The Transfer Society: Economic Expenditures on Transfer Activity.

• Author: Browning, Edgar K.
• Position: Book Review

By David N. Laband and George McClintock Washington, D.C.: National Book Network and Cato Institute, 2001. Pp. 100. $19.95 cloth, $8.95 paper.

From advertising descriptions of this small book (eighty-three pages of text) by David Laband and George McClintock, one is led to believe that The Transfer Society estimates what economists have come to refer to as rent-seeking costs. The authors themselves do not use this term until late in the book (chap. 5), and it is not clear whether they regard all the costs they have identified and estimated as rent-seeking costs or as something else. Whatever the costs are called, the magnitude is startling--approximately $549 billion in 1997. The "transfer society" is apparently far more costly than most of us had suspected.

Or is it? The authors' estimated costs fall into some twenty different categories, and the five largest categories, accounting for nearly three-fourths of the total, include: national defense, $154 billion; police, $33 billion; commercial corporate, government, and institutional security, $72 billion; tort litigation, $92 billion; and federal and state tax loopholes, $51 billion.

Who would have thought that $154 billion in defense expenditures would be considered rent-seeking costs? (This amount is not total national defense spending, which is $253 billion, but only the amount somehow estimated as the "minimum defense expenditures required to safeguard Americans' domestic security against attack from foreigners" [p. 27].) I had thought that rent-seeking costs were simply the resource costs of attempts to influence legislation, but it is clear that the authors have a much broader concept in mind because almost none of their costs fits that definition. Although I cannot locate a clear-cut statement of what type of costs they are attempting to identify in their figures, perhaps this statement from the introduction provides an indication: "individuals devote enormous amounts of time, money, and other resources to influence the distribution of income and wealth. This activity occurs in every country in the world, including (perhaps especially) the United States, and takes two forms: attempts to appropriate other persons' wealth, and attempts to prevent other people from appropriating one's own wealth" (p. 1). It is true that most (but not all) of the costs they identify seem to take one of these two forms.

To some degree, defense expenditures clearly are intended to protect our wealth from...