Rent-Seeking
The pursuit of wealth through political or regulatory manipulation rather than productive activity.
What is Rent-Seeking?
Rent-seeking is an economic concept describing the attempt by individuals, firms, or organizations to gain wealth by manipulating the political or regulatory environment rather than by creating new economic value through productive activity. The term derives from 'economic rent,' which is income in excess of what a factor of production would earn in a competitive market. Rent-seeking activities include lobbying for favorable legislation, obtaining regulatory protections, acquiring government subsidies, and securing legal monopolies. While beneficial to the rent-seeker, these activities impose deadweight losses on society by diverting resources away from productive uses and into redistributive competition.
Example
A pharmaceutical company spending $50 million lobbying Congress to extend a patent by five years — rather than investing that capital in R&D for new drugs — is engaging in rent-seeking. The company secures an extended monopoly on an existing product without creating new societal value. Consumers pay higher prices than a competitive market would provide, and scarce R&D capital is redirected to capturing existing value rather than generating new therapies.
Source: Investopedia — Rent-Seeking