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>Rent seeking can't and won't last [because] too many people have more comfort, want too many things, and are harder to control - and now more than ever.

That's a rather pie-in-the-sky argument. People pursue rent-seeking because it gives them comfort, material goods, and freedom. The businessman who lobbies for monopolistic benefits, the politician who takes his campaign contributions, the copywriter who creates attack ads: they all follow egotistic interests. Wild, unregulated, snake-oil-and-corporate-trusts capitalism is no solution to these problems.

> In the modern world, natural resources are the limiting factor of production. It takes only a tiny percentage of the population to farm the arable land, mine iron ore, cut down and process the timber, and extract the oil. A somewhat larger percent converts those resources into the necessities of life – bread, vehicles, homes, roads, bridges, clothing, furniture, stocked grocery aisles, appliances, etc. The worker entering the economy has a problem. They must find a source of income so they can access resources and manufactured goods. But there are no unexploited resources and no surplus jobs to be had processing those resources. They need a job, but their labor is surplus and unnecessary.

This is the real problem. Everyone but a tiny percentage of the population is ... well ... not needed at all.

Maybe I'm just thick as a board tonight, but while you wrote a lot, you don't really seem to have explained "the solution to rent seeking" as you see it. Can you expound?

The challenge for most people is to understand that less regulation results in less rent seeking. Only a large and powerful state can implement the required blocks to form monopolies. Only a powerful state can entrench the class divide between the ruled and the rulers.

The solution, then, is to reduce the size of the state and allow for less central planning and involvement.

Further to this: the size of the state and those who run it seek to gain more power. Power is delivered through votes. Thus much that passes for political debate is not based on reason, but rather emotions and feelings - people finding and leveraging biases, beliefs and BS. Virtually no modern policy making is done using reason and simple analysis - instead it is done by emotionally trying to sway the argument - the 'think of the children' model.

A triumph of reason over emotion and reduction in the size o f the state. This creates the environment where those rent-seeking cannot fool those using reason, and they lack the all-powerful controls to enforce the monopolies.

"Only a large and powerful state can implement the required blocks to form monopolies." - now that is decidedly false; if there are any entry barriers (such as capital investments required to start), then free market naturally tends to consolidate (as it's more profitable) towards monopolies or oligopolies, which coincidentally means the end of free market in that industry. Only a powerful state can PREVENT monopolies and keep the free market economy as defined, with many suppliers and buyers setting the prices in a market instead of a monopolistic ultimatum.

For real life examples, see the classic USA situations of railway and oil magnates in 19th century - these monopolies weren't caused by the state and regulations, but by lack of it.

Of course, states can also create bad monopolies, but the solution is to change government actions, not to "disarm" the state - since in that case the bad monopolies will stay anyway, and even more monopolies will arise.

> For real life examples, see the classic USA situations of railway and oil magnates in 19th century - these monopolies weren't caused by the state and regulations, but by lack of it.

In the case of Standard Oil, the consumers benefited greatly from the practices of Rockefeller. Despite controlling 90% of the market at one point, its output quadrupled in a single decade (1880-1890) and prices of kerosene dropped by threefold over the same time period. Standard Oil was simply the best at what it did and succeeded as a result. During the early 1900s, the market shifted away from kerosene to gasoline (thanks to Ford) and there was a large amount of competition entering that market. Its market share in oil production fell from 1898 to 1906 from 34% to 11%. Yet it was only in 1911 that Standard Oil was broken up by the Sherman Anti-Trust Act (which, funnily enough, was passed in 1890: at the end of the decade of massive increases in production and decreases in price by Standard Oil). The fact is that, in this case, the market function properly in spite of government interference, not thanks to it.

Funny that you mention the railroads as well. The biggest threat to competition was not the companies in the free market, but instead railroad companies in control of the ICC, created in 1887. It was this government entity which allowed railroad companies, through law, to eliminate competition and screw the consumer by raising rates in a collusive manner.

All companies would eventually collude, given the opportunity to do so without punishments. For more recent examples, see the DRAM cartel some decades ago and the current global diamond market.

Or Apple and the Big Six book publishers -- five of who colluded.

