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We trace a straight line from a 1697 blasphemy execution to modern cancel culture by focusing on one variable: the cost of turning speech into coordinated punishment. We break down how social media creates common knowledge at near-zero cost, making outrage faster, bigger, and harder to control.
• Thomas Aikenhead’s case as a story about information and enforcement costs
• Transaction costs as the hidden limiter on persecution and social punishment
• The First Amendment limiting state coercion while leaving private sanctions intact
• Social media as a collapse in the cost of broadcasting accusations
• Common knowledge as the trigger for coordinated action by strangers
• Justine Sacco as the early template for modern cancellation dynamics
• Brendan Eich, Emmanuel Cafferty, James Damore, and PyCon “donglegate” as repeating patterns
• John Cleese on offense and the urge to control others’ behavior
• Listener letters on healthcare markets, consolidation, and transaction costs
• Certificate of need laws and price systems that shape competition

• Amy Poehler's super bowl ad (Dongle!):
• John Cleese on cancel culture

Letters:

• Dr. Anthony Digiorgio, UCSF, Graphic Novel Claim Denied, Off Label Ideas
• Surgery Center of Oklahoma

Book-o-da-week:

• Steven Pinker’s When Everyone Knows That Everyone Knows . . .: Common Knowledge and the Mysteries of Money, Power, and Everyday Life Scribner, 2025.

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We tell a story about German academic quarter hours-- akademische Viertel-- and use it to argue that lateness is an economics problem of coordination, incentives, and transaction costs, not just manners. We lay out five rules that predict who shows up late, why the pattern spreads, and how to spot it before you commit to a recurring meeting.
• the “academic quarter hour” as a rule that makes lateness predictable
• lateness as a transaction cost that blocks group goals
• platonic travelers and the habit of leaving no buffer
• five rules of lateness and what each predicts
• why meetings drift into equilibrium lateness over time
• lateness as an externality and prisoner’s dilemma
• incentive fixes from social sanctions to financial penalties
• watch setting quirks and backwards induction as a practical test
• listener letter on medical insurance hiding prices from consumers
• why hospitals were small before 1935 and how sulfa drugs changed that
• letter on permitting payments for solar projects and why people call them bribes
• book recommendation for the punctually challenged

Links:

• Munger, Chron of Higher Ed, 5 Rules of Lateness in Academe
• Munger, Econlib, The 5 Sorry Rules of Lateness
• New York Times article on "Time Personality"
• U of Michigan's version of the academic quarter hour
  
  

Book-o-da-week: Never Be Late Again: 7 Cures for the Punctually Challenged
by Diana DeLonzor and Gerry DeLonzor. Post Madison Publishing May 19, 2026.

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We try to make sense of a real problem many of us feel: paying a lot for U.S. healthcare while still waiting months to see a doctor. We trace how engineered transaction costs, from the Flexner Report to modern residency caps, restrict physician supply and protect price power while leaving clinicians overworked and patients stuck.
• getting “fired” by a health system and what it reveals about access
• why shortages don’t clear when prices rise, and how transaction costs block entry
• the Flexner Report as quality reform and supply restriction
• evidence of conflicts of interest and rushed methods behind the Flexner narrative
• Ruben Kessel’s puzzle on persistent price discrimination in medicine
• hospital privileges and county medical societies as cartel discipline
• why advertising bans and professional norms can function as anti-competition tools
• how residency caps and accreditation keep the bottleneck in place today
• a listener letter on data center payments as compensation versus bribes
• book of the week recommendation and a few parting thoughts

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As I note in the episode, thanks to Dr. Lance Stell, Davidson College Department of Philosophy (emeritus). Lance offered this note about the epidsode:

There's a footnote to the Flexner report. It killed the Davidson medical college - NC"s first. The school was founded by a DC faculty as a proprietary school. After 10 years operating on campus, it moved to Charlotte where it had a clinical relationship w/ the Good Samaritan Hospital - a black hospital, becoming the first medical school in the country to have such a relationship. I can send you an article about it written by Dr. Eddie Hoover, MD, a surgeon and Editor of NC"s black medical journal. Flexner execrated proprietary medical schools and it was his goal to "close them." His damning review of the Davidson medical School, renamed The NC Medical College, was successful.

