Is Lobbying "sweet" or a Misallocation of Resources?

 In Mueller’s discussion regarding rent-seeking, he identifies one way that rent-seeking may be “socially wasteful” as exerting effort and resources in order to attain greater than normal profits. Our discussion about lobbying and the potential for the misallocation of resources made me think about my dad’s job representing the U.S. Sugar beet Growers. I gave him a call the other day after class, and I can confirm, there is a lot of resource misallocation of resources happening in the sugar beet industry. The main purpose of having lobbyist for sugar beet growers is to protect them in all capacities—providing relief in years when crop yield is low, protecting them from changes in sugar price, and providing job security.

While there are many examples of misallocations of resources, I am going to share two—protective tariffs on sugar from other countries, and campaign contributions. One major effort by those representing sugar farmers is protecting them from the dumping of sugar by foreign countries into the U.S. market (which would drop the price of sugar and hurt farmers), with Mexico being the biggest example in the past decade. The U.S. sugar beet industry spends an exceptional amount of money, time, and resources to litigate for the protection of the current sugar price. It is difficult to say whether the monetary costs of protecting the sugar price outweighs the eventual benefit, but the industry claims the fight for protecting the sugar price in turn boosts the U.S. economy as a whole and provides hundreds of thousands of stable jobs to Americans. In my opinion, I may go as far to say that the lobbying group impedes trade and reduces potential consumer surplus as they push for tariffs on sugar imports.  Secondly, as lobbyists do, the organization representing U.S. sugar beet farmers host fundraisers and donates to the campaigns of members of congress. However, the representatives who receive donations do not always end up voting in favor of legislation that is beneficial to sugar beet farmers. This is an example of a large misallocation of resources in an effort to attain some “rent” or benefit that could come from some particular litigation. All in all, we can see a multitude of the problems associated with rent-seeking in lobbying, but the existence of such a function in our country goes to show that many people somehow see the potential benefits of lobbying outweighing the substantial misallocation of resources.