Title: What Is Rent-Seeking Behavior?
Headings: What Is Rent-Seeking Behavior?
What Is Rent-Seeking Behavior?
Content: In cases like tax planning, not to participate in rent-seeking when doing so would clearly benefit you is just a needless personal sacrifice. However, even if we exploit such an opportunity, we should still oppose the legislation that establishes these incentives in the first place. Such legislation is prevalent in our government. Any efforts to subsidize or bail out struggling businesses are rent-seeking. When some banks take excessive risks to gain excessive returns, they are risking that the returns will be worth the hazards involved. But when government bails out these risky banks, they give them a large advantage over their more cautious competitors. These banks are able to privatize any profits from their risky ventures, yet through rent-seeking they have managed to coerce the public to pay for their failures. Rather than having an incentive to lend prudently, there is a greater incentive to be categorized as too big to fail. A wasteful amount of rent-seeking accompanies most government spending. Studies suggest that $1.5 trillion is wasted on public sector rent-seeking.