Thanks, Lance, I did not know that! I added that link, below.

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Links:

• The infamous Flexner Report: http://archive.carnegiefoundation.org/publications/pdfs/elibrary/Carnegie_Flexner_Report.pdf
• Hiatt and Stockton on the Flexner Report: "The Impact of the Flexner Report on the Fate of Medical Schools in North America After 1909"
• Hiatt: "Around the Continent in 180 Days."
• Hiatt: "The Amazing Logistics of Flexner's Fieldwork."
• Kessell, Journal of Law and Economics, 1958: "Price Discrimination in Medicine."
• Eddie L Hoover, Catherine R Lewis. 2006. Journal of the National Medical Association. "Good Samaritan Hospital and the North Carolina Medical College circa early 1900: the first major affiliation between a black hospital and a white medical college."
• Ernest Jones, "The God complex" in Essays in Applied Psycho-Analysis.

Earliest source I could find for the TWEJ: https://www.netfunny.com/rhf/jokes/old89/godplay.840.html

PA data center story: https://www.thecentersquare.com/pennsylvania/article_3b615fd8-5d36-45c4-bfb6-4a3162104f0b.html

Book-o-da-week: Daniel Hannan, Inventing Freedom, Broadside Press. https://www.amazon.com/Inventing-Freedom-English-Speaking-Peoples-Modern/dp/006223174X/

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BIBLIOGRAPHICAL NOTE: The information in this episode comes from Red Flags Press. Their main web site is very useful for research purposes, and I recommend it!

We follow the idea of the “social parasite” through socialist writing and show how it shifts from moral accusation to an enforceable legal category once society claims ownership over individual labor. We argue that the transaction costs of monitoring effort and assigning “socially useful” work push real-world socialism toward surveillance, coercion, and punishment.
• socialist critique of wage labor as work or starve
• transaction costs as defining, monitoring, and enforcing property rights
• the property rights switch from self-ownership to society owning labor
• “from each according to their ability” as an obligation backed by force
• socialist writers labeling middlemen and many professions as parasites
• the party as the decision-maker when prices are suppressed
• Joseph Brodsky’s trial as a real anti-parasite enforcement example
• why the parasite problem expands and becomes politically arbitrary
• how similar labor-claim logic shows up in authoritarian socialism and fascism
• why Scandinavian social democracy is capitalism, not classical socialism
The book of the week is Lenin’s What Is to Be Done? Burning Questions of Our Moment, and I strongly recommend it.

Links:

Red Flags, "Why Socialism Says Slacking is Theft."

Moments in Soviet History: The Trial of Joseph Brodsky

Leo Huberman, The ABCs of Socialism.

"Soviet Era 'Parasites'" https://www.themoscowtimes.com/2016/05/20/soviet-era-parasites-return-to-todays-russian-a52934

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We break down how sportsbooks function as brokers that match contracts, set prices through the point spread, and earn their living through the vig. Kevin Braig joins us to explain how law, technology, and property rights shape whether sports betting markets stay clean or slide toward corruption and bad incentives.
• five reasons people gamble, from dopamine to positive skewness
• what a sports bet is as a contract and why a book exists as a broker
• how the 11-to-10 price and the vig work in practice
• why point spreads are a pricing technology and a marketing tool
• how street-level enforcement and local political capture governed bookmaking
• why Nevada legalized betting and how phones and smartphones changed everything
• the Coasean case for clearly assigned property rights between leagues and books
• how prop bets and inside information can erode trust in games
• why extreme taxes and licensing fees raise transaction costs and distort markets

Judge Kevin Braig's book, "Bookmakers vs. Ballowners"

RH Coase, "The Problem of Social Cost"

Gustavo Dudamel's opera, "Wealth of Nations"

