Some prominent people are distressed by Zohran Mamdani’s victory over Cuomo. There are real concerns regarding Mamdani. Mamdani is a self-described socialist, and socialism has failed disastrously everywhere it’s been tried.

Others, like Paul Krugman, trivialize the threat of Mamdani socializing New York. Mamdani may dream of a fully socialized New York City, but his current platform falls well short of full blown socialism. Krugman also points out that Andrew Cuomo was a deeply flawed candidate.

Recent criticisms of Mamdani fail to account for the time factor- specifically long-run versus short-run effects of bad public policies.

Mamdani dreams of a more affordable New York. He wants to use rent control to make NYC housing more affordable. Critics point out that rent controls which lower the money price of apartments kill incentives to invest in current and new buildings. This is true, in the long run. Vietnamese Foreign Minister Nguyen Co Thach said: “The Americans couldn’t destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy.“

There are many other examples of rent control lessening the quality and quantity of apartments. However, it takes a number of years for artificially low rents to noticeably change the quality and quantity of apartments. The more immediate problem with rent control is that low rents will attract more people to New York. In other words, demand will exceed supply persistently- this creates queues of people waiting for apartments. Economist Avraham Barkai proved that the costs of waiting in queues make the real-full price of “cheap” regulated goods higher, not lower. Time has value, and time spent waiting increases the real costs of goods with low money prices.1 Mamdani is likely incapable of learning anything from Barkai. Barkai was an Israeli, and Mamdani is a Jew/Israel hating racist.

Barkai’s analysis rests on the optimistic assumption that people passively wait in line for rent-controlled apartment. Economist Gordon Tullock argued, correctly, that people invest real resources in fighting over wealth transfers.2 Rent controls transfer wealth from Landlords to the Tenants who are first in line. Political fights to raise or lower rents, or to let some skip ahead in queues, waste resources. Political fights over New York City rent control decreases will make the full costs of housing in New York City higher, not lower. The costs of queuing and rent-seeking over reduced NYC rents would be an immediate, not a long run, problem in a Mamdanized NYC. The lesson here is clear: the costliest mistake people can make is believing that public policies can deliver goods at lesser or no cost.

Mamdani also wants city-owned stores to supply “low-cost” groceries to New Yorkers. The same problems apply here: lower money prices mean food lines (a familiar sight in socialist nations) or restricted-regulated entry. Citizens and socialized society face a basic problem. Free access to “cheap goods” creates a “tragedy of the Commons.” Common ownership of scarce resources by “the people” incentivizes people to supply less and demand more of these goods. This leads to persistent shortages. Socialist officials then find themselves in a position of either abandoning socialism, or imposing controls on access to resources. Vladimir Lenin and his fellow Bolsheviks temporarily abandoned socialism during the mid 1920s, to end the chaos created by their initial policies.

Detailed regulations concerning access to resources in socialism lead to the “Tragedy of the Anti Commons” (AKA Tragedy of the Contested). In the long run, socialist societies adopt large bureaucracies to enforce detailed regulatory rules. The problem with the tragedy of the Commons is that there are no gatekeepers to resources, no private owners to regulate the flow of real goods to the public, according to market prices. The problem with the tragedy of the Anti Commons is that there are too many gatekeepers.3 The bureaucratic systems that evolve in socialism create roadblocks to positive economic change. David Levy explains how consumers in socialism jump ahead in queues by paying bribes. That is, socialist societies end up creating bureaucracies and regulations that lead to wasteful stagnation and corruption. Mamdani should pay heed to this warning regarding long-run problems in socialism, but he would likely dismiss this analysis simply due to Levy’s name- he is a bigot.

Mamdani also favors raising the minimum wage to $30 an hour. This likely would not happen. States that raise their minimum wage rates to high levels provide exemptions which partly nullify these policies. Many states set the teen minimum wage at 85% of the official minimum wage. A number of states exempt certain occupations from the minimum wage entirely. Many states also allow for a lower 90 day teen training wage. New York State has such a proposal under consideration right now.

The speeches and debates that politicians make in public target certain “expressive values” in the electorate. Special interests lobbying- behind closed doors- minimizes the damaging short run effects of socialistic policies, including minimum wage laws.4 This idea of a $30 an hour minimum wage is likely more a matter of rhetoric than of reality. Of course, Mamdani could raise minimum wages somewhat. This would lead to immediate increases in teenage unemployment, and long run investment in labor saving devices.

Was there a better alternative to Mamdani? Yes. Andrew Cuomo is a corrupt greedy politician. But, there are worse things than corruption. The worst economic disasters of the modern world were driven by ideology, not by corruption. Marxist ideologues- Maoists, Leninists, the Khmer Rouge- murdered over 100 million people in the 20th century. Mancur Olson has pointed out that corrupt politicians have an interest in long run economic development. Politicians who restrain themselves from stealing too much in the short run end up being able to steal much more in the long run, due to economic development.5 Corrupt politicians- like the Clinton’s, the Pelosi’s, the Cuomo’s- can steal more from a wealthy country, in the long run. Paul Krugman’s limited understanding of Economics causes him to overlook this fact of our politics.

Mamdani is a delusional ideologue, and therefore dangerous in the long-run. Those who predict immediate disaster from his mayoral administration will be proven wrong. Failure of predictions by prominent Mamdani’s critics may embolden his supporters, and thus could increase the long term danger of Mamdani’s socialistic policies. It is all too easy for devout socialists to falsely interpret lack of predicted immediate failure as proof of initial success.

Those who oppose socialism should be careful to distinguish between long run policy effects and short run policy effects. Most of all, we should stress the relative efficiency of private markets, in the short run, and even more so in the long run.

• 1

  See A theory of rationing by waiting https://www.journals.uchicago.edu/doi/abs/10.1086/466785

• 2

  Tullock’s fist article on this topic is here- https://www.cameroneconomics.com/tullock%201967.pdf

• 3

  The Supreme Court recently dealt with this type of problem. The practice of lower courts making national policy created a situation where there were too many gatekeepers in the Federal public sector. This stymied the efforts of President Trump to implement certain policies of his.

• 4

  See Democracy and Decision by Brennan and Lomasky https://www.cambridge.org/core/books/democracy-and-decision/F6B9DCA136CB2DF4E73A0AC7BC6BE2BE

• 5

  See Olson’s analysis of encompassing interests in his brilliant book, Power and Prosperity.