I work as a consultant/research analyst. My company and career are based entirely around rent seeking. Sometimes it's tragically comical how blatant this kind of thing can get. You can go to meetings and see that everybody in the room (or Teams call) is aware that what you're doing is either pointless or actively harmful, but nobody cares because the project is needed to tick a box or to appease some weird fringe, or is a vanity project for some manager or bureaucrat with nothing better to do. People often don't care because it's not their money being spent and they know that they'll get in trouble if they say anything, so they just go along with it and tell the client what they want to hear (I am one of these people). As bad as the indifferent people are though, the true believers, the people who think their rent seeking is actually moral or a force for good, are worse, because they will pay you to tell them something they already think they know, use it to justify bad decisions, and then when they fail, pay you to explain how the main reason they failed is because people didn't listen to them enough or give them enough money. The true believers tend to be the most aggressive, so they take control quickly and since most of the people they're dealing with are indifferent, they get their way easily and steamroll over everyone else. The apathetic people do this too, but they're generally smart enough to know their limits, in my experience they tend to recognise that if they go too far they risk losing control, or needing to explain themselves, they're the kind of parasites who just want a free meal. The true believers are the kind that will eventually kill the host organism.
Thanks for sharing your experience- i was just wondering if theres an example in the digital world and your comment helped. Sorry for your dilemma; i imagine its not that easy to leave in order to meet your costs, but good luck!
My experience has been very different as a consultant, and one of the reasons why i started my own consulting agency is the horrible business/management practices in most of the businesses in my place, leading them to go bankrupt or shutdown. For a large company what you've said may be true, but for medium and small enterprises the lack of proper guidance could directly lead to their demise.
Unfortunately we are full of these people who take without giving and they call themselves successful. As Einstein said, "strive to be a person of value, not a person of success"
The Landlord did not work for or earn his success. But I know plenty of people who are successful who earned it and helped employ many people to feed there families. I’d be weary about minimizing go getters. We all benefit from inventiveness. So “landlords” should not all be treated as the Villain. There are many landlords that got there the blue collar route. And they’ve earned it.
@@stevencapitanocalitri5321 being a landlord isn't a job, they bought property it is their responsibility to take care of it. I'm not in the business of feeling bad for a good landlord. a landlord is a landlord.. if he takes care of his property then ok. that isn't a thing that needs any kind of accolades. I am cool with landlords who are just renting out a second home due to having to move for a job or something and maintains the property. follows the law and doesn't neglect their tenants.. Most landlords don't do this, some have found devious ways to illegally evict tenants and leave properties empty making the housing market harder to enter and using it as a pretext to increase rents.. This isn't outlier behavior so I am not feeling bad for any "Suffering" landlords out there. they made choices, thought they could make some investor cash, if it doesn't work out they made a bad investment plain and simple. It's different if it is property they live on and times are just hard. for that I tell them to get a job.
@@stevencapitanocalitri5321even if they earned their income before they became a landlord, as soon as they became a landlord they became rent-seeking thieves who stole value created by others through their leverage of the land ownership.
In Australia, rent-seeking is the main game in town, mainly through banking and property. Literally trillions of dollars wasted just to trade houses back and forth between each other. Insanity.
That weirdly reminds me of how NFTs work. The value goes up from mere trading back and forth and then finally selling it to someone who likes 'valuable' things
As a carpenter, I've often thought of this when seeing something that I built years ago. As a very young man, focused on pursuing wealth, I took an aptitude test for getting into insurance sales. After the initial disappointment of hearing that I failed it, my attitude quickly changed when I realized what that actually revealed.
"The first man who, having fenced in a piece of land, said 'This is mine', and found people naïve enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody." - Jean-Jaques Rousseau, 1754
Spoken like a proper white man from an era when they decided they are the most civilised and needed to ‘civilise’ people who weren’t white, when actually they, as a society were nothing more than perfumed barbarian-savages. Territory marking, and fighting over it’s dominion is as natural, and essential, in the animal world as the sun and water are. It has been happening long before even primates evolved as an order and it’ll continue to happen as long as there is life on earth. We have just taken it to unnatural level with the aid of technology. Humans aren’t doing anything that was unseen by Mother Earth before us, we are (maybe) just doing it in ways that no other species have ever done before us.
@@rajath275 No. Spoken like a scholar who understands the difference between profit and exploitation. In your racist zeal to lionize sociopathic behavior, please don't mistake the revolutionary for the people he was rebelling against, either.
@@ezakustam ‘lionise sociopathic behaviour’? Damn, looks like people still cannot think above the binary even in the 21st century. How long do you think people can be fooled by using using big words for little meaning, to defend thoughts that lacks fundamental roots that would agree with any modern logic and science? The problem with the west has always been that the people of today can see the world only through the obsolete lenses made by people who died centuries ago during a period that was vastly different from current realities and far removed from any real knowledge of facts of the world that wasn’t a construct of the post Roman, Eurocentric society. Any legitimate challenge to that automatically becomes racist, fringe, supremacist, yada yada yada.
You think there were no wars over territory before private ownership of land? Even non-human animals fight of territory. And what about "the Tragedy of the Commons"?
@@ronmoore6598 that fight goes to the grave with those animals. Meanwhile foreigners pretend like they can come onto someone else’s place and own it. How about I steal your stuff and sell it back to you?
This could literally be most of my country, there's a constant effort by some otherwise lazy people make money by privatising public spaces. Even libraries weren't spared, and parks are closely following (most parks take a fee to enter these days anyway). Thank you for teaching me what the concept was called!
Totally, even the state will charge you for using the "public space", which actually means, you're not part of the public. Hence, what's everybody's is nobody's, but the state's profit.
@@CosmoviZionn If the state is using the money its making for, say, the maintenance of that public space, I could be okay with it. But I still think ABSOLUTELY public spaces are a must, because there is always someone in the world who doesn't even have the money needed to enter a park
Rent seeking has become a larger and larger part of the US. You see it in the government of course, but you also see it with the mass number of land lords, who inevitably become the only ones that can afford to buy more property due to the prices. You see it in people purchasing companies then taking the lions share of the profits from the people that actually do the work, you see it in finance, crypto, and many other places. They usually have skin in the game, just not nearly as much as the people buy charge over. The ratios are rarely the same. I’m not a socialist, just a capitalist that understands capitalism can only go so far before the people losing so vastly out number those taking the winnings that a revolution or tyranny is inevitable. I think we’re getting close.
