Title: What Is Rent-Seeking Behavior?
Headings: What Is Rent-Seeking Behavior?
What Is Rent-Seeking Behavior?
Content: Although hiring lobbyists clearly benefits the company they represent, the work of lobbyists does not add value to the larger marketplace. If property rights on the surplus the company seeks had been more stable, such roles for lobbyists would never have been created. Rent-seeking doesn't add any national value. It is coerced trade and benefits only one side. Rent-seeking can include piracy, lobbying the government or even just giving away money. Imagine a thriving sea trade in which ships carrying cargo receive a 20% profit on the value of the goods. Now imagine the first pirate who arms his boat with cannons and rent-seeks the profit. The pirates are not producing any value of their own but are spending their own resources to capture the surplus of the shipping trade. If the pirate ship captures just one in every hundred ships, the average profit for the traders will drop to 19%. Meanwhile the pirate ship is seizing a 100% profit.