Is America Encouraging the Wrong Kind of Entrepreneurship?
Comments in this thread and similar threads on Reddit make me dispair for the future."America's fetish for privatization promotes rent-seeking""Not having single payer healthcare is the single biggest reason we have so much rent seeking in healthcare"A society with fully socialized means of production is not free of rent-seeking.  On the contrary, every single job in every organization in the economy is rent-seeking in that case.Anyone with experience in Indian public industries pre-liberalization, will tell you.Human beings in large organizations will often try to act in their own interest as opposed to the organizations interest.  It is up to the organization to build up structures and culture to fight this innate tendency in humans.The problem is, organizational cultures tend to drift over time.  Though an organization may be founded small, with a lot of idealism, and selfless workers, in the long run, political players will infiltrate the upper ranks ... you soon see people trading influence for their own benefit.The worst aspects of this are seen in India still, where people get a job, and then use whatever powers the job grants to extract rents from co-workers, the public, etc.The market plays a role in preventing this.The market is the ecosystem which provides predators which hunt and kill the decrepit organizations that have too much rent-seeking behavior internally.When a government company is full of rent-seekers there is no solution except to wait for some revolution to occur, because its never politically feasible to fire so many public sector workers.In the case of private companies, unless the government intercedes, an organization that is inefficient and full of rent-seekers will soon be overtaken by spry rivals who focus on consumer benefits.Let me give you some concrete examples.  Have you ever read about how labor and management used to act at General Motors?  There used to be jets for the upper level managers.  Special dining rooms for them.  Separate bathrooms for them.  The company was struggling, and the employees (the managers) were giving themselves all kinds of cushy perks.The relationship between the board and the shareholders was terrible.  The shareholders couldn't do anything against management and the workers.  In ordinary cases such a company would have gone belly up after shareholders lost faith and committed capital elsewhere.  Instead, the government propped up GM with defense contracts, government contracts, and finally a bailout.  It was government intervention that allowed rent-seeking by individuals to continue.