And you know, I like the way Robert Kyosaki writes & presents alternate views on how to prosper in a world where jobs are disappearing, but at the end of the day, what he teaches is how to be a better 'rent seeker.'
Rent-seeking is enabled when excessive wealth is passed to the generation who did not earn it. With the power of their wealth and their lack of ability, they degrade the government and economy. Because of their resources, they are also unequal under the law. The question would then be, who controls the excessive wealth.
These new economic theory videos ARE GENIUS I love you guys keep it up. Rent Seeking and Skin in the game, super important concepts that are not burden with crazy equations and graphs. Keep up the good fight, enlighten the people like me who have trouble making sense of the world!
@@sweetgeorgia70 The USA too. Taxation without representation. Very little of the taxes goes to road work and the community. Our entire government is to benefit those in power, and politics here is just charades.
This issue is also generational. Why should people born decades earlier be able to rig the system in their favour and against the interests of future generations.
This concept brings to mind the M.O of faith healers, evangelical pastors, and false prophets in the U.S and Africa. They fleece the innocent of their hard-earned money, while enriching themselves, on the premise that their followers owe God money to receive 'blessings'.
Love this video, very good overview. I do think that there are some good reasons to have licenses for things-- but those licenses should probably be free & relatively easy to get, bc my reasons for them are record keeping & trying to prevent over fishing/ hunting/ etc. Probably only for commercial enterprises or hunting for sport? If you only fish/ hunt to feed your family or community, it's unlikely to make much environmental impact. But that's admittedly not entirely germaine to the topic of this video I guess lol.
I am a rent seeker too, and I agree that it is horrendous to pay rent. My rent is set extremely low $100 a month, to give them a chance to get their own property. I also suggest rent seekers offer rent to own options...
Well....you must be one in a million. Not only do I pay rent, but I am regularly emotionally abused by the guy I rent from. Can't afford to move. Soooo tired.
0:08 a business, no matter how productive, does not create new wealth "for others". It makes more with less but still only for itself (though it may be taxed, but the same can be truth of wealth that is the result of rents). Ultimately rent seeking is a form of private taxation that concentrates wealth in the hands of a few, leading to inequality, poverty and depravation. Other than that good video, particularly liked this quote at 3:52
Not exactly true, since a business do in fact create wealth when it obtains revenue by providing others with products or services others want to exchange for money (i.e. the product/service is in demand). A business that doesn't generate a product or service demanded by others, and doesn't satisfy any need, simply gets bankrupt. This works this way only in a free market system, but in the case in a non-free market economy (with monopolies, for example) the State or other violent agent tries to manipulate the market by either applying penalties for a product or for buying from a certain company, or could ban them altogether (as it happens in socialist economies where the State basically bans privately-owned companies and withholds unproductive negative-income State monopolies).
4:00 "...when the land was in common..." A rare concept in recorded history. Civilizations have always been based on land ownership by the crown or the wealthy. In the feudal system, there was always a quid pro quo between the crown, the lord to whom the fief of land was given, and the peasants who worked it. Everyone got something. For the fiefdom, the king retained the loyalty of his barons. For his labor, the peasant got the use of land that was not his and the lord's protection in the event of attack.
@@user-dr5me1xt4y I'm not so sure. Even before agriculture, tribes were territorial. Land was only "in common" within the tribe that hunted on it and they defended it from other tribes. I doubt much changed when herding began. Tribes still protected their grazing lands. Once agriculture became the norm, hierarchal societies developed and land ownership became the norm.
@@bigredracingdog466 Some tribes were territorial, yes. Many groups were mobile and fluid/open to other groups. Their circumstances most often did not allow for accumulation and so they would not have shared our modern notions of property. They were fiercely egalitarian ("primitive communism"). Even if we conclude that they were territorial, you still had groups sharing access to "their" geographic area in a non-hierarchical way within their groups. Private ownership is the norm today, but we have modern examples of people taking a more communal and egalitarian approach to land distribution, e.g. the Zapatistas.
@@user-dr5me1xt4y The problem with those communities is that they don't scale up to a national level. A small commune can change and adapt to suit local challenges, but national bureaucracies as in the Soviet Union and the PRC made a mess of communal "ownership."
I question the premise that such a configuration isn't scalable, or that trying to scale it up necessitates bureaucracy. All large complex systems are made up of smaller and smaller components, right? A modern U.S. state is composed of different counties with various cities, the cities are made up of different boroughs/neighborhoods, etc. We could keep this level of organization while changing from the current centralized federalist system which has a top-down hierarchy to a decentralized network of confederations where people are able to actually govern themselves. @@bigredracingdog466
Good explanation, I'll link this when I have to quickly get the concept to some people. Maybe you can go in to a little bit of Georgism in the next video on the topic too while at it? The most vivid modern large-scale rent seeking activity in the Western and Asian Big cities, is definitely the housing/property/mortgage market.
This sounds a lot like licensing. These days, you need to get a license for almost everything. You need a license to braid hair. You need a license to open businesses. You need a license to sell cigarettes. Everything needs a license. It is not merely done for financial reasons, but the state's ever-growing need to control everything. It is all done under the guise of protecting the consumer from incompetent or immoral practitioners. However, the free market is much better at dealing with this problem. For starters, people who provide low-quality goods and services will quickly get a bad reputation. The same goes for scammers and cheaters. Honest people who provide high-quality goods and services will get a good reputation. Furthermore, businesses will want to build trust with customers, so they seek certification and verification from independent inspectors. Let's say a restaurant opens up. The owner will want to hire good workers to work there. He will want to make sure his restaurant is clean and safe. Since it is a new restaurant, people don't know if it is good or not. The owner will seek an inspection from a reputable firm to convince customers that his restaurant is clean and safe. He also knows that if his food makes people sick, then it will be very difficult to convince everyone to eat there, again.
