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Don't know if you're serious or trying to be funny, but I'll bite: Around here, or in the Maker Community, "passive income" is referring to something that you

Don't know if you're serious or trying to be funny, but I'll bite: Around here, or in the Maker Community, "passive income" is referring to something that you put in a lot of effort into in such a way that when left alone, it keeps producing value for other people without your continuous supervision. Examples would include writing a (e)Book; creating "side dish" type products, like eCommerce plugins or themes, creating a video course, or even having an entire SaaS, and then hiring people who then slowly replace you. Interestingly, begging for money on a street corner would not fall under this definition, since it wouldn't work without you being physically there, generating the income. Did that clear things up?

tsimionescu 6y ago
I believe in this case, social parasitism refers to rent seeking, essentially. So, some of your examples are indeed examples of it. For example, if you're not contributing to a SaaS anymore, you are just collecting rent from it, which, at least after a while, it is a form of social parasitism. Of course, selling a book and living off of mew sales is not.
- hpkuarg 6y ago
  That is absolutely not what rent-seeking means. Users of the SaaS are still gaining value from it -- otherwise they wouldn't be using it anymore. It is only economic rent, and rent-seeking behavior, if the OP instead focuses their energy on (for example) making it so that it is illegal to use anything other than their SaaS application for that particular purpose.
  - jrochkind1 6y ago
    Aren't payers of literal actual "rent" on a property gaining value from it, otherwise they wouldn't be paying rent on it anymore?
    - nuclearnice1 6y ago
      In the phrase “rent seeking” the word "rent" does not refer specifically to payment on a lease but rather to Adam Smith's division of incomes into profit, wage, and rent.
      - jrochkind1 6y ago
        Yes, but he used the word "rent" for a reason, he didn't make up a brand new meaning for it! Paying rent to the person who legally owns a piece of land is definitely included. In general, income from being recognized by the government as owning a resource of which there is a fixed quantity, and which everyone needs (you have to live somewhere, and in Smith's time if you were a peasant you have to raise crops somewhere to survive; and the government says you have to pay someone for that land, the people the government recognizes as the owners). Land is actually the main thing Adam Smith was talking about, with other things being extensions by analogy from that. The "profiting from regulation" sense of "rent" is an extension of the plain meaning of "rent", but not mainly what Smith was actually talking about at all. Not sure if Smith in his time and place even talked about the "regulatory" aspect. Ordinary rent in it's plain meaning is what he was mainly talking about. The others are extensions by metaphor or analogy from it! Adam Smith quotes: > "The whole annual produce of the land and labour of every country, or what comes to the same thing, the whole price of that annual produce, naturally divides itself, it has already been observed, into three parts; the rent of land, the wages of labour, and the profits of stock; and constitutes a revenue to three different orders of people; to those who live by rent, to those who live by wages, and to those who live by profit. These are the three great, original, and constituent orders of every civilised society, from whose revenue that of every other order is ultimately derived." [The three divisions of income you speak of -- "the rent of land" is pretty clear, this isn't a weird meaning of 'rent' but the plain one!] > "As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce." > "The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give." > "The landlord demands a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own. "
  - someguydave 6y ago
    The government enforces copyright law, which is an economic rent given to holders of copyrights.
  - woofie11 6y ago
