The Brewer, the Baker, and the Monopoly Maker

Journal of Entrepreneurship and Public Policy, Forthcoming

Posted: 14 Nov 2010 Last revised: 17 Jan 2015

Diana Weinert Thomas

Creighton University

Peter T. Leeson

George Mason University - Department of Economics

Date Written: November 12, 2010

Abstract

This paper examines how productive entrepreneurial activities, such as innovation, influence unproductive entrepreneurial activities, such as regulatory rent seeking. We argue that the former may increase the latter. Confronted with a situation in which innovation erodes their monopoly returns, legally protected producers and policymakers reregulate industry to recapture lost rents. Regulation policy under such reregulation tends to be more encompassing, and thus produces more unproductive entrepreneurial activity, than preinnovation regulation policy. This reflects the greater number or variety of producers that new regulation policy must encompass for reregulation to recreate rents. To investigate our argument we consider Bavaria’s brewing industry in the 14th through 16th centuries.

Suggested Citation

Thomas, Diana Weinert and Leeson, Peter T., The Brewer, the Baker, and the Monopoly Maker (November 12, 2010). Journal of Entrepreneurship and Public Policy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1708180

Diana Weinert Thomas

Creighton University ( email )

2500 California Plaza
Omaha, NE 68178
United States

Peter T. Leeson (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://www.peterleeson.com

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