McDonalds are a prime example of this. They started out as a standard burger joint, but in time realised that owning the land the restaurant was on, and franchising the business model was more profitable. Now McDonalds makes more money from renting property than from the burgers.
Based on this, one can argue that the biggest rent-seekers seem to be the government, collecting a tax on everything. But then in theory, they would create the frameworks and enforce laws that allow for productive enterprises to produce, e.g., police upholding the law. We can argue that landlords are the rent-seekers, for they own the land but often do not add anything productive, such as when landlords own a house and just rents it out for money. But the landlord would also be liable for repairs and maintenance of said property, that is productive. On the other hand, without private ownership, productivity would fall, like in communism. Like all things in life, moderation is vital. Having competent people and institutions with a vested interest in seeing something become productive would do wonders to increase its productivity. In this example, instead of building a chain to block fishermen, the lord could build a fishery market to facilitate trading, unloading fish, maintaining boats, etc. (assuming this leads to increased number of fish), then have all the fishermen pay a fee for its use. Fishermen, peasants, and the lord himself would all gain from such a project.
Landlord _per se_ are not rent-seekers, since they provide what is not naturally there, namely a house or any kind of development included in a property. A landlord of an empty lot would be more akin to a rent-seeker, but even those cases would need to be analyzed closely and individually, because there are many ways on how value can be added to a property. However, latinfundia and withholding of great quantities of wild terrain is certainly rent-seeking behavior. That's why I think every citizen of a given country has to be granted by law with a certain (small?) amount of land that they can possess without paying anything; if they want to expand that initial, basic and free lot, they have to pay for every extra hectare or acre on top of that provision. That would grant that every citizen owns enough land to at least have a house, and therefore much harder to find themselves homeless, and by the other hand would prevent the possession by single individuals of large amounts of unproductive land.
Isn't all land owned by the government somehow? Even if an individual 'owns' a piece of land. The individual has to pay 'property tax'. Tourist revenues. Etc. Love the content!
@@karanushree97 Agreed and disagreed. I understand it's easier to criticize. Not all of it comes back in quality roads, transportation, water or schemes. It's a business model now and business means profit. The aspect of 'Rent' is what I'm referring to from the video.
@@karanushree97 It doesn't all come back to those things though. There's administration costs. Costs that wouldn't exist in a private transaction between the local community (pooling money together for road maintenance) and the firm they hire to do said task. Taxation is wasted money that is literally stolen through coercion by the government.
Depends. In a kingdom, the king owns all the land. In a republic, the public own all the land. The government is merely the management of sovereign land.
In India education system is likely to be following this for ages Where they conduct exams to get into medical or reputed universities with syllabus who can cleared by rich people who have paid lump-sum amount to school and tutors .. And others like us made to study with unprofessional teacher and unwanted stuff syllabus just to give us false gratification of that we're educated making us to waste time subjecting ourselves to learn with no proper guidance and support . In last 5 years students are make use of resources available on internet because of free resources available on internet.
As a small benefit to your problem (and I’m sorry about your situation), I find Indian based childrens videos much more educational than North American content. Now I understand why, it’s based on necessity.
Ok, but if they hike the prices on fish, people will simply choose other foods, if only out of necessity. People aren't, as Thomas Sowell says, chess pieces you can push around a board. They respond to circumstances imposed on them.
of course, and that's why rent-seeking behaviour propagate. To continue the analogy of fish, assuming there's other foods available, let's say grain, people will choose that instead. This would probably bump the price up by added demand, and in a functioning market economy lead to increased supply (again assuming there's capacity for that), maybe some of the fishermen career switch to farmer (doubtful). This would lead to reduced rent gained from fish for the rent seeker, and more overall profit in the grain producers. Now what would a rent-seeking lord do in that situation? Remove the chains or fences? Probably not, unless the people have a say in it, and instead add rent-seeking behaviour on the farmer instead. (the latter option is almost always cheaper than the former, if Tullock paradox apply) This can go on for a long time, like a game, until some form of Nash equilibrium is reached; Lord can't extract more rent without hurting his total income, and the people can't adapt their behaviour further to increase their standing. my 5cent.
So, the example used (the land owner) is somewhat flawed for a modern analogy. He owns the land and has a resource people would like to use. He has 2 options: let them use it for free or charge them. The video suggests this is the only concern (the landlord making money) but the reality is that people on other people's land places the landowner in a liability situation. If the people hurt themselves, others, have accidents and whatnot, they sue the landowner for lack of safety equipment, lack of signage, lack of controlled access and so on. The landlord is not so much providing a service as he is assuming a responsibility...and that can cost him big.
The story of the recent decline of the already-disfunctional and and ineffective British economy and particularly the exploitation of other parts of the country for the benefit of London and SE England and those in power. A story of low level corruption, the mechanism of which is largely invisible or poorly understood but the basics of which are fairly readily explained in the manner of this video.
I think this concept is something that everyone should have down cold before they graduate high school. The US doesn't have the kind of blatant corruption that a lot of banana republic type countries have. I mean we're not out paying bribes to government employees or dealing with mafias. But rent-seeking? Oh, we've got rent-seeking. But I think a lot of people aren't really looking for it so they don't see how much it costs them. So when the legislature passes some law with some innocuous pretext then people aren't looking to see what market is becoming less free and who's getting rich from that law.
WHAT?!?!?! Your corruption is legal, they’re not even hiding it anymore lol. Lobbyists. The US is run by corporations. There is no Left or Right. Politicians trade stocks based on the advance knowledge of law changes because of the committees they sit on. How does Nancy Pelosi beat the top 5 Hedge Fund managers for the past 5 years? It’s amazing.
Well, owning properties has been the best payed job for decades thanks to increased public spending and low interest rate. I'll keep voting for politicians who keep increasing my real estate value and increases the inequality in the society. Let the future generations pay the price.
On the other hand its: "The Tragedy of the Commons" when there is no private property. So its not so simple, and private control of resurces it's not allways bad.
@@DieNibelungenliad No, its something in opposition. But we need keep in mind both occurrence, to get complete picture. Do not judge or draw far-reaching conclusions after becoming familiar with the disadvantages of one occurrence. Attempting to "fix it" can make the latter appear negative, which can be even worse.
