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Musk: Innovator or Rentier?

Posted By Barry Ritholtz On February 28, 2014 @ 8:56 am In Markets | Comments Disabled

Income inequality has been a big theme in U.S. politics and economics recently. We discussed a mathematical anomaly [1] 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 [2],” 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 [3]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2014/02/musk-innovator-or-rentier/

URLs in this post:

[1] mathematical anomaly: http://www.bloombergview.com/articles/2014-02-14/there-s-rich-then-there-s-the-0-01-

[2] The Rent Seeker, Posing as Visionary: http://streetwiseprofessor.com/?p=8091

[3] Continues here: http://www.bloombergview.com/articles/2014-02-28/elon-musk-visionary-or-rent-seeker

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