Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Rent Hypothesis

esoltas.blogspot.com

Post reply on HN
Print view View original

61–70 of 150 posts

Re: The Rent Hypothesis

#61

Post by tjradcliffe »

logicallee wrote: post #54

Look at all the rent Apple is seeking on the new 12 inch Macbook, for example. In 2015 the world supply of 12 inch Macbooks increased suddenly and unexpectedly. Nobody saw it coming. The world simply has a great new product in it starting in 2015 that it didn't have in 2014 or 2013. On HN there were 1269 comments: https://news.ycombinator.com/item?id=9172373 One thousand, two hundred, sixty-nine! The current front-pa…

"Some innovators are not rent-seekers" does not imply "No innovator is a rent-seeker" or even "Most innovators are not rent-seekers".

This is an argument about distributions, and you've provided a (very funny) datapoint that tells us almost nothing about the distributions, and which most of us were already aware of.

The interesting question is: how much innovation and investment is going into rent-seeking vs building new products people actually want?

There has been an argument from at least the 90's that rent-seeking was impeding innovation in technology. When Microsoft was the dominant force in tech the joke was that you couldn't start a company that would be the next Microsoft, but you could start a company that would get bought and just down by Microsoft to preempt any competitive threat, and that was just as good a way to get rich as building the next Microsoft.

History didn't work out quite the way the advocates of that argument predicted, and it is unlikely to do so this time.

Re: The Rent Hypothesis

#62

Post by sliverstorm »

kd0amg wrote: post #43
baddox wrote: post #31

> Rents are not always bad. Protections for intellectual property make sense not in spite of the rents they generate, but rather because of them. A patent, after all, is a temporary monopoly. These monopoly rents give incentives for innovation and allow innovators to cover the costs of research and development. This is a weird way to talk about IP and rent. Is profit from IP necessarily rent? The problem is that "ren…

I've always seen rent defined as payment collected in excess of the seller's cost to make and hand over the product (not the whole product line, just the individual item). In a perfectly competitive market, price is driven down to match that cost, but the comparison with production cost is easier to apply in markets that aren't perfectly competitive (like licenses for a particular patent). Once an invention has been…

It sounds like you've defined rent == profit, which suggests you need to adjust your definition of rent.

Economic rent is hard to wrap your head around; I defer to the Wiki:

In classical economics, economic rent is any payment made (including imputed value) or benefit received for non-produced inputs such as location (land) and for assets formed by creating official privilege over natural opportunities (e.g., patents)

In neoclassical economics, economic rent also includes income gained by beneficiaries of other contrived exclusivity...

In layman's terms I think it could be described as income for having/being rather than income for making/doing.

Re: The Rent Hypothesis

#63

Post by logicallee »

bcg1 wrote: post #56
logicallee wrote: post #54

Look at all the rent Apple is seeking on the new 12 inch Macbook, for example. In 2015 the world supply of 12 inch Macbooks increased suddenly and unexpectedly. Nobody saw it coming. The world simply has a great new product in it starting in 2015 that it didn't have in 2014 or 2013. On HN there were 1269 comments: https://news.ycombinator.com/item?id=9172373 One thousand, two hundred, sixty-nine! The current front-pa…

What you're describing is just smart business. Producing a desirable product that people choose to buy is not rent-seeking, it is the free market fulfilling a need/want at price people are willing to pay. An example of rent-seeking however would be if Apple set up deals with schools and colleges to roll the cost of devices into their tuition, which is really mostly malinvestment paid with student loan debt. If the am…

you didn't read the author's definition of rent, which was more technical than "rent-seeking". For example, if you self-publish an ebook for $49, nearly 100% of that would be considered rent by the author. Read his definition carefully.

Re: The Rent Hypothesis

#64

Post by sliverstorm »

nwah1 wrote: post #44

See also: The Law of Rent Land, and natural opportunities in general, are the original and most fundamental source of rent. Even the electromagnetic spectrum is monopolized. And although the holders of these exclusive rights do pay the FCC, they pay very little compared to the actual value. Likewise, people pay very little in taxes compared to the true value of their land. Imagine if instead of having to pay income t…

What is the true value of the land under your house? Or do you simply object to the current property tax rates rather than valuation?

Re: The Rent Hypothesis

#65

Post by bbcbasic »

ccvannorman wrote: post #6

This is a very important topic as robotics and automation begin their exponential curve of running our lives. Who will own the robots? Will the majority of humanity be enslaved to rent-seekers who own patents on a robot hinge?

No.

Anecdotal argument:

In my budget the biggest costs are housing, food, utility bills.

The costs of my semi-automatic robots - such as the dishwasher, fridge, washing machine, vacuum cleaner, lawnmower are loose change in comparison.

