Rent-Seekers Draining Our Future
How Powerful Industries and Individuals Exploit Taxpayer Money
In a world where innovation and adaptability are supposed to drive success, certain industries and individuals have mastered the art of rent-seeking—leveraging government connections and taxpayer dollars to sustain their wealth and dominance. Instead of creating value or competing in a fair market, these actors secure subsidies, tax breaks, and favourable policies to line their pockets at the expense of the public good. From fossil fuels to property development, and even the tech sector, rent-seeking has become a systemic issue, draining resources that could be better spent on our collective future.
The Fossil Fuel Industry: Holding Progress Hostage
The fossil fuel industry is perhaps the most glaring example of rent-seeking in action. Despite being one of the most profitable sectors in history, it continues to receive billions in taxpayer-funded subsidies each year. In Australia alone, the government spends $11.6 billion annually propping up fossil fuel projects through tax breaks, fuel rebates, and infrastructure investments. This is money that could instead be directed toward renewable energy, public health, education, or disaster resilience.
Rather than adapting to the realities of climate change and shifting global energy markets, fossil fuel companies have used their political influence to delay the inevitable. They’ve captured governments to maintain their outdated business models, even as renewable energy proves not only viable but cheaper and more efficient. By clinging to these subsidies, they are effectively holding Australia—and the planet—hostage.
Property Development: Profit Over People
The property development sector is another rent-seeking heavyweight, using political donations and lobbying to secure favourable zoning laws, tax breaks, and government-backed infrastructure projects. These developers often push for policies that inflate housing prices and lock ordinary Australians out of the property market, while pocketing the gains. Public land is frequently sold off at bargain prices, and taxpayers are left footing the bill for the infrastructure needed to support these developments.
This isn’t about building homes for Australians—it’s about maximising profits for a select few, even if it exacerbates the housing crisis and deepens inequality.
Tech Titans and the Myth of Free Enterprise
Elon Musk, often celebrated as a trailblazing innovator, has built his empire on a foundation of government subsidies, contracts, and public funds. While Tesla and SpaceX have made advancements in electric vehicles and space exploration, these achievements were fueled by billions of dollars in taxpayer money. Musk has crafted a narrative of himself as a self-made visionary, but the reality reveals deep reliance on public resources and systems. From exploiting government subsidies to opposing unionisation and perpetuating poor labour practices, Musk has consistently extracted value from public funds while deriding the institutions that enabled his success.
In recent years, Musk’s ambitions have shifted from wealth accumulation to consolidating political and economic power. Through his ownership of Twitter (now X), he has leveraged the platform to amplify his influence, secretively engaging with global leaders and promoting autocratic ideas. His demands, such as shutting down the U.S. government for weeks, coupled with his embrace of far-right ideologies like TESCREALism, signal a move toward reshaping global governance to favour billionaire control over democratic institutions. Musk’s ventures in space, AI, and energy are not just about innovation but about monopolising key industries to dictate humanity’s future.
Musk’s story underscores the dangers of unchecked corporate power. Far from being a triumph of free enterprise, his rise exemplifies rent-seeking and systemic exploitation, where public resources are co-opted for private gain. As Musk uses his fortune to manipulate public policy and international relations, his unchecked influence threatens not only democracy but the collective future of humanity. Separating the myth from reality is crucial to preventing billionaires from privatising public goods and undermining governance for their personal agendas.
Many Corporations Rely on Government Contracts
Many of the world’s largest corporations would not have reached their current scale without lucrative government contracts propping them up. In Australia, companies like Transurban have secured long-term toll road contracts that lock taxpayers into decades of payments, while private profits soar. In the United States, defense contractors such as Lockheed Martin and Raytheon have amassed billions by securing government defense deals, often through opaque bidding processes. These corporations effectively privatise profits while socialising risks and costs, leaving taxpayers to bear the burden. Similarly, the Big Four consulting firms—PwC, Deloitte, KPMG, and EY—have exploited government contracts for decades, often overcharging and delivering subpar services. In some cases, their actions have led to criminal investigations, exposing a pattern of systemic abuse that erodes public trust.
