Rent-Seeking

Definition

Rent-seeking is the expenditure of resources to capture economic rent — to obtain a larger share of existing wealth — rather than to create new wealth. Examples include lobbying for subsidies or monopoly privileges, and, paradigmatically, capturing the unearned increment of land.

Origins

The behaviour was analysed by Gordon Tullock (1967) and named "rent-seeking" by Anne Krueger (1974). The terminology draws directly on the classical analysis of land rent: rent is the original case of income obtained from control of a scarce, unproduced asset rather than from production.

Connection to Georgism

Georgist analysis treats private capture of land rent as the foundational form of rent-seeking — value extracted from the community's activity without contribution. Modern work such as Mazzucato et al. (2023) extends the framework from land to finance and digital platforms, and Stiglitz places rent-seeking at the center of inequality.

See Also

• Government-Granted Licences and Privileges — the umbrella concept tying land titles, banking charters, spectrum, and taxi medallions together as one rent-generating structure
• Objection: the public-choice critique — rent-seeking theory turned on Georgism itself: Leviathan, assessment discretion, and the transitional-gains trap
• Rent-seeking drags economic growth — the evidence page: MSV, Baumol, and the honest magnitude caveats
• FIRE Sector
• Economic Rent · Land Monopoly · Mapping Modern Economic Rents

Sources

1. Anne Krueger (1974), "The Political Economy of the Rent-Seeking Society," American Economic Review.
2. Mazzucato, Ryan-Collins & Gouzoulis (2023) — wiki summary
3. Louis Kaplow (2019), "Market Power and Income Taxation" · wiki summary — used for how rents from market power should be taxed.
4. Rothschild & Scheuer (2011), "Optimal Taxation with Rent-Seeking" · wiki summary — used for the optimal-tax case for taxing rent extraction more heavily.