In 1967, Gordon Tullock published an article entitled “The social costs of tariffs, monopolies and theft» which described the mechanics of this Anne O. Krueger will call later “THE rent seeking society.” Rent-seeking may seem a bit abstract, but if you understand why theft makes the world worse off, on the Internet, then you understand why rent-seeking society is such an escape.
We had an object lesson on this recently when I checked my text messages and saw one from my wife saying I needed to cancel a credit card because her wallet was stolen. She had gone kayaking with a friend and when they returned to their car, the window had been smashed and their wallets had been stolen. Credit cards are easy to cancel, but the cash they carried is obviously lost.
From an economy-wide perspective, the transfer It doesn’t really matter. Instead of us spending $100, someone else does it. Stolen money is a cost to us, but it is not a cost to “society”. It just changes hands.
Tullock and Krueger explained that rent-seeking is ineffective because people consume real resources trying to achieve an outcome. transfer Rather than a transaction. Others consume real resources trying to prevent transfers. Thieves could have used their time and tools to produce things, and if they had produced something that they could sell for more than their cost, they would have created value. They could have built a birdhouse or swept out someone’s garage or a virtually infinite number of things.
Instead, they used their time and tools by simply redistributing things. The cost to society is what they could have created while they were busy stealing, plus anything they destroyed in the process (a van window, in this case, plus the time we had to spend canceling credit cards and that we will have to spend monitoring transactions).
Lobbying – and distributive politics in general – is like breaking into a car and stealing a wallet or pocketbook. rob a record store. Instead of creating something new, lobbyists and special interests spend their money trying to take over something that already exists. The world is worse off than what they could have done instead.
If you look at the Federal Register, you can see example after example after example of special privileges granted to visible and sympathetic interest groups. People celebrate when they win, because after all, who doesn’t like free money? It’s not free, of course, despite claims that the extra spending would boost the economy. As Frédéric Bastiat recalls, the money has to come from somewhere. It is also important to note that the time and money spent lobbying Congress for this privilege could have been spent creating instead of taking, just as thieves might use their time and talents to otherwise thing.
Art Carden is a Trust Fellow professor of economics and medical properties at Samford University, and he is, by his own admission, as Koched as they come: he has an award named in honor of Charles G. Koch in his office, he does a lot of work for and is affiliated with an array of Koch-related organizations, and he has applied for and received money from the Charles Koch Foundation to host events on campus.
