If I bought some land, built a windmill with my bare hands out of stone and wood that I cut and shopped myself, and became the flour producer for the entire region, people tend to say it's a deserved reward.

If I bought that company, paid people to do all the work setting up a dozen more windmills, paid people to manage the new bigger company, and then sold it again to the highest bidder, now suddenly I'm rent-seeking and profiting off of the poor. Even if those things wouldn't have gotten done without this intervention.

It's like a Ship of Theseus: If you split up the flour company into its constituent pieces and slowly hire other people to do them, at what point does it become unethical rent-seeking?

Even someone who buys an income stream solely to ride it out with the minimum amount of maintenance is at least taking a risk to their capital. And even if they protect it with an insurance policy or similar, they're at least locking up the money for a dedicated purpose usually for an extended period of time. People are often afraid of taking risk or limiting their options, so people who do so are providing some value.

https://en.wikipedia.org/wiki/Rent-seeking

https://en.wikipedia.org/wiki/Economic_rent

It refers to the economic consequences of things like regulatory capture and corruption.

So MichaelBurge is making a valid critique of the original article, whether or not the article was correct in using the term "rent seeking"

Your contribution to the wealth of the economy from buying the stock is only the effect of the marginal increase in the speed of transaction and price from the share owner selling to you rather than having to wait for the next, possibly lower bidder on the share. The contribution to the economy made from you passively holding the stock is only the effect of the marginal boost to the share price from you not selling on entrepreneurs, lenders and investors. The average gain you make from share price appreciation is likely to be more than that; the difference is economic rent.

Given there are already enough stock investors for trades to be made in microseconds with tiny spreads, the positive effect of an individual secondary market stock trade is so close to zero as to make the "functionless investor" characterization broadly correct.[1] Moreover, since your decision to purchase secondary market stock has an opportunity cost; you might otherwise have invested it directly in producing something in a market without such ready access to capital, its effect on economic growth might be net negative.

[1]of all the circumstances where economists treat transfer payments as irrelevant, this one might be the most justified

Your same logic could be applied to consumers. Any one individual buying products does not keep the economy functioning. We could say they're "functionless consumers."

Except if you extend that logic to all consumers, there is no economy.

Similarly, any one secondary investor might not make or break the existence of functional capital markets. But if you extend that logic to all secondary investors, suddenly there are no longer any primary investors.

Perhaps even more importantly, I also pointed out that (i) the marginal contribution of buying secondary market stocks to the growth of the economy is substantially less than their average 7% annual return for the passive investor and (ii) because the risk adjusted return of this economic rent is an attractive alternative to investing in creating new capital, it can in certain circumstances even have a negative effect on economic growth. Those were the real points Keynes was trying to make.

It could be a lifetime or time-limited right to a dividend, with voting rights attached. This would prioritise sustainable profit generation with a long-term view, and eliminate the current malaise of seeking short-term spikes in share price.

Perhaps through some kind of all employee profit sharing system that all the employees agree on. Alternatively, if there has to be ownership, ownership of the company can be split between all employees, and the profits shared amongst them accordingly.

I should divulge that by HN standards I am a screaming commie. I think unions are a good idea, and I think inheritance tax should be pretty much 100%. I'm not necessarily in favour of this employee-owners profit redistribution system, but it's an answer to the question of where profits should go if there are no rentier shareholders.

By what standard? Does a new employee get the same percentage as every other employee? If so, how is that fair when certain positions objectively have much more impact on the success of the company? If not, who decides allocations for new employees and who the allocations should come from?

Also, who is going to put up the capital in the first place to start the business if there is no return?

These facts would appear to contradict your statements.