> No. The literal definition of the economic drag on value creation is "rent seeking".
No, that's not the literal definition of "rent-seeking", not even close. I really wish this term had a different name because I see people on HN misusing it on a daily basis. "rent-seeking" is a specific term in economics that refers to entities colluding with the government to distort the market in their favor. The taxi medallion system is a classic example of rent-seeking. Owning property and leasing it out, whether it's land, vehicles, apartments, or machinery, is NOT rent-seeking.
> Be a part of the solution and build something. Do not be a part of the problem and become a landlord.
Would you prefer a world in which people are not allowed to rent apartments?
So Robert Shiller is not fully versed on the topic, in your opinion?
> The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. [1]
That's not the same thing as building/buying a house and renting it out, in my opinion (and is backed by the introductory paragraph on the URL you cited).
If you dig a canal and charge for passage, that is equivalent to renting a house (and is not "rent seeking" either per economics/public policy discussion).
I'm updating the situation to match the case of an improvement to land being rented (to wit, a house). I agree that a chain across a natural waterway is rent-seeking. A chain across a man-made canal is not (as the creator of that canal is seeking to increase their own wealth while creating additional wealth in total).
This is quite a stretch drawing a line between a feudal lord and a land lord.
Most landlords simply purchase, or very often inherit, their property, not unlike feudal lords, and then charge rent to live there. We are drawing some very small lines to separate those two.
I should add that I consider it much different if someone builds a structure and then rents it out. I, and most, would not consider that rend seeking, as they created new value in the creation of the house. Simply purchasing land and then renting it out, creates no new value.
Normal investments, stocks, bonds, etc help to create value in that the things they support need capital to be built. Land itself, will exist with or without capital resources. So the things that make capital markets work, do not apply to land.
How are the second and subsequent owners of a share of stock helping to create value in a way that the second and subsequent owners of a house are not? (Realizing that most people are renting houses/improved land, and very rarely unimproved land.) Both are providing value to the previous owner, which the previous owner considers when deciding to make the original investment.
> In public choice theory and in economics, rent-seeking involves seeking to increase one's share of existing wealth without creating new wealth [1]
> The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. [1]
Even if you don't rent out your residence (you live there), you're still collecting implicit rent. It's the value you would have been paying to be a renter, society loses because you exclude others from your residence. And every residence has to be owned by someone. You cannot escape rent seeking unless you're homeless or live in a jurisdiction with a "Land Value Tax".
That's an incredibly thin argument (society loses because you don't let someone pay rent to live in your home). You have to deny the existence of second-order intangibles which seed first-order tangible economic value such as community and social cohesion. If you like, ownership-based behavioural incentives. A 'stake in society'.
You misunderstand my argument entirely. The problem isn't that society loses because you don't let someone pay rent in your home. Society loses because you don't let someone else live in your home for free, but you do let yourself do that. This is the value you extract from owning the land, which nobody else can extract.
No, that's not the literal definition of "rent-seeking", not even close. I really wish this term had a different name because I see people on HN misusing it on a daily basis. "rent-seeking" is a specific term in economics that refers to entities colluding with the government to distort the market in their favor. The taxi medallion system is a classic example of rent-seeking. Owning property and leasing it out, whether it's land, vehicles, apartments, or machinery, is NOT rent-seeking.
> Be a part of the solution and build something. Do not be a part of the problem and become a landlord.
Would you prefer a world in which people are not allowed to rent apartments?