IMO “rent-seeking” is just a smokescreen for the profit motive. Sure, Tullock’s conception of rent-seeking illustrates one of many “easier” ways to make a profit…but the issue is really that, regardless of the level of “government interference” in markets, unethical capitalists will still attempt to capture other people’s surplus with as little effort as possible. Here are some common examples brought to you by corporate America:
1. Engaging in high-risk speculative investments using other people’s money.
2. Perpetuating debt-slavery (among poor consumers using excessive interest and predatory lending, among developing countries using “structural adjustment policies,” etc.).
3. Exciting artificial demand (through blatantly false advertising, deceptive persuasion, etc.) for products that either do more harm than good, or don’t deliver on what was promised.
4. Using publicly funded discoveries (i.e. academic and government-funded research) to create products and services that enrich owner-shareholders (extremely common in pharmaceutical and high-tech).
5. Paying workers less than a living wage to perpetuate wage-slavery and tax-funded welfare subsidization (i.e. Walmart).
6. Relying on publicly funded infrastructure (roads, bridges, communications, utilities, etc.) to facilitate free enterprise while avoiding or evading paying taxes or otherwise funding that infrastructure.
7. Patent trolling.
8. Callous disregard for health and safety of workers and consumers - and/or environmental destruction - in order to maximize profits.
9. Anti-competitive practices (hostile takeovers, price fixing, corporate espionage, kickbacks, single-sourcing, etc.).
10. Crony capitalism (cronyism, clientism, regulatory capture, pork barrel projects, A.L.E.C. legislation, etc.).
11. War profiteering (i.e. Halliburton)
Please note that although only a few of these examples can technically be categorized as “rent-seeking,” all of them represent the same essential qualities of unethical behavior.
What are the negative long-term effects? Simply put, they contribute directly or indirectly to the vast and ever-compounding negative externalities of capitalism:
Endangerment of consumer health and well-being.
Exploitation and abuse of workers.
Corruption and capture of political institutions.
Increased infantilization and external dependencies of consumers.
Huge concentrations of wealth in a decreasing minority of owner-shareholders at the expense of an ever-deepening impoverishment of worker-consumers.
Monopolization and consequent lock-down on new innovations.
Dumbing down of the general populace in order to facilitate exploitation agendas.
Environmental destruction and resource depletion.
* Economic instability (boom/bust cycles).
So, in summary, the “long term effects” of rent-seeking and the many other expressions of the profit motive on a growth-dependent capitalist economy are, ultimately, self-destruction.
I would also recommend perusing these posts as well:
1) T Collins Logan's answer to What are some common misconceptions people have about capitalism? (https://www.quora.com/What-are-some-common-misconceptions-people-have-about-capitalism/answer/T-Collins-Logan)
2) T Collins Logan's answer to Is Capitalism morally justifiable? (https://www.quora.com/Is-Capitalism-morally-justifiable/answer/T-Collins-Logan)
My 2 cents.
(From Quora question: https://www.quora.com/What-is-the-long-term-effect-of-rent-seeking-on-the-economy)
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