esoltas
Joined 11 years ago
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Comment · 11 years ago
Someone beat me to posting the Kauffman research... Also, the investment to GDP ratio is here, although a lot of the decline was housing: http://research.stlouisfed.org/fred2/graph/?g=14LZ.
Comment · 11 years ago
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/infohdl2441-30nstiku669...), what you see is that most the growth in capital/income ratios comes from increases in the value of land capital. That would suggest George is still relevant to our world, and that conversations about IP might be secondary.
Comment · 11 years ago
Yep, and I define it at the top of the most that way. Rent = profit in excess of opportunity cost of the production factor.
Comment · 11 years ago
Soltas (the author) here. What I meant by "rents are not always bad" is that "rent" is a positive (i.e., value-free) concept, not a normative (moral) one. "Rent" in economics merely implies that the profits are in excess of a competitive-equilibrium outcome/allocation. In this case, the competitive outcome is perverse -- nobody innovates because, without IP, you pay for the cost of R&D but "copycats" can steal the idea without paying. (It's a prisoners' dilemma.) So profits from a patent are rent, insofar as they come from the protection per se. As I acknowledge, I think those rents are economically useful -- as an economist, I don't have anything interesting to say as to whether they are morally acceptable, as you discuss in your post. For example, it's a fair argument to say that "ideas should be free," and that the purpose of IP is not to enrich/honor/etc the innovator but merely to give him the incentive to contribute the idea to the social good. Or you might argue the opposite of that. I don't really have an opinion. Hopefully this clarifies the way economists use the word "rent."