Title: What Is Rent-Seeking Behavior?
Headings: What Is Rent-Seeking Behavior?
What Is Rent-Seeking Behavior?
Content: You might think that giving away money is free, but it is not. Even if you hold a random lottery, potential winners still need to take the time to enter. At my $5 hourly wage, my entry cost me $15. I learned later they received 450 entries. If my experience was typical, the rent-seeking cost of all the applicants was $6,750 just to win a $1,000 scholarship. If you add the time to judge the competition and send return letters, the waste gets even greater. Rent-seeking never encourages productivity. The production of valuable goods and services is maximized with strong property rights when little is wasted in efforts to seize the surplus of others or to prevent others from seizing our surplus. During a strong economy there are fewer incentives for rent-seeking because production is highly rewarded. But when economic times make it more difficult to produce, it becomes more attractive to rent-seek someone else's surplus.