[areyouseriousxx]

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]

https://en.wikipedia.org/wiki/Rent-seeking

[sokoloff]

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).

[imtringued]

You're twisting the situation now. It's not a canal. It's a free waterway that the land owner has no rights over.

[sokoloff]

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).

[areyouseriousxx]

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.

[sokoloff]

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.