Chapter 8

In chapter eight Wheelan sheds light on the question of "why our growing knowledge of public policy does not always translate into a perfect world." The answer lies in politics and small interest groups. We have research pointing towards practices that will improve the economy, but we are unable to act on this knowledge due to the established "christmas tree" system in politics. I find how politics can hold back economic growth by working like a game in which votes are won through supporting unneeded subsidies frustrating, but Wheelan shows how nearly impossible it is to change the system. I was surprised to learn that ethanol is actually harmful to the environment but retains subsidies because the interest group receiving the subsidy is small and organized while those paying for it are a diverse and disorganized group. The system is difficult to change, but at least small changes are necessary to keep moving forward and avoid falling into a position like that of Industrial Revolution era China. As Wheelan points out, progress is halted when we do things akin to banning the telegraph to help the Pony Express.