I don't know if I've got it wrong or the author does, but I think about it like actual rents.
Landlords don't make money by providing a service or selling goods. They make money by sitting on something no one else is allowed to have. They don't have to do anything more than sit back and collect checks. Sure, they bought the land originally, but there's no more investment to be made after that. They can invest in a nicer building or grounds, or compete on services such as "free" utilities or quicker repairs, but those are above and beyond the "rent-seeking" part of his revenue. He could just rent an empty lot, like a trailer park or campground.
This is analogous to, for example, telephone lines. They cost a lot to initially build out, but once they're there, the phone company only has to charge people for access. They provide a service back at the switching station, but most of what they're getting money for is owning lines that already exist. It's harder to separate rent from their other revenue, but it's there.
It generalizes to all revenue that is of the "sit back and collect checks" variety. Cellular carriers sitting on a chunk of spectrum they can sell access to. They can just rent it out to MVNOs if they don't want to provide those services themselves. Film studios sitting on a catalog of work they can sell, license, etc. So yes, IP revenues are definitely rents.
> Landlords don't make money by providing a service or selling goods. They make money by sitting on something no one else is allowed to have.
Is that second sentence any less true of any other trade, including the traditional selling of goods? After all, the only reason you have to give a food vendor money for food is that the vendor (or someone on the vendor's behalf) will use violence if necessary to defend the vendor's exclusive claim on that food.
> Sure, they bought the land originally, but there's no more investment to be made after that.
That isn't true. There are maintenance costs and property tax, and less obvious things like the opportunity cost of risk of purchasing a house in order to rent it out.
The fact that Uncle Sam is the ultimate rent seeker is beside the point.
The difference between land and widgets is that widgets are continuously manufactured and sold. Once you sell me a sandwich, you can't take it back. It's mine. Rent is the opposite. They're not making more land, or spectrum, or whatever, and that's not what they're selling. They're selling access to it. And they can revoke that access at any time. The thing I'm paying for isn't mine, it's still theirs the whole time.
It is a little bit different. Commodities can be produced by multiple people and end up being the same thing. Now there are other factors involved I can contribute to economic rent being charged. For example, the hotdog vendor at the bottom of my building can charge 1.05 for the hotdog, whereas the guy at the other side of the park will have to charge .65 for me to walk past the guy charging 1.05. It's tough to get away from economic rent.
Landlords don't make money by providing a service or selling goods. They make money by sitting on something no one else is allowed to have. They don't have to do anything more than sit back and collect checks. Sure, they bought the land originally, but there's no more investment to be made after that. They can invest in a nicer building or grounds, or compete on services such as "free" utilities or quicker repairs, but those are above and beyond the "rent-seeking" part of his revenue. He could just rent an empty lot, like a trailer park or campground.
This is analogous to, for example, telephone lines. They cost a lot to initially build out, but once they're there, the phone company only has to charge people for access. They provide a service back at the switching station, but most of what they're getting money for is owning lines that already exist. It's harder to separate rent from their other revenue, but it's there.
It generalizes to all revenue that is of the "sit back and collect checks" variety. Cellular carriers sitting on a chunk of spectrum they can sell access to. They can just rent it out to MVNOs if they don't want to provide those services themselves. Film studios sitting on a catalog of work they can sell, license, etc. So yes, IP revenues are definitely rents.