4 ms·

Nope. Capitalism is about capital going to where it is most productive. Rent Seeking is about capital going to where it's told to go based on rules.

epistasis 11y ago
That's a pretty unusual definition of rent seeking; what sort of other axioms are you assuming in order to get to that? Here's another definition: >When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation. http://www.investopedia.com/terms/r/rentseeking.asp http://www.investopedia.com/terms/r/rentseeking.asp
danharaj 11y ago
That is a laughable definition. Let's just define our favorite economic system as "the system where the best things happen". Capitalism is merely a kind of economic system where the means of production are controlled privately for the purpose of profit. Observed consequences of capitalism are commodity production, competitive markets, sophisticated financial markets and instruments of debt and credit, wage labour, capital accumulation, and rent seeking.
- vezzy-fnord 11y ago
  Rent-seeking is relatively agnostic of any particular economic order. To some extent, the Marxist-Leninist planned economies were nothing but that.
  - danharaj 11y ago
    I didn't say rent seeking only occurs in capitalist systems, only that it is a consequence of the premises.
- ArkyBeagle 11y ago
  "... for the creation of consumer surplus." Adam Smith describes mercantilism, which is nearly pure rent-seeking and capitalism. which is oh so much less so. If you have a royal patent on all beaver pelts from the New World - to where your corporation can order the sinking of ships carrying contraband beaver pelts - then this is nearly pure rent-seeking. Rent seeking grows like weeds at the edges of capitalism, but it is not, strictly speaking, capitalist but rather that which capitalism replaces. This may seem pedantic but it's actually pretty useful.
  - CuriousSkeptic 11y ago
    Did Adam Smith differentiate between free market economies in general and capitalism in particular? It seems to me that much of his work is about the former rather than the latter,taking capitalism as the only instance. A quote from Wikipedia[1]: "Smith defined "capital" as stock, and "profit" as the just expectation of retaining the revenue from improvements made to that stock. Smith also viewed capital improvement as being the proper central aim of the economic and political system" So, in capitalism this is implemented as private property. (A perpetual, transferable, exclusive right to some resource) If we f.ex. changed the implementation from perpetual to time limited non-transferable, we could do so in a manner that would retain the expectation of retaining just enough revenue from improvements. Would this still be capitalism? [1] https://en.m.wikipedia.org/wiki/History_of_capitalist_theory https://en.m.wikipedia.org/wiki/History_of_capitalist_theory (The actual source was a broken link)
    - ArkyBeagle 11y ago
      I think your question is about 50 to 100 years later than Smith. He, so far as I know, did not distinguish between capitalism and free markets. His work was nearly ahead of its time as written anyway. The "time limited" thing sounds more like 19th Century Progressive thinking informed of Ricardo. It sounds basically like George to my ear. And dependent on how all the math works, I can see no reason it would not be an improvement on perpetual ownership.
- wycx 11y ago
  ...plus regulatory capture and anti-competitive behavior.
CuriousSkeptic 11y ago
A market economy redistributes capital according to demand. I don't really see how capitalism is necessary to achieve that from a market. I take capitalism to mean a market economy in which capital is traded as private property in a manner where the property holder gets to extract rents from ownership. As a contrast, I've been thinking of a system where property laws are altered so that property rights imply rent going from the propery holder, not too. I think this can be done in a manner so that the market manages to distribute capital to where it is needed, even more effective than the current system, while also have a few interesting side effects toward social justice and welfare. Land value taxes are the obvious example. But take copyright. What if those rights could only be claimed as long as you pay for them? It could for example make it much easier for streaming services as either there is an entity paying for the exclusive right, whom you could negotiate streaming rights with, or there is none, implying the work is in he public domain.
- fineIllregister 11y ago
  Something like Georgism? https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism
  - CuriousSkeptic 11y ago
    Or all out geo-libertarianism https://en.m.wikipedia.org/wiki/Geolibertarianism https://en.m.wikipedia.org/wiki/Geolibertarianism
- vezzy-fnord 11y ago
  The Georgist ideal is problematic because it exalts "land" as being this special component of the general welfare over another factor of production. Yet, all production of capital goods and consumer goods must start from nature-given resources (thus land) mixed with labor. A land value tax would then be a penalty on the entire time structure of production. I'd wager a government levying an LVT would negate its benefits since such an undertaking would give it sufficient velocity to expand its actions and thus be able to collude with the private sector in all the other, more damaging I'd think, forms of rent-seeking. The progressive income tax has become a failure due to the wealth elasticity of demand being higher amongst those with more assets (thus being least sensitive to it), along with them finding it easier to avoid it. I don't see an LVT as faring much better.
VikingCoder 11y ago
Society would have to give up property rights, in order to not have "rules" forcing capital to "go where's it's told." Contracts, holding shares, property... These are pretty dang fundamental, but you're just brushing them all off as "rules." It's absurd to try to study Capitalism SEPARATE from those rules.
malandrew 11y ago
If productivity is defined as capital going to where it can generate the most new additional capital, then both statements you made are identical. The rules distort reality so that some activities are productive in excess of their marginal utility instead of productive proportional to their marginal utility. Housing rents in pretty much all markets are productive in excess of the real life utility from the housing that earns that rent due to the myriad restrictions that prevent supply from growing proportionally to demand. Lawmakers should as a general rule try manage both supply and demand curves so that the intersection between the two moves towards the origin or stays relatively the same.

