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Reason says rent seeking is improductive and self destructive behaviour. One will engage in such activities only if the expected returns outweights the costs, w
by guylhem 14y ago
Reason says rent seeking is improductive and self destructive behaviour. One will engage in such activities only if the expected returns outweights the costs, which include the destruction of the system.
A rational person will not come to this conclusion under a system where such inefficiency is discouraged - pure and perfect competition, capitalism.
Many people wonder whether capitalism is a good thing. Bring them reason, science, let them work it out and make their own basic decision. Let them fight the bad reasoning themselves, come out of their local optimas if you prefer a math analogy. Racism and religious extremism must have some value, or such behaviours would not have because so widespread. But they seem to be local optimas, or even destructive in the end, just like rent-seeking.
Here is another way to look at this - look at the immigration net flows: it seems that more people want to immigrate in capitalist countries than emigrate out of them.
If it is reasonable to doubt my deductions, is it reasonable to doubt so many people may have made the same conclusions independently ?
Read about how immigrants affiliate politically, which belief system they adhere to. Apparently a lot of them want to be paid for the fruit of their labour, and not for pure idleness, want to be left alone - and many other libertarian values.
I'm sorry if that is not a valid explain for you. It is for me.
- bob13579 14y agoHow do you explain government rent-seeking, where there is no competition? Take government pensions or teacher unions for example.
- sliverstorm 14y agoTo make sure we are on the same page, let me try to summarize: you are essentially saying that so long as people take into account negative externalities, rent seeking behavior goes away? I don't disagree with your premise, but I do disagree that this will result in rent seeking behavior going away. One of the classic problems with capitalism is literally exactly this- negative externalities are not properly accounted for.
- guylhem 14y agoWe are on the same page. I wouldn't phrase it that way, but yes, ideally negative externalities should be internalized by individuals to make the problem vasnish. But failing that, if individual parties may engage in negotiations to achieve better outcomes (Ronald Coasce) Less regulation are usually a 1st thing to try in that process, to cause change by voluntary association, naming and shaming. Issues can be mitigated. But regulation is a pandora box. There are whole parts of economics studying that - public policy and industrial organisation.