The Recovering Bureaucrat’s favorite journalist from the Land of Lincoln, John Kass, has been chronicling the disheartening details of how the feudal structure is propped up. In his latest column for the Chicago Tribune, called “Change in Madiganistan Starts at Home,” Kass outlines how Speaker of the House Michael Madigan, high priest of the Illinois CAPS, controls the political apparatus that has bankrupted the state.
This level of control could only happen in either a one-party state like California or a place, like Illinois and New York, where both parties are in on the deal.
Here in the once Golden State, the Republican Party slowly committed hara-kiri over the past twenty years, and now has become all but irrelevant to statewide decision-making. With the erosion of our once dominant manufacturing base, the big business establishment is controlled by banking, Hollywood, and Silicon Valley—activities indifferent to, if not outright manifestations of, the parasitic impact of rent-seeking on wealth creation.
The Destructive Impact of Rent-Seeking
It’s essential to our civic responsibilities to be literate with political economic terms and dynamics. “Rent-seeking” originally meant financial activities that of themselves generate no wealth but are entirely dependent upon actual wealth production for their existence. Investopedia explains it thus: “When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.”
An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don't create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group.Sandy Ikeda has a primer on rent-seeking on the Foundation for Economic Freedom’s website, The Freeman.
According to the principle of human action that Ludwig von Mises used as the starting point of economics, man acts in order to improve his situation as he sees it. One of the important lessons taught by Mises, and later many of the adherents of the Public Choice school of political economy, who follow in the footsteps of Tullock and James Buchanan, is that while the principle of human action is universal, the particular actions chosen, and the consequences that follow from them, depend crucially on the “rules of the game.”