Economic rents are the cash that people can extract from the rest of us because they have cornered something. Rarely they come from unfortunate realities - those rare examples of natural monopolies say. More often the opportunity is government created, the result of crass, foolish or corrupt policy making. Running from last to first, say the creation of a legal monopoly and its granting to a court favourite to examples too common to detail to this crasssness about lorries:
Hauliers may be forced to enter a lottery to operate lorries in Europe after Brexit,the government said yesterday.
Guidance published by the Department for Transport (DfT) said “random selection” could be employed to stop the limited number of operator permits being monopolised by the same large companies.
The document suggested that if Britain leaves the EU without a deal then a permit system may be needed in place of hauliers having free access to or from the EU. It is likely that a system run by the European Conference of Ministers of Transport (ECMT) would be used, with only 984 annual permits and 2,832 one-month permits available for British hauliers in 2019.
Quite who decided this, how they decided it and who was stupid enough to agree to the decision is unknown. But there’s that limit on haulage permits. That makes the possession of such a permit something of value. Just as with a taxi medallion. We’ve just watched and applauded in glee as Uber has broken that permit limit and so destroyed the value of that economic rent which was the medallion. Yet as we do so, as we free up and make more efficient the economy, we impose exactly such permit limits upon haulage, creating again those economic rents?
Crass, foolish or corrupt, your choice. But it’s certainly not the way to run a continent nor a country, is it? The deliberate creation of what we normally try to eradicate, market power and economic rents?