I doubt the fully automatic robots of the future will be excessively priced but yes some patent holders will be rich, even undeservedly so, but we won't be their slaves.

The bigger problem with robots is something similar to The Matrix movie. A side effects of a very smart robot is that she becomes aware that there is more to life than serving humans.

Re: The Rent Hypothesis

#66

Post by toomuchtodo »

gohrt wrote: post #36
toomuchtodo wrote: post #21

Earlier quoted context omitted.

I think you're wrong. Humanity won't destroy the golden goose. The next Aaron Swartz will release it to the public, whether that's distributing the software to everyone, or finding a way to freely build/distribute high-level robotics. Just as Prometheus brought fire to the humans, someone will find a way to prevent the future from being locked away. Once you achieve the necessary level of automation, you only need on…

You are ignoring the cost of acquiring resources. Robots will run society before the problem of unlimited energy is solved.

Enough sunlight hits earth every 5 minutes to power all of civilization for a year. The energy is unlimited, the challenge is collection.

Re: The Rent Hypothesis

#67

Post by moron4hire »

thesteamboat wrote: post #48
moron4hire wrote: post #40

Earlier quoted context omitted.

I don't think violent revolt is quite necessary. We certainly seem to be seeing a non-violent revolt happening in the entertainment industry. People, unhappy with the way the music and movie industry have been trying to leverage their monopolistic power over certain franchises, have turned to non-violently pirating media, to the point that, for a lot of people, and many properties, the easiest mode of obtaining them…

> All that the people must do to overthrow the tyrant is to just sit down on the ground and give up helping him, because the tyrant has no true power of his own. I think the fear here is that at some point the relevant servants of the tyrant will all be technological constructs unable of sitting down. If we're really careful about making sure our robot army doesn't revolt then what happens when a tyrant controls them…

I would call that a phobia, not a fear.

Re: The Rent Hypothesis

#68

Post by nwah1 »

sliverstorm wrote: post #64
nwah1 wrote: post #44

See also: The Law of Rent Land, and natural opportunities in general, are the original and most fundamental source of rent. Even the electromagnetic spectrum is monopolized. And although the holders of these exclusive rights do pay the FCC, they pay very little compared to the actual value. Likewise, people pay very little in taxes compared to the true value of their land. Imagine if instead of having to pay income t…

What is the true value of the land under your house? Or do you simply object to the current property tax rates rather than valuation ?

Assessment needs to become more accurate and more of our taxation should shift to land, and away from productive activity.

It may even be possible in many locales to use self-assessment, with the concept being that if you set it too low, others may outbid you according to a certain set of rules to keep things fair and reasonable.

Current property tax assessors are licensed professionals, and each county in the US handles it differently. Sometimes they are elected, sometimes they are appointed.

One could also imagine the local governments outsourcing assessment to private tax assessment companies. Zillow and many companies already have assessments for most of the country freely available on their website.

Re: The Rent Hypothesis

#69

Post by collyw »

spinlock wrote: post #60
baddox wrote: post #31

> Rents are not always bad. Protections for intellectual property make sense not in spite of the rents they generate, but rather because of them. A patent, after all, is a temporary monopoly. These monopoly rents give incentives for innovation and allow innovators to cover the costs of research and development. This is a weird way to talk about IP and rent. Is profit from IP necessarily rent? The problem is that "ren…

The philosophy behind patents is that they encourage the sharing of research so that the total cost of rnd to society is minimized. Whithout ip protection, firms would rely on trade secrets. They would still charge more for their products but a competitor would have to spend the money on research to compete. I don't know if you would still call the premium they could charge rent or if you would amortize rnd over the…

Linux and the open source movement pretty much disproves that theory. Better (or "at least as good") quality kernels than the two biggest software companies and biggest defenders of intellectual property rights on the planet could manage.

We should really look at the evidence rather than repeating the mantra.

Re: The Rent Hypothesis

#70

Post by baddox »

sliverstorm wrote: post #62
kd0amg wrote: post #43

Earlier quoted context omitted.

I've always seen rent defined as payment collected in excess of the seller's cost to make and hand over the product (not the whole product line, just the individual item). In a perfectly competitive market, price is driven down to match that cost, but the comparison with production cost is easier to apply in markets that aren't perfectly competitive (like licenses for a particular patent). Once an invention has been…

It sounds like you've defined rent == profit, which suggests you need to adjust your definition of rent. Economic rent is hard to wrap your head around; I defer to the Wiki: In classical economics, economic rent is any payment made (including imputed value) or benefit received for non-produced inputs such as location (land) and for assets formed by creating official privilege over natural opportunities (e.g., patents…

The wiki definition you quote is essentially what I was going off of. There are still terms that need to be defined, like "natural opportunities" and "contrived exclusivity," and that gets you right back to property rights.
Post reply on HN