by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
Rent-seeking is a strange term; it’s the economists’ version of the infield fly rule. If you’re in the know about rent-seeking, it’s likely you are conversant in economics.
The president is not. (Which shouldn’t surprise, since so many of his economic schemes depend upon inverted demand curves to work. He hasn’t issued an Executive Order that demand curves slope upward — yet.) He recently criticized the Koch brothers of rent-seeking for their efforts to have special investment tax credits for renewable energy end.
But so you’re up to speed on the term, here are several stabs at defining it:
Basically, rent-seeking is spending some of your resources to capture others’ resources without producing anything of value to them. Big corporate lobbies offering campaign handouts and employing people to troll the halls of power for special tax breaks just for themselves, special favors just for themselves, special laws to force consumers to do business with them, regulations aimed at hampering if not kneecapping their competitors, etc., are immediate examples of rent-seeking.
It’s no wonder Forbes columnists David John Marotta and Megan Russell analogized rent-seeking activity to pirates seizing the profit of merchant ships.
If you want to see a visual example of rent-seeking in action, today’s Carolina Plott Hound has it:
It’s all about winning government goodies. Sending swarms of lobbyists into the General Assembly is how this industry “competes.”