The old school grown ups, like me, call this old fashioned looting. A major unintended consequence is that a major military alliance produces less artillery ammunition than their adversary . Funny how stealing never profits you against men that have honor and do not steal.
Become a rent seeker. Gain fabulous wealth to the point that the truly powerful will follow you. Then deceive them and trick them into acting in the public interest. Watch them fail, and enjoy the fruits of taking down an unjust system from the inside out.
The Entire world is made up of Rent Seekers. I think you need to be extraordinary to add 'Actual Value' in this world. ( like your video is extraordinary ) But consultants, accountants, real estate agents, lawyers etc. are all rent seekers. Brilliant Engineers, Inventors, Amazing Scientists, Brilliant Architects, Brilliant Designers on the other hand aren't. And Rent Seekers get the talented people to make better Toys ( Arms ), Tools, Laws, Plans, Tax Structures, Spying Mechanisms, Machines to Seek Rent in a more effective manner. When the naive innocent talented people feel they are just doing it for the good of the humanity.
I don't know, offering your skills and services doesn't seem like rent seeking exactly. It doesn't reach the value adding of the second list of characters, but I don't think its rent seeking. You are offering some value to someone else who doesn't know their way around the law or taxes, etc.
I've heard this term used but never quite got it. In my mind I related it to a landlord, but most landlords do add value, upkeep and improve the building, offer housing that's easier to move in and out of than an owned home. Anyway, the rent seeking described in the video is absolutely a detriment to society and is anti meritocratic. I would love it if it could be gotten rid of. That said is there a value to "rent seeking" in the example of a land owner managing the resources of their land? Like if they didn't charge for people to use it would it fall victim to a tragedy of the commons?
انا أختكم من فلسطين من قطاع غزة المحاصر اعيش ظروف سيئة وقاهرة أولادي جميعهم مرضى ويعانون من اعاقات وهم بحاجة ماسة للادوية والمتابعة عندهم امراض مزمنة وانا ليس بحيلتي أن اوفر اجتياجاتهم وبيتي بالايجار وليس لي دخل ثابت اعيش منه مصروف اولادي من ايدي الناس فأتوجه اليكم ان تنظرو لأولادي بعين الرحمة والشفقة وتمدو يد العون لهم الله يجبر بخاطركم (ما نقص مال من صدقة) ارجوكم ان تمدو يد العون لأولادي.....
*"seek profits that the Government will TAX so they need not work"* so no, neither profits nor revenues had without work *HOWEVER* if the *LAZY INDIGENT MONEY PRINTING PEOPLE SET UPON SOCIETY ALL BE MADE WORTHLESS* yes indeed guranteed rent seeking and far worse be the result of that *AS THE WORKERS STILL MUST GET PAID* and no Government in the World is in charge of that only the producers do that... *WHICH INCLUDE THE CREDITORS I MIGHT ADD* 😊😊
From a "did not work a day in his life" perspective, the rent seeker is working to erect barries that will facilitate the rent-seeking. Why not work to get rid of work (in all its expansive sense) altogether. That'll be freedom. AGI and Nuclear Fusion.
![Capitalism vs. Socialism: Which Works Better? [Deep Dive into Public Data Analysis]](http://i.ytimg.com/vi/TohYugHlB8I/mqdefault.jpg)
I work as a consultant/research analyst. My company and career are based entirely around rent seeking. Sometimes it's tragically comical how blatant this kind of thing can get. You can go to meetings and see that everybody in the room (or Teams call) is aware that what you're doing is either pointless or actively harmful, but nobody cares because the project is needed to tick a box or to appease some weird fringe, or is a vanity project for some manager or bureaucrat with nothing better to do. People often don't care because it's not their money being spent and they know that they'll get in trouble if they say anything, so they just go along with it and tell the client what they want to hear (I am one of these people).
As bad as the indifferent people are though, the true believers, the people who think their rent seeking is actually moral or a force for good, are worse, because they will pay you to tell them something they already think they know, use it to justify bad decisions, and then when they fail, pay you to explain how the main reason they failed is because people didn't listen to them enough or give them enough money. The true believers tend to be the most aggressive, so they take control quickly and since most of the people they're dealing with are indifferent, they get their way easily and steamroll over everyone else. The apathetic people do this too, but they're generally smart enough to know their limits, in my experience they tend to recognise that if they go too far they risk losing control, or needing to explain themselves, they're the kind of parasites who just want a free meal. The true believers are the kind that will eventually kill the host organism.
Ding Ding Ding!!!
I.E.
the DSA and their Demigods
Damn, thats some heavy shit. Its time to change careers, bro
ever consider you do nothing worthwhile with your job and should find a career that does something useful?
Thanks for sharing your experience- i was just wondering if theres an example in the digital world and your comment helped. Sorry for your dilemma; i imagine its not that easy to leave in order to meet your costs, but good luck!
My experience has been very different as a consultant, and one of the reasons why i started my own consulting agency is the horrible business/management practices in most of the businesses in my place, leading them to go bankrupt or shutdown.
For a large company what you've said may be true, but for medium and small enterprises the lack of proper guidance could directly lead to their demise.
I knew about this concept, but now it has a name. Thanks for educating us, Sprouts!
It's also called being jewish
Unfortunately we are full of these people who take without giving and they call themselves successful. As Einstein said, "strive to be a person of value, not a person of success"
The Landlord did not work for or earn his success. But I know plenty of people who are successful who earned it and helped employ many people to feed there families. I’d be weary about minimizing go getters. We all benefit from inventiveness. So “landlords” should not all be treated as the Villain. There are many landlords that got there the blue collar route. And they’ve earned it.
@@stevencapitanocalitri5321 being a landlord isn't a job, they bought property it is their responsibility to take care of it. I'm not in the business of feeling bad for a good landlord. a landlord is a landlord.. if he takes care of his property then ok. that isn't a thing that needs any kind of accolades. I am cool with landlords who are just renting out a second home due to having to move for a job or something and maintains the property. follows the law and doesn't neglect their tenants.. Most landlords don't do this, some have found devious ways to illegally evict tenants and leave properties empty making the housing market harder to enter and using it as a pretext to increase rents.. This isn't outlier behavior so I am not feeling bad for any "Suffering" landlords out there. they made choices, thought they could make some investor cash, if it doesn't work out they made a bad investment plain and simple. It's different if it is property they live on and times are just hard. for that I tell them to get a job.
