Political Economy in the Carolinas

POLITICAL ECONOMY IN THE CAROLINAS Vol. 1 BOARD OF DIRECTORS Michael Munger, Duke University Chairman Karen Palasek, Barton College Vice Chairman James Otteson, Wake Forest University President Roy Cordato, John Locke Foundation Journal Editor Adam C. Smith, Johnson & Wales University Development Director Brad DeVos, American Institute for Economic Research Conference Director, Treasurer Jenna Robinson, Martin Center for Academic Renewal Fellowship Director Peter Calcagno, College of Charleston Board Member David Riggs, Charles Koch Foundation Board Member Classical Liberals in the Carolinas (CLC) was organized for the express purpose of bringing together classical liberal scholars in the Carolinas region. In order to continue to grow the organization and expand its programming, CLC relies on the generosity of like-minded individuals and scholars who believe in their mission. Please consider donating to their fund at www.classicalliberals.org. Copyright © 2018 by Classical Liberals in the Carolinas, Inc. Printed in the USA by Westmoreland Printers Incorporated. Permission is granted to reproduce articles published in this journal, so long as reproduced copies are used for non-profi t educational or research purposes. For all reproduction purposes, permission must be obtained from the Editor. Articles in PEC are double blind refereed. Submissions are being accepted through clc.submittable.com. POLITICAL ECONOMY IN THE CAROLINAS 2018 l Vol. 1 FROM THE EDITOR Letter from the Editor Roy Cordato l 5 ARTICLES Intellectual Diversity and Academic Professionalism James R. Otteson l 8 No Free Lunch: How State Map Acts Inadvertently Damage Property Values as They Aim to Lower Craig J. Richardson, Russell M. Smith Road Expenditures & Joseph Sloop l 20 The Political Economy of Resource Misallocation in the Energy Sector: A Case Study of South Carolina’s V. C. Summer Nuclear Project Jody W. Lipford l 44 The Political Economy of Craft Beer in North Carolina (and Beyond) Christopher Koopman & Adam C. Smith l 76 NOTES & COMMENTARY Classical Liberalism’s History, Heritage, and Relevancy to Our Times Richard M. Ebeling l 99 What Are Economic-Impact Studies Really Measuring? Roy Cordato l 108 State Tax Policy and Growth: A Research Note Peter M. Frank l 112 BOOK REVIEWS Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World by Dierdre McCloskey Michael Munger l 119 The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen Robert Whaples l 122 POLITICAL ECONOMY IN THE CAROLINAS EDITOR Roy Cordato, John Locke Foundation MANAGING EDITOR Adam C. Smith, Johnson & Wales University SENIOR EDITORS Richard Ebeling, The Citadel James Otteson, Wake Forest University Andrew Taylor, North Carolina State University EDITORIAL BOARD Peter Calcagno, College of Charleston Stephanie Crofton, High Point University Peter Frank, Wingate University Daniel Hammond, Wake Forest University Bradley Hobbs, Clemson University Petur Jonsson, Fayetteville State University Edward Lopez, Western Carolina University Rob Roy McGregor, University of North Carolina Charlotte Zagros Madjd-Sadjadi, Winston Salem State University Steve Margolis, North Carolina State University Kelly Markson, Wake Tech Community College Michael Munger, Duke University Randall Parker, Eastern Carolina University Craig Richardson, Winston Salem State University Robert Salvino, Coastal Carolina University William Sandberg, University of South Carolina Jane Shaw, Martin Center for Academic Renewal Terry Stoops, The John Locke Foundation Richard Stroup, North Carolina State University Timothy Terrell, Wofford College Robert Whaples, Wake Forest University Bruce Yandle, Clemson University (Emeritus) 4 POLITICAL ECONOMY IN THE CAROLINAS FROM THE EDITOR Dr. Roy Cordato, Editor The John Locke Foundation, Raleigh, NC North Carolina State University Welcome to the inaugural issue of Political Economy in the Carolinas (PEC). This venture is unique. The journal is published by Classical Liberals in the Carolinas (CLC), a membership organization made of academics, public policy analysts, and interested business professionals from North and South Carolina that have a special interest in the ideas of classical liberalism and how these ideas can be invoked to analyze and solve problems of public policy facing the two states. The purpose of this journal is to publish high quality research that explores topics related to, and that advance, CLC’s mission. Analysis and research in published papers will take a broad range of approaches which will include comparative empirical analysis with other states in the region or nation, historical perspectives, interpretive or theoretical essays, and philosophical inquiries that highlight classical liberal ideas in the context of contemporary policy