3 ms·
I think that the comment was confusing not because of a positive/normative distinction, but because many economists would use the word rent only to refer to ine
by swatow 12y ago
I think that the comment was confusing not because of a positive/normative distinction, but because many economists would use the word rent only to refer to inefficiency. While patents are ex post inefficient since they grant a monopoly, they are ex ante efficient (in theory) because they provide incentives to discover new things.
It seems like a real stretch to call a drug company that researches a completely new drug and patents it "rent seeking", even if they can be said to enjoy "monopoly rents" ex post.