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Comment by snidane | Hacker News Reader

Entities without competition inflate prices until they capture all the extra new pie.

You receive increase in salary from your boss one year and next year it gets eaten away by monopolies like healthcare, education, housing and landlords.

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Rent seeking may be zero sum, but the economy as a whole not. If we banned rent seeking the economy would likely grow faster. You could argue that's changing the game, but the economy is a weird one in that changing the game is part of the game.

We do ban a lot of rent seeking, though. For example, theft and fraud are rent-seeking activities. So the sorts of rent seeking that you still see are the ones that are hardest to ban.

Banning rent seeking doesn't work. Christianity tried banning interest and it just causes non Christians to offer lending services which then results in xenophobia. Interest payments partially derive from the liquidity services provided by market participants (think long opening hours and storing products ahead of time). Money effectively becomes a public institution where people voluntarily give it value in the form of liquidity services. That public institution is then kept in private hands who lend out money and then get to market these liquidity services as if they provided the public institution themselves. Basically someone else does the work and you get to benefit.

The answer to this problem is a demurrage fee on cash. Banks can then compete by offering the ideal negative rate that is in proportion to the liquidity premium. Banks can then use this fee to pay for liquidity services.

Is anyone doing this? No and I don't think it will happen in the next 30 years.

So rent seeking doesn't work because a long time ago one subpopulation banned it and it didn't work for the population as a whole? That's ridiculous. It's like saying prohibition in the US didn't work because booze was legal in Canada.

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