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.
Similar content being viewed by others
References
Bhagwati, J.: 1982, ‘Directly Unproductive, Profit-Seeking DUP Activity’, Journal of Public Economics 14, 88-1002.
N. E. Bowie and T. W. Dunfee: 2002, ‘Confronting Morality in Markets’, Journal of Business Ethics 38, 381-93.
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).
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).
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).
DeBow, M. E.: 1992–1993, ‘The Ethics of Rent-Seeking?: A New Perspective on Corporate Social Responsibility’, Journal of Law and Commerce 12, 1–21
Donaldson, T. and T. W. Dunfee: 1999, Ties that Bind: A Social Contracts Approach to Business Ethics (Harvard Business School Press, Boston).
Dunfee, T. W.: 1998, ‘The Marketplace of Morality: First Steps Toward a Theory of Moral Choice’, Business Ethics Quarterly 8, 127-45.
Dunfee, T. W.: 1999, ‘Corporate Governance in a Market with Morality’, Law and Contemporary Problems 62, 129-57.
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);
Farrell, A. E. et al.: 2006. ‘Ethanol Can Contribute to Energy and Environmental Goals’, Science 311, 506-8.
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).
Glick, M.: 1994, ‘Is Monopoly Rent Seeking Compatible with Wealth Maximization?’, Brigham Young Law Review 1994, 499-519.
Harberger, A. C.: 1954, ‘Monopoly and Resource Allocation’, American Economic Review 44, 77-87.
Harberger, A. C.: 1959, ‘Using Resources at Hand More Effectively’, American Economic Review 49, 134-46.
Hindmoor, A.: 1999, ‘Rent Seeking Evaluated’, Journal of Political Philosophy 7, 434-52.
Kirzner, I.: 1989, Discovery, Capitalism, and Distributive Justice (Basil Blackwell, Oxford).
Krueger, A.: 1974, ‘The Political Economy of the Rent-Seeking Society’, American Economic Review 64, 291-303.
Laband, D. and J. Sophocleus: 1988, ‘The Social Cost of Rent Seeking: First Estimates’, Public Choice 58, 269-75.
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.
Pasour, Jr, E. C.: 1987, ‘Rent Seeking: Some Conceptual Problems and Implications’, Review of Austrian Economics 1, 123-43.
Posner, R. A.: 1975, ‘The Social Costs of Monopoly and Regulation’, Journal of Political Economy 83, 807–827.
Posner, R. A.: 1986, Economic Analysis of Law, 3rd ed. (Little Brown, Boston).
Rowley, C., Tollison, R. D. and G. Tullock (eds.): 1988, The Political Economy of Rent Seeking (Kluwer Academic, Boston).
Tollison, R. D.: 1982, ‘Rent Seeking: A Survey’, Kyklos 35, 575-602.
Tollison, R. D.: 1997, ‘Rent Seeking’, in D. Mueller (ed.), Perspectives on Public Choice (Cambridge University Press, Cambridge).
Tullock, G.: 1967, ‘The Welfare Costs of Tariffs, Monopolies, and Theft’, Western Economic Journal (now Economic Inquiry), 5, 224-32.
Tullock, G.: 1975, ‘The Transitional Gains Trap’, Bell Journal of Economics 6, 671-78.
Tullock, G.: 1989, The Economics of Special Privilege and Rent Seeking (Kluwer Academic, Boston).
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Boatright, J.R. Rent Seeking in a Market with Morality: Solving a Puzzle About Corporate Social Responsibility. J Bus Ethics 88 (Suppl 4), 541–552 (2009). https://doi.org/10.1007/s10551-009-0324-5
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-009-0324-5