3 ms·
> rent seeking behavior So many people are confused about the meaning of this term lately, to the point where I think we might need to scrap it and come up wit
by asfasgasg 8y ago
> rent seeking behavior
So many people are confused about the meaning of this term lately, to the point where I think we might need to scrap it and come up with a new one. In traditional economics, rent-seeking is a bad thing, because it involves lobbying the government to increase one's revenues without performing any economically beneficial function. This is why the term has a negative connotation. Almost all economists think this type of behavior causes inefficiency.
Buying a house and renting it out does not fall under this category. In this case, you are performing a beneficial economic function (i.e. you are providing someone a dwelling, in exchange for money). There are related rent-seeking behaviors, such as lobbying the government to prevent building new housing stock for the purpose of increasing the value of your dwelling and the amount of your rents. But the act of investing itself? Not rent-seeking. Not considered bad by most economists.
- uiri 8y ago"Rent" in the colloquial sense of payments pursuant to a residential lease is a different meaning from "rent" in the economics sense of the word. The use of this word falls into the trap of many words with differing colloquial and technical meanings. I don't see how abandoning a word's technical definition because of a competing colloquial definition helps anyone.
- fanzhang 8y agoThe problem is that rent seeking, in the colloquial sense, is an attempt to paint a normal activity, like getting paid rent for housing, with the same brush as bribery type behavior. It's very similar to say, how Trump co-opted fake news to just mean any news he disagreed with. Original creators of the term fake news are rightfully mad because technically it should refer to news that is clearly factually untrue, like pizzagate.