Advertisement

Journal of Business Ethics

, Volume 88, Supplement 4, pp 541–552 | Cite as

Rent Seeking in a Market with Morality: Solving a Puzzle About Corporate Social Responsibility

  • John R. BoatrightEmail author
Article

Abstract

Rent seeking by lobbying for government favors is generally thought to be wasteful. In view of this wastefulness, it is puzzling that rent seeking by corporations has not been criticized as a failure to be socially responsible or even as an unethical business practice. This article examines the compatibility of rent seeking with corporate social responsibility by utilizing Thomas Dunfee’s idea of a marketplace with morality. This idea is useful for solving this puzzle because in considering whether rent seeking is compatible with corporate social responsibility, it is necessary, first, to define rent seeking, which this article argues is a normative concept, and, second, to find some principled way of identifying rent-seeking behavior. It also solves the puzzle about rent seeking by revealing that the concept of rent seeking itself is of little use in determining whether certain conduct is or is not socially responsible since rent seeking activity cannot be identified without first evaluating which activity is rent seeking.

Keywords

rent seeking corporate social responsibility market of morality market with morality 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Bhagwati, J.: 1982, ‘Directly Unproductive, Profit-Seeking DUP Activity’, Journal of Public Economics 14, 88-1002.Google Scholar
  2. N. E. Bowie and T. W. Dunfee: 2002, ‘Confronting Morality in Markets’, Journal of Business Ethics 38, 381-93.CrossRefGoogle Scholar
  3. Buchanan, J. M.: 1980, ‘Rent Seeking and Profit Seeking’, in J. M. Buchanan, R. D. Tollison and G. Tullock (eds.), Toward a Theory of the Rent-Seeking Society (Texas A&M University Press, College Station).Google Scholar
  4. Buchanan, J. M., R. D. Tollison and G. Tullock (eds.): 1980, Toward a Theory of the Rent-Seeking Society (Texas A&M University Press, College Station).Google Scholar
  5. Cowling, K. and D. Mueller: 1980,”The Social Cost of Monopoly Power,” in J. M. Buchanan, R. D. Tollison and G. Tullock (eds.), Toward a Theory of the Rent-Seeking Society (Texas A&M University Press, College Station).Google Scholar
  6. DeBow, M. E.: 1992–1993, ‘The Ethics of Rent-Seeking?: A New Perspective on Corporate Social Responsibility’, Journal of Law and Commerce 12, 1–21Google Scholar
  7. Donaldson, T. and T. W. Dunfee: 1999, Ties that Bind: A Social Contracts Approach to Business Ethics (Harvard Business School Press, Boston).Google Scholar
  8. Dunfee, T. W.: 1998, ‘The Marketplace of Morality: First Steps Toward a Theory of Moral Choice’, Business Ethics Quarterly 8, 127-45.CrossRefGoogle Scholar
  9. Dunfee, T. W.: 1999, ‘Corporate Governance in a Market with Morality’, Law and Contemporary Problems 62, 129-57.CrossRefGoogle Scholar
  10. Dunfee, T. W.: 2001, ‘Marketlike Morality within Organizations’, J. M. Darley, D. M. Messick and T. R. Tyler (eds.), Social Influences on Ethical Behavior in Organizations (Lawrence Erlbaum Associates, Mahwah, NJ);Google Scholar
  11. Farrell, A. E. et al.: 2006. ‘Ethanol Can Contribute to Energy and Environmental Goals’, Science 311, 506-8.CrossRefGoogle Scholar
  12. Frank, R. H: 1996, ‘Can Socially Responsible Firms Survive in a Competitive Environment?’, in D. M. Messick and A. E. Tenbrunsel (eds.), Codes of Conduct: Behavioral Research into Business Ethics (Russell Sage Foundation, New York).Google Scholar
  13. Glick, M.: 1994, ‘Is Monopoly Rent Seeking Compatible with Wealth Maximization?’, Brigham Young Law Review 1994, 499-519.Google Scholar
  14. Harberger, A. C.: 1954, ‘Monopoly and Resource Allocation’, American Economic Review 44, 77-87.Google Scholar
  15. Harberger, A. C.: 1959, ‘Using Resources at Hand More Effectively’, American Economic Review 49, 134-46.Google Scholar
  16. Hindmoor, A.: 1999, ‘Rent Seeking Evaluated’, Journal of Political Philosophy 7, 434-52.CrossRefGoogle Scholar
  17. Kirzner, I.: 1989, Discovery, Capitalism, and Distributive Justice (Basil Blackwell, Oxford).Google Scholar
  18. Krueger, A.: 1974, ‘The Political Economy of the Rent-Seeking Society’, American Economic Review 64, 291-303.Google Scholar
  19. Laband, D. and J. Sophocleus: 1988, ‘The Social Cost of Rent Seeking: First Estimates’, Public Choice 58, 269-75.CrossRefGoogle Scholar
  20. Mixon, Jr., F. G. and J. B. Wilkinson: 2000, ‘Is Rent-Seeking Immoral? Examining the Behavior of Religion-Based Political Action Committees and Coalitions’, Applied Economics Letters 7, 467-73.CrossRefGoogle Scholar
  21. Pasour, Jr, E. C.: 1987, ‘Rent Seeking: Some Conceptual Problems and Implications’, Review of Austrian Economics 1, 123-43.CrossRefGoogle Scholar
  22. Posner, R. A.: 1975, ‘The Social Costs of Monopoly and Regulation’, Journal of Political Economy 83, 807–827.CrossRefGoogle Scholar
  23. Posner, R. A.: 1986, Economic Analysis of Law, 3rd ed. (Little Brown, Boston).Google Scholar
  24. Rowley, C., Tollison, R. D. and G. Tullock (eds.): 1988, The Political Economy of Rent Seeking (Kluwer Academic, Boston).Google Scholar
  25. Tollison, R. D.: 1982, ‘Rent Seeking: A Survey’, Kyklos 35, 575-602.CrossRefGoogle Scholar
  26. Tollison, R. D.: 1997, ‘Rent Seeking’, in D. Mueller (ed.), Perspectives on Public Choice (Cambridge University Press, Cambridge).Google Scholar
  27. Tullock, G.: 1967, ‘The Welfare Costs of Tariffs, Monopolies, and Theft’, Western Economic Journal (now Economic Inquiry), 5, 224-32.Google Scholar
  28. Tullock, G.: 1975, ‘The Transitional Gains Trap’, Bell Journal of Economics 6, 671-78.CrossRefGoogle Scholar
  29. Tullock, G.: 1989, The Economics of Special Privilege and Rent Seeking (Kluwer Academic, Boston).Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  1. 1.School of Business AdministrationLoyola University ChicagoChicagoU.S.A.

Personalised recommendations