Research Insights: The "Game of Mates"
Academics such as Cameron Murray and Paul Frijters, in their groundbreaking book Game of Mates: How Favours Bleed the Nation, detail how a network of elites—politicians, lobbyists, and corporate executives—rig systems to benefit themselves at the expense of the public. They explain how these networks perpetuate wealth concentration by turning public money into private gain, often through opaque and unaccountable processes.
Similarly, in Rigged: How the Global Economy Works for the Rich and Powerful, the authors lay bare the mechanisms that allow billionaires to consolidate their wealth by gaming the system. Tax breaks, subsidies, and the privatisation of public assets are central to their strategies. These studies highlight a disturbing truth: the current economic system is not broken; it is working exactly as designed—for the benefit of a select few.
The Second Gilded Age: A Warning
We are living in what many economists call the Second Gilded Age, marked by unprecedented levels of inequality and the concentration of wealth and power. The parallels with the late 19th century are striking: a few individuals and corporations control vast resources, often to the detriment of the broader society. Public assets are being sold off, public money funneled into private hands, and workers marginalised, all while the myth of the "self-made billionaire" continues to be perpetuated.
The experiment of neoliberalism has proven to be an epic failure. Promising efficiency and prosperity through deregulation, privatisation, and market-driven policies, neoliberalism has instead exacerbated inequality, weakened public institutions, and concentrated power in the hands of the few. By prioritising corporate profits over public welfare, it has eroded the social contract, leaving communities to bear the brunt of inadequate healthcare, education, and infrastructure. The consequences are clear: neoliberal policies have enriched elites while hollowing out the middle class and impoverishing the most vulnerable.
This is not just a crisis of economics but one of democracy. As billionaires like Elon Musk accumulate influence, they increasingly dictate policy priorities—deciding where public money is spent, how we address climate change, and even how we live our lives. This level of control is fundamentally undemocratic, and it’s up to us to push back.
A Path Forward: Reclaiming Our Public Wealth
To stop the looting of the public purse, we must take bold action to unrig the system. Here’s what needs to be done:
1. Campaign Finance Reform
Limit corporate donations and lobbying to reduce the outsized influence of big money in politics.
2. Transparency in Subsidies
Require full public disclosure of all government subsidies, tax breaks, and contracts, along with their intended and actual outcomes. This would allow taxpayers to see exactly where their money is going and demand accountability.
3. End the Privatisation of Public Assets
Stop selling off public assets to private interests. Instead, these assets should be managed transparently and for the benefit of all citizens.
4. Invest in Public Goods
Redirect subsidies and public funds from entrenched industries to areas that benefit the majority, such as renewable energy, universal healthcare, affordable housing, and education.
5. Strengthen Independent Oversight
Establish independent bodies to oversee government spending and corporate accountability. These bodies must have the power to investigate and penalise misuse of public funds. Citizen assemblies can also play a critical role in this process by providing a platform for everyday people to participate in decision-making and hold both corporations and governments accountable. By incorporating diverse perspectives, citizen assemblies ensure that public spending aligns with the broader interests of society, fostering transparency and trust.
6. People-Powered Politics
Encourage grassroots movements that hold leaders accountable and promote policies that serve the common good. Citizen assemblies and participatory budgeting are tools that can amplify public voices. Community independents also serve as an antidote to the dominance of the two-party system, offering a means to bring diverse and localised perspectives into national debates. Supporting their rise can help counterbalance the outsized influence of major parties and foster a more inclusive and representative democracy.
7. Tax Billionaires and Corporations Fairly
Introduce progressive taxation policies to ensure billionaires and large corporations pay their fair share of taxes. By closing tax loopholes, ending offshore tax havens, and enforcing strict penalties for tax evasion, governments can recover significant revenue to reinvest in public goods such as healthcare, education, and renewable energy. Proper taxation will also help curb the excessive accumulation of wealth and power in the hands of a few, fostering greater economic equity.
A Call to Action
We do not pay taxes so a few can hoard billions while the rest of us struggle with rising costs, stagnant wages, and dwindling public services. Our money should be used to build a fairer, more equitable society—not to subsidise the super yachts and rockets of billionaires.
