Rent-Seeking Fat Cats

A Corporate Fat Cat

Question: Why would a union leader, corporate head, or anyone else deliberately restrict the nation's capacity to produce?

Answer: Because it is in their self-interest to do so.

For example, the moral hazard of rent-seeking can be considerable. If "buying" a favorable regulatory environment is cheaper than building more efficient production, then a firm may choose the former option to the detriment of the latter.

Note that money spent on lobbyists rather than on innovation, invention, training, and additional capital retards economic growth.