Über die Autorinnen und Autoren

Wayne A. Leighton is Professor of Economics at Universidad Francisco Marroquín, Executive Director of The Antigua Forum, and former Senior Economic Adviser at the U.S. Senate and the Federal Communications Commission.Edward J. López is BB&T Distinguished Professor of Capitalism at Western Carolina University and President of the Public Choice Society.

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Madmen, Intellectuals, and Academic Scribblers

STANFORD ECONOMICS AND FINANCE

Contents

Preface..........................................................................................xiAcknowledgments..................................................................................xiii1. Ideas and the Rules of Politics...............................................................12. The Never-Ending Quest for Good Government....................................................133. Economists Join the Battle of Political Ideas.................................................494. Public Choice: How We Choose Bad Policies and Get Stuck with Them, or Not.....................795. How Ideas Matter for Political Change.........................................................1086. Four Stories of Political Change..............................................................1357. What Is to Be Done? Assembling the Wisdom.....................................................175Notes............................................................................................191Index............................................................................................199

Chapter One

Coaches abused basketball again today. —The Washington Post, March 8, 1982

It was March 7, 1982, and the cold drizzle falling on Greensboro, North Carolina, was no match for college basketball fever. The hottest ticket in the country was the Atlantic Coast Conference (ACC) men's basketball championship, with nationally ranked number-one North Carolina taking on number-three Virginia, in a rematch of their two-game split of the regular season. This game had it all. Both teams had come in with only two losses all year. A total of five future National Basketball Association (NBA) players, three of them future all-stars, would take the court, and the greatest basketball player of all time, Michael Jordan, was in his debut season for Carolina. A rare national television audience was about to tune in. And inside the Greensboro Coliseum, 16,034 screaming fans felt lucky just to be there when the game tipped off. The anticipation was palpable. The excitement could not have been greater.

But, by the end of the game, the fans were booing, the players on both sides were disappointed, and both coaches were taking flack for thinking too much and playing too little. With seven minutes and thirty-three seconds left to play and his team ahead by one point, North Carolina's coach, the legendary Dean Smith, told his team to play keep-away. With Virginia's coach Terry Holland keeping his squad close to the basket in a zone defense, the North Carolina players were free to dribble and pass and stall and do everything but shoot. As the game clock ticked away, and a glorious game turned foul, the chorus of boos rose in crescendo beyond the rafters of the Greensboro Coliseum. One thoughtful sportswriter summed up the despair: "Imagine the final 12 minutes of Hamlet if the cast started reciting the Congressional Record. Or Hemingway writing the last chapters of his classics in pig Latin. Coaches abused basketball again today, ruined what could have been a game for the ages by thinking."

The ACC championship wasn't the only "slowdown" game that year where fans booed; it was just the biggest. Average scoring nationwide had been declining for seven straight years and had reached its lowest point in more than three decades. The various conference leagues were becoming increasingly worried about the quality of play and a possibly shrinking fan base. The National Collegiate Athletic Association (NCAA) began looking into the rules of the game and how "stall-ball" was not only possible but in fact a winning strategy too tempting for coaches to pass up. Desperate for a good idea, they turned a figurative eye to Danny Biasone, an Italian immigrant who had settled in Syracuse, New York, and in 1954 invented the twenty-four-second shot clock.

Danny Biasone owned a bowling alley and had built up enough of a fortune to start a professional basketball team. In 1946, his Syracuse Nationals began to play in what would soon become the National Basketball Association. In 1950 the NBA had its own "stall-ball" fiasco, when the Fort Wayne Pistons beat the Minneapolis Lakers by the dubious score of 19–18. A shrewd businessman, Danny Biasone protected his investment by inventing the shot clock. Like many revolutionary ideas, his was simple. He divided the 2,880 seconds of a forty-eight-minute game by the average number of shots per game, which was 120. He arrived at an average of one shot taken every twenty-four seconds. By the new rule, if the team on offense failed to shoot the ball within twenty-four seconds of taking possession, the whistle would blow, and the other team would get the ball. When the NBA introduced Biasone's rule in 1954, the number of shot attempts and average scoring increased by 15 percent—in one year! The idea rescued pro basketball and ushered in its modern era.

Chances are the NCAA brass didn't actually consult Biasone in 1982. It didn't have to. By that time the NBA was a very successful sports enterprise, and the shot clock for college basketball was on everyone's mind. But the idea hadn't gone anywhere yet (except for one minor college league, the Sun Belt Conference, which had recently begun using a forty-five-second shot clock). In fact, basketball coaches around the country hated the idea. Just twenty days after the Carolina–Virginia letdown, the NCAA rules committee held a survey, and coaches voted against a thirty-second shot clock by a whopping 343 to 53. Even so, the NCAA rules committee pressed on, saying the shot clock was necessary "as a result of a decrease in scoring, what many people thought was an excessive use of zone defenses and because some teams were holding the ball a little too long ..." After a few years, as different leagues experimented with different rules, the NCAA eventually settled on a thirty-five-second shot clock. The days of stall-ball and angry fans were over. College basketball became immensely popular—and profitable. By 1989, CBS television paid $1 billion for the right to broadcast the postseason tournament, and by 1999 the network upped the ante to $6 billion, making college basketball one of the biggest revenue sports in U.S. history.

The Rules of Politics

You may wonder why a book about politics begins with a story about basketball. But a close look reveals that there is more than basketball at play in the shot clock story. Sports are like controlled experiments in human behavior; they have much to tell us about the way people interact and why. The coaches and players are highly motivated, and how they play depends a lot on the rules of the game. When a new idea changes the rules of sports, players and coaches have new and different incentives. In basketball, a shot clock increases the costs of holding the ball for too long, while a three-point line increases the benefits of long-range shooting. When the rules of sports change, we get an unobstructed view into how incentives shape people's strategies and tactics, which largely determine how the game turns out.

The rules of politics work the same way. Voters, politicians, corporations, and all other political actors are driven largely by their incentives in politics, which in turn...