If it is decidedly false, name one monopoly that exists without a state backing it up. I am genuinely interested because I have thought long and hard for an example, and I have never found one. It's hard enough to find a real monopoly [as oppposed to a company enjoying current market dominance], and to me, impossible to find one that exists without the help of the state.

The free market does not tend towards monopoly or oligopoly. If any one player is gaining market power and capturing a lot of consumer surplus, then competition will eventually find a route around that and supply an alternative with better value. This has been proven time and time again.

Even coming up with a situation where you need a large capital investment to get started, given a compelling enough market (which is what is created when an individual firm tends towards monopoly) then the capital formation is possible to organise.

Your solution 'change government actions' is hopelessly unworkable, this is what the original post is all about. All the while the opportunity to rent-seek is available, people with the desire to do so are going to exploit it.

The countries with the worst monopolies are those with the largest share of the income owned and distributed by the state. These monopolies harm consumers and rivals and only exist because the state is there to back them up. This goes all the way up to the very worst monopoly of them all, which is where the state is the economy, such as in soviet russia.

Reduce the size and reach of the state, and you make it impossible for rent-seeking behaviour to occur, because there is no structure to support it.

"The free market does not tend towards monopoly or oligopoly. If any one player is gaining market power and capturing a lot of consumer surplus, then competition will eventually find a route around that and supply an alternative with better value. This has been proven time and time again."

I don't think I could disagree with that specific statement more than I do (even though I agree with some of your others, and your opening line). In order to accept those words I would have to ignore the existence of monarchies, dictators, cartels, and simple things like the phrase "the rich get richer." Our society and economies are structures imposed on the true mathematical and physical chaos of space and organic chemistry.

I agree with some of what you say ("Reduce the size and reach of the state, and you make it impossible for rent-seeking behaviour to occur, because there is no structure to support it."), but I would note that there are some things that individuals simply cannot do alone, the most important of which is holding the power of monopolies/oligopolies accountable. I would rather not call that government, simply a group action, but it still amounts to a common banner. Unfortunately, any organized power will only continue to claw for more power. Government won't limit itself. In that sense, I agree that it seems necessary to withdraw that power substantially and regularly from government, but I also see the renewal of that power as inevitable in order to prevent abuse in some other area. ("The price of freedom is eternal vigilance.")

Unfortunately we have a disadvantageously simple language of left vs right, all or none, (leading to extreme communism or extreme capitalism - for example, Ayn Rand vs Marx - both of which lead to the same totalitarianism), rather than focusing on the philosophical middle and economic nursery conditions where growth is possible, fair, and competitive. It is constantly necessary to destroy our last great success in order to make room for the next one (to focus on beneficial endevours). It is also our choice how long we avoid that renewal, and how big an undertaking it must be to move forward.

> The free market does not tend towards monopoly or oligopoly. If any one player is gaining market power and capturing a lot of consumer surplus, then competition will eventually find a route around that and supply an alternative with better value.

This is true under the usual simplifying first-week-of-Econ 101 assumptions (which exclude economies of scale, barriers to entry, irrationality -- including imperfect consumer information about the utilities realized in purchases, interaction between markets [note that the last two interact in an important way, in that enough money derived from one market and applied to the information market can drive imperfect consumer information in a particular direction], etc., etc., etc., ad nauseum, ad infinitum), which are useful for pedagogical purposes at that stage but tend not to exist in the real world in the markets for a wide variety of goods.

This has been proven time and time again.

Can you please provide an example of where a monopoly has formed with no state power involved? I am interested in this area and want to find any real world examples.

Yeah, you can see how this would happen if you look at Internet access in the US. Remember how, when Google announced they'd launch Google Fiber in Austin, AT&T announced an equally fast fiber rollout there. Now imagine if that first fiber rollout was being done by a company that actually needed to show profitability on its investment - there's no way that they could compete with AT&T, they'd fold before they made enough money to expand and that'd be the end of them. Which is why, until Google got interested, the US was stuck with the incumbent telecom and cable operators.

> first fiber rollout was being done by a company that actually needed to show profitability on its investment

I don't follow your point. Do you think Google has done the investment not expecting to make a profit?

