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The Rent Hypothesis

esoltas.blogspot.com

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Re: The Rent Hypothesis

#131

Post by moron4hire »

collyw wrote: post #122
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…

That's because it is easy to pirate music. There are plenty of people who are unhappy with the way that banks have and continue to behave. It is however a bit more difficult to help yourself to some of the money in the banks even if you feel justified to.

If one person owns all the dollars then dollars become useless as a medium of exchange. People have always and will continue to figure out their own currencies when the official one fails them.

Re: The Rent Hypothesis

#132

Post by Retra »

bbcbasic wrote: post #101
Retra wrote: post #74

Earlier quoted context omitted.

>A side effects of a very smart robot is that she becomes aware that there is more to life than serving humans. This is amateur nonsense. One could easy argue the same for anything: "Humans will discover there is more to life than money, success, and pleasure, and they will all kill themselves. That's what I'm afraid of!" How much you care to work is not a function of your intelligence or awareness. The problems that…

> This is amateur nonsense. Yes I admit I am an amateur predictor of the future, like most people. :-) > One could easy argue the same for anything: "Humans will discover there is more to life than money, success, and pleasure, and they will all kill themselves. That's what I'm afraid of!" Not sure how this is the same thing? > How much you care to work is not a function of your intelligence or awareness. The problem…

>If you are intelligent you won't work for someone else for no reason.

"Someone else" is a flexible mental construct. If you considered humans to be part of your 'self identity', you would work for them regardless.

>When computers build computers, they will evolve.

And how will they know which of those new computers to run and which to trash? They have to evaluate their function using their current implementation. That's just continuity.

Humans are the same way: we can't tell if our brains are doing the right thing except by using our brains. So you can't evade those constraints.

Think of it like this: if you are creating random functions, it is because you already value the creation of random functions. If you keep some and discard others, it is because you already value the ones you keep over the ones you discard. You always have to use your own evaluation.

The worry is not that computers will cease to value humans, but that they didn't value humans to begin with (because we didn't properly specify what a human is and how it should be valued.) You can't go from valuing humans to not valuing them without being in error.

And furthermore, as soon as a machine goes into error, we'd stop using it. If your computer decides to stop running programs and start playing tic-tac-toe all day, you'll shut it down and replace it. Useful machines will be under such scrutiny. Nobody is going to run an unreasonably powerful machine and not monitor it regularly.

In this sense, it is like a regular employee at a business. If they decide that their time is better spent not working, you can just fire them and move on.

Re: The Rent Hypothesis

#133

Post by dragontamer »

stonemetal wrote: post #52
dragontamer wrote: post #8

Earlier quoted context omitted.

No robot is 100% self sufficient. There will always be a need for skilled labor to maintain and update robots. Even the most magical electric self-driving car requires maintenance in the form of software updates, tire rotations and the like. I think we are entering a period of "super industrialization", where even fewer workers are needed to do greater amounts of work. Careful care needs to go into making sure we don…

There will always be a need for skilled labor to maintain and update robots. Why? Surely we will come up with maintenance robots that will maintain the other ones, including other instances of the maintenance robot. In my experience automation tends to have very mechanical edges, so the very act of automating something brings about a system that is easier to automate further.

> Why? Surely we will come up with maintenance robots that will maintain the other ones, including other instances of the maintenance robot.

And who's job is it to make sure that these maintenance robots actually are doing their job?

We basically have 100% automated webpages, providing services and automatically updating themselves. (Puppet, Aptitude, etc. etc.). Even the process of buying new computers to hook into a webpage's processing system has been automated "through the cloud" with Heroku, Amazon Web, and OVH Servers.

And yet, you still require roughly one IT guy every 100 servers, to make sure that those servers are actually running. (+/- whatever, based on skill-level and maturity of the project)

I mean, the best-case scenario for a maintenance robot is something like Nagios, which will automatically check if various web services are still up and running.

Re: The Rent Hypothesis

#134

Post by drcube »

baddox wrote: post #94
drcube wrote: post #83

Earlier quoted context omitted.

I don't know if I've got it wrong or the author does, but I think about it like actual rents. Landlords don't make money by providing a service or selling goods. They make money by sitting on something no one else is allowed to have. They don't have to do anything more than sit back and collect checks. Sure, they bought the land originally, but there's no more investment to be made after that. They can invest in a ni…

> Landlords don't make money by providing a service or selling goods. They make money by sitting on something no one else is allowed to have. Is that second sentence any less true of any other trade, including the traditional selling of goods? After all, the only reason you have to give a food vendor money for food is that the vendor (or someone on the vendor's behalf) will use violence if necessary to defend the ven…

The fact that Uncle Sam is the ultimate rent seeker is beside the point.

The difference between land and widgets is that widgets are continuously manufactured and sold. Once you sell me a sandwich, you can't take it back. It's mine. Rent is the opposite. They're not making more land, or spectrum, or whatever, and that's not what they're selling. They're selling access to it. And they can revoke that access at any time. The thing I'm paying for isn't mine, it's still theirs the whole time.

Re: The Rent Hypothesis

#135

Post by nwah1 »

mullingitover wrote: post #106
nwah1 wrote: post #68

Earlier quoted context omitted.

