax code. But Zingales hasn’t enough time to dwell on such considerations; he has too many other interesting and creative ideas to consider.
Matthew Mitchell | Jan 10, 2013
Since at least the days of Adam Smith, economists have suspected that economic freedom was a necessary, if not sufficient, condition for human prosperity. Smith wrote of freedom as a “system of natural liberty” and declared that “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice.”…
Jeremy Horpedahl, Brandon Pizzola | Oct 25, 2012
This study documents the economic distortions and inefficiencies that result from a tax system filled with tax expenditures. We review each of the ten largest tax expenditures for individuals and corporations, focusing the following distortions of economic activity: spending on goods and services, capital allocation, the distribution of income, and lobbying and rent-seeking.

Testimony & Comments

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.
Todd Zywicki | Jul 10, 2012
Much of the government’s political intervention in the bankruptcy cases appears to have been motivated to benefit the UAW rather than the companies themselves over U.S. taxpayers, who put billions of dollars at risk to fund the bailouts.
Veronique de Rugy | Jun 19, 2012
For obvious reasons, more than any other recent events, the waste of taxpayers’ money due to Solyndra’s failure has attracted much attention. However, the problems with loan guarantees are much more fundamental than the cost of one or more failed projects.
| May 25, 2011
Anthony Sanders testified before the House Committee on Financial Services about steps to end the GSE bailout.
Todd Zywicki | May 24, 2011
Todd Zywicki testified before the House Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs.
Lawrence J. White | Apr 15, 2009
This statement for a roundtable of the U.S. Securities and Exchange Commission examines the changes in regulation that elevated the judgments of the credit rating agencies about the creditworthiness…

Speeches & Presentations

Expert Commentary

Apr 16, 2014

What's the point of the Department of Commerce? If not for the Census and the Patent Office, the department would function as little more than a one-stop shop for special interests. Don't believe me? Look at its record.
Apr 15, 2014

Right now, hundreds, maybe even thousands of people in your community stand ready to help you. For a small fee, they’d be willing to lend you their car, their cat or their couch. And you, too, would probably be willing to help them if you could only get connected.
Mar 21, 2014

Policy makers like to play favorites with private companies, privileging a few with tax breaks and others with subsidies, coming to the rescue of some or surrounding others with regulatory rules to box out the competition. For companies lucky enough to receive these favors, life is good (at least for a while). But life isn't so good for others. Behind every privilege to a particular firm, there is a taxpayer, a customer, or a competitor who ends up paying for it. And those who are privileged today can easily find themselves on the other side of the equation tomorrow.
Feb 04, 2014

Barring some unforeseen outbreak of economic literacy on Capitol Hill, the farm bill is about to become law. As I’ve indicated in my recent essay on farm policy, this is a shame for the American consumer and for the American taxpayer.
Dec 30, 2013

Tesla Motors, the fast growing electric car company, just received yet another handout from the government. The gift comes in a form of a $34.7 million tax break from the state of California to increase the company's production capacity, and it isn't the first set of subsidies that Tesla has obtained from federal and state authorities.
By Nita Ghei |
Sep 30, 2013

Desperation is driving some politicians to go where no government has gone before. The City Council of Richmond, Calif., voted in September to use the power of eminent domain to condemn 624 mortgages in which the homeowners owed more than the current market value of the property. The vote threatens to bring mortgage financing for residents to a crashing halt. If successful, the move will expand the power of eminent domain well beyond any previous boundary by applying it not to the home, but the mortgage, which is entirely separate. It would cause tremendous damage to the residents of the city in both the short term and in the long term.


The large numbers that spill across Ex-Im balance sheets concern all US taxpayers. Although names like JP Morgan and TD Bank are listed on these records, taxpayers are ultimately responsible for these liabilities. The US government should not exploit taxpayers’ credit to funnel risk-protected assets to large private corporations. It is past time to put this cash cow for cronies out to pasture.


Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. Her primary research interests include the US 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 lead scholar on 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 lead researcher on 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.


Matthew Mitchell | April 09, 2014
Matthew Mitchell Discusses Film Tax Credits on WFSU

Recent Events

Despite the ideological miles that separate them, activists in the Tea Party and Occupy Wall Street movements agree on one thing: both condemn the recent bailouts of wealthy and well-connected banks. But when it comes to government-granted privileges to particular firms or industries the bailouts were just the tip of the iceberg.


Media Clippings

Matthew Mitchell | Oct 22, 2013
Matt Mitchell discusses "Uber Wars" on Reason TV.
Matthew Mitchell | Aug 21, 2013
Matt Mitchell cited at NPR.
Matthew Mitchell | Jul 28, 2013
The Governor’s Opportunity Fund — just one of numerous economic-incentive programs operated by the state — is something like a slush fund the governor can use to “secure a business location or expansion project.”…
Donald J. Boudreaux | Jul 16, 2013
Don Boudreaux hits one out of the park here. It’s one of those arguments that you or I haven’t come up with ourselves but which make immediate sense once explained. Don’s point, the one he wants to highlight, is that in a world of homogenous labour then perhaps that inimum wage isn’t quite so bad.
Matthew Mitchell | Jul 15, 2013
The scandal threatening McDonnell’s career is the likely outcome when people believe the governor’s job description entails promoting businesses, said Matthew Mitchell, a senior research fellow with the Mercatus Center at George Mason University in Fairfax.
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