4 ms·

I suspect the initial premise is incorrect. The purpose of a company that makes widgets is to make widgets. Nothing more. Some rent seekers realized that they

by bregma 6y ago

I suspect the initial premise is incorrect. The purpose of a company that makes widgets is to make widgets. Nothing more. Some rent seekers realized that they could extract some of the wealth created by the company making widgets, and that they could manipulate various people involved in other enterprise to enhance and enforce their rent-seeking abilities. To that end, they have manipulated the various controls on the use of violence in our society such that they can not only continue to extra wealth from the labour of the widget-makers, but that the widget-makers are required to make more widgets and give up increasing portions of the wealth they create. The cancer is not the company, whose purpose is not growth. The cancer is the rent seeker who sucks the life out of the company causing it to swell and fester and eventually autolyse.

cmiles74 6y ago
I think the purpose of a healthy company is to make widgets. A company that's unsuccessful or on the path to failure will thrash about and, I think, eventually decide their purpose is simply "to make money". Clearly we should invest in the former companies but even the latter, in some cases, stumble on something worthwhile and become successful.
deleted 6y ago
[deleted]
eternalban 6y ago
We can get our analogy ducks in order: - The economy is an ecology. - A company is an organism. - Rentiers are carcinogens. It would be interesting to know if there have been models of economies that disallow usury and rent seekers. I know Michael Hudson has made the distinction between industrial and rentier capitalism [1], and there is also CASSE [2] (but that seems to be aligned with the "too many people" ideological line), but I am not aware of any contemporary writing on the nature and dynamics of economies that disallow usury and rent seeking in principle. [1]: https://michael-hudson.com/2021/01/the-rentier-resurgence-and-takeover-finance-capitalism-vs-industrial-capitalism/ https://michael-hudson.com/2021/01/the-rentier-resurgence-an... [2]: https://steadystate.org/ https://steadystate.org/
- vorpalhex 6y ago
  Historically, even societies that disallowed usary still needed financiers - they would just hunt them down and kill them when it came time to pay the piper. Not even attempts at communism have survived removing dynamic markets.
  - eternalban 6y ago
    Market =/= Usury. Two entirely distinct concepts, with distinct names.
    - vorpalhex 6y ago
      Usury in a basic definition means lending money with interest, and the collection of that interest. [1] Lending money involves risk. The only way to offset risk is with potential gain - ie, interest. You're not going to loan someone a few million, knowing you might lose it all, and having no expected gain. If you don't have loans of any kind, you basically don't have a market. You can't form most kinds of businesses, you can't invest in equipment, etc etc. Even in strict communism where the government owns the things that allows businesses to run you need capital to buy materials and perform research before you can sell products. If you can't buy and you can't sell, you don't have any modern conception of a market. [1]: It can also mean to charge exorbitant interest
      - eternalban 6y ago
