The welfare costs of rent-seeking: a methodologically individualist and subjectivist revision

Gordon Tullock is acknowledged for being the first to recognize the true costs of rent-seeking as including not only the Harberger triangle but also the Tullock rectangle. This rectangle does not constitute merely a lossless transfer of wealth, but it causes a misallocation of resources as rent-seek...

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Autor principal: Michael Makovi
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Publicado: Editura ASE Bucuresti 2015
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Acceso en línea:https://doaj.org/article/3f5d24ece0434d98ab2e664442e7fe6e
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spelling oai:doaj.org-article:3f5d24ece0434d98ab2e664442e7fe6e2021-12-02T00:08:38ZThe welfare costs of rent-seeking: a methodologically individualist and subjectivist revision1843-22981844-8208https://doaj.org/article/3f5d24ece0434d98ab2e664442e7fe6e2015-11-01T00:00:00Z http://jpe.ro/pdf.php?id=7305 https://doaj.org/toc/1843-2298https://doaj.org/toc/1844-8208Gordon Tullock is acknowledged for being the first to recognize the true costs of rent-seeking as including not only the Harberger triangle but also the Tullock rectangle. This rectangle does not constitute merely a lossless transfer of wealth, but it causes a misallocation of resources as rent-seekers invest resources in lobbying. However, a close reading of Tullock’s writings shows that his arguments are formulated in a holistic fashion, speaking of what is efficient or inefficient for society. Rent-seeking is inefficient because it reduces societal welfare. But according to a methodologically individualist and subjectivist economics, such a claim is invalid. We must distinguish between positive economic fact and normative moral philosophy. We call for a reconstruction of utility and welfare economics based on methodological individualism and subjectivism with implications for the theories of monopoly and competition: practices which Neoclassical perfect-competition theory considers to be evidence of rent-seeking should instead be deemed as indications of genuine competition Political economy should be concerned with ascertaining which institutions will best enable individuals to pursue their individually subjective ends – or else economists should be explicit about their normative preferences and political philosophies.Michael MakoviEditura ASE BucurestiarticleTullockrent-seekinginterest groupsefficiencysubjectivismmethodologyEconomics as a scienceHB71-74DEENFRJournal of Philosophical Economics, Vol IX, Iss 1, Pp 73-101 (2015)
institution DOAJ
collection DOAJ
language DE
EN
FR
topic Tullock
rent-seeking
interest groups
efficiency
subjectivism
methodology
Economics as a science
HB71-74
spellingShingle Tullock
rent-seeking
interest groups
efficiency
subjectivism
methodology
Economics as a science
HB71-74
Michael Makovi
The welfare costs of rent-seeking: a methodologically individualist and subjectivist revision
description Gordon Tullock is acknowledged for being the first to recognize the true costs of rent-seeking as including not only the Harberger triangle but also the Tullock rectangle. This rectangle does not constitute merely a lossless transfer of wealth, but it causes a misallocation of resources as rent-seekers invest resources in lobbying. However, a close reading of Tullock’s writings shows that his arguments are formulated in a holistic fashion, speaking of what is efficient or inefficient for society. Rent-seeking is inefficient because it reduces societal welfare. But according to a methodologically individualist and subjectivist economics, such a claim is invalid. We must distinguish between positive economic fact and normative moral philosophy. We call for a reconstruction of utility and welfare economics based on methodological individualism and subjectivism with implications for the theories of monopoly and competition: practices which Neoclassical perfect-competition theory considers to be evidence of rent-seeking should instead be deemed as indications of genuine competition Political economy should be concerned with ascertaining which institutions will best enable individuals to pursue their individually subjective ends – or else economists should be explicit about their normative preferences and political philosophies.
format article
author Michael Makovi
author_facet Michael Makovi
author_sort Michael Makovi
title The welfare costs of rent-seeking: a methodologically individualist and subjectivist revision
title_short The welfare costs of rent-seeking: a methodologically individualist and subjectivist revision
title_full The welfare costs of rent-seeking: a methodologically individualist and subjectivist revision
title_fullStr The welfare costs of rent-seeking: a methodologically individualist and subjectivist revision
title_full_unstemmed The welfare costs of rent-seeking: a methodologically individualist and subjectivist revision
title_sort welfare costs of rent-seeking: a methodologically individualist and subjectivist revision
publisher Editura ASE Bucuresti
publishDate 2015
url https://doaj.org/article/3f5d24ece0434d98ab2e664442e7fe6e
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