As for the 'rent-seeking' stuff how the hell are traditional dividends not a classic example of it?
More deeply I don't know how one can distiguish profit-seeking from rent-seeking in any rigorous way in the real world - the wage relation itself is a form of rent-seeking since the printers are deprived of part of their labouring efforts by the owner of the printing press; the waitress by the cafe owner; and the cafe owner by the mega-corp franchise.
Beyond any economic (read narrowly as monetary) relation one thing a UBI does is to free up the time investment otherwise demanded by wage labour.
Dividends and "traditional" profit are gains you get from productive work. Rent seeking is getting paid for no productivity. Traditional dividends are not directly rent-seeking, because they are (traditionally) paid for out of the profits of a productive enterprise. Theoretically if the company in which you own shares doesn't make a profit, you don't get dividends.
If you make a ton of money building widgets and selling that at a mark-up, that's profit-making. If you already sold someone a widget and make customers pay you to keep using it, that's rent-seeking. Calling software development a "subscription" because you force updates on people every month: rent-seeking.
If you profit by buying low and selling high, that's neither profiting from productivity or rent-seeking, that's playing the market, and should also be discouraged (see: massive windfall profits of natural gas companies in Texas; also see "lucky" people who bought Bitcoin at $1 or some now-massive stock at low price. Basically I'd tax dividends at normal income rate, and tax gains due to sale of stock at some much higher price).
If I were to seriously look at creating a policy, I'd look at encouraging profits from productivity and discouraging rent-seeking and buy-low-sell-high profit. I'm still pondering how to address real-estate abuse; probably some combination of taxing non-residence property based on total amount of non-residence property owned and mandating that rental payment by the residents confers ownership share.
The expectation is that true economic profit (not merely "accounting profit") should trend to zero if the markets actually work, due to competition forcing actors to undercut each other in pursuit of finite market share. Even in that imaginary zero-profit state there will still be "accounting profit" on the books, but it would fall to the minimum level of adequate compensation to justify what labor there is in managing the process (this is assuming a legal framework that rewards and requires this sort of top-down management to be done), effectively serving only as the "wages" of directing investment.
If true profits do not fall to zero (they don't), it's evidence that "economic rent" is being extracted through the influence of legal power, open coercion, or some other source of market failure. Economic rent is most obvious in land or resource rents; inheriting a small area of land in Manhattan might draw millions of dollars a month to its owner (who contributes literally nothing to justify this beyond their permission for others to make use of economic opportunities), and similarly control of an oilfield can draw profit in the thousands of percent on extraction (but requires a global regime of colluding producers to keep prices high).
But economic rent and rent-seeking obviously isn't confined to land-rent, and all its various forms can be easily re-expressed naively as "profit" or "dividends" that are in reality very difficult to separate from that notion of "productively earned profits" (it's hard to make that distinction without access to information that doesn't exist). The rent could be extracted through collusion or monopolism removing the influence of competition and allowing sustained price-fixing, through newer legal instruments such as intellectual property in patents, copyright, and trademarks, or through political control of tax revenue, for instance. Chattel slavery and debt slavery are, likewise, processes that can be likened to rent-seeking. Speculation in commodities and securities is a process that is similarly motivated by that same drive of rent-seeking, relying upon fraud, market manipulation, or insider information to make any "true profit" (beyond the mere accounting profit of the possibly-useful facilitation of transactions which rapidly trends to zero or devolves to gambling).
So basically, I agree with feelo that profit-seeking and rent-seeking are almost identical. The motive force behind the oft-celebrated process of market "innovation" is the temporary monopoly the first entrant into a market gains, giving them a period of high rents and a leg-up in suppressing competition going forward (or, more typically, the attractive prospect of selling out to a more successful monopolizer at a massive return on their original capital, that monopolizer themselves typically bankrolled by rents from another source).
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Topic: Armchair Economics Thread - Re-Resurrection (Read 33952 times)