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Investors (and lenders) put a lot of effort in carefully selecting good investments, and take a lot of risk in giving money to others. Interest and investment r

Investors (and lenders) put a lot of effort in carefully selecting good investments, and take a lot of risk in giving money to others. Interest and investment return is necessary, at the bare minimum, to cover the loss of failed investments and unpaid loans. There's quite a bit of effort that goes into selecting a good place to invest. And, there's also a whole lot of risk involved. Look at Y Combinator, or other VCs and angel investors, for example. If investments count as "rent-seeking behavior", eliminating it would nearly destroy the economy. People often fail to see the value of deferred expenditure of money / capital, while criticizing rent-seeking behavior. There's real value in a person choosing not to spend their money immediately, and instead giving it to someone else.

Gibbon1 9y ago
One thing that gets missed because economists spend the last 50 years trying to burying it was that the high tax rates the US used to have were there to prevent extractive rents. Extractive mean instead of taking profits and re-investing converting profits to personal income. That's what got taxed. So back then we had high tax _rates_, high investment, and low profits. Now were have low tax rates, low investment, and high profits. The thing economists don't want to you get is the amount of taxes collected remained mostly constant. The difference is in the amount re-invested vs the amount extracted.
chesimov 9y ago
Would the reasoning be something like this? Investors determine how money might optimally be put to use, for example identifying which ventures are most likely to succeed/fail, thus providing value to society, for which they are paid?