Abstract
The above figure which has been famous since The Welfare Costs of Tariffs, Monopolies and Theft (Tullock, 1967) has led to a very large amount of research, and even a larger amount of references to the importance of the rent-seeking cost. Basically, what the article claimed was that the total cost of monopolies, tariffs and crimes was represented not only by the triangle at the right, usually called the Harberger triangle, but also by the rectangle. It argued that the development of monopoly, tariff, or other special privilege normally involved the investment of resources. There is no reason why these resources should receive a higher return than resources invested in other activities, hence the rectangle, which represented the return on them should more or less equal the amount of resources invested. In the words, the social waste from rent seeking was much greater than the previous studies had indicated.
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