> David Ricardo introduced the term “rent” in economics. It means the payment to a factor of production in excess of what is required to keep that factor in its present use. So, for example, if I am paid $150,000 in my current job but I would stay in that job for any salary over $130,000, I am making $20,000 in rent.
Similarly, a landlord charges rent in excess of what it costs to maintain the land and building. Unless I’m misunderstanding Ricardo’s definition, that fits neatly inside of it.
A landlord is not “rent seeking” just by charging rent. For instance they are providing value in the form of risk arbitrage in most cases.
The only case a landlord is purely rent seeking in the economic sense is if they only captured the difference in value of their properties due to external factors.
Similarly, one of the classic examples of ER is wage premiums paid to closed-shop union members: the clearing price for the labor involved is, say, $20, but your union bumps that up to $25; the extra $5 is ER. There is directly substitutable labor that could be acquired at a discount to union labor, but closed-shop rules lock in the extra rents.
If I buy a piece of land a build a house on it and rent it out, I'm adding value to society by creating value.