From top: Simon Coveney, Richard Bruton and Leo Varadkar; Tony Groves
We have a Rental Crisis in this country. I’m not talking about the Daft.ie, Daft Rental Crisis, although that certainly is a Crisis. A small bedroom, as part of a house-share at €900 per month is a Crisis. But the Rent Crisis I’m referring to is caused by what economists call Rent-Seeking.
A Rent-Seeker is a person or entity that seeks to increase their share of wealth, without actually creating any wealth.
Rent-Seekers look to use their wealth and influence to reduce economic efficiency in a way that will increase the value of their particular pot of gold. The best Rent-Seekers find ways to take something that used to be free and introduce a charge for it.
It’s important to note that not all Rent-Seekers are Big Multinational Companies, Banks or Private Healthcare Companies; although many of these are. There are less obvious Rent-Seekers all around us.
Politically they tend to be Right Wing Capitalists who espouse Libertarian, Free Market Views. But ideologically they are Selectively Libertarian and are only interested in freeing up the market to their advantage. They tend to say nasty things about the Left and label anybody who talks of tackling inequality as “grasping, deluded, spiteful and envious“.
Many of them, like Leader in Waiting, Leo Varadkar tend to air their extreme Right Wing views by suggesting we privatise 20 Dublin Bus Routes, or suggest migrant workers should only receive 3 months dole as an incentive to leave. But he quickly glosses over his Far Right leanings by mentioning equality of opportunity in an Irish Independent puff piece.
Rent-Seekers are the ‘Haves’ in our Society. They have accumulated wealth without creating any. Generational Landlords and the like. Many of them sit in the Dáil. How can you expect Rent-Seeking Politicians to seriously tackle the Rental Crisis they are benefiting from?
These fake free marketeers are, for the most part, liars. They are all for the free market when it comes to eroding public services. They are all for the free market, with incentives, when it comes to their particular fiefdoms. The Construction Industry Federation spends more money on lobbying than the Construction Industry those on building Lobbies.
Why? It’s quite simple. If you need to invest one million euro in “incentives” in order to game the free market, but stand to make a billion euro from the rejig then why not! Think it’s a miracle we aren’t more corrupt? Have a read of the Tullock Paradox.
Think about it. 50% of Irish workers earn less than €30,000. By 2014 we had the highest percentage of Low Paid Workers in the OECD. Most workers have suffered wage stagnation for a decade. Yet there are 7,000 new Irish Millionaires in 2016. How does this happen? Rent-Seekers.
Rent-Seekers and or free market libertarians decry the Welfare State. They should celebrate it. Cormac Lucey, Chairman of the Hibernia Forum likes to use the above Gini Index to show inequality isn’t that bad. What he fails to mention is that our spending on Welfare lifts the lower paid out of extreme poverty.
He neglects to say that the Welfare Bill is a bargain. It’s a small price to pay in order to avoid things like a wealth tax, or a fair Corporation Tax. The Welfare bill keeps the pressure off the Rent-Seekers. If these state supports weren’t in place Paddy would really want to know who isn’t playing fair.
A total of 1.9 million people receive some payment from the Department of Social Protection, Pensioners, Carers, and Job-seekers etc. This is down from 2.2 million in 2013. The total spend is €19 billion per year. In other words the same amount of money the EU Commission say Apple owes us in back taxes and interest. Yet Leo Varadkar launched a “hard-hitting” publicity campaign regarding Welfare Cheats!
Ask a fake free market libertarian, their views on immigration. Watch them tell you that only markets should be free, people should be restricted because of a quirk of birthplace and some lines drawn on a map a few hundred years ago.
Ask a fake free market libertarian, their views on a wealth tax, or wealth redistribution. Watch them call you a Communist and insist that they gained their wealth via some sort of talent that makes them better than you or I.
A real Free Market Libertarian, Professor of Economics Bryan Caplan, advocates for the Free Market as a fair and just way for people to deal with each other.
He advocates for a Free Market that includes the free movement of people. In his own words “the single greatest loss to the world right now is the talent trapped in poor countries, where they can only function at a small fraction of their potential productivity”.
Think of all that untapped potential, stuck because of people/corporations (who espouse equality of opportunity) are Rent-Seeking. Think of the wealth creation missed out upon because fake free market libertarians are busy rigging the system, domestically and globally, to grow their percentage share of the pie.
The fake free market libertarians are the like the new politics. They create and do nothing productive. They generate no new innovations and inhibit real entrepreneurial spirits. They limit competition in their fields.
They are Leo Varadkar, hinting at tax cuts for the wealthy, while punching down at those on Social Welfare. They are Simon Coveney, worried about EU Water Fines, but unconcerned about EU Emissions Fines.
They are Vertex Pharmaceutical, charging €159,000 per patient, per year for Orkambi. They are Irish Retail Banks with Mortgage Interest Rates 2.5% above the EU average. They are the Rent-Seekers.
But yeah, equality of opportunity and stuff. Am I right, Right Wingers?
Tony Groves is a full-time financial consultant and part-time commentator. With over 18 years experience in the financial industry and a keen interest in politics, history and “being ornery”, he has published one book and writes regularly at Trickstersworld