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I think capital allocation is sometimes too abstract for people to see the value in. If I bought some land, built a windmill with my bare hands out of stone an
by MichaelBurge 10y ago
I think capital allocation is sometimes too abstract for people to see the value in.
If I bought some land, built a windmill with my bare hands out of stone and wood that I cut and shopped myself, and became the flour producer for the entire region, people tend to say it's a deserved reward.
If I bought that company, paid people to do all the work setting up a dozen more windmills, paid people to manage the new bigger company, and then sold it again to the highest bidder, now suddenly I'm rent-seeking and profiting off of the poor. Even if those things wouldn't have gotten done without this intervention.
It's like a Ship of Theseus: If you split up the flour company into its constituent pieces and slowly hire other people to do them, at what point does it become unethical rent-seeking?
Even someone who buys an income stream solely to ride it out with the minimum amount of maintenance is at least taking a risk to their capital. And even if they protect it with an insurance policy or similar, they're at least locking up the money for a dedicated purpose usually for an extended period of time. People are often afraid of taking risk or limiting their options, so people who do so are providing some value.
- maxerickson 10y agoRent seeking is jargon. It doesn't refer to running a business. https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Economic_rent https://en.wikipedia.org/wiki/Economic_rent It refers to the economic consequences of things like regulatory capture and corruption.
- aoeusnth1 10y agoThe original article is naively expanding the definition to include simply "owning things which are worth money/time", i.e. the time value of money is somehow rent-seeking corruption.
- force_reboot 10y agoYou are are applying the standard definition of rent/rent seeking used by economists. But MichaelBurge's post is using the language of the original article, which claims that renting out an apartment, or making capital gains from a business, "rent seeking". So MichaelBurge is making a valid critique of the original article, whether or not the article was correct in using the term "rent seeking"
- golergka 10y agoThere's one thing this communist logic doesn't take into account: risk. Ownership and risk are inherently tied to one another. Thinking only about scenarios where this risk already passed and then calling owners "parasites" is survivorship bias in the purest form.
- ommunist 10y agoCommunists took ultimate risk when they risked their lives overthrowing capitalism as a system, being it Russia in 1917 or Cuba in 1953.
- golergka 10y agoThat statement's not entirely factually correct, lies by omission, but most importantly, doesn't have anything to do with the risk in question.
- ommunist 10y agoSure thing. A sparrow bravely takes risk of competition for food among other sparrows. And this is not that exact risk the hawks take.
- wtbob 10y agoCommunists slew far more anti-Communists than anti-Communists slew Communists, by orders of magnitude. Lenin, Stalin, Mao, Pol Pot, Castro, Ho: all killed far more after they took power than were killed by those they overthrew.
- aoeusnth1 10y agoFor your last point, I would also add that the sale of such a income stream is a private consentual business relationship. Neither the seller or the buyer is being exploited. I feel like communists like the author simply don't understand the time value of money.