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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2015
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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) |
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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 |
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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 |
work_keys_str_mv |
AT michaelmakovi thewelfarecostsofrentseekingamethodologicallyindividualistandsubjectivistrevision AT michaelmakovi welfarecostsofrentseekingamethodologicallyindividualistandsubjectivistrevision |
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