Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts

of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org

where you can subscribe, find other episodes, comment on this podcast, and find links to

another information related to today's conversation. Our email address is mail at econtalk.org. We'd

love to hear from you. My guest today is Joel Waldfogel, the Aaron Krantz family professor and

chair of the Department of Business and Public Policy at the Wharton School of the University of

Pennsylvania. He's the author of the tyranny of the market, why we can't always get what we want. Joel

welcome to econ talk. Thank you. Our topic today is the performance of the market relative to the

tyranny of the political process. You and I hold very different views on the subject, so I hope

we'll have a lively discussion. In your book, tyranny, the tyranny of the market, you argue that

markets don't work as well as some of us think they do. What do you have in mind? Well, I guess what I

have in mind is that when there are big fixed costs of providing things, meaning that a lot of

expenditure has to be made by the firm before even the first widget comes off the line, that we can

only get what we want if a lot of other people also want what we want. When our preferences differ,

when different people have very different preferences over what kind of stuff they want, it becomes an

issue because I get what I want only if there are a lot of people who share my preferences. How do you

contrast that with what's historically been called the tyranny of the political process?

So traditionally, some observers, I think many sense of observers have worried about the political

process because when we do things through politics, the majority wins and the rest of folks go away

from the process with something other than what they want. I think a lot of observers have said,

look, the market really avoids that problem. Milton Friedman's very memorable words. He says,

each man can vote for the color of tie he wants and get it through the market, whereas the political

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