        > Usury in a basic definition means lending money with interest, and the collection of that interest. [1] Good. This is fine. So we strike various other non-sequitors from your original reply: > Not even attempts at communism have survived removing dynamic markets. Free markets, profit making, private property, incorporation for making profit (by providing goods and services) are all entirely orthogonal to the very specific 'debt instrument' of "lending money at interest". Even the broad concept of 'debt' itself is not limited to a specialized form of debt that involves usury. The solution space of financilizing an economic system is not limited to interest bearing debt instruments. And to insist that any alternative is "communism" does not bear scrutiny. > Historically, even societies that disallowed usary still needed financiers - they would just hunt them down and kill them when it came time to pay the piper. I assume you refer to the stormy relations between medieval European kings and their bankers. A gentle reminder that European history is not the entirety of human history. (Just as an aside, who besides the Templars got killed over defaulted debt?) You mentioned "markets" also known as "bazaars". Did you know that while European kings were allegedly killing their bankers there was an entire thriving civilization next door that disallowed interest bearing debt instruments? - https://www.jstor.org/stable/3632489 https://www.jstor.org/stable/3632489 There have been suggestions that usury was instrumental in the social dislocation that significantly contributed to the collapse of food supplies in Mesopotamia. (I can't find the link atm). Regardless, it is an intriguing fact that the 3 Semitic religions that arose in succession in the same "cradle of civilization" after the demise of Mesopotamia and neighboring bronze age civilizations -- that is Judaism, Christianity, and Islam -- all felt it necessary to put the injunction against usury in the proverbial mouth of God in primary scripture. Rather curious, don't you think?
stdbrouw 6y ago
The purpose for who? When you run the company you yourself own, it hardly matters whether you are rewarded through salary, a dividend or stock appreciation, and presumably you care a lot about the actual product and not just about making money. When you invest in a company you are not otherwise involved in, on the other hand, there's just no point to it unless you get back more than your initial investment, so either the company must grow or at the very least if it doesn't, it should be reliably profitable and share those profits with shareholders. Same thing when you lend out money. This isn't rent seeking: capital is crucial to any business and to provide it is to provide a valuable service. Which is not to say that there's not a lot of rent-seeking behavior in the stock market, or that modern capitalism is entirely sane, but that's a different topic.
auggierose 6y ago
When a company is founded, the purpose of it is whatever the founders want it to be. After a while, there might not be a purpose anymore, just a thing that is.
A12-B 6y ago
I don't like invoking the word 'rent-seeking' because it's highly subjective. The formal definition is extracting value without providing any. One could easily make the argument that all business investors are like this. Why act like it's just a case of a few people then?
- bregma 6y ago
  I don't think it's just a case of a few people. Rent-seeking by itself is morally neutral, like guns. Like a gun, it's how you use it that determines if you're contributing positive value to overall society. The purpose of the economy is also not the accumulation of wealth by a few people. Having lots of money is nice but it turns out it's nowhere near the most important thing in life.
  - thesteamboat 6y ago
    > Rent-seeking by itself is morally neutral, like guns. Like a gun, it's how you use it that determines if you're contributing positive value to overall society. This strikes me as a bad analogy. What differentiates your statement from Theft by itself is morally neutral, [...] it's what you steal that determines if you're contributing positive value to overall society. You might be willing to endorse that statement, but I think most people would not. I think that if you want to assert that rent-seeking is tool-like, with multiple uses some positive and some negative, then the burden of proof is on you to provide some examples.

