Rent Seeking, Corruption and Madness

I think that anyone defending climate science occasionally runs into an economist type who accuses those of us who would like to limit CO2 emissions of "rent seeking". There is more than a whiff of contempt usually associated, which is peculiar, because the contempt tends to come from someone who (like most people) would not hesitate to rent out surplus space at the highest rate they could get.

Wikipedia to the rescue:

"rent-seeking is an attempt to derive economic rent by manipulating the social or political environment in which economic activities occur, rather than by adding value. An example of rent-seeking is the limitation of access to skilled occupations imposed by medieval guilds."

And here is a case in point:

Washington, D.C. is considering a bill that would require every cab driver in the city to own a special permit called a medallion. The total number of medallions would be capped at 4,000, which would reduce the current number of cabs by more than one-third and put thousands of drivers out of business. (The city government has no idea how many licensed cabs are in the district, though estimates range from 6,500 to 10,000.)

If that weren't bad enough, most drivers wouldn't have the option of buying a medallion. The first set of medallions would be offered for sale to the minority of cabbies who have been driving for at least five years and who live in Washington D.C. (Again the city government has no idea how many current drivers meet this criteria, but rising real estate prices and weak city services have led many drivers to leave the district.)

Who will be offered the next set of medallions, according to the bill? That would be cab companies, who could then rent medallions to drivers. This system would destroy the relatively open-access taxi industry in D.C., in which the majority of drivers are owner-operators free to make their own schedules and keep whatever money they earn on the job. In cities such as New York and Boston, drivers pay upwards of $800 a week to rent their medallions.

A libertarian blog comments:

You can think of two theories of government. One theory is that government exists to correct externalities and provide public goods. The other is that government uses the language of helping people to justify giving stuff to the politically powerful out of the pockets of the rest of us. Here’s some evidence for the second theory.

My sympathies are entirely with the small-timers who choose their own hours and can scale their efforts informally to match available demand. Here is a case where the diseconomy of scale is absolutely obvious.

The video implies that the governmental process is corrupt and that there is no legitimate reason for medallions. I don't know about that, though to be honest I can't really think of one. But I know this is another example of pressure to increase the minimum amount of work people have to do to participate in the economy. As such, it is clearly retrograde to the world of leisure that has been stolen from us for no good reason and replaced by a frantic false scarcity.

And the video, amidst the innuendo, does at least sketch the case for how the process might be corrupt.

So when people for whom limits to growth and limits to carbon emission treat us with suspicion and hostility, and bandy this "rent seeking" term around, it's important to remember that such a thing can conceivably happen. That is, we are making business more difficult for them, and the first question on their mind is "follow the money". How they get to us is perfectly silly, though Dick Lindzen is happy to spin crazed fantasies about it.

But this is the kind of thing they are worried about.

In this particular case, I have nothing to say about the corruption angle.

I very strongly think cutting people off from part time and informal income is just generally anti-resilience. Some will see it as abuse of the public by government, others as abuse of government by big business. But in any case, it concentrates wealth and increases stress, exactly the opposite of what ought to be happening. I wonder if there isn't some common ground to be found here with libertarian types.

Taking 10,000 people working half time, turning them into 5,000 people working full time and splitting their take with the people who have the capital to snap up all the medallions, is just the sort of lunacy that the anti-leisure economy foists upon us. This, as Shrek would say, is the opposite of helping.