Moochers, monopolists and market-based poverty help

Speaker 1 NPR.

Speaker 2 This is the indicator from Planet Money. I'm Darien Woods.

Speaker 1 I'm Waylon Wong.

Speaker 3 And I'm Adrienne Ma. We take a little pride in having our econ nerd credentials.

Speaker 3 And every once in a while, we think, why not put these credentials to the test by having a little competition, a little friendly competition we like to call the indicator quiz bowl.

Speaker 3 Today on the show, it's a trivia matchup between our own Darian Woods

Speaker 3 and Waylon Wong.

Speaker 1 I'm shadow boxing, you can't tell.

Speaker 3 So the way this will work is I'll ask five questions. Whoever gets the right answer will get a point for that, and the winner will be the person with the most points at the end of the show.

Speaker 2 Simple enough.

Speaker 3 Today's indicator quiz bowl topic will be the economics of the public sector, aka government economics.

Speaker 1 Oh, does Darien have an unfair advantage because he's worked in the public sector pre-MPR?

Speaker 4 But in New Zealand, so does that transfer?

Speaker 2 We'll find out.

Speaker 1 Don't you also have a degree in public policy from an American university?

Speaker 2 Nobody at the Olympics complains that the other person's been training too much.

Speaker 1 All right, let's find out after the break.

Speaker 5 This message comes from ATT. America's first network is also its fastest and most reliable.

Speaker 5 Based on Root Metrics United States Root Score Report 1H 2025, tested with best commercially available smartphones on three national mobile networks across all available network types, your experiences may vary.

Speaker 5 Rootmetrics rankings are not an endorsement of AT ⁇ T. When you compare, there's no comparison.
AT ⁇ T

Speaker 6 This message comes from AppleCard. AppleCard members can earn unlimited daily cash back on everyday purchases wherever they shop.

Speaker 6 This means you could be earning daily cash on just about anything, like a slice of pizza or a latte from the corner coffee shop.

Speaker 6 Apply for Apple Card and the Wallet app to see your credit limit offer in minutes. Subject to credit approval, AppleCard issued by Goldman Sachs Bank USA, Salt Lake City Branch.

Speaker 6 Terms and more at Applecard.com.

Speaker 5 This message comes from Capital One. Say hello to stress-free subscription management.
Easily track, block, or cancel recurring charges right from the Capital One mobile app. Simple as that.

Speaker 3 Learn more at capital1.com/slash slash subscriptions terms and conditions apply okay darian and whalen here is your first question which economic concept describes the situation where individuals benefit from a public good without contributing to its costs thus undermining incentives to pay for that good free rider oh my gosh that is the correct answer oh man i'm relieved you were so fast darian my brain was like buffering buffering

Speaker 2 you got to talk to your internet service provider for that.

Speaker 1 No, I have to talk to my brain. Is that going fast enough?

Speaker 3 Free rider is the correct answer.

Speaker 3 And, you know, in a free market system, you wouldn't necessarily expect private companies to take up certain services or goods because they could be susceptible to this Free Rider problem.

Speaker 3 And that's why, for example, you have government stepping in and doing things like providing for the national defense.

Speaker 2 Yeah, I mean, it would be hard for, I don't know, a private military to go around every household asking for contributions.

Speaker 4 Goodness.

Speaker 1 I never answer my doorbell ever.

Speaker 3 Okay, one point for Darian. Next question.

Speaker 3 The Sherman Antitrust Act of 1890 is the foundation of antitrust policy in the United States. What was the name of the company that was part of a landmark anti-monopoly case in the early 1900s?

Speaker 4 Standard Oil. Standard Oil.
Oh, gosh.

Speaker 3 Got to give that to Darien. Again, the answer was standard oil.

Speaker 1 What if it was just the lag?

Speaker 4 Maybe it was the lag. Oh, my gosh.

Speaker 3 Here's some trivia about Standard Oil. It was officially declared an illegal monopoly in a landmark 1911 Supreme Court case called Standard Oil Company of New Jersey versus the U.S.

Speaker 3 In that case, the court ruled that Standard Oil violated the Sherman Act by restraining trade and commerce in petroleum.

Speaker 3 And it also established the, quote, rule of reason antitrust precedent, which still lives on today.

Speaker 1 Was this covered on the Gilded Age? I haven't watched that show.

Speaker 3 That is going to be its own episode.

Speaker 4 Oh, okay.

Speaker 1 Spin off.

Speaker 3 Question number three.

Speaker 3 What do you call a market intervention that levies a tax on a market transaction that creates a negative externality borne by individuals not directly involved in the transaction? Pecuvian tax.

Speaker 3 That is the correct answer. Oh, gosh.

Speaker 1 You said it's so fascinating. I'm going to hear the answer.

Speaker 2 Pecuvian tax.

Speaker 4 Peguvian tax.

Speaker 1 Okay, I think that I would not have been able to come up with even one more time.

Speaker 2 Arthur Cecil Pegu, Cambridge economist.

Speaker 4 Stop showing up.

Speaker 2 I'm sorry. I'm the most hated

Speaker 2 quiz contestant.

Speaker 1 No, I love it, actually.

Speaker 4 I love it.

Speaker 3 That is three for three for Darian.

Speaker 4 This is my revenge for the movie trivia episode where Wayland just swept the floor.

Speaker 3 So that is the correct answer. Some examples of Peguvian taxes include things things like carbon taxes, taxes on tobacco, or the plastic bag tax at your local grocery store.