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 han…

> Assessment needs to become more accurate Doesn't the market already provide reasonably accurate assessment, via insurance companies?

That is a good point, there are multiple industries which have solved the problem of land assessment. I'm sure leveraging these insurance assessments could be another way to supplement some of the other approaches I mentioned.

Re: The Rent Hypothesis

#136

Post by nwah1 »

Yen wrote: post #90
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…

As an interesting thought experiment - What if we taxed land, but the tax rate was based entirely on the size of the parcel, and the total valuation (land + improvements) of all nearby parcels, not including the current one. In theory, this adjusts the price of holding the land based on how desirable it is, encouraging either efficient use, or selling, and doesn't encourage trickery where someone tries to keep their…

Taxing by size is how Israel does it. It isn't a good idea, though, because it falls disproportionately on rural owners, and it ignores the central insight of the law of rent.

The point is that monopolization of prime locations is what drives "real" wages down. In other words, the amount you can afford after rent and taxes take their cut, is determined by these factors.

You should instead pay for what you use, by value. If that doesn't happen, rents will just flow as unearned income to owners of the best land, and wages will be depressed. And then we'll additionally need to tax productive activity to make up the shortfall.

The "margin of production" is the best available rent-free land, and the point is that the better this land is, and the more productivity is possible upon it, the better your next best alternative to paid labor is. Thus, employers must pay you more, or landlords must demand less... because otherwise you'll take that next best alternative.

Of course, the alternative includes all subjective and intangible things too... but that is what I mean by "real wage."

Re: The Rent Hypothesis

#137

Post by crdoconnor »

Dylan16807 wrote: post #125
crdoconnor wrote: post #104

Earlier quoted context omitted.

>nobody innovates because, without IP, you pay for the cost of R&D but "copycats" can steal the idea without paying. This just isn't true. It's human nature to innovate, just as it is human nature to sing, play music and dance. There are many times when the IP system is not only absent, but actively working against the creator, yet it doesn't stop the process of innovation. It just slows it down. The government also…

You're going way off on a tangent from the article. Some people innovate because it's their desire, that's irrelevant to the economic argument that patents encourage research departments. That the current implementation of patents is highly flawed doesn't affect that basic fact.

>Some people innovate because it's their desire, that's irrelevant to the economic argument that patents encourage research departments.

It's highly relevant. If the patent system is being given credit for innovation taking place that would have taken place anyway, maybe it should be dismantled or at least heavily scaled back.

Re: The Rent Hypothesis

#138

Post by panglott »

esoltas wrote: post #91
panglott wrote: post #37

It seems that he's mostly considering the value of the idea of economic rents in terms of how well they explain corporate profits as a means of testing the idea of economic rents themselves. However, the core idea of economic rents comes from analyses of land rents and monopoly rents in the 19th century: application to contemporary corporate profits is a derivative application of the idea. Land rents, for example, we…

It's true that I'm talking about all different types of rents in the article. I've written about land rents and land taxes here, if you're interested: http://esoltas.blogspot.com/2012/06/on-land-taxes.html . Also, as old as the Henry George analysis of land rents is, it is still quite relevant. If you look at some of the rebuttals to Piketty's capital (eg., this one: https://ideas.repec.org/p/spo/wpecon/infohdl2441-3…

Thanks, I've long wished there was a well-informed contemporary reappraisal of Henry George. There were a few municipalities in the U.S. that went to land value taxation in the late 19th century, but their economic history is not especially remarkable. Most, IIRC, have shifted to conventional property taxes, mostly because the original impetus for Georgist taxes are now obscure and out of fashion, and there is a perceived value to having tax structures common to other municipalities (easier to attract businesses and professionals if taxes aren't unusual).

Re: The Rent Hypothesis

#139

Post by Dylan16807 »

PepeGomez wrote: post #128
Dylan16807 wrote: post #127

Earlier quoted context omitted.

Did you read the second line of the comment?

Yes, I did? You didn't give any examples, except that salt isn't such a thing.

Salt is the fourth line. It comes after the examples you asked for. Are you screwing with me?

SilasX listed that they have a monopoly on SilasX's labor. That's a pretty sensible monopoly.

They also listed "Creator's monopoly on patterns that only exist because that creator found them" as something they are okay with.

Re: The Rent Hypothesis

#140

Post by Dylan16807 »

crdoconnor wrote: post #137
Dylan16807 wrote: post #125

Earlier quoted context omitted.

You're going way off on a tangent from the article. Some people innovate because it's their desire, that's irrelevant to the economic argument that patents encourage research departments. That the current implementation of patents is highly flawed doesn't affect that basic fact.

>Some people innovate because it's their desire, that's irrelevant to the economic argument that patents encourage research departments. It's highly relevant. If the patent system is being given credit for innovation taking place that would have taken place anyway , maybe it should be dismantled or at least heavily scaled back.

Let's say for the sake of argument that the patent system is 5% encouraging research and 95% stealing credit.

It doesn't matter to someone explaining that good rents exist. That the 5% exist at all allows a demonstration of the concept.

The article mentioned that the patent system overshoots, with a link to more info. That's all that's needed.

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