Rent-Seeking Pays

A short comment on rent-seeking:

It may be that the most thoroughgoing distortion of free markets and capitalism is rent-seeking – consolidation of firms to give commodity pricing and market dominance to a few, benefiting from favorable government privileges and regulations (also obtaining market privileges through the prevention of regulation), cronyism of all sorts, agreements in restraint of trade,…

We should not, therefore, blame capitalism or those in finance and enterprise for the sins of rent-seeking, only those who engage in rent extraction.

I noticed recently in The Economist a claim that in the U.S., rent-seeking through special tax benefits is profitable. The money spent on lobbyists who arrange for the special tax advantages to be adopted by the Congress or through administrative interpretation of regulations earns a return for companies of 22,000%. Secondly, American financial firms which spent the most on lobbying benefited disproportionately from bank bailouts after the 2008 financial crisis.