Title: What is rent-seeking? Definition and meaning - Market Business News
Headings: What is rent-seeking? Definition and meaning
What is rent-seeking? Definition and meaning
Rent-seeking behaviors of lobbying
Rent-seeking licensing rackets
Rent-seeking in government
Video – Rent-Seeking – Definition and Meaning

Content: The strategy or activity creates no extra wealth, but the company gets richer, and the taxpayer has to foot the bill. Imagine you are the head of a company and succeed in getting subsidies or persuading the government to introduce legislation that limits competition and makes it much more difficult for new competitors to enter your market – barriers to entry – you have managed to grow your share of current total wealth in that sector without adding anything to make that market bigger – you have been involved in rent-seeking behavior. Apart from earning income without creating any additional wealth, you have not put any of your capital at risk either. Rent-seeking licensing rackets
Any market sector or profession where there is a closed-shop system, rent-seeking exists. A closed shop is any area of activity that is restricted to a particular small group. Rent-seeking comes in many forms, including barriers to entry like onerous licenses, having to belong to a particular trade union in order to work in a trade, imposing tariffs, and corruption in government. In all cases, no additional wealth for the nation, sector or society is created. Sometimes, requiring a license is necessary and makes sense. For example, doctors are not allowed to practice if they don’t have a license – that is to protect the well being of patients. Pilots are not allowed to fly passenger planes unless they have a special license – that is to protect the lives of the passengers.