@@stevencapitanocalitri5321even if they earned their income before they became a landlord, as soon as they became a landlord they became rent-seeking thieves who stole value created by others through their leverage of the land ownership.
Realtors and landlords
In Australia, rent-seeking is the main game in town, mainly through banking and property. Literally trillions of dollars wasted just to trade houses back and forth between each other. Insanity.
Germany got lots of that too. The hugely complex tax system allows for lots of rent seekers happily strive in property, law and as tax consultants.
That weirdly reminds me of how NFTs work. The value goes up from mere trading back and forth and then finally selling it to someone who likes 'valuable' things
@@PichuElric NFTs are not necessary. People who lose money there shouldn't even have that money...
Pretty sure rent seeking is the main game in most of the developed world.
As a carpenter, I've often thought of this when seeing something that I built years ago. As a very young man, focused on pursuing wealth, I took an aptitude test for getting into insurance sales. After the initial disappointment of hearing that I failed it, my attitude quickly changed when I realized what that actually revealed.
"The first man who, having fenced in a piece of land, said 'This is mine', and found people naïve enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody."
- Jean-Jaques Rousseau, 1754
Spoken like a proper white man from an era when they decided they are the most civilised and needed to ‘civilise’ people who weren’t white, when actually they, as a society were nothing more than perfumed barbarian-savages. Territory marking, and fighting over it’s dominion is as natural, and essential, in the animal world as the sun and water are. It has been happening long before even primates evolved as an order and it’ll continue to happen as long as there is life on earth. We have just taken it to unnatural level with the aid of technology. Humans aren’t doing anything that was unseen by Mother Earth before us, we are (maybe) just doing it in ways that no other species have ever done before us.
@@rajath275
No. Spoken like a scholar who understands the difference between profit and exploitation. In your racist zeal to lionize sociopathic behavior, please don't mistake the revolutionary for the people he was rebelling against, either.
@@ezakustam ‘lionise sociopathic behaviour’? Damn, looks like people still cannot think above the binary even in the 21st century. How long do you think people can be fooled by using using big words for little meaning, to defend thoughts that lacks fundamental roots that would agree with any modern logic and science? The problem with the west has always been that the people of today can see the world only through the obsolete lenses made by people who died centuries ago during a period that was vastly different from current realities and far removed from any real knowledge of facts of the world that wasn’t a construct of the post Roman, Eurocentric society. Any legitimate challenge to that automatically becomes racist, fringe, supremacist, yada yada yada.
You think there were no wars over territory before private ownership of land? Even non-human animals fight of territory. And what about "the Tragedy of the Commons"?
@@ronmoore6598 that fight goes to the grave with those animals. Meanwhile foreigners pretend like they can come onto someone else’s place and own it. How about I steal your stuff and sell it back to you?
This could literally be most of my country, there's a constant effort by some otherwise lazy people make money by privatising public spaces. Even libraries weren't spared, and parks are closely following (most parks take a fee to enter these days anyway).
Thank you for teaching me what the concept was called!
Totally, even the state will charge you for using the "public space", which actually means, you're not part of the public. Hence, what's everybody's is nobody's, but the state's profit.
@@CosmoviZionn If the state is using the money its making for, say, the maintenance of that public space, I could be okay with it. But I still think ABSOLUTELY public spaces are a must, because there is always someone in the world who doesn't even have the money needed to enter a park
@@PichuElric I don't disagree with that.
Really? Wow. Didn't know that type of thing was going on.
🤪 L I T E R A L L Y 🤪
Did you ever stop to think maybe it's LITERALLY all countries and that LITERALLY not everything revolves around you?
Rent seeking has become a larger and larger part of the US. You see it in the government of course, but you also see it with the mass number of land lords, who inevitably become the only ones that can afford to buy more property due to the prices. You see it in people purchasing companies then taking the lions share of the profits from the people that actually do the work, you see it in finance, crypto, and many other places. They usually have skin in the game, just not nearly as much as the people buy charge over. The ratios are rarely the same.
I’m not a socialist, just a capitalist that understands capitalism can only go so far before the people losing so vastly out number those taking the winnings that a revolution or tyranny is inevitable. I think we’re getting close.
Word!
And you know, I like the way Robert Kyosaki writes & presents alternate views on how to prosper in a world where jobs are disappearing, but at the end of the day, what he teaches is how to be a better 'rent seeker.'
Rent-seeking is enabled when excessive wealth is passed to the generation who did not earn it. With the power of their wealth and their lack of ability, they degrade the government and economy. Because of their resources, they are also unequal under the law. The question would then be, who controls the excessive wealth.
These new economic theory videos ARE GENIUS I love you guys keep it up. Rent Seeking and Skin in the game, super important concepts that are not burden with crazy equations and graphs. Keep up the good fight, enlighten the people like me who have trouble making sense of the world!
It almost sounds like goverment in some countries.
New Zealand is a classic but the UN Agenda 2021 and Agenda 2030 are being slavishly being followed by all political parties.
My thoughts to.
Hungary. 😒
It is
@@sweetgeorgia70 The USA too. Taxation without representation. Very little of the taxes goes to road work and the community. Our entire government is to benefit those in power, and politics here is just charades.
This issue is also generational. Why should people born decades earlier be able to rig the system in their favour and against the interests of future generations.
I think "rent" should be replaced with "toll"...its less misreading
It's not a new concept. Been referred to it as such for a long time. A lot of economic terms are unclear: 'quantitative easing', for example. . . :)
He's renting access to the river.
Landlords are the prime example of rent seekers.
Georgism addresses this!
Great information and illustrations. This lesson on rent is thought provoking. Makes me rethink investing, even if most of us didn't inherit wealth.
In Indonesia, the road belong to gangsters who call themselves to be the parking men. We have to pay them for parking.
Great example
Same in Lisbon Portugal. Homeless men in parking lots will ‘protect’ your car while it’s parked for a donation of course.
