#91 Landlords in a Rent-Seeking Scam

CongressModern Day Kings and Queens

History reveals that political rulers are as good as their ability to distribute gifts, booty, and other material rewards to their most valuable and loyal servants. Powerful men and women doled out titles of nobility, lands to faithful servants, and bureaucratic offices with hefty salaries to trusted advisors. Loyalty and assistance to the rich and powerful often come with many financial benefits. After all, these men and women can make their posse rich. 

Today’s kings and queens are the elected officials in Washington. They appoint or hire, sometimes for life, the faceless bureaucrats inside governmental agencies, commissions, panels, committees, and executive officers. These regime executives dole out jobs to loyalists and favored interest groups. They are the policymakers who rewrite laws and regulations that favor those who can offer the regime something in return.

The Prize – Getting Elected

H.L. Mencken described elections as an “advance auction of stolen goods.” 

In the United States, the federal government in 2020 controlled a budget of more than six trillion dollars, one hell of a treasure for Congress to allocate. Congress, by the way, has control over the regulations and statutes that can make or break businesses and households with one action.

It is no wonder that powerful corporations go to the regime seeking tax breaks, subsidies, and anti-competitive regulations. They hire pressure groups, lobbyists, and public relations consultants to secure wealth and favors from Congress.

The strategy is to manipulate public policy to create advantageous economic conditions to increase profits. Rent-seeking is the natural outcome in any regime that controls the budget. The riches go to the politically powerful, not to those who work the hardest or are the most productive. This cronyism is the crux of a corporate state.

Wealth re-distributed through a process of state coercion rather than through the voluntary market process results in a wealth flow in the direction of favored industries and firms and not competitiveness.  

To increase wealth without creating new wealth results in economic inefficiency, misallocation of resources, reduced wealth creation, lost government revenue, and an increase in income inequality. Collectively, these all have contributed to our national decline.

Politicians understand this system. They try to play both sides. In every election cycle, campaigns to get “big money” out of politics are common. Not surprisingly, their answer is in more government regulation. Their solution keeps the gravy train rolling.

Real Solution

Murray Rothbard wrote in his history of economic that centralized political power creates a system of state-building, state privilege, and state-monopoly capitalism.

Reduce the booty! This one action will reduce the power of the regime. Reducing the number of stolen goods available, the federal government suddenly becomes less of a target for lobbying, bribes, and other means of obtaining special favors. 

Cut the budget! Slash most of the 16 million full-time bureaucratic jobs that exist in Washington today. 9 of the 20 wealthiest counties in America are the suburbs of Washington, DC. It does not seem right.