epistasis 11y ago

That's a pretty unusual definition of rent seeking; what sort of other axioms are you assuming in order to get to that? Here's another definition: >When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation. http://www.investopedia.com/terms/r/rentseeking.asp http://www.investopedia.com/terms/r/rentseeking.asp

danharaj 11y ago

That is a laughable definition. Let's just define our favorite economic system as "the system where the best things happen". Capitalism is merely a kind of economic system where the means of production are controlled privately for the purpose of profit. Observed consequences of capitalism are commodity production, competitive markets, sophisticated financial markets and instruments of debt and credit, wage labour, capital accumulation, and rent seeking.

vezzy-fnord 11y ago
Rent-seeking is relatively agnostic of any particular economic order. To some extent, the Marxist-Leninist planned economies were nothing but that.
- danharaj 11y ago
  I didn't say rent seeking only occurs in capitalist systems, only that it is a consequence of the premises.
ArkyBeagle 11y ago
"... for the creation of consumer surplus." Adam Smith describes mercantilism, which is nearly pure rent-seeking and capitalism. which is oh so much less so. If you have a royal patent on all beaver pelts from the New World - to where your corporation can order the sinking of ships carrying contraband beaver pelts - then this is nearly pure rent-seeking. Rent seeking grows like weeds at the edges of capitalism, but it is not, strictly speaking, capitalist but rather that which capitalism replaces. This may seem pedantic but it's actually pretty useful.
- CuriousSkeptic 11y ago
  Did Adam Smith differentiate between free market economies in general and capitalism in particular? It seems to me that much of his work is about the former rather than the latter,taking capitalism as the only instance. A quote from Wikipedia[1]: "Smith defined "capital" as stock, and "profit" as the just expectation of retaining the revenue from improvements made to that stock. Smith also viewed capital improvement as being the proper central aim of the economic and political system" So, in capitalism this is implemented as private property. (A perpetual, transferable, exclusive right to some resource) If we f.ex. changed the implementation from perpetual to time limited non-transferable, we could do so in a manner that would retain the expectation of retaining just enough revenue from improvements. Would this still be capitalism? [1] https://en.m.wikipedia.org/wiki/History_of_capitalist_theory https://en.m.wikipedia.org/wiki/History_of_capitalist_theory (The actual source was a broken link)
  - ArkyBeagle 11y ago
    I think your question is about 50 to 100 years later than Smith. He, so far as I know, did not distinguish between capitalism and free markets. His work was nearly ahead of its time as written anyway. The "time limited" thing sounds more like 19th Century Progressive thinking informed of Ricardo. It sounds basically like George to my ear. And dependent on how all the math works, I can see no reason it would not be an improvement on perpetual ownership.
wycx 11y ago
...plus regulatory capture and anti-competitive behavior.

CuriousSkeptic 11y ago

A market economy redistributes capital according to demand. I don't really see how capitalism is necessary to achieve that from a market. I take capitalism to mean a market economy in which capital is traded as private property in a manner where the property holder gets to extract rents from ownership. As a contrast, I've been thinking of a system where property laws are altered so that property rights imply rent going from the propery holder, not too. I think this can be done in a manner so that the market manages to distribute capital to where it is needed, even more effective than the current system, while also have a few interesting side effects toward social justice and welfare. Land value taxes are the obvious example. But take copyright. What if those rights could only be claimed as long as you pay for them? It could for example make it much easier for streaming services as either there is an entity paying for the exclusive right, whom you could negotiate streaming rights with, or there is none, implying the work is in he public domain.

fineIllregister 11y ago
Something like Georgism? https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism
- CuriousSkeptic 11y ago
  Or all out geo-libertarianism https://en.m.wikipedia.org/wiki/Geolibertarianism https://en.m.wikipedia.org/wiki/Geolibertarianism
vezzy-fnord 11y ago
The Georgist ideal is problematic because it exalts "land" as being this special component of the general welfare over another factor of production. Yet, all production of capital goods and consumer goods must start from nature-given resources (thus land) mixed with labor. A land value tax would then be a penalty on the entire time structure of production. I'd wager a government levying an LVT would negate its benefits since such an undertaking would give it sufficient velocity to expand its actions and thus be able to collude with the private sector in all the other, more damaging I'd think, forms of rent-seeking. The progressive income tax has become a failure due to the wealth elasticity of demand being higher amongst those with more assets (thus being least sensitive to it), along with them finding it easier to avoid it. I don't see an LVT as faring much better.

VikingCoder 11y ago

Society would have to give up property rights, in order to not have "rules" forcing capital to "go where's it's told." Contracts, holding shares, property... These are pretty dang fundamental, but you're just brushing them all off as "rules." It's absurd to try to study Capitalism SEPARATE from those rules.

malandrew 11y ago

If productivity is defined as capital going to where it can generate the most new additional capital, then both statements you made are identical. The rules distort reality so that some activities are productive in excess of their marginal utility instead of productive proportional to their marginal utility. Housing rents in pretty much all markets are productive in excess of the real life utility from the housing that earns that rent due to the myriad restrictions that prevent supply from growing proportionally to demand. Lawmakers should as a general rule try manage both supply and demand curves so that the intersection between the two moves towards the origin or stays relatively the same.