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View Diary: Renters make good Democrats, and other demographic observations (129 comments)

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  •  There is an entire branch of economics (1+ / 0-)
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    skibum59

    devoted to economic rent.

    You insist on tying it to property, but we are all in fact paying rent to the owners, regardless of having a mortgage or not on a house, owning a car outright or not, etc.

    It seems we are on different levels regarding the use of the word.

    Consider that bank profits are almost entirely taxpayer money.  

    The banks own this government and extract rent from us. You might not like the use of the word, but what happens to us if we refuse to pay the rent?  Off to (debtors) prison! How does "owning your home" save you from that?  

    It doesn't because you owe rent, regardless.

    Please see: Why the Rich Act the Way They Do - about economic rent.

    "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

    by YucatanMan on Sun Mar 17, 2013 at 08:48:01 PM PDT

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    •  That's Not Rent (1+ / 0-)
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      YucatanMan

      There is indeed a lot of talk about "rent". There is a lot of economics in there. A lot of economics, not just in this rent talk, is just talk - no value, no real sense. Our economy is managed by legions of economists whose quality is reflected in the terrible state it's been in for generations.

      You point at "Why the Rich Act the Way They Do" as explaining "rent". Well, that points to "rent seeking behavior" for its definition of "rent seeking behavior", which in turn points to a Wikipedia article "rent-seeking". That article is not about the rent itself, but about the political economics of rent seeking: eg. bribing Congress to require people pay someone else without people deriving value from that someone else. It's about the bribing, not even about the payment without getting value. BTW, that article also says

      A simple definition of rent seeking is spending resources in order to gain by increasing one's share of existing wealth, instead of trying to create wealth. The net effect of rent-seeking is to reduce total social wealth, because resources are spent and no new wealth is created.

      Which is false, because the resources spent are paid to someone else, so the net "social wealth" (undefined, but evidently just net wealth) is the same, not less. So that whole article is both riddled with bad economics (and invalid logic), and an irrelevant derivative of the actual topic, rent. That's not rent, and building a series of DKos articles on it as the basis for an argument delivers a dwelling in which I wouldn't let my understanding live, even if offered free.

      Now it turns out that in your latest comment you made the distinction of economic rent. Which makes it clear that you are simply conflating two kinds of rent: economic and contract. All the rent I have described is contract rent, the default meaning of  renting. That is simply payment for use of property one doesn't themself own.

      If you want to use Wikipedia as your definitions, you'll have to stick close to

      Economic rent typically describes the difference between the amount paid for the inputs to a production process and the amount that would be paid for those inputs assuming a unitary (or greater) elasticity of supply.

      Economic rents use control of the resource to drive its price beyond the cost of its use to its owners. It's artificial pressure on the supply/demand ratio. It sounds unfair, but it is the basis of all profit, including the inconvenience of finding and negotiating with yet another supplier. While profit is any retained exercisable value beyond mere bare subsistence.

      So yes, some economic rents are unfair. And they lead to rent seeking, which is inherently economically unfair. And indeed we all are subject to many economic rents when we interact with our economy, which even paid off mortgage holders do, and indeed all taxes are economic rents.

      But:
      1. That is not the rent I have been talking about in specific terms, which you have been saying is economic rent. The rent you're referring to is not the rent I have been. And your rent is quite obscure compared to my rent.

      2. Not all economic rents are either unfair, or unnecessary, or incompatible with progressive values. Taxes are progressive - when they're progressive, meaning some are, meaning some economic rent is progressive.

      So owning your home protects you from contract rent, as I said (though I didn't specify "contract", because that is the common meaning of "rent" when talking about home ownership, and what I described is "contract").

      Nothing protects anyone from economic rent. And not all of it is unjust. Unless you're comparing to say a pure communist or pure libertarian society, which you might as well compare to Oz or some other magical place.

      I think we disagree only in semantics. But the distinctions between economic rent and contract rent, and even moreso between economic rent and rent-seeking, are important. Conflating them sees us disagreeing, or not even comprehending each other.

      Maybe if we can get the respective terms applied properly to their respective definitions we can finds something worth disagreeing about :).

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Mon Mar 18, 2013 at 07:22:00 AM PDT

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      •  Yes, we agree. Almost always, actually! (1+ / 0-)
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        DocGonzo

        I think the Owners are always conspiring to squeeze more money from the Working people in every way possible.  

        The times we live in are not so economically different from Feudalism.   The serfs pledge allegiance to their giant corporations (lords) and the lords pay as little as possible. Currently corporations hold record profits and record amounts of cash on hand, but there have been precious few raises in wages.

        Small business and independent workers all are beholding to banks and suppliers, which all end up being Owners in the final analysis (Owners are those very few people who do not have to work for a living.  They live only upon the rents they collect whether interest on loans they've given, investments, actual real estate, etc)

        I don't think I'm stopping my thinking. I just see it as a different perspective regarding "rent."

        Of course, I agree with you as to real property, but I also think it carries on to "economic rent" which is money transferred from the working class to the ownership class in my view.  

        For over 30 years, policy has intentionally funneled money to the owners.  That is what has to change, but there is no sign that it is going to.  After watching video of Obama's neoliberal economics speech, I'm sorta depressed.

        "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

        by YucatanMan on Mon Mar 18, 2013 at 10:16:06 AM PDT

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        •  More Mutual Correction (0+ / 0-)

          Yes, we're on the  same side. I appreciate a dialectic argument: hones both the point and the sharpening tools.

          I suppose that "economic rent" is "rent" since it's a cost paid to someone else who controls what's rented, and it's "economic" since it's a consequence of the economics (eg. a labor monopoly or a government tarrif increasing costs down the line), that's "economic rent". But that is so different from "contract rent" that economists should use a word different from "rent", and any modifier not as redundant as "economic". Semantics is not negligible when it confuses.

          BTW, why "YucatanMan"?

          "When the going gets weird, the weird turn pro." - HST

          by DocGonzo on Mon Mar 18, 2013 at 12:36:06 PM PDT

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          •  Yucatan! I'm there much of the time. (0+ / 0-)

            And soon, perhaps, full time.   Not Cancun or any of the crazy and crazy-priced resort towns.  (A Ben& Jerry's ice cream is more expensive in Cancun than New York City).

            Over in the opposite, sane and violence-free corner of the peninsula is the capital of Yucatan.  One million people, strong city services, excellent health care.

            And then, the Maya.  And history. And no cold winters. and.....

            "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

            by YucatanMan on Tue Mar 19, 2013 at 02:09:36 PM PDT

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            •  Yucatan (0+ / 0-)

              I spent an equinox in Chichen Itza, and I honeymooned in Tulum, had a gravitational hallucination on the beach at Progreso. Never bothered with Cancun. I banged around Merida with a middle aged character out of a Jimmy Buffet song who claimed his father had been governor for a long time. Yucatan is my favorite part of Mexico.

              "When the going gets weird, the weird turn pro." - HST

              by DocGonzo on Wed Mar 20, 2013 at 07:06:26 PM PDT

              [ Parent ]

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