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Hereditary monarchy seems like a ridiculous way to pick a leader, yet it dominates most of human political history. We argue the reason is transaction costs: succession systems survive when they settle “who rules next” cheaply enough to prevent recurring civil war.
• Why hereditary monarchy is historically prevalent compared with democracy and universal suffrage
• Why “divine right” stories often rationalize a choice people already find tolerable
• Thomas Paine’s critique of hereditary succession and what it misses
• Hobbes on the state of nature as what happens when sovereignty is contested
• Succession as the master coordination problem of political order
• Transaction costs applied to elections, enforcement, legitimacy, and rent seeking
• Why elective monarchy can become an armed auction for total power
• Bright line rules versus discretionary selection and why speed can beat “better”
• How constitutional design lowers the cost of leadership transition when it works
• The legitimacy problem and why dynasties converge on endogamy
• The genetic consequences of endogamy and the Habsburg cautionary tale
• Twedges, book recommendation, and a listener letter on board game “math trades”

LINKS:

Thomas Paine, Common Sense, February 1776

Michael Munger, The Ugly Pig, 20224

A.P. Martinich, Thomas Hobbes: A Biography, 1999.

Thomas Hobbes, Leviathan, 1651.

Neal Schultz, Suicide Kings: Hereditary Monarchy, 2025

Tbadel Barter App

Cosmos Institute, Coasian Bargaining at Scale, 2025

UPDATE: An interesting, and more clearly articulated, application of the reasoning here.... https://aminga.substack.com/p/how-transaction-cost-economics-explains

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Permits feel like “just paperwork”, until they quietly become the biggest barrier to building, investing, and even basic economic growth. We use Chile’s fight with “permisologia” to show how bureaucracy creates delay, uncertainty, and political risk even when the stated goal is safety or environmental protection.
• permits as transaction costs that quietly tax projects and entrepreneurship
• why bureaucracy is not the same thing as government and why it crowds out market coordination
• “permisologia” in Chile and how a one-stop shop becomes many counters
• parallels to India’s license raj and the logic of rent seeking choke points
• Dominga as a case study in shifting rules, scandal, and investment held hostage
• documented GDP and jobs costs from permitting delay and collapsed processing capacity
• Chile’s LMAS reform plan including deadlines, digitization, and sworn declarations with sanctions
• Parkinson’s Law, bike shedding, and why committees obsess over trivial items
• listener letter on commune life and how transaction costs show up inside “one big firm”

Links:

What is "Permisología"? https://comentarista.emol.com/2294117/27242033/Emol-Social-Facts.html

Framework Law (LMAS): https://www.bluefieldresearch.com/research/chile-takes-another-step-towards-mining-reform/

Parkinson's Law and the "Law of Triviality": https://fs.blog/parkinsons-law/

Twin Oaks Community: https://www.twinoaks.org/

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A talk with Dr Anya Shortland about the economics of ransomware and the gray-zone institutions that let extortion markets function when nobody can truly enforce trust. We dig into how cyber insurance quietly becomes a form of governance, why data leaks change the game, and what national security risks emerge as everything gets connected.
• criminal markets that sit between legal firms and underworld gangs
• insurance as governance through protocols, repeat play, and incident response packages
• why victims amplify risk when they throw money at crises
• the origin story of early ransomware and the transaction costs that made it fail
• step-by-step ransomware mechanics from phishing to exfiltration to encryption
• how gangs price ransoms by reading cash flow and insurance certificates
• leak sites, privacy regulation, and third-party liability as bargaining leverage
• why cyber insurance is fragmented and slow to enforce security standards
• deductibles, coverage caps, and market hardening that push better cybersecurity
• AI-enabled phishing and the asymmetric arms race between attackers and defenders
• state-linked ransomware, impunity jurisdictions, and critical infrastructure threats
• efficiency versus resilience in smart cities and the Internet of Things

Anja Shortland at Kings College London

• Shortland's book, Dark Screens: https://www.amazon.com/Dark-Screens-Hackers-Shadowy-Ransomware/dp/1541705750
• Shortland's first TAITC episode: "Deals with shadows"

Links mentioned in podcast:

Alex Danco's pirate puzzle

Pete Leeson's book, The Invisible Hook

David Deutsch's book, The Beginning of Infinity

You can follow Mike Munger on Twitter at @mungowitz