This concept brings to mind the M.O of faith healers, evangelical pastors, and false prophets in the U.S and Africa. They fleece the innocent of their hard-earned money, while enriching themselves, on the premise that their followers owe God money to receive 'blessings'.
wow yea that does sound like it. this term seems to be using EVERYWHERE
Love this video, very good overview. I do think that there are some good reasons to have licenses for things-- but those licenses should probably be free & relatively easy to get, bc my reasons for them are record keeping & trying to prevent over fishing/ hunting/ etc. Probably only for commercial enterprises or hunting for sport? If you only fish/ hunt to feed your family or community, it's unlikely to make much environmental impact.
But that's admittedly not entirely germaine to the topic of this video I guess lol.
This is how the Nigerian government operates. So sad
🙏🙏🙏🙏🙏
These hands are clapping
An excellent video and even better topic. Well done Sprouts team!
I am a rent seeker too, and I agree that it is horrendous to pay rent. My rent is set extremely low $100 a month, to give them a chance to get their own property. I also suggest rent seekers offer rent to own options...
Well....you must be one in a million.
Not only do I pay rent, but I am regularly emotionally abused by the guy I rent from.
Can't afford to move.
Soooo tired.
0:08 a business, no matter how productive, does not create new wealth "for others". It makes more with less but still only for itself (though it may be taxed, but the same can be truth of wealth that is the result of rents). Ultimately rent seeking is a form of private taxation that concentrates wealth in the hands of a few, leading to inequality, poverty and depravation.
Other than that good video, particularly liked this quote at 3:52
Not exactly true, since a business do in fact create wealth when it obtains revenue by providing others with products or services others want to exchange for money (i.e. the product/service is in demand). A business that doesn't generate a product or service demanded by others, and doesn't satisfy any need, simply gets bankrupt. This works this way only in a free market system, but in the case in a non-free market economy (with monopolies, for example) the State or other violent agent tries to manipulate the market by either applying penalties for a product or for buying from a certain company, or could ban them altogether (as it happens in socialist economies where the State basically bans privately-owned companies and withholds unproductive negative-income State monopolies).
In UK Royal family are the main land owners.
4:00 "...when the land was in common..."
A rare concept in recorded history. Civilizations have always been based on land ownership by the crown or the wealthy. In the feudal system, there was always a quid pro quo between the crown, the lord to whom the fief of land was given, and the peasants who worked it. Everyone got something. For the fiefdom, the king retained the loyalty of his barons. For his labor, the peasant got the use of land that was not his and the lord's protection in the event of attack.
Rare indeed in *recorded* history. Go back a little further, and for 99% of our existence as a species this common "ownership" was the norm.
@@user-dr5me1xt4y I'm not so sure. Even before agriculture, tribes were territorial. Land was only "in common" within the tribe that hunted on it and they defended it from other tribes. I doubt much changed when herding began. Tribes still protected their grazing lands. Once agriculture became the norm, hierarchal societies developed and land ownership became the norm.
@@bigredracingdog466 Some tribes were territorial, yes. Many groups were mobile and fluid/open to other groups. Their circumstances most often did not allow for accumulation and so they would not have shared our modern notions of property. They were fiercely egalitarian ("primitive communism"). Even if we conclude that they were territorial, you still had groups sharing access to "their" geographic area in a non-hierarchical way within their groups.
Private ownership is the norm today, but we have modern examples of people taking a more communal and egalitarian approach to land distribution, e.g. the Zapatistas.
@@user-dr5me1xt4y The problem with those communities is that they don't scale up to a national level. A small commune can change and adapt to suit local challenges, but national bureaucracies as in the Soviet Union and the PRC made a mess of communal "ownership."
I question the premise that such a configuration isn't scalable, or that trying to scale it up necessitates bureaucracy. All large complex systems are made up of smaller and smaller components, right? A modern U.S. state is composed of different counties with various cities, the cities are made up of different boroughs/neighborhoods, etc. We could keep this level of organization while changing from the current centralized federalist system which has a top-down hierarchy to a decentralized network of confederations where people are able to actually govern themselves. @@bigredracingdog466
Thank you
Could you make a video on driving anxiety and where it derives from? And how to get over it?
Can you be specific and post it here? www.sprouts.featureupvote.com
This is what right now transatlantic corporations do nowadays.
Closing all the mom and pop stores and forcing everyone to walmart or Amazon to buy
Such as "You will own nothing and be happy".
Support the teaching of economics in schools: patreon.com/sprouts
Like selling you free water in bottles after you contaminate the sources so no one can drink it free....
Taxi plate license price is the first comes to my mind. Taking Without Giving
Nestle: *Sweating*
Good explanation, I'll link this when I have to quickly get the concept to some people.
Maybe you can go in to a little bit of Georgism in the next video on the topic too while at it? The most vivid modern large-scale rent seeking activity in the Western and Asian Big cities, is definitely the housing/property/mortgage market.
"In theory" seems like a silly thing to say about the most common economic practice in the entirety of the capatalist world. 😑
This sounds a lot like licensing. These days, you need to get a license for almost everything. You need a license to braid hair. You need a license to open businesses. You need a license to sell cigarettes. Everything needs a license. It is not merely done for financial reasons, but the state's ever-growing need to control everything. It is all done under the guise of protecting the consumer from incompetent or immoral practitioners.
However, the free market is much better at dealing with this problem. For starters, people who provide low-quality goods and services will quickly get a bad reputation. The same goes for scammers and cheaters. Honest people who provide high-quality goods and services will get a good reputation. Furthermore, businesses will want to build trust with customers, so they seek certification and verification from independent inspectors.
Let's say a restaurant opens up. The owner will want to hire good workers to work there. He will want to make sure his restaurant is clean and safe. Since it is a new restaurant, people don't know if it is good or not. The owner will seek an inspection from a reputable firm to convince customers that his restaurant is clean and safe. He also knows that if his food makes people sick, then it will be very difficult to convince everyone to eat there, again.
Your videos are so amazing and well produced. I wish this had more views!