    It absolutely is the definition of rent-seeking. That doesn't make it bad. If I wrote a book, government grants me a limited monopoly on production of that book, and I can collect rent (in an economic sense) from anyone who wants to reproduce that book. That's a good thing. A difference comes in that with land, the underlying resource is limited. With books, it isn't. We're both collecting rents, but on something different. That difference translates into why it's helpful to incentivize writing books, but not helpful to incentivize consolidation of land among a few landlords. Over time, the two converge, though. If copyright still applied to works from 1500, it would be crippling to society. People couldn't build from a collective intellectual commons, since it'd all be locked up. The people who collected rents on those works would have less incentive to work, not more, despite having no relation to their creation. Whoever owned the rights to the work of de Vinci would have tremendous income based on no contribution to society. It would create a new feudalism or nobility. That's why the copyright and patent clause in the US Constitution guarantees copyrights and patents only for a limited term. Rent-collecting on Mickey Mouse works incentivized Walt Disney to create Mickey. That was a obviously a good thing. Rent-collecting on Mickey Mouse now a century later isn't incentivizing anything except for extra profits to a megacorp, and limiting others' ability to build off of Walt's work. That's obviously a bad thing. If you build a SaaS, and you collect rent from it, more power to you. If your grandchildren's grandchildren don't need to work because they're still collecting rent, we've messed something up. TL;DR: rent seeking != parasitic. Both are distinct economic concepts.
    - kcb 6y ago
      If we extend the term to mean nearly any type of business, is it really useful at that point?
      - woofie11 6y ago
        No one is extending anything. It's a term in economics and in public choice theory. The short definition is "seeking to increase one's share of existing wealth without creating new wealth." In this context, "creating new wealth" has a specific definition as well. Sitting on a SaaS service, or charging license fees for software I wrote a decade ago isn't it. Building a house and getting paid for clearly is. Rent-seeking is usually bas, but it isn't always bad. Creating wealthy early on in your life, and then sitting on passive wealth generation feels okay to me. However, if you have a legacy family where wealth was last created 500 years ago, and everyone is extracting wealth by virtue of having been born into the right family, that's not okay. Your values may differ. That's okay too. Values differ between individuals and cultures.
- enriquto 6y ago
  This. Writing a book and selling copies of it is a perfect example of a productive activity. How on earth writing a book can be construed as a "passive" activity? A clear example of non-productive (parasitic) activity is renting real state that you inherited. You are extracting, continuously, a lot of money from society without having ever produced anything of value. I do not understand by what crazy mechanism this is regarded as a socially acceptable thing to do.
  - lultimouomo 6y ago
    Would it be different if I rented real estate that I bought with money I earned with my labor? In that case, I would say that your beef is with inheritance, not rent.
    - enriquto 6y ago
      It can be parasitic or not, depending on what you do. If you inherit an expensive property in your twenties, and you stop studying and live off rent, then yes, you have become an unproductive "parasite". If, otherwise, you rent the property for a couple of years while you finish your studies and save some money for reforming it before going to live there (or sell it)... then of course you are not a parasite.
      - lultimouomo 6y ago
        You didn't answer my question though. Let's say I live out of rent from my mid-30s. In the first case, it's because my rich father died and I inherited; in the second case, it's because I worked 10 years as a highly successful professional, which allowed me to buy the property. Am I a parasite in the first case? Am I a parasite in the second? Variant: am I a parasite if instead of having inherited / buying property, I inherited / bought a large amount of stock in index funds and I live off market returns?
        enriquto 6y ago
        Doing some non-productive things in your life does not mean at all that you are a parasite. But if, at the end of your life, your contribution has been grossly negative, then I guess that you have been. Listen, I don't even think that being a small-scale parasite is a morally horrendous thing. If you are happy, that's OK, you are not really hurting anybody. I'm just very sad that all of our cities are teeming with large-scale ones!
- lultimouomo 6y ago
  I fail to see the difference between SaaS and book sales. People are still working to sell new copies of the book you wrote 10 years ago - it needs to be printed, distributed, sold to the customer (and maybe shipped to him afterwords). In the same way, SaaS needs to be maintained and operated. In both cases someone gets to do the ongoing work, and someone gets paid for the original work. Why do you think they are qualitatively different?

