Liberty vs. Leviathan

Chronicling Liberty's battle against Leviathan

Rent-seeking 101

In a sentence, rent-seeking is the economic phenomenon of a small, powerful special interest group using the power of government for its own benefit at the expense of a much larger but less powerful group (consumers, you and me).

Sheldon Richman of The Future of Freedom Foundation, exposes the insurance industry as the rent-seekers of so called Healthcare Reform in “Not So Strange Health-Care Bedfellows“.

Under a mandate the industry would have millions of new captive customers, mostly healthy young people who will pay premiums but make few claims. This will mean huge new politically derived profits.

For a more detailed explanation of rent-seeking, see Sanford Ikeda’s Rent-Seeking : A Primer, published by The Freeman at the Foundation for Economic Education.  Ikeda makes clear the distinction between wealth building and wealth destroying rent.

And last, but by no means least, in The Law (L.27-L.30) Bastiat sounds a warning of suffering to those who fail to oppose the evil of plunder inherent in a rent-seeking society:

Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter—by peaceful or revolutionary means—into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.

Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws!

Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess. ) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.

It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution—some for their evilness, and some for their lack of understanding.


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