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by robertlagrant 972 days ago
Rent seeking is trying to create a legal/regulatory structure that means you can farm people. E.g. coming to the UK from some countries you need to prove you can speak English. Assuming you can, and you need a waiver on the test, there is a sole organisation you can pay hundreds of pounds to to send them your degree certificate, and for them to say in some government UI "yes, this probably means they can speak English".

It's not just general and optional recurring payments.

1 comments

Regulatory lock-in is certainly one method of guaranteeing rent. I'd argue copyrights and patents are as well. Microsoft and Google get accused of rent seeking because of their near monopolies, but I don't think most of their income is particularly based on regulation. You find other forms of lock-in can come from network effects in social media (Facebook), or B2B lock-in due to outsourcing of basic business operations (IBM, Oracle, Salesforce).
I think the accusations can be divided into several categories:

- actual rent-seeking (as you say, not really true for companies such as Microsoft and Google, except where you see e.g. government documents needing to be submitted in Word. But that's very likely incompetence on behalf of the bureaucracy rather than Microsoft)

- having a dominant market position due to having a very high quality product, or set of products that work together well

- a random grudge phrased as rent-seeking, because the Twitter user in question doesn't know what rent-seeking is, but has seen their friends accuse companies of it

I don't know what the proportions are, but I suspect the former is minimal to nonexistent for e.g. Google.