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When I rent an apartment, I'm obviously receiving something of value in return. The question is where the landlord's increasing profit comes from. If they make more profit from building new housing, maintaining it, improving it, and taking on risk, that's creating value. But if the profit comes primarily from owning a scarce asset that has appreciated because of zoning restrictions, land scarcity, market conditions, or monopoly ownership then no new wealth is created. A massive number of businesses have failed in my city due to high rents. There are actually a good amount of commercial vacancies and in healthy market you would expect landlords to lower their prices to attract tenants -- but they don't. The actual value of the property is increasing at a rate that they actually don't have to rent out the space. The economics make it better for it sit empty. This is effectively destroying wealth for small business owners. Selling food isn't extraction. Growing more food, improving yields, creating better products, and serving more customers is wealth creation. My point is that an increasing amount of economic growth doesn't come from producing more value. It comes from finding ways to extract more revenue from existing value. Smaller packages for the same price, subscription fees, service charges, planned obsolescence, monopolistic pricing, rent increases, financial engineering, and other mechanisms that increase profits without a corresponding increase in output. In other words, "growth" is being driven by capturing a larger share of the pie rather than making the pie bigger. Just look around, this is what everyone is complaining about! |