Political Rent-seeking, Taxation And The Efficiency Of Markets – Article Example

Davidson, Sinclair. “The ABC are just rent-seekers.” Catallaxy Files, October http catallaxyfiles.com/2014/10/01/the-abc-are-just-rent-seekers/ 30 October 2014.
This article suggests that Australian Broadcasting Cooperation (ABC) should be privatized because it is just rent-seeking. The author of this article bases its argument on the suggestion of Malcolm Turnbull who argues that ABC is not commercial company, so its performance does not depend on its revenue. On the contrary, the performance of the public corporation depends on its ability to convince the government to increase its budget. According to Turnbull, suggests that a commercial broadcaster can save money by preserving its programme budget. On the other hand, a public broadcaster saves money by cutting programming and cancelling new series and shows. This is considered to be an easy and lazy ways that public broadcasters use to cut on costs.
Davidson (2014) thinks that this is correct, but he suggests that programming decisions depend on the consumer preference, not management preference. In this case, if the company does not respond to its consumer demand by design it will be forced to account to taxpayers through the government. He concludes that a public corporation should not just be accountable to the government; hence ABC should be privatized because it is completely unaccountable and a threat to democracy and market efficiency. This article is relevant to political rent seeking, taxation and market efficiency because ABC seeks rent from the public through taxation by the government; and is unaccountable to the taxpayers; causing market efficiency problems.
Works cited
Davidson, Sinclair. “The ABC are just rent-seekers.” Catallaxy Files, October 1, 2014. http://catallaxyfiles.com/2014/10/01/the-abc-are-just-rent-seekers/ 30 October 2014.