by bregma 6y ago

cmiles74 6y ago

I think the purpose of a healthy company is to make widgets. A company that's unsuccessful or on the path to failure will thrash about and, I think, eventually decide their purpose is simply "to make money". Clearly we should invest in the former companies but even the latter, in some cases, stumble on something worthwhile and become successful.

deleted 6y ago

[deleted]

eternalban 6y ago

We can get our analogy ducks in order: - The economy is an ecology. - A company is an organism. - Rentiers are carcinogens. It would be interesting to know if there have been models of economies that disallow usury and rent seekers. I know Michael Hudson has made the distinction between industrial and rentier capitalism [1], and there is also CASSE [2] (but that seems to be aligned with the "too many people" ideological line), but I am not aware of any contemporary writing on the nature and dynamics of economies that disallow usury and rent seeking in principle. [1]: https://michael-hudson.com/2021/01/the-rentier-resurgence-and-takeover-finance-capitalism-vs-industrial-capitalism/ https://michael-hudson.com/2021/01/the-rentier-resurgence-an... [2]: https://steadystate.org/ https://steadystate.org/

vorpalhex 6y ago
Historically, even societies that disallowed usary still needed financiers - they would just hunt them down and kill them when it came time to pay the piper. Not even attempts at communism have survived removing dynamic markets.
- eternalban 6y ago
  Market =/= Usury. Two entirely distinct concepts, with distinct names.
  - vorpalhex 6y ago
    Usury in a basic definition means lending money with interest, and the collection of that interest. [1] Lending money involves risk. The only way to offset risk is with potential gain - ie, interest. You're not going to loan someone a few million, knowing you might lose it all, and having no expected gain. If you don't have loans of any kind, you basically don't have a market. You can't form most kinds of businesses, you can't invest in equipment, etc etc. Even in strict communism where the government owns the things that allows businesses to run you need capital to buy materials and perform research before you can sell products. If you can't buy and you can't sell, you don't have any modern conception of a market. [1]: It can also mean to charge exorbitant interest
    - eternalban 6y ago
      > Usury in a basic definition means lending money with interest, and the collection of that interest. [1] Good. This is fine. So we strike various other non-sequitors from your original reply: > Not even attempts at communism have survived removing dynamic markets. Free markets, profit making, private property, incorporation for making profit (by providing goods and services) are all entirely orthogonal to the very specific 'debt instrument' of "lending money at interest". Even the broad concept of 'debt' itself is not limited to a specialized form of debt that involves usury. The solution space of financilizing an economic system is not limited to interest bearing debt instruments. And to insist that any alternative is "communism" does not bear scrutiny. > Historically, even societies that disallowed usary still needed financiers - they would just hunt them down and kill them when it came time to pay the piper. I assume you refer to the stormy relations between medieval European kings and their bankers. A gentle reminder that European history is not the entirety of human history. (Just as an aside, who besides the Templars got killed over defaulted debt?) You mentioned "markets" also known as "bazaars". Did you know that while European kings were allegedly killing their bankers there was an entire thriving civilization next door that disallowed interest bearing debt instruments? - https://www.jstor.org/stable/3632489 https://www.jstor.org/stable/3632489 There have been suggestions that usury was instrumental in the social dislocation that significantly contributed to the collapse of food supplies in Mesopotamia. (I can't find the link atm). Regardless, it is an intriguing fact that the 3 Semitic religions that arose in succession in the same "cradle of civilization" after the demise of Mesopotamia and neighboring bronze age civilizations -- that is Judaism, Christianity, and Islam -- all felt it necessary to put the injunction against usury in the proverbial mouth of God in primary scripture. Rather curious, don't you think?

stdbrouw 6y ago

The purpose for who? When you run the company you yourself own, it hardly matters whether you are rewarded through salary, a dividend or stock appreciation, and presumably you care a lot about the actual product and not just about making money. When you invest in a company you are not otherwise involved in, on the other hand, there's just no point to it unless you get back more than your initial investment, so either the company must grow or at the very least if it doesn't, it should be reliably profitable and share those profits with shareholders. Same thing when you lend out money. This isn't rent seeking: capital is crucial to any business and to provide it is to provide a valuable service. Which is not to say that there's not a lot of rent-seeking behavior in the stock market, or that modern capitalism is entirely sane, but that's a different topic.

auggierose 6y ago

When a company is founded, the purpose of it is whatever the founders want it to be. After a while, there might not be a purpose anymore, just a thing that is.

A12-B 6y ago

I don't like invoking the word 'rent-seeking' because it's highly subjective. The formal definition is extracting value without providing any. One could easily make the argument that all business investors are like this. Why act like it's just a case of a few people then?

bregma 6y ago
I don't think it's just a case of a few people. Rent-seeking by itself is morally neutral, like guns. Like a gun, it's how you use it that determines if you're contributing positive value to overall society. The purpose of the economy is also not the accumulation of wealth by a few people. Having lots of money is nice but it turns out it's nowhere near the most important thing in life.
- thesteamboat 6y ago
  > Rent-seeking by itself is morally neutral, like guns. Like a gun, it's how you use it that determines if you're contributing positive value to overall society. This strikes me as a bad analogy. What differentiates your statement from Theft by itself is morally neutral, [...] it's what you steal that determines if you're contributing positive value to overall society. You might be willing to endorse that statement, but I think most people would not. I think that if you want to assert that rent-seeking is tool-like, with multiple uses some positive and some negative, then the burden of proof is on you to provide some examples.