Lobbying - an inefficient use of resources

In Tullock’s article “The Welfare Costs of Tariffs, Monopolies, and Theft” he details the costs associated with monopolies, emphasizing the resources spent in trying to secure a monopoly or to prevent someone else from doing so. Tullock’s analysis suggests that lobbying is often an inefficient of resources so long as these resources are being used to determine the direction of a transfer of rent rather than to benefit the economy as a whole. An article in the Chicago Tribune (link in title) discusses lobbying efforts made with regard to three separate proposed coal gasification projects. The Leucadia and Power Holdings bills passed but the Tenaska bill was rejected. The difference between the Tenaska proposal and the other two proposals is that the Tenaska proposal required increased prices for big businesses. The businesses in the area joined forces to form a coalition against the bill and to produce an enormous lobbying effort including “launching a website and a marketing and media campaign against the Tenaska bill.”

Although the businesses’ lobbying efforts were successful, the resources they used in their efforts were generally put to waste. It is clear in the article that the residents of the areas surrounding the proposed plant locations have large concerns regarding pollution, with Sen. Trotter claiming the reason he did not vote for the Tenaska bill was because of his concerns with respect to emissions. The resources spent in lobbying for and against the Tenaska bill could have been used in many other ways, but it seems as though using them to improve the ability of these plants to sequester emissions would have been a practical and much more beneficial one to area residents. Then the residents could have had the jobs they needed without the increased pollution they dreaded. Although resources are not so easily transferable in reality as they might be assumed to be in theory it is obvious through Tullock’s argument that the resources expended in lobbying by the hundreds of businesses that participated in the effort could have been used in some way to benefit the economy as a whole rather than to protect the profits of the businesses from being transferred to Tenaska or area residents. The Tribune’s quotation of Jack Darin sums things up nicely: “This was kind of a lobbyist feeding frenzy instead of a smart policymaking process.”