This example shows the point that it is virtually impossible to maintain a monopoly in a free market. So if one company had a monopoly on internet access, and then Google successfully enters that market, it's not a monopoly.

Short run market dominance and monopolies seem to be often conflated, but they aren't the same thing.

If we could run everything on "reason", yes, that would be great. I don't disagree, it would produce good results. The problem is, humans show time and time again they cannot be counted upon to act reasonably or rationally.

Suppose I were to argue that all our problems would go away if we had free energy. "Yes, of course" you might say. "That would solve many many problems. But we don't have free energy, and we probably never will." This is how I feel about your position.

How is this true online?

On the internet, monopolies are natural for social networking, online auctions, classified ads, and search. Each of these require the user to go to the site with the most ads, friends, bidders or sellers, or results.

How do you think the government created an E-Bay, Google, Facebook, or Craigslist?

Reason says rent seeking is improductive and self destructive behaviour. One will engage in such activities only if the expected returns outweights the costs, which include the destruction of the system.

A rational person will not come to this conclusion under a system where such inefficiency is discouraged - pure and perfect competition, capitalism.

Many people wonder whether capitalism is a good thing. Bring them reason, science, let them work it out and make their own basic decision. Let them fight the bad reasoning themselves, come out of their local optimas if you prefer a math analogy. Racism and religious extremism must have some value, or such behaviours would not have because so widespread. But they seem to be local optimas, or even destructive in the end, just like rent-seeking.

Here is another way to look at this - look at the immigration net flows: it seems that more people want to immigrate in capitalist countries than emigrate out of them.

If it is reasonable to doubt my deductions, is it reasonable to doubt so many people may have made the same conclusions independently ?

Read about how immigrants affiliate politically, which belief system they adhere to. Apparently a lot of them want to be paid for the fruit of their labour, and not for pure idleness, want to be left alone - and many other libertarian values.

I'm sorry if that is not a valid explain for you. It is for me.

To make sure we are on the same page, let me try to summarize: you are essentially saying that so long as people take into account negative externalities, rent seeking behavior goes away?

I don't disagree with your premise, but I do disagree that this will result in rent seeking behavior going away. One of the classic problems with capitalism is literally exactly this- negative externalities are not properly accounted for.

We are on the same page.

I wouldn't phrase it that way, but yes, ideally negative externalities should be internalized by individuals to make the problem vasnish.

But failing that, if individual parties may engage in negotiations to achieve better outcomes (Ronald Coasce)

Less regulation are usually a 1st thing to try in that process, to cause change by voluntary association, naming and shaming. Issues can be mitigated. But regulation is a pandora box.

There are whole parts of economics studying that - public policy and industrial organisation.

How do you explain government rent-seeking, where there is no competition? Take government pensions or teacher unions for example.

  | I'll put islamism in that bag (the basic idea
  | of stoning to death women who had sexual relation
  | outside of marriage in this day and age is not
  | very palatable to me).

It's my understanding that rules like that (e.g. stoning) are not in the Qur'an, but are 'old' rules thought up by different sects of Islam.

1. This is like decrying Christianity as a cult because of David Koresh. Or getting angry at all Christians because the Catholic church tried to cover up the whole paedophile priest thing.

2. Even people that are part of these sects don't necessarily follow all of the rules. E.g. I've known Jewish people that ate ham.

AFAIK Stoning is from an authentic hadith. An interesting point that could be used to decrease this is Islam frowns on bitching and backbiting. So...

I'm not for or against any religion.

It's all a matter of proportion. How many Koresh are there? Enough to put beheading/stoning/etc. videos on youtube ? Islam seems to have the #1 "bad spot" at the time.

I feel very sorry about that, because as the human race it's like trying to advance without the help of a whole third of world population - and the worst thing is we do not let the people who refuse such belief system immigrate easily in democratic countries. Just look at the way muslims (and apostates) emigrating from north africa to europe are treated.

At the moment we are wasting a lot of human potential, and that's sad.

Hopefully things will change [even if I'm not sure about it when I see the "antilibertarian" downvotes posts, without even taking a minute to express why they think it does not contribute to the discussion. I guess I should know better about liberals and their so called values :-/]

EDIT: I was talking about the 1st post, about reaon, which took multiple downvotes but not a single dissenting reply in about 2 minutes. Prove me wrong, give me arguments to challenge my position - I'm begging for them.

