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Honest question from a non-economist: where is the distinction drawn between "value extraction" and "rent seeking"? Even the canonical example of lobbyists can
by bumby 2y ago
Honest question from a non-economist: where is the distinction drawn between "value extraction" and "rent seeking"?
Even the canonical example of lobbyists can make some ambiguously defensible position that they add some value; e.g., "We make sure constituents have a conduit to their representative"
- PaulDavisThe1st 2y ago"Rent seeking" requires that you own ("control") a thing people want/need and will/can pay for. "Value extraction" almost implies non-ownership, and represents more of a contractual arrangement whereby you provide X to a set of transactions that would happen without you, and in return you receive Y. Obviously if Y is universally of less or equal value to X, nobody is harmed. But if Y is of significantly more value to a given demographic or particular circumstances, then it is not clear that this is a win for society overall. Where they overlap is if you have managed to create sufficiently high barriers to entry in the field of "providing X". This is tantamount to ownership of a resource that people want, and you're the only provider (or one of just a few).