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They presumably charge much more than their ongoing costs. Rent seeking doesn’t mean zero costs.
by tshaddox 1y ago
They presumably charge much more than their ongoing costs. Rent seeking doesn’t mean zero costs.
- victorbjorklund 1y agoDoesnt most companies in all industries charge more than their operating costs? Same with people, most work for a salary higher than their operating costs.
- tshaddox 1y agoYes, but the point is that rent seeking profits come from things which don’t contribute to economic productivity, which is the accusation being discussed. Having non-zero costs doesn’t imply that you’re not rent seeking.
- MichaelZuo 1y agoSo then what is the cutoff and who gets to decide it? I doubt anything has literally perfectly zero contribution.
- 7bit 1y agoThe market does. So competitors and demand. The problem is that you have really only little competitors on the market. Eg. Microsoft 365 namely being the one that has outgrown any competitors that can seriously threaten them. They can dictate the prices and they do it willy-nilly and there is no-one that forces them to be cheaper.
- MichaelZuo 1y agoThe market doesn’t write comments on HN… clearly another entity must be typing out readable comments.
- victorbjorklund 1y agoI know what rent seeking is. That is why it is wrong to claim any salary/profit above operating costs are rent seeking.
- tshaddox 1y agoI didn’t claim that and neither did the commenter before me. The commenter implied that, because the operation has non-zero costs, it must not be rent seeking. I offered a correction.
- satvikpendem 1y agoThat's just profit, their incentive to actually build the thing in the first place.
- tshaddox 1y agoWell yes, rent seeking is specifically profit from things that don’t create new wealth or contribute to economic productivity.
- theamk 1y agoMost SaaS contribute to economic productivity though. I see the uptime of local services that our IT maintains, let's just say it's not good. By paying a monthly fee for Slack, we get a working communications system which much better uptime than what we could get from self-hosted. This is very specific contribution in economic productivity, as the company gets no work done when the communications system is down.