May 13th – Tunnels and Rents

  1. Tunnel of Eupalinos.  We came up with several of our own theories of how the Tunnel of Eupalinos was built.  This is a tunnel over 1km long, dug from both ends, which is entirely level, and meets in the middle.  It is considered one of the great engineering marvels of ancient Greece (http://calteches.library.caltech.edu/4106/1/Samos.pdf).
  2. Managers as Rent-Seekers.  Employees get paid less than their value (otherwise profit wouldn’t be possible).  This excess profit can be considered a ‘rent’, in economic terms, that the employees pay.  In a hierarchical management structure each department generates a surplus of this value, or rent, part of which is collected by the manager of the department.  This could partly explain why managers are paid more than their team, and why the more levels in hierarchy, the wider the gap between the wages at the top and bottom.  Other insights included that extremely high marginal tax rates, death duties and capital gains taxed as income are  ways to counter effects of rent-seeking.

May 13 2014 Mindmap

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