McDonalds are a prime example of this. They started out as a standard burger joint, but in time realised that owning the land the restaurant was on, and franchising the business model was more profitable. Now McDonalds makes more money from renting property than from the burgers.
This is the ultimate way to get wealthy.
It is the system that so much of Singapore's economy is based on, particularly in properties.
i've only heard good things about singapore's housing
This reminds me of how the TH-cam app requires you to pay in exchange for the ability to play videos in the background.
Im talking about on phones. Ofcourse, theres a way to circumvent this but you get my point. This wasnt the case before
Great illustrations !!
Amazingly accurate....whoa!!
It is very obvious but what are we going to do about it? Where to power stops?
Based on this, one can argue that the biggest rent-seekers seem to be the government, collecting a tax on everything. But then in theory, they would create the frameworks and enforce laws that allow for productive enterprises to produce, e.g., police upholding the law.
We can argue that landlords are the rent-seekers, for they own the land but often do not add anything productive, such as when landlords own a house and just rents it out for money. But the landlord would also be liable for repairs and maintenance of said property, that is productive. On the other hand, without private ownership, productivity would fall, like in communism.
Like all things in life, moderation is vital. Having competent people and institutions with a vested interest in seeing something become productive would do wonders to increase its productivity. In this example, instead of building a chain to block fishermen, the lord could build a fishery market to facilitate trading, unloading fish, maintaining boats, etc. (assuming this leads to increased number of fish), then have all the fishermen pay a fee for its use. Fishermen, peasants, and the lord himself would all gain from such a project.
Landlord _per se_ are not rent-seekers, since they provide what is not naturally there, namely a house or any kind of development included in a property. A landlord of an empty lot would be more akin to a rent-seeker, but even those cases would need to be analyzed closely and individually, because there are many ways on how value can be added to a property. However, latinfundia and withholding of great quantities of wild terrain is certainly rent-seeking behavior. That's why I think every citizen of a given country has to be granted by law with a certain (small?) amount of land that they can possess without paying anything; if they want to expand that initial, basic and free lot, they have to pay for every extra hectare or acre on top of that provision. That would grant that every citizen owns enough land to at least have a house, and therefore much harder to find themselves homeless, and by the other hand would prevent the possession by single individuals of large amounts of unproductive land.
This in essence is an entirety of the existence of governments.
Isn't all land owned by the government somehow? Even if an individual 'owns' a piece of land. The individual has to pay 'property tax'. Tourist revenues. Etc.
Love the content!
Yes. And it comes back to people in the form of good roads, transportation, govt schools and schemes
@@karanushree97 Agreed and disagreed.
I understand it's easier to criticize.
Not all of it comes back in quality roads, transportation, water or schemes. It's a business model now and business means profit. The aspect of 'Rent' is what I'm referring to from the video.
@@karanushree97 in some developing countries, it...doesn't.
@@karanushree97 It doesn't all come back to those things though. There's administration costs. Costs that wouldn't exist in a private transaction between the local community (pooling money together for road maintenance) and the firm they hire to do said task.
Taxation is wasted money that is literally stolen through coercion by the government.
Depends. In a kingdom, the king owns all the land. In a republic, the public own all the land. The government is merely the management of sovereign land.
It's always been my belief rent seeking it's despiteful.
Great work 🥳🥳🥳 Thank you 💜💜💜
In India education system is likely to be following this for ages
Where they conduct exams to get into medical or reputed universities with syllabus who can cleared by rich people who have paid lump-sum amount to school and tutors ..
And others like us made to study with unprofessional teacher and unwanted stuff syllabus just to give us false gratification of that we're educated making us to waste time subjecting ourselves to learn with no proper guidance and support .
In last 5 years students are make use of resources available on internet because of free resources available on internet.
As a small benefit to your problem (and I’m sorry about your situation), I find Indian based childrens videos much more educational than North American content. Now I understand why, it’s based on necessity.
Accurate style of music for a video about rent seeking. If you know you know.
Wonderful
Ok, but if they hike the prices on fish, people will simply choose other foods, if only out of necessity. People aren't, as Thomas Sowell says, chess pieces you can push around a board. They respond to circumstances imposed on them.
of course, and that's why rent-seeking behaviour propagate. To continue the analogy of fish, assuming there's other foods available, let's say grain, people will choose that instead. This would probably bump the price up by added demand, and in a functioning market economy lead to increased supply (again assuming there's capacity for that), maybe some of the fishermen career switch to farmer (doubtful). This would lead to reduced rent gained from fish for the rent seeker, and more overall profit in the grain producers.
Now what would a rent-seeking lord do in that situation? Remove the chains or fences? Probably not, unless the people have a say in it, and instead add rent-seeking behaviour on the farmer instead. (the latter option is almost always cheaper than the former, if Tullock paradox apply) This can go on for a long time, like a game, until some form of Nash equilibrium is reached; Lord can't extract more rent without hurting his total income, and the people can't adapt their behaviour further to increase their standing.
my 5cent.
@DannyBoi email us if you want to help us go deeper into economics. Thanks for the wonderful comment! Jonas
Road tolls in Norway -- certainly decrease economic activity and increase reliance on government compensation programs.
So, the example used (the land owner) is somewhat flawed for a modern analogy. He owns the land and has a resource people would like to use. He has 2 options: let them use it for free or charge them. The video suggests this is the only concern (the landlord making money) but the reality is that people on other people's land places the landowner in a liability situation. If the people hurt themselves, others, have accidents and whatnot, they sue the landowner for lack of safety equipment, lack of signage, lack of controlled access and so on.
The landlord is not so much providing a service as he is assuming a responsibility...and that can cost him big.
Great point 👏🏾
Lessons on modern economy.
The best example of rent seekers would be the central banks and their toadie Banksters 🧐.
So beautiful 👏 ..
Just like TH-cam, it was totally free before and now they want you to pay if you want not to watch ads...
Thanks! Very nicely made.
Thanks
Thank you Chao 🙏🥲
Yes, i see in my country ..now i understand 😅
What equipment adds no value to society? Meaningless infrastructure projects? Why would an individual waste his money in this way?
Well, they are everywhere, if you ask.
Y’all are great!
Great one !
