Planet Money

Prices go up. Occasionally, prices go down. But for 70 years, the price of a bottle of Coca-Cola didn't change. From 1886 until the late 1950s, a bottle of Coke cost a nickel. On today's show, we find out why. The answer includes a half a million vending machines, a 7.5 cent coin, and a company president who just wanted to get a couple lawyers out of his office.

Today's show is the story of two men and one big idea. The big idea is that a poor country should take a small, empty part of its territory and say: We're going to build a new city here. And in this new city, we're going to get rid of our existing laws and rules, and bring in the best laws we can find from around the world. Get help from foreign countries. Maybe the UK could serve as a court of appeals. Maybe Canada could send in a few Mounties to help set up a police force. The two men are Paul Romer, a world famous North American economist, and Octavio Sanchez, chief of staff to the president of Honduras. They think their big idea could be the answer to one of the oldest, hardest problems in economics: How do poor countries get richer? And they seem like a perfect match. Paul is a famous economist who can sell the idea around the world. Octavio has the ear of the president in a poor country looking for a change. On the show, we find out what happens when they try to make their idea a reality.

Why do businesses selling the same thing crowd around each other rather than strike out on their own? To answer that question, Adam Davidson and Chana Joffe-Walt walk through some New York City neighborhoods – the diamond district, the plant district, the chess district — where store after store sells the exact same thing.

A monster storm flooded parts of the biggest city in America this week. Millions of people are still without power.But in the long run — even in the medium run — New York (and New Jersey!) will recover. And for the U.S. economy as a whole, this disaster will barely be a blip.This is largely because there are countless backup plans hiding everywhere in our economy. On today's show, a flooded grocery store reveals safety nets that are usually hidden but, at moments like these, are suddenly made visible.

You rarely see lard on menus. There aren't shelves and shelves of it in every supermarket. In this country, we've sort of lost touch with the once beloved pig fat. On today's podcast, we ask — who killed lard? Was it Upton Sinclair? His novel, The Jungle, contained this memorable passage about the men who cook the lard: ...and as for the other men, who worked in tank rooms full of steam, and in some of which there were open vats near the level of the floor, their peculiar trouble was that they fell into the vats; and when they were fished out, there was never enough of them left to be worth exhibiting,— sometimes they would be overlooked for days, till all but the bones of them had gone out to the world as Durham's Pure Leaf Lard! Or should we blame William Procter and James Gamble? It was their company which created a new alternative to lard — the "pure and wholesome" Crisco. Note: Today's podcast is a rerun. It first ran in January, 2012.

For months now, we've been creating a fake presidential candidate based on the best ideas economics has to offer. We came up with a platform, with the help of a panel of economists. We hashed out the disagreement among the panel. We brought in political consultants who laughed at us, but also gave us some great messaging ideas. Today, we take it to the people — or, at least, a focus group. We find out whether these economically sound ideas can get anyone's vote. And we create a couple real ads for our fake candidate.

Two big patent cases this summer in the smartphone industry: 1. A jury finds that Samsung violated Apple's patents, and orders Samsung to pay Apple $1 billion. 2. A judge throws out a case between Apple and Motorola (now owned by Google). The judge goes on to write an article in the Atlantic arguing that there are too many patents in America, and lots of industries could probably get along fine with no patents at all. These radically different rulings were just the latest reminder that the world of software patents is a mess. Big companies that should be focused on inventing the next great thing are instead spending billions of dollars buying up patents and suing each other. Small companies have to worry that someone with some random patent is going to sue them and shut them down. On today's show, we talk with Mark Lemley, who has some ideas for fixing the patent mess. Lemley is a professor at Stanford law school and an expert on software patents. Lemley also works for clients in the private sector, including Google.

On today's show, we meet a self-described robber baron who decided to spend his billions on finger paint and changing tables. We revisit decades-long studies that found preschool made a huge difference in the lives of poor children. And we talk to a Nobel prize-winning economist who says that spending public money on preschool produces a huge return on investment. We'll have more on preschool this weekend on This American Life.

America used to lead the world in making cars. Now we don't. China does.We used to be the number one maker of steel. American steel built bridges and ships all over the world. Not anymore.But the world's most popular music still comes from American artists. Turn on a car radio in Italy, walk into a store in Mozambique, and there's a good chance you'll hear an American pop tune.Music is an export, just like anything else. And, as with other exports, businesses in lots of other countries are fighting for their share of the global market. They want people all around to world to be listening to their music. And they're figuring out how to make it happen.The popularity of PSY's song "Gangnam Style" is not a fluke. Korea has spent the last twenty years preparing for this moment.

Loyal Planet Money listeners may remember Willow Tufano, the Florida teenager who bought a house. We did a show about her back in March. On today's show, we follow up with Willow. She just bought another house. She's trying to land a reality TV deal. And she recently wore a Pikachu costume on a trip to Alabama.

Earlier this summer, we set up two shell companies in tax havens. On today's show, we continue our quest to figure out what people actually do with shell companies. We discover the world of "Asset Protection," which is a fancy way of saying "hiding money." It's a world of Latvian companies and offshore conferences, of people trying to hide money from their future-ex-husbands and future-ex-wives. "It's kind of like Alice in Wonderland down the rabbit hole," one insider tells us.

Note: This show is a re-run. It originally aired in April, 2011. Lots of economists write about the economics of illegal drugs. Here's a paper from a Harvard guy. Here's another co-authored by a couple Chicago guys. One thing missing from those papers: Actual drug dealers. So for today's podcast, we run some economic theory by Freeway Rick Ross (pictured), who was one of the biggest crack dealers in LA in the '80s and '90s. He went to prison in '96, and was released on parole in '09. Economists say that people demand a "risk premium" to do illegal, risky work. But it didn't feel that way to Ross: When you come from where I was when I started selling drugs, you feel hopeless. You don't think you're going to live past 24 years old. Go to jail, come out with stripes. Really wasn't any risk. Everything I had going on at the time, it was nothing. I was like a lump on a log. The risk most people would look at — you could get killed, go to prison — was Ok. What's more, he really liked being a drug kingpin. I loved it. ... I felt like I was powerful. ... It was every man's dream to be free. ... I'd rather be doing that than anything else, almost.

On the show today, the story of an innovation that changed the way the world works, and of the man who made this innovation possible. Luca Pacioli was a monk, a mathematician, a magician and possibly, the boyfriend of Leonardo da Vinci. Jane Gleeson-White, author of Double Entry: How the Merchants of Venice Created Modern Finance, tells us the story of Pacioli and how his book on mathematics changed business across the planet.

Earlier this year, we created a presidential candidate. A fake candidate, sure. But a candidate with real ideas — ideas embraced by economists across the political spectrum, and rejected by every politician who wants to get elected. Getting rid of the mortgage-interest tax deduction. Eliminating corporate taxes. Legalizing marijuana. On the show today, we bring in real political consultants to help us plan a campaign for our fake candidate. Our goal: Sell our candidate to America by making economics sexy.

Global trade wars. Small-time bike thieves. And what happens when the Fed talks big. On today's show, we bring you three short Planet Money stories.