analysis. Furthermore, PEC places no restrictions on approach or disciplinary perspective. Indeed, submissions are welcome from a wide range of disciplines including political science, economics, legal studies, history, and philosophy. Our only requirement is that articles be rigorous, thoroughly researched and speak to the mission of both CLC and the journal. It is also important that published articles are intelligible to a non-specialist but broadly educated and engaged audience that would include academics, public policy and think tank researchers, business people and entrepreneurs, and policy makers. A few remarks on our journal layout. We have divided the journal into three sections: “Articles,” “Notes and Commentary,” and “Book Reviews.” Papers published in the “Articles” section are fully refereed using a double-blind process. Essays for the “Notes and Commentary” section and the “Book Reviews” are mostly solicited by the editors, VOL. 1 . 2018 5 though we are happy to consider unsolicited submissions for these sections. “Notes and Commentary” will play an important role for PEC. These essays will be shorter, less technical, and therefore easier to digest in a single read than those that might be found in the Articles section. Our hope is that this section may bring some readers to PEC that might not otherwise be attracted to an ‘academic journal’ and ultimately encourage interest in the publication more broadly. The book review section will be the most ‘free-wheeling’ in that any book that might be related to classical liberal ideas and of interest to those who are attracted to those ideas are fair game. As evidenced by the two reviews featured in this issue, the books do not have to focus on policy issues in the Carolinas or public policy at all. Moving on to the content of this issue, I particularly want to call the readers’ attention to our lead article (“Intellectual Diversity and Academic Professionalism”) by Professor James Otteson, Professor of Political Economy at Wake Forest University. We are especially excited to open the journal with this piece, not just because it speaks to a topic of importance to the Carolinas, but because it makes a broader point that we hope will set the tone for PEC more generally. As Otteson states in the abstract to his paper “I argue that academics should embrace a professional identity that is informed by and dedicated to an open-ended process of inquiry that has characterized our intellectual tradition since the time of ancient Greece, and not by allegiance to particular political positions or outcomes.” As the editor, I want this journal to adopt this same identity. This vision dovetails completely with the classical liberal tradition of scholarship that we want to promote in the pages of PEC. Clearly one of the most important aspects of this tradition has been and continues to be the spirit of open inquiry that it embodies. Professor Richard Ebeling from The Citadel, echoing Professor Otteson’s point, states in his opening article to our Notes and Commentary section (“Classical Liberalism’s History, Heritage and Relevancy to Our Times”) that the classical liberal tradition goes back to the Greeks who “spoke of the importance of man’s reason and the need for freedom of thought if our minds were to challenge each other’s logic and understandings as we groped toward a more complete awareness of the objective world around us.” These two articles by Otteson and Ebeling not only serve to inform the potential reader about the journal’s philosophical standards and perspective but should also give guidance to potential authors about the kind of research we are seeking to publish. But this issue is comprised of much more than these two important contributions. Articles by Craig Richardson and Jody Lipford are great examples of the kind of empirical analysis that the journal seeks to publish, shedding light on regulatory issues in both North and South Carolina, while Koopman and Smith provide an analysis of regulations on the distribution and marketing of craft beer in North Carolina, which have significantly restrained entrepreneurship in this industry. 6 POLITICAL ECONOMY IN THE CAROLINAS In closing I want to thank those who have made and are making this journal possible. Special thanks must go to Managing Editor, Dr. Adam C. Smith from Johnson and Wales University. He has enthusiastically performed much of the necessary legwork in getting this project off the ground. He is great to work with and I can’t thank him enough. I would also like to thank our editorial board and especially our senior editors, Professor James Otteson, Professor Richard Ebeling, and Professor Andrew Taylor from North Carolina State University. Their expertise and council

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