“PRIVILEGE-SEEKING”—NOT “RENT-SEEKING”. Economics has some jargon that is confusing. One of my pet peeves is the phrase “rent-seeking”. To most people it would seem to have something with landlords and tenants. In fact, “rent-seeker” is one of the harshest names that an economist can call some one. In this paper on “Cronyism”, David Henderson proposes a better term: “The term economists use to describe this investment in getting government favors is rent seeking. The term is misleading: It is really privilege-seeking.” Henderson explains why he condemns “cronyism” or privilege-seeking: “This particular individual gets a subsidy because of his connection to politicians; that one does not. This particular
industry gets subsidies or government protection from competition because it is particularly effective at organizing politically….” Kids, you may not agree with an attack by Henderson or other economists on what they consider to be wasteful expenditure, but if they don’t use the word “rent-seeking”, you will have a better understanding that they are attacking and why they are attacking.
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Having observed from inside the Executive Branch four decades of privilege-seeking, I have no quarrel with those who use their money and political connections to attempt to win an advantage by persuading Congress to enact a law favoring them. The law or directive report language has to be accepted by at least a committee if not the entire House or Senate or both. The issue is not straightforward, however, when an earmark gets buried in an omnibus appropriation that has not been read by those who vote to enact it. We are currently in a political climate — maybe just a season — in which the term “earmark” is a pejorative and raises veto threats. As a result, the privilege-seeking Senators and Congressmen have to use their wits to make sure that a fair share of the Federal funds they appropriate will reach their State or Dsitrict.