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I think you really nailed it. In mature economies it's no longer about creating anything but about extracting and concentrating value through financial instrume
by api 9y ago
I think you really nailed it. In mature economies it's no longer about creating anything but about extracting and concentrating value through financial instruments. That is so much easier. Real invention, design, and production are incredibly hard compared to just finding some angle to extract interest or profit from asset appreciation.
That is also what will ultimately bring us down. I have a suspicion that a more general formulation of this effect is a major cause of why civilizations collapse.
- akie 9y agoIf the whole economy is built on rent seeking behavior, then who is left to pay the rent?
- pkaye 9y agoAt that point you ask for a tax cut for corporations to boost the economy.
- deleted 9y ago[deleted]
- api 9y agoNobody, hence collapse.
- olivermarks 9y agoThe reality is that most western transportation firms have been more interested in selling debt than vehicles for the last 20 years. The vehicle production is almost a necessary evil to get to the leasing and hire purchase gold. Management styles and staff reflect this... example https://en.wikipedia.org/wiki/GM_Financial https://en.wikipedia.org/wiki/GM_Financial
- Spooky23 9y agoThe Chinese consumer.
- roel_v 9y agoThat is not what rent seeking means.
- Rapzid 9y agoHumans have excelled at producing more than they need for centuries. Route everyone's outputs through yourself, and then dole out the necessities only. Now you're wealthy. Edit: I guess what I'm saying is; things will stratify. Someone will always be "paying the rent".
- chii 9y ago> Someone will always be "paying the rent". those people are called the poor. and they get the bad end of the stick.
- crdoconnor 9y agoThe whole economy isn't built on rent seeking behavior, but rent seekers are largely in charge and are molding it to better fit their interests, even though it already serves their interests very well. Trump (a property developer) is a fairly good example of this. As with all parasitic systems, sometimes the host is killed and sometimes the host fights back. Right now the host doesn't appear to be fighting back very effectively.
- emiliobumachar 9y agoThere's a lot to hate about Trump, but I'm confused by that example. Property development is building, in perhaps the most literal sense. Trump Towers are actual things that provide tangible value. I don't know if their valuations are sane or if the processes used were ethical, it that what you were aiming at?
- crdoconnor 9y agoProperty development conflates building construction which does provide tangible value with land value rent extraction and speculation, which does not. The latter is largely how Trump managed to grow his wealth; he's pretty bad at the former. This provides a good summary of this principle: https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism