Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't by John Jr. (books that read to you TXT) 📕

The prospect of passing on a political reputation to others deserves a brief digression here. Might a politician stay honest in his last term in order to transfer his good reputation to other politicians? Popular former presidents, governors, senators, and congressmen frequently pop up at campaign rallies and political conventions to endorse current candidates. But a closer look reveals that politicians are not able to transfer their reputations wholesale to others. When Rudolph Giuliani endorsed Michael Bloomberg as his successor for New York City mayor, it was surely helpful, but it wasn’t the same thing as having Giuliani run for another term. The same rule applies to Ronald Reagan’s recommendation of George H. W. Bush and Bill Clinton’s endorsement of Al Gore. People can’t simply transfer their own reputation to others whenever it’s convenient to do so.

This reflects another difference between businesses and politicians; firms can sell their reputations, but individuals can’t. If some company buys out Campbell Soup, consumers won’t feel the need to get to know the new Campbell owners before they decide whether to continue buying the soup. Customers will still pay for the product as long as the price and recipe remain unchanged and it continues to carry the Campbell name. It’s the reputation a firm cultivates for its product—not a firm’s personnel—that guarantees a product’s quality. Retiring politicians cannot pass on their reputations in the same way.

There is, however, one instance in which politicians can bestow their reputation on someone else—they can pass it on to their own family members, especially their children and grandchildren. A successful politician’s children begin their own political careers with an advantage; until they develop their own political record, they are generally associated with their parent’s political reputation. Politicians ranging from former vice president Al Gore to President George W. Bush have used their forebears’ political reputation as a launching point for their own political careers.

Because a politician’s reputation can’t be transferred outside his family, a politician’s child who doesn’t go into politics simply loses the benefits of this reputation. It’s not like inheriting a family business, where a son or daughter could sell it off and use the proceeds toward some other line of business. Since going into politics is the only way a politician’s child can exploit his parent’s political reputation, it should come as no surprise that politicians’ children follow their parent’s careers at higher rates than most other professions: about 30 percent of politician’s children follow their parent’s profession, second only to the children of farmers.7 By contrast, about 15 percent of sons of fathers from all self-employed licensed occupations follow that path themselves.8

We have already seen, however, that the prospect of passing on a good political reputation to one’s children does not make a retiring politician more honest than others. Neither does the threat of re-election nor the hopes of securing a good job after retirement from politics. So what does keep politicians honest?

To answer this question, let’s first analyze some professions that enjoy near-total job security. For example, with lifetime appointments, Supreme Court justices are removed from any equivalent of re-election pressures. If we look at the current justices with over ten years’ experience on the court, nearly all of them rule in an ideologically consistent fashion—Justices Breyer, Stevens, Souter, and Ginsberg are reliable liberal votes, while conservatives extol the dependability of Scalia and Thomas. Only Kennedy is considered a swing justice.

Most people would have little difficulty explaining why the individual justices consistently vote either liberal or conservative—it’s because they really believe in their political philosophy. When a president nominates justices, he looks for a judge who will provide a reliable vote for his political orientation. He analyzes potential nominees’ career voting records and looks for other signs of an intrinsic commitment to shared ideals. Judges may be able to hide or misrepresent their true philosophy in hopes of getting a Supreme Court nomination, but it is difficult to do this over a long period of time. Supreme Court nominees will usually have years of consistent rulings that testify to their reliability. If a president nominates someone without a clear record, he risks getting burned. This was the case with George H. W. Bush’s 1990 nomination of David Souter, a judge with little experience on the Appeals Court who, after his appointment, became one of the Supreme Court’s most liberal justices.9

The tenure process among university professors works in a similar way. Once a professor gets tenure, he has near-absolute job security. So why would a professor continue to work hard once he gets tenure? The answer is that tenured professors usually have an intrinsic interest in teaching and research. A candidate for tenure who doesn’t really enjoy working may try to work just hard enough to get tenure in hopes of having a minimal workload thereafter. But the period leading up to the tenure decision, which typically lasts around five to seven years, acts as a probationary period in which professors can pick up on subtle signs that a candidate may not genuinely value his teaching and research. Does a candidate spend his summers doing research or vacationing? Does he like to talk about his academic interests or about television? Ultimately, over time, candidates who value work will distinguish themselves from those who do not, and it is these professors who tend to get tenure.10

This same process helps to explain why professors are overwhelmingly liberal. Because tenure is for life, professors are reluctant to offer it to conservative candidates whose politics may then annoy them for decades. The probationary period leading up to the tenure decision gives professors a chance to observe not only a candidate’s work habits, but also his political inclinations. Perhaps a candidate can hide his true politics for a time, but can he do this for five