I just attended the first plenary talk at my favorite annual economics meetings: those of the Association for Private Enterprise Education. It was on “Political Capitalism” by my friend Randy Holcombe of Florida State University.

In the talk he applied public choice to understanding how various rules and regulations get set. So far, so good.

But then he tried to link it up the top 1%/bottom 99% dichotomy. He sees the interest groups that succeed in getting their way as being in the top 1%.

In Q&A, I didn’t ask a question, but made a statement. I pointed out that two of the most powerful lobbies in Washington are the National Education Association and the American Association of Retired Persons and that few of their members are in the top 1%. I noted that I come from coastal California, where many of my fellow homeowners show up to oppose virtually any new home getting built–and often succeed in preventing it or slowing it down by years. I pointed out that most of these fellow homeowners are not in the top 1% and that I’m closer to the top 1% than many of them are: I’m guessing I’m in about the top 7 or 8%. So, I concluded, if you stick with the 1%/99% dichotomy, you’re going to miss a lot.

Randy answered that the rank and file members of the NEA and of the AARP don’t have much power: It’s the heads of these organizations, he said, that have power and they are in the top 1%. I responded that if they went strongly against the wishes of their rank and file members, they would not be in those positions for long.