tsimionescu 6y ago

I believe in this case, social parasitism refers to rent seeking, essentially. So, some of your examples are indeed examples of it. For example, if you're not contributing to a SaaS anymore, you are just collecting rent from it, which, at least after a while, it is a form of social parasitism. Of course, selling a book and living off of mew sales is not.

hpkuarg 6y ago
That is absolutely not what rent-seeking means. Users of the SaaS are still gaining value from it -- otherwise they wouldn't be using it anymore. It is only economic rent, and rent-seeking behavior, if the OP instead focuses their energy on (for example) making it so that it is illegal to use anything other than their SaaS application for that particular purpose.
- jrochkind1 6y ago
  Aren't payers of literal actual "rent" on a property gaining value from it, otherwise they wouldn't be paying rent on it anymore?
  - nuclearnice1 6y ago
    In the phrase “rent seeking” the word "rent" does not refer specifically to payment on a lease but rather to Adam Smith's division of incomes into profit, wage, and rent.
    - jrochkind1 6y ago
      Yes, but he used the word "rent" for a reason, he didn't make up a brand new meaning for it! Paying rent to the person who legally owns a piece of land is definitely included. In general, income from being recognized by the government as owning a resource of which there is a fixed quantity, and which everyone needs (you have to live somewhere, and in Smith's time if you were a peasant you have to raise crops somewhere to survive; and the government says you have to pay someone for that land, the people the government recognizes as the owners). Land is actually the main thing Adam Smith was talking about, with other things being extensions by analogy from that. The "profiting from regulation" sense of "rent" is an extension of the plain meaning of "rent", but not mainly what Smith was actually talking about at all. Not sure if Smith in his time and place even talked about the "regulatory" aspect. Ordinary rent in it's plain meaning is what he was mainly talking about. The others are extensions by metaphor or analogy from it! Adam Smith quotes: > "The whole annual produce of the land and labour of every country, or what comes to the same thing, the whole price of that annual produce, naturally divides itself, it has already been observed, into three parts; the rent of land, the wages of labour, and the profits of stock; and constitutes a revenue to three different orders of people; to those who live by rent, to those who live by wages, and to those who live by profit. These are the three great, original, and constituent orders of every civilised society, from whose revenue that of every other order is ultimately derived." [The three divisions of income you speak of -- "the rent of land" is pretty clear, this isn't a weird meaning of 'rent' but the plain one!] > "As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce." > "The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give." > "The landlord demands a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own. "
- someguydave 6y ago
  The government enforces copyright law, which is an economic rent given to holders of copyrights.
- woofie11 6y ago
  It absolutely is the definition of rent-seeking. That doesn't make it bad. If I wrote a book, government grants me a limited monopoly on production of that book, and I can collect rent (in an economic sense) from anyone who wants to reproduce that book. That's a good thing. A difference comes in that with land, the underlying resource is limited. With books, it isn't. We're both collecting rents, but on something different. That difference translates into why it's helpful to incentivize writing books, but not helpful to incentivize consolidation of land among a few landlords. Over time, the two converge, though. If copyright still applied to works from 1500, it would be crippling to society. People couldn't build from a collective intellectual commons, since it'd all be locked up. The people who collected rents on those works would have less incentive to work, not more, despite having no relation to their creation. Whoever owned the rights to the work of de Vinci would have tremendous income based on no contribution to society. It would create a new feudalism or nobility. That's why the copyright and patent clause in the US Constitution guarantees copyrights and patents only for a limited term. Rent-collecting on Mickey Mouse works incentivized Walt Disney to create Mickey. That was a obviously a good thing. Rent-collecting on Mickey Mouse now a century later isn't incentivizing anything except for extra profits to a megacorp, and limiting others' ability to build off of Walt's work. That's obviously a bad thing. If you build a SaaS, and you collect rent from it, more power to you. If your grandchildren's grandchildren don't need to work because they're still collecting rent, we've messed something up. TL;DR: rent seeking != parasitic. Both are distinct economic concepts.
  - kcb 6y ago
    If we extend the term to mean nearly any type of business, is it really useful at that point?
    - woofie11 6y ago
      No one is extending anything. It's a term in economics and in public choice theory. The short definition is "seeking to increase one's share of existing wealth without creating new wealth." In this context, "creating new wealth" has a specific definition as well. Sitting on a SaaS service, or charging license fees for software I wrote a decade ago isn't it. Building a house and getting paid for clearly is. Rent-seeking is usually bas, but it isn't always bad. Creating wealthy early on in your life, and then sitting on passive wealth generation feels okay to me. However, if you have a legacy family where wealth was last created 500 years ago, and everyone is extracting wealth by virtue of having been born into the right family, that's not okay. Your values may differ. That's okay too. Values differ between individuals and cultures.
enriquto 6y ago
This. Writing a book and selling copies of it is a perfect example of a productive activity. How on earth writing a book can be construed as a "passive" activity? A clear example of non-productive (parasitic) activity is renting real state that you inherited. You are extracting, continuously, a lot of money from society without having ever produced anything of value. I do not understand by what crazy mechanism this is regarded as a socially acceptable thing to do.
- lultimouomo 6y ago
  Would it be different if I rented real estate that I bought with money I earned with my labor? In that case, I would say that your beef is with inheritance, not rent.
  - enriquto 6y ago
    It can be parasitic or not, depending on what you do. If you inherit an expensive property in your twenties, and you stop studying and live off rent, then yes, you have become an unproductive "parasite". If, otherwise, you rent the property for a couple of years while you finish your studies and save some money for reforming it before going to live there (or sell it)... then of course you are not a parasite.
    - lultimouomo 6y ago
      You didn't answer my question though. Let's say I live out of rent from my mid-30s. In the first case, it's because my rich father died and I inherited; in the second case, it's because I worked 10 years as a highly successful professional, which allowed me to buy the property. Am I a parasite in the first case? Am I a parasite in the second? Variant: am I a parasite if instead of having inherited / buying property, I inherited / bought a large amount of stock in index funds and I live off market returns?
      - enriquto 6y ago
        Doing some non-productive things in your life does not mean at all that you are a parasite. But if, at the end of your life, your contribution has been grossly negative, then I guess that you have been. Listen, I don't even think that being a small-scale parasite is a morally horrendous thing. If you are happy, that's OK, you are not really hurting anybody. I'm just very sad that all of our cities are teeming with large-scale ones!
lultimouomo 6y ago
I fail to see the difference between SaaS and book sales. People are still working to sell new copies of the book you wrote 10 years ago - it needs to be printed, distributed, sold to the customer (and maybe shipped to him afterwords). In the same way, SaaS needs to be maintained and operated. In both cases someone gets to do the ongoing work, and someone gets paid for the original work. Why do you think they are qualitatively different?