It’s time to demand transparency and accountability. We must unmask the rent-seekers who are siphoning off our collective wealth and redirect those resources toward the public good. People-powered politics is the antidote to the neoliberal ideology that has sold off our public assets and eroded our democracy.
The stakes are too high to remain passive. We are not powerless. By organising, voting, and demanding systemic change, we can dismantle the rigged system and build a future where public wealth benefits everyone, not just the privileged few. Let’s reclaim what is rightfully ours and ensure that public money serves the public interest.
Onward we press.
Here is a list of credible references for your review:
First I would encourage you to subscribe to this excellent website: Evonomics - changes in economic thinking can change the world, for the better.
On Rent-Seeking and Government Subsidies
Murray, Cameron & Frijters, Paul (2017) - Game of Mates: How Favours Bleed the Nation. This book details the systemic rent-seeking behaviors of elites in Australia.
Stiglitz, Joseph E. (2012) - The Price of Inequality: How Today's Divided Society Endangers Our Future. This book explores the role of government policies in exacerbating inequality through rent-seeking.
Publisher Link
OECD (2021) - Government Support for Fossil Fuels. This global report provides data on subsidies and support for fossil fuel industries.
On Neoliberalism and Economic Inequality
Stiglitz, Joseph E. (2024). Neoliberalism Is Devouring Itself. The Atlantic. April 2024.
Piketty, Thomas (2014) - Capital in the Twenty-First Century. This seminal work explains how neoliberal economic policies have contributed to wealth inequality.
Saez, Emmanuel & Zucman, Gabriel (2019) - The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay. This book exposes how tax policies under neoliberalism benefit the wealthy.
On Corporate Welfare and Accountability
United Nations Conference on Trade and Development (2020) - World Investment Report. Provides global data on subsidies, tax breaks, and government contracts benefiting multinational corporations.
Big Four Consulting Firms Scandals:
PwC Australia (2023): "PwC Tax Leak Scandal." Reported misuse of government information to benefit private clients.
Deloitte (2019): "Oversight Failure in Public Contracting." Deloitte's role in overcharging for public sector projects.
On the Second Gilded Age
The Truth about Musk from his Biographer (15 Dec 2024) - Seth Abramson provides a detailed analysis of Musk
Tortise Investigates - Podcast Series 2024
Elon’s Spies Episodes 1-4ABC News (2024): Experts warn of a new Gilded Age in the United States: highlighting modern parallels to the late 19th century, including rising inequality and concentrated wealth.
Freeland, Chrystia (2012) - Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. Highlights the modern parallels to the Gilded Age.
Kuttner, Robert (2018) - Can Democracy Survive Global Capitalism? Examines the intersection of corporate power, public policy, and democracy.
Academic Articles and Reports
OECD (2015) - In It Together: Why Less Inequality Benefits All. This report outlines how reducing inequality improves economic growth and well-being.
Credit Suisse (2021) - Global Wealth Report. Offers data on wealth concentration and inequality worldwide.
IMF (2014) - Redistribution, Inequality, and Growth. Demonstrates how inequality undermines economic stability.
Hi Sue, nice article, although I wonder if it might be better to express it a little differently?
You've rightly identified the root causes of our problems - neoliberalism and government capture by vested interests. However, while I agree with your proposed solutions, I don't think that this article clearly lands on the opportunity we need to create - a government that serves the common good. (This would be a government more interested in serving the public interest than their own or their donors' interests). If we can achieve that, then there's no limit to the good outcomes that can be created.
Also, in the context of independent campaigning, not everyone in the community is so informed that they understand the problems and solutions so clearly. So to talk to this broad audience, I think it's important to prioritise the hope and joy of achieving government for the common good, and leave it a little more open as to what outcomes people want from such a good government.
So, to review your proposals, may I respond by re-sorting them so that democratic processes are prioritised over progressive outcomes:
SHORT TERM - Activities outside of government which are needed in order to vote in a government for the common good.
#1 (6.) People-Powered Politics - it appears we have to work within the status-quo system before we can reform it, so this item comes first.
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