"Good Profit," Rent Seeking and National Security Considerations

Reader comment on: Two Ways To Get Rich

Submitted by Bob K (United States), Jul 23, 2017 09:13

Charles Koch in his book, "Good Profit," touches on what might be called good profit (creative, adding value capitalism) vs predatory or crony capitalism approaches. A third approach to that mentioned in the posting might be to offshore one's business to stay competitive. It would seem the crunch comes when a country can no longer produce vital parts itself for military equipment, having only a potential military rival country as a source. Does national interest then trump economic considerations? Does one then negotiate for removal of protectionist barriers based on increasing trustworthiness and a level playing field of trade partners? Do protectionist barriers for national interest considerations which drive up costs then need some kind of accompanying limits (taxes?) on rent seeking profits until competition can be restored? Or are those higher profits in the country's and ultimately the citizens' interests, drawing in more competitors? Would putting a tariff, a law forcing domestic sourcing, or a domestic subsidy be better to ensure strategic national interests? What a slippery slope it can all become. Do these kinds of protections ironically run the risk of reducing our competitiveness as more and more aspects are designated "vital?" Better to improve our educational system, our infrastructure, the security of our global trading system, rule of law internationally, etc? Getting our trading policies right in itself would be a huge competitive advantage for our country and our reciprocal trading partners as a whole. Let's hope this will be the case.

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