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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,

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. "

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. "