"Rent Seeking" is economic jargon. It is recently minted bit of jargon, dating only back to the 1970s. It refers to the bad habit people have of going to the government for help. Special regulations are sought to make life more difficult for competitors, such as license requirements for contractors or brokers. Tariffs are sought to interfere with foreign competition. This keeps people out of the business. People try to get a benefit or entitlement for being in a particular class such as children or the elderly or minorities. Social Security is a special payment to the aged. Business tries to get a subsidy, such as a tax credit for solar power.
Rent seeking might be looked at as a way to make society more fair. Or it might be looked at as a way people try to get unfair results from the economy. From the government perspective it could be a way of social engineering, changing behavior in desirable ways.
Does it work? It creates a drag on the system. It encourages bribes. "Rents" in this definition are themselves a sort of bribe to various groups.
We are stuck with it. People have always gone to government for favors.
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1 comment:
oddly enough
"rent control" is rent seeking
it is government giving a special group (renters) a special privilege(lower than market rents and eviction protection)
one bad side effect is that disputes between landlords and tenants become more frequent and more bitter.
In a free market a landlord will either try to satisfy the tenant by doing what it takes, becasue vacancies are expensive, or if the tenant is unreasonable the landlord can simply end the tenancy with a 30 day notice.
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