Rent Seeking Action
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A Rent Seeking Action is an economic action that attempts to tap into existing wealth (by taking steps to demand economic rent).
- Example(s):
- When a company lobbies the government for loan subsidies, grants or tariff protection.
- …
- Counter-Example(s):
- See: Organized Crime Group, Political Lobbying Group, Economic Monopoly, Capitalism, Market-Driven Economy.
References
2013
- http://en.wikipedia.org/wiki/Rent-seeking
- In public choice theory, rent-seeking is an attempt to obtain economic rent, (i.e., the portion of income paid to a factor of production in excess of that which is needed to keep it employed in its current use), by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. One example is spending money on political lobbying in order to be given a share of wealth that has already been created. A famous example of rent-seeking is the limiting of access to lucrative occupations, as by medieval guilds or modern state certifications and licensures. People accused of rent-seeking typically argue that they are indeed creating new wealth (or preventing the reduction of old wealth) by improving quality controls, guaranteeing that charlatans do not prey on a gullible public, and preventing bubbles.
Many current studies of rent-seeking focus on efforts to capture various monopoly privileges stemming from government regulation of a market. The term itself derives, however, from the far older practice of appropriating a portion of production by gaining ownership or control of land.
- In public choice theory, rent-seeking is an attempt to obtain economic rent, (i.e., the portion of income paid to a factor of production in excess of that which is needed to keep it employed in its current use), by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. One example is spending money on political lobbying in order to be given a share of wealth that has already been created. A famous example of rent-seeking is the limiting of access to lucrative occupations, as by medieval guilds or modern state certifications and licensures. People accused of rent-seeking typically argue that they are indeed creating new wealth (or preventing the reduction of old wealth) by improving quality controls, guaranteeing that charlatans do not prey on a gullible public, and preventing bubbles.
1974
- (Krueger, 1974) ⇒ Anne O Krueger. (1974). “The Political Economy of the Rent-seeking Society." The American Economic Review, 64(3).