But no, nothing at all. And my attitude is the problem ?? It's like watching a reddit gang in operation, sorry

  | I guess I should know better about
  | liberals and their so called values

I'd say that the downvotes are more aimed at your attitude ("People downvoting me? It's those damn Liberals!"). It's like you're taking cues from Rush Limbaugh.

There's also the fact that he's treating Ayn Rand as a serious philosopher instead of a base political propagandist.

Read John Rawls first work, read Ayn Rand. See the parrallels yourselves. Only the first one was acknowledge by the establishment, while the second one was not.

Interestingly, they process more or less the same way, and come to very similar conclusions.

I don't need a chocolate medal given by the government to an author to decide whether it is worth reading or not. If you do, and if you hate libertarianism, read about Rawls. The guy received a medal from Clinton - that's as liberal as it gets.

You mistakenly believe the political spectrum stops at "big government worshiping liberals". I'm a freaking socialist, I'll abolish your private property as soon as look at you.

"Ayn Rand style capitalists do worry about the letter and the spirit of the laws and of a contract"

And Tolkein-style hobbits have hairy feet.

"She said that beautifully : "I am not primarily an advocate of capitalism, but of egoism; and I am not primarily an advocate of egoism, but of reason. If one recognizes the supremacy of reason and applies it consistently, all the rest follows."

Such a shame she let faulty premises and emotion cloud her writing and her philosophy then really.

>> (the comments suck however - they basically try to deny the fact that for humanity as a species, the last century has been the best ever)

Part of me says that the added stresses from never being happy, always want more, do rain on that parade. Maybe being "a dumb peasant" somewhere with a full stomach but otherwise no larger goals is best.

>> The basic idea stands - too many people have more comfort, want too many things, and are harder to control - and now than ever.

Yeah but they are not organized, at least not in USA. Those making bank are kicking back to the politicians that decide what system /laws us suckers have to follow. The greatest investment ever is in the political process, a million dollar donation can easily yield billions.

Try buddhism or stoicism (I read Seneca) and you'll be happy my friend, even with less :-)

You'll even be happier to see everyone in the human race is getting more.

It even beats being dumb with a full stomach, because how good is happiness if it is based on ignorance?

but it is this unhappiness that drives progress - if people are content, there would be no new innovation to try and improve the status quo. If there is no selfishness, there would be no incentive and desire to outdo your neighbour (or competitor).

So? Why should progress be a goal in and of itself? Shouldn't progress be in the service of something else? If that something else is solving unhappiness, then why do you have a problem if unhappiness is solved through other means and progress becomes obsolete? Perhaps you are just addicted to progress and future-oriented thinking and thus cannot stay happy for long.

so you assume that "solving unhappiness" is the end goal - to which i m arguing that its not. Unhappiness is but a symptom of some problem (currently, its the lack of wealth and material for 90% of the population). If for some reason, everyone managed to get converted into buhdism and not feel any of the unhappiness that they'd otherwise have felt, did the situation really improve? Aren't they just tricking themselves into thinking they are in a state of enlightenment?

There will never be a shortage of malcontents. The rebellion of the 60s sprung from the prosperity of the 50s.

Also from the hideously repressive, reactionary and paternalistic social norms of the '50s.

This really strongly depends on how you define words like "content" or "unhappiness". If you define them using the lower-brain functions, then your point stands and Total Happiness means everyone has sufficient amounts of beer and television to avoid realizing how empty and stupid their lives are.

If you define them using higher-brain functions, your point falls apart precisely because scientific progress is itself a source of potential contentment.

On the macro level I totally agree. But on a personal level it may be different, even though we're all benefiting from inventions of those that went nuts and lost many years of sleep

I don't think there is anything wrong with rent-seeking in buddhism. Ask Steve Jobs.

There is spiritual value in "rent-seeking" beyond greed. It's just not that obvious in our "rich is evil" kind of culture.

I find it interesting how often extremist capitalist beliefs justify themselves as producing more for everyone and then preaching Buddhist spirituality to individuals as a way to be happy with less.