DER. Diminishing Value of Future Economic Rent
... What effect will the predistribution of economic rent (PRF) have on the market?
Each next person to transfer cash into an account will receive a smaller percentage of future economic rent. What effect will this have?
I'm going to go off of the rails a bit here, but I promise to bring it back around to the issue at hand.
A young man's heart is filled with want and he seeks out a young woman. Do you ever see him pursue an old woman? Rarely. When we do, we see it as off putting. The same when a young woman pursues an older man. Often this is the genesis of tumult and divorce. There is something regal about a couple on their 60th wedding anniversary. There is a natural wholeness to fidelity and to the generations clinging to each other as we move through life. We are born, we grow old together, and then we die to make room for the generation behind us.
This is the effect that I expect predistribution of economic rent to have. The longer an account is around the harder it will become for it to attract new contributors. On the other hand, the contributors that have been around a while will collectively continue to support the account and look for future economic rents.
I expect many will 'date' the account, find a nice spot to settle down and then continue to live with their commitment until the end. Til death do you part.
I guess in a sense I'm speaking about the love of corporations. This is a very odd thing for me to say as I generally feel the opposite way. But this is a new kind of corporation. One that must ramp up its contribution to the relationship with customers as the pref count goes up.
Of course, our goal is to live much, much longer lives. This will incentivize corporations to redouble their efforts to stay relevant by increasing their attractiveness as they get older. This done by growing exponentially.
Of course the opposite will be true as well. What happens when the corporation has a significant(maybe close to 100%) stake in the account of a 30 year old worker that has been with the company for 10 years? Is it more profitable for the company to keep the worker in their job or to do everything they can to help that worker capture economic rents outside of the corporation?
I believe we will see a new dedication of the corporation to the labor where the corporation receives a significant rebate on the wages they pay labors by helping educate the laborer and push them to more profitable enterprises.
Therefore:
Expect the diminishing value of economic rent over the life of an account and provide for that life cycle.
Diminishing value of future economic rents will lead to Corporate Death (KIL) and to the Enrichment of Labor (LBR).