WASHINGTON — The spoils society advances.

The “spoils society” is a phrase I coined some years ago to illustrate a basic problem of wealthy societies, including, of course, the United States. After all, our annual GDP (gross domestic product) is approaching $20 trillion. The problem is that, as societies become richer, so does the temptation for people to advance their economic interests by grabbing someone else’s wealth, as opposed to creating new wealth.

We see the resulting redistributive struggles all the time. They’re part of the social fabric: divorcing couples fighting over the marital assets; Congress debating who should — or shouldn’t — get tax cuts or subsidies (say, Social Security); lawyers launching “class action” suits to remedy alleged wrongs; patent “trolls” suing tech companies over possible infringement issues.

Regardless of where your sympathies lie — redistribution is both good and bad — what connects all these activities and many others is that they don’t result in the production of more goods and services. Instead, they involve the shifting of money and wealth from one party or group to another. They recall the spirit of 19th-century politicians’ defense of patronage jobs: “To the victors belong the spoils.”

This sort of economy may be larger than you think. That’s the gist of the provocative new book “The Captured Economy,” by Brink Lindsey of the Niskanen Center think tank and Steven M. Teles, a political scientist at Johns Hopkins University. They argue that the economy is riddled with self-serving arrangements, mainly benefiting the rich, that impose excess costs on the poor and middle class and reduce economic growth.

Take housing. Restrictive zoning arrangements drive up home prices, say Lindsey and Teles, citing detailed studies by Harvard economist Edward Glaeser and his collaborators. In some areas, housing scarcities have resulted in huge premiums in home prices: 20 percent …read more

Source:: Deseret News – U.S. & World News

(Visited 1 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *