Rent Hiking

When discussing the influences on modern economics, the concept of “rent seeking” has become a major source of study. The term itself dates back to 1974 in an essay written by Anne Krueger. For economists, rent is a return generated in excess of what would be typical for market competition and above normal profit gains. It follows that, rent seeking is the act of gaining advantage or privileges from entities in power, on trade outside normal competitive market forces, such as through the means of lobbying or tariffs. For instance, this shows up with the holders of intellectual properties, rent seeking behavior in these industries can stifle new creative ideas. Over the years, many authors and other creators of works in the arts have pushed …show more content…
This lobbying would be considered rent seeking behavior. Taxi services are known to artificially limit the number of medallions issued to drivers. This makes for a higher demand for a service that can eventually be exploited at a price higher then it normally would be set. In fact, the focus of rent seeking behavior has been generally on the bodies of government or entities in power. Those solicited for accommodation are the ones that can enact the regulations that would favor the interested party. Indeed, money spent in pursuit of a beneficial law or regulation moves wealth in areas that lessen its utility for society. Regulations enacted under the motives of rent seeking may be detrimental to society as a whole and stifle normal market corrections. Particularly, the self motivated nature of rent seeking is best described through the lens of the psychological egoist, which states that people and companies participate in activities that only benefit themselves. With the desire of companies to protect and even increase their share of profit, the perception that the “grass is greener” in fair market competition validates the use of any means necessary to get a “leg