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Hmmm, that's an interesting distinction; But someone who intelligently evaluates startups and picks a more genuinely productive one (likely to discover new pure

Hmmm, that's an interesting distinction; But someone who intelligently evaluates startups and picks a more genuinely productive one (likely to discover new pure gains) to give money to seems to qualify as a valid outcome. Unlike things which are very hard to justify, like directly impeding such people for selfish reasons. Perhaps it's about selfishness?

nostrademons 5y ago
I think one useful distinction might be "Imagine that the state collapsed and you could no longer count on guys with guns to defend your pieces of paper. What happens to your income?" The obvious losers would be landlords (the literal definition of "rent-seeking"), because without that piece of paper, there's just a tenant that lives in that apartment and you have no claim on any of their money. A carpenter who actively builds a house, however, is creating value: even without the state, people still need houses, and he has useful skills for things people want. Financial assets would crash, trademarks would become worthless, there'd be open season on patents. Medical care is still creating value. People who grow and prepare food would be very useful. Software engineering is in the middle: new software that people use is creating value, but just sitting on a service that you own exclusive rights to because it's protected by copyright & trade secret laws is rent-seeking. This also illustrates a lot of the confusion between the two. Without the state to enforce contracts, there's no way to tie "the value you create now" with "getting paid for it later". When a carpenter builds a house, he now owns a house that he can pay for later - but without the state to enforce his right to the deed of his house, he's got nothing to sell and no reason to invest the labor in the first place. Same with the service that the software engineer creates and the drug that the biologist discovers. You could look at rent-seeking as "property rights that have extended beyond the public's attention span".

nostrademons 5y ago

I think one useful distinction might be "Imagine that the state collapsed and you could no longer count on guys with guns to defend your pieces of paper. What happens to your income?" The obvious losers would be landlords (the literal definition of "rent-seeking"), because without that piece of paper, there's just a tenant that lives in that apartment and you have no claim on any of their money. A carpenter who actively builds a house, however, is creating value: even without the state, people still need houses, and he has useful skills for things people want. Financial assets would crash, trademarks would become worthless, there'd be open season on patents. Medical care is still creating value. People who grow and prepare food would be very useful. Software engineering is in the middle: new software that people use is creating value, but just sitting on a service that you own exclusive rights to because it's protected by copyright & trade secret laws is rent-seeking. This also illustrates a lot of the confusion between the two. Without the state to enforce contracts, there's no way to tie "the value you create now" with "getting paid for it later". When a carpenter builds a house, he now owns a house that he can pay for later - but without the state to enforce his right to the deed of his house, he's got nothing to sell and no reason to invest the labor in the first place. Same with the service that the software engineer creates and the drug that the biologist discovers. You could look at rent-seeking as "property rights that have extended beyond the public's attention span".