Quote by James M. Buchanan on Fiscal Capacity and Rent-Seeking

„If you have an area where high-income receivers concentrate, you have a higher fiscal capacity. That fiscal capacity is a valuable resource and will create rent-seeking. People will trying to get that resource one way or the other, including immigration. It is very much like the medieval peasants putting their sheep on the commons pasture. It is better than the open range, and if you let them have open access they will, in fact, put too many sheep on the pasture and waste the value that the pasture has.“

James M. BuchananJames M. Buchanan explains how high incomes increase fiscal capacity and create rent-seeking, illustrated by the commons example.
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James M. Buchanan was an American economist and Nobel laureate, known for his work on public choice theory.

This passage discusses fiscal capacity in areas with high incomes and resulting rent-seeking effects, illustrated by a historical analogy.


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James M. Buchanan (1919–2013) was an American economist best known for developing public choice theory, analyzing political behavior using economic principles. He was awarded the Nobel Prize in Economic Sciences in 1986.

James M. Buchanan quote about fiscal capacity, immigration, and regional equalizationCopyright © yoice.net – Quote Artwork
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"We want to limit the exploitation of the fiscal capacity of the richer regions by keeping down the rate of immigration to a level that would be meaningful and efficient. One way to do that is to have a scheme of equalization which essential bribes people to stay in the poorer regions." James M. Buchanan
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James M. Buchanan quote about artificial scarcity and wasted resourcesCopyright © yoice.net – Quote Artwork
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"If you create an artificial scarcity through public policy, artificial rent so to speak - setting up a new import quota or giving out a particular office that is very beneficial - people are going to invest money, time and resources in trying to secure that opportunity. If the value is created independently of the search for it, the search for it is wasted." James M. Buchanan
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James M. Buchanan quote image about rent-seeking and political favorsCopyright © yoice.net – Quote Artwork
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"Imagine that Queen Elizabeth I, in her time, had the opportunity to give out a monopoly for playing cards within the kingdom. She knew she was going to give it to one of her courtiers. These courtiers would then all try to curry her favour. Meanwhile, they would not contribute anything to the product of the kingdom, in fact, they were wasting resources trying to secure a single prize. That, more or less, is rent seeking." James M. Buchanan
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James M. Buchanan quote image about rent control and political mechanismsCopyright © yoice.net – Quote Artwork
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"Politically, sometimes you get situations where rent control will go through. It is especially true in an emergency, where there is a sudden, sharp increase in demand for housing or a cut back in supply. People will simply not allow the marketplace to allocate housing resources and so you get pressures for rent control. Once you have it, it is hard to eliminate." James M. Buchanan
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Walter Lippmann quote about income distribution and economic efficiencyCopyright © yoice.net – Quote Artwork
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"A better distribution of incomes would increase that efficiency by diverting a great fund of wealth from the useless to the useful members of society. To cut off the income of the useless will not impair their efficiency. They have none to impair. It will, in fact, compel them to acquire a useful function." Walter Lippmann
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