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Making investments that produce a positive return, by supplying consumers with higher quality goods and services at a lower cost, is not rent-seeking.
by ETH_start 22d ago
Making investments that produce a positive return, by supplying consumers with higher quality goods and services at a lower cost, is not rent-seeking.
- int_19h 21d agoThe investors don't manufacture those higher quality goods and services - their workers do. The investors collect economic rent from the worker's outputs.
- ETH_start 17d agoThe capital that the workers operate is an extension of the investor. The investor is an active participant making their capital available for the productive enterprise. And if the investors collect economic rent from the workers' output, then the workers collect economic rent every time an investor hires them for a project in which the investor loses money. But under the standard Economics definition of "economic rent", a positive investment return from a project in which a person risked investment capital and the worker provided labor in exchange for a guaranteed wage is not economic rent that was extracted by the investor.