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Sounds like it's classic capitalism as outlined by Adam Smith. Smith didn't envision massive corporations making money by having the government pass favorable
by fleitz 14y ago
Sounds like it's classic capitalism as outlined by Adam Smith.
Smith didn't envision massive corporations making money by having the government pass favorable legislation, he envisioned many small players making a decent living through competition rather than rent seeking.
- georgemcbay 14y agoI know what you mean by "rent seeking", but in this context it sounds funny because what Airbnb is all about is allowing everyone to, literally, rent seek.
- chii 14y agoi suppose rent seeking isn't inherentely bad, but over charging for rent is. And you can over charge rent if the barrier to enter into the rental business (i.e., become a landlord) is high. AirBnB actually lowers the barrier to entry for rent seeking, and thus, make rent seeking fairer over all as theres more competition. To take it slightly off topic, the banking and finantial sector could use some lowering of barriers to entry. Banks aren't bad, but banks that are too entrenched are. What sort of lower barrier could you set so that there could be 'mom and dad' banks?
- fennecfoxen 14y agoThe free market, remember, is only efficient under certain circumstances, particularly: transaction costs must be low and there must be few barriers to entry. AirBnB et cetera lower the transaction costs and remove barriers to entry.
- oillio 14y agoEasy discovery of price information is also important to capitalistic markets. Of course, AirBnB helps there as well.