4 ms·

well put, if your axiomatic paradigm is laissez-faire economics, whose credibility is fast being eroded as its negative consequences (exclusive returns to capit

well put, if your axiomatic paradigm is laissez-faire economics, whose credibility is fast being eroded as its negative consequences (exclusive returns to capital only) become all too awfully apparent. Terms meant as derogatory such as "economic rents" basically mean allowing some friction to the free market so that labour may obtain more of the returns, and consequently, workers may find some dignity, income stability, social cohesion, and solidarity. Thus some measure of economic rent-seeking should be tolerated, legislated, even if that means equity valuations may suffer, because the alternative is societal breakdown which destroys capital completely.

winstonewert 10y ago
It seems to me that economic rents typically end up being friction that allows the owner of capital to capture returns, not something that helps workers get it.
- davidf18 10y ago
  It applies to both labor and capital. Overuse of licensing for jobs, including barbers and hair stylists. Regarding labor, guilds or labor unions, or the American Medical Association that makes it more difficult for foreign doctors to work here than Israel makes it for foreign doctors to work there. And so on.
davidf18 10y ago
Economic rents apply to workers as well: guilds and labor unions. Licensing for any work including barbers and hairstylist with licensing requiring expensive courses. Even in medicine, it is much harder for foreign doctors to work in the US than in Israel, a country with lots of competent medicine. It really applies to any group that uses politics, regulation, to give profits beyond those in a healthy, efficient market. In the case of taxis, it is helpful to eliminate economic rents so that fares are more affordable. Instead of using economic rents to ensure that drivers get undeserved income which works against wealth creation, the workers should focus on eliminating economic rents that creates higher living costs, chief among these are the use of zoning density restrictions to create artificial land scarcity which results in higher rents. Since a significant portion of one's salary goes towards renting an apartment or house or paying for an overly expensive mortgage, then eliminating the onerous zoning laws will go much farther towards improving the economy. It is because of zoning density restrictions that housing is so expensive in SF, NYC, Boston, LA, SD, and other coastal cities.
- powera 10y ago
  The phrase https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture applies to what you're describing here more than "economic rent" does.
  - davidf18 10y ago
    I deal with regulatory capture in my work (in healthcare and patient safety). Regulatory capture is when experts use expertise over (say) public regulators who have less expertise to give their industry economic rents.. In addition, there are problems with people working on these (often) public regulatory agencies later working as lobbyists for the very special interest groups they were supposed to regulate. The wiki article you supply gives many examples of this from the FAA, to the NRC, to the Fed regulating investment banks, .... The economic rents frequently are political laws passed to create special licensing requirements to create politically induced barriers to entry for people wishing to have a job. The economic rents also apply to other politically induced scarcities such as limitations on zoning density to create housing scarcity or taxi medallions to create taxi scarcity.

winstonewert 10y ago

It seems to me that economic rents typically end up being friction that allows the owner of capital to capture returns, not something that helps workers get it.

davidf18 10y ago
It applies to both labor and capital. Overuse of licensing for jobs, including barbers and hair stylists. Regarding labor, guilds or labor unions, or the American Medical Association that makes it more difficult for foreign doctors to work here than Israel makes it for foreign doctors to work there. And so on.

davidf18 10y ago

Economic rents apply to workers as well: guilds and labor unions. Licensing for any work including barbers and hairstylist with licensing requiring expensive courses. Even in medicine, it is much harder for foreign doctors to work in the US than in Israel, a country with lots of competent medicine. It really applies to any group that uses politics, regulation, to give profits beyond those in a healthy, efficient market. In the case of taxis, it is helpful to eliminate economic rents so that fares are more affordable. Instead of using economic rents to ensure that drivers get undeserved income which works against wealth creation, the workers should focus on eliminating economic rents that creates higher living costs, chief among these are the use of zoning density restrictions to create artificial land scarcity which results in higher rents. Since a significant portion of one's salary goes towards renting an apartment or house or paying for an overly expensive mortgage, then eliminating the onerous zoning laws will go much farther towards improving the economy. It is because of zoning density restrictions that housing is so expensive in SF, NYC, Boston, LA, SD, and other coastal cities.

powera 10y ago
The phrase https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture applies to what you're describing here more than "economic rent" does.
- davidf18 10y ago
  I deal with regulatory capture in my work (in healthcare and patient safety). Regulatory capture is when experts use expertise over (say) public regulators who have less expertise to give their industry economic rents.. In addition, there are problems with people working on these (often) public regulatory agencies later working as lobbyists for the very special interest groups they were supposed to regulate. The wiki article you supply gives many examples of this from the FAA, to the NRC, to the Fed regulating investment banks, .... The economic rents frequently are political laws passed to create special licensing requirements to create politically induced barriers to entry for people wishing to have a job. The economic rents also apply to other politically induced scarcities such as limitations on zoning density to create housing scarcity or taxi medallions to create taxi scarcity.