(p. 6) In an influential paper, the economists Kevin M. Murphy and Robert W. Vishny, both at the University of Chicago Booth School of Business, and Andrei Shleifer at Harvard University argue that countries suffer when talented people become what we economists call “rent seekers.” Instead of creating wealth, rent seekers simply transfer it — from others to themselves.
Job titles don’t tell you whether someone is primarily a rent seeker. A lawyer who helps draft precise contracts may actually be helping the wheels of commerce turn, and so creating wealth. But trial lawyers in a country with poorly functioning tort systems may simply be extracting rents: They can make money by pursuing frivolous lawsuits.
For the full commentary, see:
SENDHIL MULLAINATHAN. “Economic View; Maximizing the Social Returns to a Career in Finance.” The New York Times, SundayBusiness Section (Sun., APRIL 12, 2015): 6.
(Note: the online version of the commentary has the date APRIL 10, 2015, and has the title “Economic View; Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance.”)
The paper praised and summarized above, is:
Murphy, Kevin M., Andrei Shleifer, and Robert W. Vishny. “The Allocation of Talent: Implications for Growth.” Quarterly Journal of Economics 106, no. 2 (May 1991): 503-30.