James Bessen (previously: “broadly shared knowledge is key to broadly shared wealth”) has a new paper, Accounting for Rising Corporate Profits: Intangibles or Regulatory Rents? (shallow summary) about regulatory rent seeking in the U.S.
Bessen looks at potential measures of regulatory rent seeking and finds these account for about half of increased profits, is significant to the overall economy ($2 trillion increase in corporate valuation, $200 billion annual transfer from consumers) and is concentrated in “chemicals, including pharmaceuticals; petroleum refining; transportation equipment; electric, gas, and sanitary utilities; and communications.” If I understand correctly, that’s not including the financial industry as their data was not comparable.
Yes, drugs. But I’m posting here more as a bookmark to than to provide any kind of analysis:
- The paper does not include IP rents in its consideration of rents from regulation (again, if I understand correctly). However its methods and references probably point to ways of measuring IP rents.
- The results might encourage those who think campaign finance reform must come first but probably better supports calls for other reforms seeking to minimize rent seeking … and I could read it as confirming my theory, that huge knowledge commons institutions are needed to effectively compete in the market and especially for political rents.