Re: Fake? Economic Rent

"Wells" <2006wells@xxxxxxxxxxx> wrote in message
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"The Trucker" <mikcob@xxxxxxxxxxx> wrote in message
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Rent seeking is the use of economic resources to restrict production for
the
purpose of raising price(s) to extract monopoly profits.

So you posit that monopoly profits are not economic rent?

It depends on whether they result from resources being brought into
production or whether they result from resources being used to constrict
production in order to raise price. For example, monopoly profits resulting
from government aiding in the transformation of,say, a competitive industry
into,say, an oligopoly as a result of some sort of bribery would constitute
rent-seeking activity.



An economic rent
results from the use of scarce resources in production.

That does not coincide with any definition of economic rent with which
I am familiar.

Of course it does. Rents and quasi-rents always result from a quantitative
constraint on some resource used in production.

http://en.wikipedia.org/wiki/Quasi-rent

That does not appear to be the case for a "quasi-rent".

If a resource is not used in
production then it couldn't earn a rent by definition.

Therefore: The remuneration realized by a sports star is NEVER a rent. Because
the sports star is not involved in production. We WILLINGLY pay to be
entertained by such people. There is no "need" that drives us, no coercion of
any kind. And there is no political barrier to entry keeping any of the
competitors
from becoming a sports star. This is not the same thing as taxi medallions, or
controlling the number of medical school classes or the number of students per
class; not the same thing as labor unions and banks.

The point that I am attempting to get at here is that I am beginning to see that
for rent to be privatized the use of political barriers to entry must be
employed.
And if the rent of land is socialized then there is no "rent"?

Rent seeking is
sometimes referred to as "government failure", that is, government is
bribed
to award monopoly (market) power to a producer or to a group of
producers
desiring to withhold resources from production for a rise in price.

So it would seem that "rent" is realized by virtue of this political
exercise.

Yep. Douglas North has estimated that over 50% of US GDP involves returns to
rent-seeking industries.


--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org


.

Relevant Pages

  • Re: Dont Forget Mises -- and Dump the Third Way!
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