F
fnr
Guest
“Rent-seeking behavior” is a term economists use, in contrast with profit-seeking behavior, to point out when people seek to raise the prices of their assets by manipulating the social and political environment, rather than by trying to create new wealth.
The classic example of rent-seeking behavior is the Medieval guild system, by which people were forbidden from entering into lucrative occupations (e.g., weavers) in order to keep the price of goods manufactured by those protected occupations high and to limit competition. There are plenty of other examples.
More recently, I’ve come across what seems a more subtle form of rent-seeking. Several high-rise apartment developments have been proposed for sites outside the downtown area in my city. The surrounding buildings are all generally 1-2 stories tall, so these new apartments would certainly change the local character. Downtown area residents are showing up at public meetings complaining about the design of the proposed apartment buildings, its clashing with the “character” of the local neighborhood, and discussing the unwelcome population that might take up residence in the new buildings (in this case, well-to-do college students). The local residents are making their case against the new buildings public, with coverage in the local press.
To me, the activism of the local residents is another example of rent-seeking behavior. First, by showing up in sufficient numbers, they’re showing local politicians that there are electoral risks to supporting the new buildings. Second, the goal of stopping the new buildings accomplishes two benefits for local residents – (1) their local skyline is preserved, so possibly their property values stay higher, and (2) the supply of housing is curtailed, which means that the college students that would have been the residents of the new buildings will bid up the prices on surrounding housing. That latter factor hurts the poor, since it makes housing throughout the area more expensive and pushes the poor into lower quality housing or into homelessness.
Assuming that my description of the consequences of blocking the new buildings is correct, what is the moral status of the actions of the local residents in trying to stop the new buildings? It’s hard to say that they’re actively committing a sin, but are they? What they’re doing seems wrong, even if it’s unintentional. Are these actions immoral or not?
The classic example of rent-seeking behavior is the Medieval guild system, by which people were forbidden from entering into lucrative occupations (e.g., weavers) in order to keep the price of goods manufactured by those protected occupations high and to limit competition. There are plenty of other examples.
More recently, I’ve come across what seems a more subtle form of rent-seeking. Several high-rise apartment developments have been proposed for sites outside the downtown area in my city. The surrounding buildings are all generally 1-2 stories tall, so these new apartments would certainly change the local character. Downtown area residents are showing up at public meetings complaining about the design of the proposed apartment buildings, its clashing with the “character” of the local neighborhood, and discussing the unwelcome population that might take up residence in the new buildings (in this case, well-to-do college students). The local residents are making their case against the new buildings public, with coverage in the local press.
To me, the activism of the local residents is another example of rent-seeking behavior. First, by showing up in sufficient numbers, they’re showing local politicians that there are electoral risks to supporting the new buildings. Second, the goal of stopping the new buildings accomplishes two benefits for local residents – (1) their local skyline is preserved, so possibly their property values stay higher, and (2) the supply of housing is curtailed, which means that the college students that would have been the residents of the new buildings will bid up the prices on surrounding housing. That latter factor hurts the poor, since it makes housing throughout the area more expensive and pushes the poor into lower quality housing or into homelessness.
Assuming that my description of the consequences of blocking the new buildings is correct, what is the moral status of the actions of the local residents in trying to stop the new buildings? It’s hard to say that they’re actively committing a sin, but are they? What they’re doing seems wrong, even if it’s unintentional. Are these actions immoral or not?
