4 ms·

>create a permanent dynasty of rent seekers Living off inherited wealth isn't rent seeking; your dynasty doesn't need to collect any rents if you've left a lar

>create a permanent dynasty of rent seekers Living off inherited wealth isn't rent seeking; your dynasty doesn't need to collect any rents if you've left a large enough sum of money to them in a trust. They're living entirely off the money you earned fair and square.

mschuster91 3y ago
> They're living entirely off the money you earned fair and square. And who actually makes that money? Those who pay rent, either in actual rent if you invested into real estate, or in one or another kind of fees, that you(r kids) can set (almost) at will. Getting to that point where you are a rent seeker is the core issue at heart of SV-style capitalism. Use and burn enormous amounts of VC to destroy entrenched industry by price dumping (and in some cases like taxis, actually providing a better service), then either acquire or destroy your competition, and finally you have complete control over the market in a way that it would require enormous amounts of money to even be anything close to a threat to you (and at that point, you acquire them). Additionally, use the income from your market stranglehold to pivot into new ventures, because you can do so with ease. The best examples for how that played out are Microsoft, Facebook, Amazon, Google and, to a bit, Apple. Utterly dominant in their respective fields, and all at the control of one or more money spigots. And this is why these companies were and are valued at the valuations they have... investors assess companies on their chance of getting to such a dominant position, to then reap the benefits of the money spigot.
- edgyquant 3y ago
  Deployment of capital is not the same thing as rent seeking.
kristianp 3y ago
Living off inherited wealth is kind of the economic definition of rent-seeking. Rent is a technical term in economics, going back to the times of lords and serfs.

mschuster91 3y ago

> They're living entirely off the money you earned fair and square. And who actually makes that money? Those who pay rent, either in actual rent if you invested into real estate, or in one or another kind of fees, that you(r kids) can set (almost) at will. Getting to that point where you are a rent seeker is the core issue at heart of SV-style capitalism. Use and burn enormous amounts of VC to destroy entrenched industry by price dumping (and in some cases like taxis, actually providing a better service), then either acquire or destroy your competition, and finally you have complete control over the market in a way that it would require enormous amounts of money to even be anything close to a threat to you (and at that point, you acquire them). Additionally, use the income from your market stranglehold to pivot into new ventures, because you can do so with ease. The best examples for how that played out are Microsoft, Facebook, Amazon, Google and, to a bit, Apple. Utterly dominant in their respective fields, and all at the control of one or more money spigots. And this is why these companies were and are valued at the valuations they have... investors assess companies on their chance of getting to such a dominant position, to then reap the benefits of the money spigot.

edgyquant 3y ago
Deployment of capital is not the same thing as rent seeking.

kristianp 3y ago

Living off inherited wealth is kind of the economic definition of rent-seeking. Rent is a technical term in economics, going back to the times of lords and serfs.