Rent Seeking or Extortion: Root Cause of Human Suffering

The eminent economist Joseph Stiglitz said that an economic activity or behaviour can be called rent seeking when it doesn’t increase the pie of total wealth in society but increases the share of the pie of a person. Good economic activity is that which increases the total collective wealth (pie) and thus thereby increases the wealth of the person who contributed to this. Bad economic activity does not lead to any contribution to society but still makes that person(s) rich.

 If this rent seeking gets stopped most of the problems in society and much human suffering vanish. Let us introduce the word ‘extortion’ instead of ‘rent seeking’. Because rent seeking may imply that those who build and maintain things (like buildings, vehicles, computers and so on) and give them to rent are actually doing something bad. Moreover ‘extortion’ brings out the full gravity of the situation where someone deprives the other of their proper income.

 This extortion is not done upon just some person(s) but also the entire society. This is because the entire society suffers when someone gets extorted and is thus unable to contribute effectively to society.

 In modern society we cannot directly determine whether someone is extorting others or not. This is because almost all professions have people who extort others and extorting practices along with those who are not extorting. Extortion has become omnipresent. It exists side by side with genuine economic contribution. More important thing is extortive practices emerge in various fields and stay competitive everyone is forced to adopt them even though they don’t approve that practice.

The best way to determine whether extortion is occurring or not is by observing people who are being extorted. We can say that whenever a person does not get the optimal amount of wealth required to live happily and successfully function in his profession, then that person has been extorted. A traffic constable may need his uniform, a vehicle, a gas mask and so on apart from salary to live. While the CEO of a large corporation may even need a chartered flight to enable him to function effectively. Thus the optimal amount of wealth required varies by profession and situation. A person with a disease needs the health care and medication to get well. When any person is deprived of this optimal amount by any per cent then we can say that the person has been extorted upon by someone. Maybe many people.

Thus farmers who do not get the proper price for their produce are getting extorted. This is because when the product is required by society and useful to society then those who produce it should be able to live. This is not happening due to extortion by others. When a person gets in the hands of loan sharks he is getting extorted. He is unable to live a normal life and unable to contribute as all his work and effort are extorted by the loan sharks in the form of high interest or even worse.

Extortion is in fact a form of war. We have three kinds of war: war of extermination, war of enslavement and war of extortion. People used to eliminate other groups from the very beginning. But the onset of agriculture led to war of enslavement. When enslavement, which leads to permanent exploitation, is not possible people resorted to extortion. This began at the very early stages. Raiding and thievery are the origins of extortion. From the earliest times people raided the settlements of other groups for cattle wealth, tools and metal and even women. These kinds of extortion wars happened until recently.

 But there is hidden extortion in what we normally consider a peaceful activity: trade. Consider two groups. Both are armed and also have considerable wealth. The bigger group has more people and are a moving group, trading with others. They visit the village of the smaller group. Both have items desired by the others. The larger group can just raid and take away what they want. But they are not willing to take the risk of getting into a fight with the smaller group. The reason is that the smaller group are not too weak and they don’t have that many items for the larger group.

 So they both agree to trade and exchange each other’s items. But here too extortion occurs. The large group force the smaller group into an unfair agreement by intimidation. The smaller group agree to the unfair proposals. So this is how the larger group has extorted the smaller group. In this form extortion is taking place even today in almost all kinds of transactions and professions.

 This is where laws come in. Normally only 10 to 15% of child births require caesarean section. Butin several states up to 75% of deliveries are by caesarean section in privatehospitals. So clearly, some hospitals are extorting their patients taking advantage of the lack of information of the patients.   The purpose of laws is to prevent such extortion. Any lobbying group or political movement in essence claims that their proposals are to prevent such extortion. But no one knows whether a certain policy reduces or actually increases extortion.

 How can we ensure that only such laws are made that reduce extortion? Here the importance of collective living of humans becomes important. We have shown elsewhere that all the individual minds of humans have combined into a single collective mind. There is a common systemic will: the Paramatma, and the survival instinct of all combines with our human nature to give rise to a positive collective will: the Vivekatma. This positive collective will of Vivekatma always tries to make those ideas dominant that are helpful to our collective survival.  

   The problem occurs when it is not allowed to be expressed. This is why we need democracy. Thus society strives to act with a single interest that is best suited not only for all the members but also to the society itself. The more democratic we are, the more the interest of the society itself becomes its agenda. To ensure that this happens we got collective decision making. To ensure that the decision is truly collective we need 'doing what is said and doing only what is said'.


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