Speaker 2 Send your complaints to Arthur Cecil Pigu in Cambridge about 100 years ago.

Speaker 1 Yeah, I was going to say, via psychic medium.

Speaker 2 So does that mean I've won the majority of the five questions?

Speaker 1 Well, Darian, I'm just here for the learning. So if you just want to make it about points, I guess we can do that.
But I'd like to keep going.

Speaker 4 All right. Yep.

Speaker 2 Let's go for more education.

Speaker 3 Yes, I think that sounds fair. Darian is technically one a majority of the points, but there are the reasons to play trivia, and not all of them are about points.
Some of them are trivial.

Speaker 4 Subvia is about salvaging my dignity if I can get one of these two questions right.

Speaker 3 Question number four.

Speaker 3 What's the term for the built-in budget mechanism that can adjust federal spending and taxation during an economic downturn to keep the economy afloat without the need for additional legislation?

Speaker 2 Automatic stabilizers.

Speaker 3 That is correct. Oh my gosh.

Speaker 1 And I did a whole episode on automatic stabilizers.

Speaker 2 And I listened to that in my preparation.

Speaker 4 Oh my gosh, Jerry.

Speaker 2 I've been training for this my whole life.

Speaker 4 Clearly.

Speaker 3 Some government programs with automatic stabilizers include unemployment insurance, the Supplemental Nutrition Assistance Program, also known as SNAP, and also Medicaid.

Speaker 3 So these benefits are boosted during times of recession where incomes fall, and the opposite happens when the economy is experiencing a boom.

Speaker 2 Right. Less people are on SNAP because more people are employed and

Speaker 2 less need.

Speaker 1 And I had done this episode about how some economists want to have like national or statewide baby bonds programs that would also potentially kick in in, you know, fallower economic times.

Speaker 1 Well, clearly on that reporting, Dan, we have a fat lot of good here

Speaker 4 on this show?

Speaker 3 If we just pretend the quiz starts now,

Speaker 3 anything could still happen.

Speaker 2 Match point for that one point.

Speaker 4 All right. I'm ready.
I'm ready. Okay.

Speaker 3 Final question. Universal basic income is a policy often associated with the political left.

Speaker 3 But free market economist Milton Friedman in the 1960s advocated for a more free market version of this that became influential among some on both the left and the right. So what was that alternative?

Speaker 2 Negative income tax.

Speaker 3 That is correct.

Speaker 1 Oh my goodness gracious.

Speaker 2 I like the scheme.

Speaker 3 So a negative income tax, as Milton Friedman envisioned it, would essentially have the government provide individuals below a certain income with money.

Speaker 3 The structure he had in mind made it so people who work made more money than people who received just the negative income tax benefit.

Speaker 3 And he also believed that this system would essentially replace all welfare programs in the U.S. someday.

Speaker 2 Both. And actually the earned income tax credit is not too dissimilar.

Speaker 2 It's different, but it's the same idea that when you earn below a certain amount of money, you will get some money from the government.

Speaker 1 Okay, well, Darien gets a bonus point for extra learning.

Speaker 4 Now the score is 6 to 0.

Speaker 4 Really, did you know the answer?

Speaker 1 No, I don't. I don't.
I think I would have needed like a little bit more time to think. You know, Darien has all these facts at his fingertips.

Speaker 1 And I need to like sit here and let the organ grinder monkey in my head roll around a little bit more.

Speaker 1 I did know the standard oil one right away, but Dari was faster.

Speaker 3 In any case, let's not take away Darian's well-earned win here.

Speaker 4 Yes, yes.

Speaker 1 And let's not dwell on the past, shall we?

Speaker 3 Darian Woods, five out of five on this indicator quiz bowl. That makes you the reigning champ for today.

Speaker 2 Yep, I want to thank all my economics and public policy tutors and my wonderful colleagues who have taught me a lot of what I know today.

Speaker 1 I need to go back and listen to our bat catalog more.

Speaker 3 Listeners, hope you enjoyed playing along. Tell us how you did and what you think about the Indicator Quiz Bowl by sending us an email, indicator at npr.org.

Speaker 3 Or if you're listening on Spotify, leave us a comment.

Speaker 2 From the Indicator team, happy Thanksgiving. We'll see you on Monday.

Speaker 3 This episode was produced by Corey Bridges with Engineering by KwaC Lee. It was fact-tacked by Cyril Juarez.
Kay Kincad edits the show and The Indicator is a production of NPR.

Speaker 5 This message comes from Vanguard. Capturing value in the bond market is not easy.

Speaker 5 That's why Vanguard offers a suite of over 80 institutional quality bond funds, actively managed by a 200-person global team of sector specialists, analysts, and traders.

Speaker 5 They're designed for financial advisors looking to give their clients consistent results year in and year out. See the record at vanguard.com/slash audio.
That's vanguard.com/slash audio.

Speaker 5 All investing is subject to risk.

Speaker 4 Vanguard Marketing Corporation, distributor.

Speaker 6 This message comes from Bombas. Treat your feet right this season with merino wool, cashmere, long staple cotton, and more.
Premium materials, better basics.

Speaker 6 Visit bombas.com/slash npr and use code NPR for 20% off your first order.

Speaker 5 This message comes from Solidime. Yesterday's approach to storage can't meet the demands of today's AI ambitions.

Speaker 5 Bigger, faster, and more energy-efficient, Solidyme solid-state storage solutions are optimized for AI. Learn more at storageforai.com.