There’s a world full of ways to generate wealth, and many of them do so by providing value. This can be a product or service. You offer something of value – your time, your skills, your knowledge, your money, or a possession. You get something you value in return.
Successful entrepreneurs create value that is widely considered worthwhile. There’s a symmetry in this exchange. In a free market, each participant in the transaction has the power to choose. Trade only happens when both parties agree the deal makes sense for them.
There’s another way to generate wealth — by gaining control of a resource, ideally monopoly control, then charging for access to it. The generic name for this approach is called rent-seeking.
For example, let’s say a major highway, built long ago with taxpayer’s money, is turned over to a private firm. The company begins charging a toll.
In this situation, a company gains monopoly control of a resource – a critical transportation route – and without creating new value, charges for access. The company might be responsible for repair and maintenance, but that work was already being done before with public funds. This is not a hypothetical scenario.
Many drivers will use this route because it’s the only practical path to work. They do not have a choice about paying the toll. They’ve been forced to rent access to their only means of getting to work. This form of rent-seeking is literally highway robbery. Notice the added cost adds value only in one direction – from the users to the owner.
Any time you are coerced into a rent-seeking relationship, you are owned. Your choices are narrowed or removed, you are fenced in and forced down a predefined path by the entity that controls the resource you need.
There are other resources subject to controlled access.
Money. Energy. Votes. Media. Health care. Privacy.
The Occupy movement made income inequity part of our national conversation and exposed our increasing dependence on rent-seeking instead of producing value. This activity doesn’t create value. It simply transfers wealth, from your pocket to someone else’s.
But you needn’t take my word for it. Perhaps analysis by Joseph Stiglitz, a Nobel Prize-winning economist would be persuasive?
So let’s see…how is your income subject to rent-seeking? Legislation to suppress wages is one way. Limiting representation in the workplace is another. Then there are banks – we all have to deal with them in our modern financial system – like it or not.
Do I need to recount the media consolidation that has concentrated our news sources in corporate hands?
Privacy – do you have any?
Health insurance – does it bother you that the U.S. spends twice as much per capita for health care than nearly every other industrialized country, yet has one of the lowest life expectancies?
You might (rightly) argue there are other influences apart from rent-seeking that affect these issues – but there’s no question that we’re living in an era when rent-seeking is a growing tactic that funnels economic growth to small proportion of the populace.
Here’s the thing:
What are you going to do about it?
Seriously. What are you going to do about it?
If someone broke into your home, you’d take action – call the police or grab a weapon, or even run out the door, but you’d do something, particularly if you have a family to defend. What’s happening to you now may not seem quite as immediate as a break-in and robbery, but it’s real, and it’s just as damaging, if not more so. A burglar might knock off your stash of jewelry, but bankers taking Vegas-style risks can, and do, knock the value of your home down by 30 percent.
What are you going to do about it?
I can hear the refrain already – “What can I do about it? There are so many scams, so many big players. I’m just one person and there are armies of lobbyists. Where to start? What to do?”
Here’s what you do. Narrow your focus. There’s just one thing that must change before we can make headway with all the other issues:
CAMPAIGN FINANCE REFORM.
Until we get dirty money of out of politics, our efforts on other issues will be circumvented, ignored, and ridiculed.
Campaign finance reform. Roll back the Citizens United decision. Point people to United Republic’s site. Check out the blog roll of groups allied with United Republic. You’ll find multiple strategies for reform. Pick one that makes sense to you and run with it. Practice explaining why the issue of campaign finance reform trumps others with your family and friends. Team with others who get it.
Roll up your sleeves. Act. Or be owned. Your call.