RENT SEEKING Meaning and
Definition
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Rent seeking refers to the economic behavior or activity of individuals, groups, or organizations that seek to obtain wealth or benefits for themselves through the manipulation or exploitation of the existing political, social, or economic system, without necessarily creating any new value or efficiently allocating resources. It involves the pursuit of economic gain by exploiting loopholes or lobbying for certain legislation or policies that grant them privileges, favors, or protections, leading to the redistribution of wealth or income in their favor.
The term "rent seeking" originates from the concept of economic rent, which refers to a gain or income derived by an individual or entity in excess of what would be gained in a perfect or competitive market. Rent seeking behavior can take various forms, such as monopolistic practices, lobbying for subsidies or tax breaks, seeking protectionist measures, or exerting influence to obtain licenses or exclusive rights.
Rent seeking activities are often seen as socially unproductive, as they divert resources, efforts, and talents away from productive activities, leading to inefficiencies, reduced economic growth, and increased inequality. It can contribute to market distortions, hinder competition, and create barriers to entry for new entrants or innovative ideas.
Rent seeking behavior is a subject of study in economics, politics, and public choice theory, as it sheds light on the dynamics of rent extraction, wealth inequality, and the influence of vested interests in shaping economic and political outcomes.
Common Misspellings for RENT SEEKING
- rentseeking
- eent seeking
- dent seeking
- fent seeking
- tent seeking
- 5ent seeking
- 4ent seeking
- rwnt seeking
- rsnt seeking
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- rebt seeking
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- reht seeking
- renr seeking
- renf seeking
- reng seeking
- reny seeking
Etymology of RENT SEEKING
The term "rent-seeking" originated from the field of economics and was first used by economists Gordon Tullock and Anne Krueger in the late 1960s and early 1970s. It has since become a popular concept in both economic and political theory.
The term itself draws its roots from the economic concept of "economic rent", which refers to the income or profit earned by a factor of production (such as land, labor, or capital) that exceeds the minimum amount required to keep it employed. Economic rent is seen as an unearned income, distinct from the wages or returns earned through productive activities.
"Rent-seeking" refers to the process or behavior of individuals, organizations, or groups seeking to obtain economic rent or unearned income by manipulating the existing political or economic system, rather than by creating new wealth through productive activities.
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