Rent-Seeking and the Culture War

According to a reputable source, rent-seeking refers to:

The expenditure of resources in order to bring about an uncompensated transfer of goods or services from another person or persons to one's self as the result of a “favorable” decision on some public policy...Examples of rent-seeking behavior would include all of the various ways by which individuals or groups lobby government for taxing, spending and regulatory policies that confer financial benefits or other special advantages upon them at the expense of the taxpayers or of consumers or of other groups or individuals with which the beneficiaries may be in economic competition.

As the examples indicate, rent-seeking is often thought of in the context of business, and the influence businesses exercise over public policy. Call rent-seeking of this type economic rent-seeking.

According to a recent study, some 800 companies benefited from a change to the tax code that occurred in 2004. The study compared the amount of money companies spent lobbying for the change with the benefit they received once they obtained it. The results? The legislation "earned companies $220 for every dollar they spent on the issue."

Obviously, rent-seeking can be a very lucrative enterprise!

But I wish to examine rent-seeking in a different context, what I will call moral rent-seeking. This occurs when a group seeks to exercise control over public policy, not economic benefits, but for moral benefits. These benefits accrue to the favored group at the expense of others who do not endorse the moral view of the group standing behind the policy change.

Suppose group X clearly thinks the world would be a better place if people were forbidden to phi. Those in X recognize that those outside their group may like to phi, but because X believes phi-ing is immoral, they don't particularly care about those preferences. Morality, group X claims, discounts the preferences of those who like to phi.

Group X lobbies the government to pass a law against phi-ing. Before group X is coordinated and well-funded, their effort succeeds, and the government passes a law against phi-ing. Group X has now achieved a benefit -- the benefit of living in a world without phi-ing -- at the expense of those who like to phi. Those not in group X have lost something, the freedom to phi, and they have not been compenated for that loss.

To me, the behavior of Group X sounds quite a bit like rent-seeking. Group X was successfully able to capture control of some portion of government power, and used that power to transfer a benefit to itself at the expense of others. The problem is that moral rent-seeking, by nature, doesn't look as objectionable as economic rent-seeking. But it is. And for the same reasons.

Group Y, let us say, is the group of people who really like to phi. Those in Group Y think there is nothing wrong with phi-ing. They do not think everyone should be obligated to phi, but being able to phi is important to their way of life. Losing that freedom is a setback to their interests. That should matter, and it does matter in the case of economic rent-seeking. But moral rent-seeking, by nature, makes it harder to address what has gone wrong between X and Y.

First, what makes this a great example of rent-seeking is that, in some sense, X and Y are in competition -- cultural competition. For those in Y like being able to phi. They wish others would leave them to their phi-ing. Not only do they resent the government telling them they can't phi, but they're not altogether fond of those in Group X, who denounce phi-ing and try to convince others to discriminate against phi-ers.

In the marketplace of ideas, X and Y have different, conflicting moral views. They have an interest (perhaps not an equally strong one) in others coming to adopt at least a portion of their respective views. But Group X is better at lobbying the government. While Y might have won the culture war, it loses the political one.

The main difference between moral rent-seeking and the typical economic variety is that Group X will undoubtedly try to claim that the benefit it seeks is one everyone should appreciate. Unlike corporate lobbyists, Group X is unlikely to freely admit that the sought-after benefit only matters to its own bottom line. This is the difference that makes it more difficult to identify the wrongness of moral rent-seeking.

According to Group X, banning phi will benefit everyone -- especially the children! -- and it will even benefit those in Group Y. This adds a layer of complexity to the issue of moral rent-seeking that separates it from the purely-for-profit rent-seeking that occurs in the economic sphere. It means, on one hand, that moral rent-seeking will typically be harder to identify. It also means that those in Group Y, who no longer have the freedom to phi, will have a harder time making the case for compensation.

After all, why should Y be compensated? They didn't lose anything they shouldn't have had in the first place.

In order to address both concerns, it is vital to attack the substance of the so-called benefit Group X claims to be achieving on our behalf. It means that when Group X calls the act of phi-ing immoral, one has to address that claim, and decisively refute it. It's that claim that excuses X in its rent-seeking activity: because X is doing it for us (or for the children!) it doesn't really count as rent-seeking, and isn't inherently objectionable.

To break the back of X's argument, one must first refute its moral claims. Then one can reveal X for the pack of rent-seeking jackals it really is.