The Economic Term of Rent Seeking

I recently learned of a new economics term of “Rent Seeking.” Searching on Wikipedia or Investopedia will give you an pretty detailed definition. For the common person, think of rent seeking as the ability to maintain (or even increase wealth) through existing methods of obtaining wealth while not providing others the ability to obtain wealth.

I realized that the rent seeking concept is more widespread and commonly practiced outside of economics. If the term is generalized even further to situations where person will “protect” what they have by implementing rules. Using the generalized term, situations related to condos and home owner associations could also be classified as rent seeking. Listening to the rationales of condo owners arguing in favor of rental unit restriction is pretty infuriating. Some of the reasoning were related to their current experience of renters, the apparent drop in property value due to renters, and potential future inability to refinance. That sounds like rent seeking to me. I never understood why some people are very adamant about issues that limit others but after learning this term it makes perfect sense to me now.

Another area I see generalized rent seeking is in these voter suppression laws. With voter suppression, politicians create superfluous rules and processes that generally makes it harder for ordinary citizens to vote. Rules such as ID laws or voter purges or even mail-in ballot restrictions further discourages voters who already may have a difficult time getting to the polls due to socio-economic reasons. In the end, the rules benefit a small population of voters relatively easy access and a lower level of entry to voting. These rules end up benefitting the politician such that the politician only needs to “please” these small voter blocs. How is this democratic if only a small voter bloc can dictate the rules to govern and affect the lives of the general population? Because it’s not.

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