James Madison on the “sagacious and monied few” who are able to “harvest” the benefits of government regulations (1787)
In Federalist Paper no. 62, James Madison (1751-1836) observes that every piece of government legislation opens up opportunities for profit by a “sagacious and monied few” to take advantage of their less well-informed fellow citizens:
Another effect of public instability, is the unreasonable advantage it gives to the sagacious, the enterprising, and the monied few, over the industrious and uninformed mass of the people. Every new regulation concerning commerce or revenue, or in any manner affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow citizens. This is a state of things in which it may be said, with some truth, that laws are made for the few, not for the many.
It should not be surprising to see many so-called “public choice” insights in the writings of the Founding Fathers of the American constitution. They were accutely aware of the self-interested activities of legislators and their allies in commerce and industry. Here we have an excellent example of this kind of analysis more commonly associated with the modern Public Choice school of economics pioneered by Tullock and Buchanan. Madison uses the analogy of “harvesting” to describe the behavior of well-informed and politically well-connected individuals who are able to extract “rents” from the opportunities opened up by government regulations and legislation. These “sagacious and monied few” are able then to pocket their political “harvest” at the expence of the “ industrious and uninformed mass of the people”.