The Transfer Society: Economic Expenditures on Transfer Activity


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About the Book

How much time, money, and other resources do Americans devote to influencing the distribution of wealth? According to David Laband and George McClintock, a conservative estimate of the total amount Americans spend on arranging or preventing forced transfers is more than $2,000 for every man, woman, and child in America.

That’s not a statement of the amount forcibly redistributed, but of the amount spent in effecting the forcible transfer of resources. And, as the authors show, this is a very conservative estimate of the dead-weight losses associated with the transfer society.

Through an ambitious cataloguing of different categories of expenditures on forced transfers and research into the amounts expended on each one, Laband and McClintock present a more complete picture of the effects of forced transfers than one would get from merely considering the aggregates of federal and state budgets or estimates of the amounts of wealth that change hands through the various forms of “freelance” redistribution, such as insurance fraud, theft, or extortion.

After a careful examination of the measurable forms of dead-weight losses, the authors conclude by noting that the numbers they present understate the magnitude of resource expenditure on transfer activity in the United States. Moreover, the authors discuss the important question of why, relative to the huge amounts of wealth transferred by government at all levels, there is so little observable and measurable expenditure on effecting transfers.

This book both poses problems and offers solutions to important issues in economics and political science.

About the Authors

David N. Laband is professor of forest economics and policy in the School of Forestry and Wildlife Sciences at Auburn University, where he was formerly Head of the Department of Economics. George C. McClintock is a financial consultant with Salomon Smith Barney in Birmingham.

What Others Have Said

“A courageous attempt to measure the waste of social value involved in securing and preventing transfers, privately and publicly.”
—Prof. James Buchanan, Nobel laureate

“At last! Everyone knows that much of what passes for economic activity is not productive at all. Instead of creating wealth, individuals, companies, and interest groups can devote resources to appropriating the wealth of others. Apart from downright theft are the entirely legal yet antisocial activities known as ‘rent-seeking,’ which can take the form of tort litigation, industrial disputes, tax privileges, subsidies, or restrictions on entry. Adding to the waste, rent-seeking threats evoke what may be even costlier defensive actions on the part of the intended victims.The authors have courageously attempted to estimate the current social costs of coerced transfers, both actual and threatened (not the total amount transferred, which is vastly larger, but the resources burned up in the process). Although the total comes to an astounding $400 billion in current dollars, the authors go on to demonstrate that this number is too low. Nevertheless, as an important first step, the authors have provided both ammunition and guidance for policy and research efforts aimed at improving the American economy.”
—Prof. Jack Hirshleifer, UCLA

“By estimating the social cost of capturing and resisting transfers, Laband and McClintock provide insights into a host of policy concerns that are not addressed directly. For example, anyone who believes that the special-interest influence of campaign contributions can be reduced by enacting more restrictions should read this book. The clear implication is that the only way to reduce political influence peddling is to reduce political influence itself, by reducing the amount governments transfer.”
—Prof. Dwight Lee, Ramsey Professor of Economics and Private Enterprise, University of Georgia


Number of Pages: 
Publication Date: 
January 1, 2001