Chapter Content
Okay, so, let's talk about, um, you know, economic rent. It's kind of a weird concept, right? I mean, like, the word "rent" makes you think of, like, your apartment or something. But in economics, it's actually something different. It's about, like, the extra value you get because you're really good at something, or, you know, your company's really good at something.
So, like, think about Lionel Messi. He's, like, one of the best soccer players, like ever. And he gets paid, like, a ton of money, right? But, like, if he wasn't a soccer player, he probably wouldn't be making nearly as much. So, the difference between what he *does* make and what he *would* make doing something else, that's kind of economic rent. It's like, he's getting extra because he's just so darn good at playing soccer.
And, you know, there was this other player, Sir Stanley Matthews. He was, like, a huge deal back in the day, but he didn't get paid anything like what Messi does. I mean, like, he got his train fare refunded, but, like, his sixpence for a cup of tea at the station? Nope, not covered. So, what's the deal? Why the huge difference?
Well, a lot of it has to do with, like, competition. Back then, there wasn't as much competition to sign players. So, even though Matthews was amazing, he didn't get the same kind of, you know, financial reward. Now, with global TV deals and all that stuff, the market for soccer players is huge. So, the best players, like Messi, can command, like, really, really high salaries.
It's kind of like land, actually. This economist, James Anderson, figured this out a long time ago. Some land is really fertile and can grow a lot of crops. Other land is, you know, not so great. So, the people who own the good land can charge more for their crops, and that extra money is, like, economic rent.
And it's not just about people, either. Companies can also earn economic rents. If a company has, like, a special technology or a really great brand, they can charge more for their products or services. And that extra profit, that's economic rent too. It's about having something that other companies just, you know, don't have.
But, it's interesting because back in the day, there were, like, these class divisions, right? So, even if you were a really talented player, you weren't necessarily going to get paid a ton. I mean, they had these amateur players versus professional players thing, and it really affected how people were treated.
Things started to change, though, you know? The players went on strike. And, you know, society changed too. The old class barriers started to break down. And that's when, you know, things started to change for players financially.
And like, another thing, back in the day, the fans got the benefit, you know? Ticket prices were cheap. Football clubs were run by local people. These days, you've got all these super-rich owners buying clubs, it’s a totally different game now. You've got oligarchs and sheikhs buying teams, and they're, like, willing to spend crazy amounts of money.
But like, not all those rich owners have been good. Some of them have been greedy, you know, just trying to make a quick buck. But at the end of the day, if you've got something special, something that other people want, you can earn economic rents. And that's true whether you're a soccer player, a company, or even just a piece of land. So yeah, economic rent isn’t always a bad thing – it’s just what happens when you’re good at something. It gets interesting when you start figuring out who benefits from it.