Income inequality has been a big theme in U.S. politics and economics recently. We discussed a mathematical anomaly about the 0.01 percent earlier in the month. A number of folks have offered up defenses of the wealthiest Americans, but they seem — like this rote piece from former Council of Economic Advisers Chairman Greg Mankiw — half-hearted and wimpy.

What got me thinking about this recently was an intriguing article by University of Houston professor Craig Pirrong. In “The Rent Seeker, Posing as Visionary,” Pirrong criticized the long line of government-support programs that Elon Musk’s many companies seem to be involved in.

Rent-seeking has morphed over time: “Rentier” is derived from the French term to describe those who lived off the income from rents, typically for real estate. But that is morphing into income from government-enforced monopolies, such as patents, copyrights or government projects. The manipulation of regulations by lobbyists — particularly by those of the financial industry — has also given rise to claims of rent-seeking.

Continues here

Category: Markets

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8 Responses to “Musk: Innovator or Rentier?”

  1. slowkarma says:

    Why can’t you be both a rentier AND a visionary? They’re not mutually exclusive — his genius is seeing that with so much money slushing around the government, you pick the current policy favorite and create a company that takes advantage of that, and make a fortune. Or several fortunes. The company itself doesn’t actually have to survive, as long as you’re creaming a percentage off the top.

  2. DeDude says:

    Absolutely correct. Without the government to make and enforce rules that protect them most of those super rich people would simply be wealthy. We the 99% have to decide whether or not it is acceptable to have rules that funnel all the newly created wealth to the super rich. As I noted before the guy who invented the wheel (a much bigger accomplishment than anything any of our 0.01%’era ever did) could not patent and get rich on it. Surprisingly and contrary to the stories we are told, he actually invented it anyway.

  3. Bob A says:

    The whole point of the subsidies was to get a new industry off the ground to the point where it could be competitive with existing (and arguably also heavily subsidized) industries. In the case of wind and solar and electric vehicles we’re nearing the point where the industry will be able to live without subsidies.

    At that point when gas and electric vehicles are cost competitive without subsidies, it will interesting to see how people choose. What would you choose?

  4. NoKidding says:

    “Rent-seeking has morphed … into income from government-enforced monopolies, such as patents, copyrights or government projects.”

    Libertarian this morning?

  5. icantdance says:

    What do you think about renaming the issue from ‘income inequality’ to ‘opportunity inequality.’

    the problem is not the rich poor gap per se. but that we do not have an acceptable floor for those least advantaged in a rich society (good schools, health services, arts, ect)

    also, what is this click bait BR ;)!?