Terrific video. Perhaps at some point you could make one based on the works of Henry George?
Can you be specific and post it here? www.sprouts.featureupvote.com
Excellent👍
Do you people consider real state business same?
Literally the UK
The story of the recent decline of the already-disfunctional and and ineffective British economy and particularly the exploitation of other parts of the country for the benefit of London and SE England and those in power. A story of low level corruption, the mechanism of which is largely invisible or poorly understood but the basics of which are fairly readily explained in the manner of this video.
Good one! Thanks!
Aw yes, the American government. *VERY* familiar.
Sounds like our government
Exactly
I think this concept is something that everyone should have down cold before they graduate high school. The US doesn't have the kind of blatant corruption that a lot of banana republic type countries have. I mean we're not out paying bribes to government employees or dealing with mafias. But rent-seeking? Oh, we've got rent-seeking. But I think a lot of people aren't really looking for it so they don't see how much it costs them. So when the legislature passes some law with some innocuous pretext then people aren't looking to see what market is becoming less free and who's getting rich from that law.
WHAT?!?!?!
Your corruption is legal, they’re not even hiding it anymore lol. Lobbyists.
The US is run by corporations. There is no Left or Right.
Politicians trade stocks based on the advance knowledge of law changes because of the committees they sit on.
How does Nancy Pelosi beat the top 5 Hedge Fund managers for the past 5 years? It’s amazing.
Sounds like…….taxes !!!
.
Please make a video discussing agnotology
Well, owning properties has been the best payed job for decades thanks to increased public spending and low interest rate. I'll keep voting for politicians who keep increasing my real estate value and increases the inequality in the society. Let the future generations pay the price.
It’s a tragedy nobody seems to notice
the government is needed to prevent the man from blocking the river with a chain, unless he has purchased a right to do so
Some angry citizens with guns are needed, not "government".
On the other hand its: "The Tragedy of the Commons" when there is no private property. So its not so simple, and private control of resurces it's not allways bad.
That's not what the Tragedy of the Commons is.
@@Dan-ud8hz i siad "in the other side", should I said "On the other hand", to express my thought?
i'm not native english speaker.
So what about collective, democratic public ownership?
This is not tragedy of the commons. Rent seekimg is done on private property.
@@DieNibelungenliad No, its something in opposition. But we need keep in mind both occurrence, to get complete picture. Do not judge or draw far-reaching conclusions after becoming familiar with the disadvantages of one occurrence. Attempting to "fix it" can make the latter appear negative, which can be even worse.
The old school grown ups, like me, call this old fashioned looting. A major unintended consequence is that a major military alliance produces less artillery ammunition than their adversary . Funny how stealing never profits you against men that have honor and do not steal.
Become a rent seeker. Gain fabulous wealth to the point that the truly powerful will follow you. Then deceive them and trick them into acting in the public interest. Watch them fail, and enjoy the fruits of taking down an unjust system from the inside out.
The Entire world is made up of Rent Seekers.
I think you need to be extraordinary to add 'Actual Value' in this world. ( like your video is extraordinary )
But consultants, accountants, real estate agents, lawyers etc. are all rent seekers. Brilliant Engineers, Inventors, Amazing Scientists, Brilliant Architects, Brilliant Designers on the other hand aren't.
And Rent Seekers get the talented people to make better Toys ( Arms ), Tools, Laws, Plans, Tax Structures, Spying Mechanisms, Machines to Seek Rent in a more effective manner.
When the naive innocent talented people feel they are just doing it for the good of the humanity.
I don't know, offering your skills and services doesn't seem like rent seeking exactly. It doesn't reach the value adding of the second list of characters, but I don't think its rent seeking. You are offering some value to someone else who doesn't know their way around the law or taxes, etc.
This sounds like a text book definition of a Tenderpreneur.
I've heard this term used but never quite got it. In my mind I related it to a landlord, but most landlords do add value, upkeep and improve the building, offer housing that's easier to move in and out of than an owned home. Anyway, the rent seeking described in the video is absolutely a detriment to society and is anti meritocratic. I would love it if it could be gotten rid of.
That said is there a value to "rent seeking" in the example of a land owner managing the resources of their land? Like if they didn't charge for people to use it would it fall victim to a tragedy of the commons?
same point Quran did it for interest ages ago
انا أختكم من فلسطين من قطاع غزة المحاصر اعيش ظروف سيئة وقاهرة أولادي جميعهم مرضى ويعانون من اعاقات وهم بحاجة ماسة للادوية والمتابعة عندهم امراض مزمنة وانا ليس بحيلتي أن اوفر اجتياجاتهم وبيتي بالايجار وليس لي دخل ثابت اعيش منه مصروف اولادي من ايدي الناس
فأتوجه اليكم ان تنظرو لأولادي بعين الرحمة والشفقة وتمدو يد العون لهم الله يجبر بخاطركم
(ما نقص مال من صدقة)
ارجوكم ان تمدو يد العون لأولادي.....
*"seek profits that the Government will TAX so they need not work"* so no, neither profits nor revenues had without work *HOWEVER* if the *LAZY INDIGENT MONEY PRINTING PEOPLE SET UPON SOCIETY ALL BE MADE WORTHLESS* yes indeed guranteed rent seeking and far worse be the result of that *AS THE WORKERS STILL MUST GET PAID* and no Government in the World is in charge of that only the producers do that... *WHICH INCLUDE THE CREDITORS I MIGHT ADD* 😊😊
Rent seeking but in the context of relationship
How about we just do what the french did and say no…
Please make video on kolb’s theory
Bitcoin and Cryptocurrency
Car dealerships sell each other used cars in a circle to keep the prices inflated.
That's business...
Nobody makes you buy the car.
@@charliepearce8767 he said they sell to each other but great reading comprehension skills! Maybe a pop up book is more your speed
And this is how it made inflatione.
where do I see rent seeking? Everywhere in Hong Kong.
The story of Florida 2020+
From a "did not work a day in his life" perspective, the rent seeker is working to erect barries that will facilitate the rent-seeking. Why not work to get rid of work (in all its expansive sense) altogether. That'll be freedom. AGI and Nuclear Fusion.
And this is how society was formed ….it was a choice