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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 ec

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.

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.