“Vested interests are universal”

Every once in a while, we experience moments of clarity. I experienced one while listening to this EconTalk podcast.

In it, Terry Moe discusses the special case where the power of vested interests in the New Orleans school district was wiped out after Hurricane Katrina and the effects that had on the re-emergence of the public school system there. It was a very interesting episode and well worth a listen.

The moment of clarity is here, with Moe speaking:

Let me just take a step back and say: Vested interests are universal. Every institution in every policy area generates vested interests. And these are interests of people who get the services of those institutions but also who get the jobs that those institutions generate or the business contracts that those institutions generate. And, this is true in agriculture; it’s true in defense; it’s true in the environment–you name it. And it’s not just true in this country: it’s true in every country; and it’s been true throughout time. This is a universal thing. All institutions generate vested interests, and those vested interests have a stake in protecting their institutions from change because those institutions are the source of their benefits. And in many cases, those benefits, like jobs and profits, have absolutely nothing to do with whether the institutions are performing well.

And so these vested interests, which have a stake in investing in political power, will use their political power in order to stop reforms even when the institutions are performing very badly. And that is the problem that all societies face, and that our society faces, in trying to have a healthy democracy in which our institutions actually work. When we have institutions that are failing, the vested interests will still protect them and make it virtually impossible for us to reform them.

This is true in state, federal and local government, U.S. Soccer, business, non-profits, school districts, universities, unions, tenure and so on.

All these things can be good.

But, a question rarely asked is what happens when they aren’t performing well?

What brings about change that might improve performance?

Do those changes threaten vested interests benefiting from the current system?

In my opinion, competition is a more preferable option to limiting the power of vested interests than natural disasters. It acts is the same manner on vested interests without all the collateral death and destruction.

Sports

For a change of pace, on this week’s EconTalk┬ápodcast Russ Roberts interviews David Epstein about his book, The Sports Gene. It is worth a listen.

I don’t recall there being a boring part to it and I think it will have wide appeal for sports fans, anybody who has played sports or just ran around the yard playing tag and anybody with kids who are interested or not interested in sports.

I learned things about what my body type is well-suited for that fits with my experience. You might, too.

It has lots of good discussion on nature/nurture, gaining 10,000 hours of deliberate experience and what we think we know about what makes us better at something isn’t necessarily true.

There was also some debunking on what we think makes a good hitter in baseball. Perhaps my micro teacher gave up too soon. He played in the minors and said he decided to quit when a fellow batter, who happened to be a good hitter, told him the secret was watching the ball to see where the spot was.

It turns out that nobody quite has reflexes for that. It’s more about reading visual cues of the wind up and release and projecting the path of the ball based on that.

That reminds me of a sports science show that tested something similar with soccer player Cristiano Ronaldo. They shut the lights out as soon as someone kicked a ball across the net to see if he could still play it into the net. He could. Why? Because of experience. He’s reacted to a ball tens if not hundreds of thousands of times and his body has a good sense of the path of the ball based on what he sees from the kick.

I wonder how many players quit too soon because some player told them something untrue like that. Perhaps the answer is more about practice than anything.