Rent Seekers

[nitro]

Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance

http://www.nytimes.com/2015/04/12/u...m_source=twitter.com&utm_campaign=buffer&_r=0

 

[marketsurfer]

Great post. Academics always look down on industry (what finance academics call WallStreet).

 

[achilles28]

Some of the biggest rent seekers are academics. Universities charge extortionist fees for tuition, most of which goes to "administrators". 45K for 10 classes???

 

[MrN]

That is very true. The higher education racket is one of the biggest rent-seeking rackets around. It is always so amusing when they point fingers.

 

[nitro]

Imo some of you guys are not understanding what the man means by "rent seekers". These are people that simply want to get in the middle of something and produce no extra wealth, only sucking in wealth to themselves. An educator is hardly a rent seeker by this definition, since education is extremely highly correlated to greater wealth not just for the individual, but, assuming she uses her education and doesn't go into a field where there is no multiplicative effect (as the professor points out in the case of some finance and some banking), also produces wealth for society as a whole.

 

[nitro]

I think that the professor is correct, but he assumes that this will go on forever. As markets become more and more efficient, there will be less and less people going into these fields because it will become commodityzed. So eventually the market self-corrects. It is just predator-prey model applied to careers.

What wealth do chess players produce, or any athlete for that matter? Should we do away with anything that isn't deemed productive for society as a whole in general? What about things that only have productive side effects? For example, what on earth does discovering the Higgs Boson produce (maybe in 100 years we will find out)

What about building roads that break every five years like in the US, so that people are kept employed, instead of building roads from the very beginning that can last 40 years the way they do in Europe?

 

[i960]

That is very true. The higher education racket is one of the biggest rent-seeking rackets around. It is always so amusing when they point fingers.

Aside from financial games educational institutions are involved in - pretty sure they're providing something of real world value: an actual education.

 

[nitro]

BTW, if you do away with money, one thing is that people will do what they love instead of what they need to do. Structured correctly, this is the ultimate motivator of people.

Will doctors still be doctors in the future when the security guard and the doctor both make $1,000,000 a year? Is money the only true motivator of human beings? Or will we all just go to the lowest common denominator when there is no seven sins to motivate us?

 

[i960]

It's interesting. I think, among traders, atleast, there's two general spheres:

* Into trading because they enjoy the financial industry mindset/modus operandi and are able to rationalize it as providing value (or don't see it as providing value but also don't care).
* Into trading because they see it as a means to an end to make money without corporate or similar oppression.

I'm in the latter group. I see it for what it is.

 

[Amalgam]

Imo some of you guys are not understanding what the man means by "rent seekers". These are people that simply want to get in the middle of something and produce no extra wealth, only sucking in wealth to themselves. An educator is hardly a rent seeker by this definition, since education is extremely highly correlated to greater wealth not just for the individual, but, assuming she uses her education and doesn't go into a field where there is no multiplicative effect (as the professor points out in the case of some finance and some banking), also produces wealth for society as a whole.

A rent seeker can also be someone who provides an economically useful good/service but at an inflated cost (45k for 10 classes).