[Dn_Ab]

It depends, some people distinguish economic rent from economic profit by restricting it to economic profits that cannot be reduced to normal by competition in the long run. Some additionally include profits without any opportunity costs.

Economic rents run counter to properly functioning markets, e.g. by raising artificial barriers such as patents or counterproductive regulation.

The key tenet of perfect competition is that in the long run, only normal profits exist. Since economic rent stands contrary to this, it cannot be a fundamental law of capitalism. In fact, economic rent is a sign of market failure. But this is reality and markets can't be perfect, so we try for good tax policies to redress this imbalance. Look at the section on rents here: http://www.economist.com/economics-a-to-z/r#node-21529784

As an aside, people think Thiel's idea on monopoly is controversial, but really it's just a catchy way of portraying the observation that, since in well functioning markets, competition leads to zero economic profit, you should always be seeking advantages (innovating) and situations which allow you to (temporarily) extract economic profit.

[reb]

That makes sense, especially when it comes to production. I'm curious how the distinction you noted applies to non-physical services? Many services seem to qualify as rent-seeking: you pay a one-time fee to obtain information or a connection others will need and the costs to maintain this information are usually minimal. I assumed selling access to that information would qualify as a form of rent-seeking since information retrieval is incredibly low-cost for whoever owns that information. And it seems like competition, even hypothetically, would never drive such services down toward cost without eradicating the industry entirely. So all info-centric services are built on economic rent. Am I off the mark?

Edited to add: The more I think about it, the more it seems all business is really about rent on information: profits are extracted by discovering a cost-effective source and repackaging that information at a higher price to an ignorant market. Innovation as a source of profit seems like rent-seeking on initially exclusive knowledge. Even production is a cascade of information bundled with profit margin and sold to the next party who lacks access you have. The physical product is only the end-game of that information chain. The profit all comes from privileged information, ie charging for something that, once obtained, costs nothing to continue profiting from. Which is economic rent, no? I feel like I must be missing something.

Edited once again: Looked into normal profit, which reframes my question slightly: is the phrase "economic rent" used to describe an objective behavior or a behavior relative to the local market (where average profits and opportunity costs vary)?