Rent seeking has once again become an important topic in economics. However, rent seeking poses challenges that standard economic theory is not well equipped to handle. This paper develops a working definition of rent seeking that can be applied to post-Keynesian growth models. The main finding is that, in a post-Keynesian framework, rent seeking will have an effect on income distribution and average productivity. In addition, increases in rent seeking can have undesirable effects on the distribution of talent.
American Intellectual Property Law Association (AIPLA). 2001. Report of Economic Survey.Washington, DC: AIPLA.
2.
BivensJ.MishelL.2013. The pay of corporate executives and financial professionals as evidence of rents in top 1 percent incomes. Journal of Economic Perspectives27 (3): 57–78.
3.
BoldrinM.LevineDavid K.2004. Rent-seeking and innovation. Journal of Monetary Economics51 (1): 127–60.
4.
CrottyJ.2009. Structural causes of the global financial crisis: A critical assessment of the “new financial architecture.”Cambridge Journal of Economics33 (4): 563–80.
5.
DasguptaP.StiglitzJ.1980. Uncertainty, industrial structure, and the speed of R&D. The Bell Journal of Economics11 (1): 1–28.
6.
DuménilG.LévyD.2011. Unproductive labor as profit-rate-maximizing labor. Rethinking Marxism23 (2): 216–25.
7.
DuttA. K.1984. Stagnation, income distribution and monopoly power. Cambridge Journal of Economics8 (1): 25–40.
8.
EdlinA. S.StiglitzJ. E.1995. Discouraging rivals: Managerial rent-seeking and economic inefficiencies. The American Economic Review85 (5): 1301–12.
9.
FlaschelP.SkottPeter. 2006. Steindlian models of growth and stagnation. Metroeconomica57 (3): 303–38.
10.
KesanJ. P.BallG. G.2006. How are patent cases resolved? An empirical examination of the adjudication and settlement of patent disputes. Washington University Law Review84 (2): 237–12.
11.
KeynesJ. M. [1936] 1964. The General Theory of Employment, Interest and Money. New York: Harcourt, Brace.
12.
LemleyM. A.ShapiroC.2005. Probabilistic patents. Journal of Economic Perspectives19 (2): 75–98.
13.
LewisW. A.1954. Economic development with unlimited supplies of labour. The Manchester School22 (2): 139–91.
14.
MarglinS.BhaduriA.1990. Profit squeeze and Keynesian theory. In The Golden Age of Capitalism—Reinterpreting the Postwar Experience, eds. MarglinStephenSchorJuliet153-186. Oxford: Clarendon Press.
15.
MilgromP. R.1988. Employment contracts, influence activities, and efficient organization design. Journal of Political Economy96 (1): 42–60.
16.
MurphyK. M.ShleiferA.VishnyR. W.1991. The allocation of talent: Implications for growth. The Quarterly Journal of Economics106 (2): 503–30.
17.
RobinsonJ.1962. Essays in the Theory of Economic Growth. London/New York: Macmillan/St Martin’s Press.
18.
RowthorneB.1981. Demand Real Wages and Economic Growth. London: Thames Polytechnic.
19.
RyooS.SkottPeter. 2013. Public debt and full employment in a stock-flow consistent model of a corporate economy. Journal of Post Keynesian Economics35 (4): 511–28.
20.
ScharfsteinD. S.SteinJ. C.2000. The dark side of internal capital markets: Divisional rent-seeking and inefficient investment. The Journal of Finance55 (6): 2537–64.
21.
SchumpeterJ. A.1947. Capitalism, Socialism, and Democracy. New York: Harper & Brothers.
22.
ShaikhA.TonakE. A.1994. Measuring the Wealth of Nations: The Political Economy of National Accounts. Cambridge: Cambridge University Press.
23.
ShleiferA.VishnyR. W.1989. Management entrenchment: The case of manager-specific investments. Journal of Financial Economics25 (1): 123–39.
24.
SkottP.ZippererBen. 2012. An empirical evaluation of three post-Keynesian models. EJEEP European Journal of Economics and Economic Policies: Intervention9 (2): 277–308.
TandonP.1984. Innovation, market structure, and welfare. The American Economic Review74 (3): 394–403.
27.
TullockG.1980. Rent seeking as a negative-sum game. In Toward a Theory of the Rent-Seeking Society, eds. BuchananJ. M.TollisonR. D.TullockG., 16–36. College Station: Texas A&M University Press.
