Question

How can you combine the ideas of public choice and rent seeking?

Answer 1

Some think that rent needs a critical contribution from the economics of public choice. Economists consider an economic rent a return to the owner of a resource above what might be expected under normal competition. Such rents continue to be decreased by market competition; high profits attract new competitors who offer cheaper rates or better value for the same goods and services. Some people take advantage of economic profits and the reform issue lies therein. License holders have the right to abnormally high earnings. The taxi industry collects votes, electioneering campaigns and campaign donations from the public officials who grant the freedom from competition.

Everybody in the industry has a strong material interest in maintaining the licensing irrespective of the impact on all others. Some people say the abolition of the rent bidding power would stop rent finding. If government did less, officials would have less rentals to give, which in turn would lead to less rent seeking and less harm to society. Only pretty real. Yet it is not possible to wish away current laws and regulations. Renting needs a constitutional solution.

Rent acquisition requires extra expenses for society. The Government's economic rentals are not economically efficient. The efforts that were spent attempting to convince policymakers to give an organized group an exemption from competition was lost. Not only money, but also the diversion of talent and time into rent searching involves this waste. Smart lobbyists should have been doing something more successful with their brains and money.

Many who regard government officials for the general welfare as benevolent seekers have a hard time accounting for rent seeking. It's not enough to suggest that a better sort will replace the poor people in government. When the better sort arrives, the opportunities generated by granting rents to organized groups will still remain The rent-seeking idea tells us to be government-skeptical, reform-pessimistic, and morally angry about the status quo.