BY EXPLOITING the economy in lieu of mending it, many politicians have found themselves more attuned to a new profession: Rent-seeking. Despite dating back to the 19th century, everyday Filipinos remain in the dark on this trade secret.
The economic concept of rent-seeking is a polarizing one, with varyingly accurate interpretations ranging from a harmless request for a raise to market manipulation made possible by income inequality. Furthermore, applying the practice to a political context cannot be done without explaining its ties to crony capitalism.
Rent-seeking clearly manifests itself when affluent groups persuade politicians to act upon their interests. It may also be initiated by the politicians themselves when they abuse their access to state resources to further allies’ socioeconomic statuses and disadvantage competition, creating oligopolies. Rent-seeking, then, is a tool used to strengthen horizontal (“fat”) dynasties and lay the foundation for vertical (“thin”) ones—allowing political families to chain their constituents through clientelism.
These political dynasties remain rife today, though explicit examples of rent-seeking vis-à-vis politics are more prominently documented in decade-old records.
The acclaimed 1993 book An Anarchy of Families: State and Family in the Philippines presents explicit details of notable—and notorious—political families in the Philippines. Its final chapter presents Iloilo’s Eugenio and Fernando H. López Sr. as they dominated mid-20th century politics. While the pair cyclically reaped the benefits of the other’s position, entrepreneur Eugenio’s wealth allegedly found further use in influencing law enforcement. An early and successful example of rent-seeking, the López clan’s dubious practices foretold the future of politics.
Exacerbated by former dictator Ferdinand Marcos’ cronyism and practiced by local criminal politicians, the Philippines has forged itself an ironclad relationship with rent-seeking. The practice’s success today has persisted to the point of normalization, due to late-stage capitalism, globalization, and post-colonialism.
Weaponized by politicians for their own agendas, rent-seeking’s consequences and motives also lie in economics where it is often detrimental for siphoning wealth. At worst, local and foreign studies caution that rent-seeking can be economically and socially damaging as the wealth drained away decreases the net outputs of affected economies.
While rent-seeking can rarely lead to good such as the development of industries and new technologies—and whereas not all family-controlled businesses automatically indulge in rent-seeking—it is still predominantly viewed in a negative light. Rent-seeking activities like lobbying and bribery divert resources and often deprive the support of more productive pursuits.
Whether a slight advantage or a huge detriment, rent-seeking is a phenomenon intimately wedged between the political and the economic. In Philippine society where these dynasties and rent-seeking are all the more rife, it pays to be vigilant of rent-seeking to help one recognize the public servants from the private investors.
