Having a "passive income" is the neat way of saying social parasitism.
Around here, or in the Maker Community, "passive income" is referring to something that you put in a lot of effort into in such a way that when left alone, it keeps producing value for other people without your continuous supervision.
Examples would include writing a (e)Book; creating "side dish" type products, like eCommerce plugins or themes, creating a video course, or even having an entire SaaS, and then hiring people who then slowly replace you.
Interestingly, begging for money on a street corner would not fall under this definition, since it wouldn't work without you being physically there, generating the income.
Did that clear things up?
It is only economic rent, and rent-seeking behavior, if the OP instead focuses their energy on (for example) making it so that it is illegal to use anything other than their SaaS application for that particular purpose.
If I wrote a book, government grants me a limited monopoly on production of that book, and I can collect rent (in an economic sense) from anyone who wants to reproduce that book. That's a good thing.
A difference comes in that with land, the underlying resource is limited. With books, it isn't. We're both collecting rents, but on something different. That difference translates into why it's helpful to incentivize writing books, but not helpful to incentivize consolidation of land among a few landlords.
Over time, the two converge, though. If copyright still applied to works from 1500, it would be crippling to society. People couldn't build from a collective intellectual commons, since it'd all be locked up. The people who collected rents on those works would have less incentive to work, not more, despite having no relation to their creation. Whoever owned the rights to the work of de Vinci would have tremendous income based on no contribution to society. It would create a new feudalism or nobility.
That's why the copyright and patent clause in the US Constitution guarantees copyrights and patents only for a limited term.
Rent-collecting on Mickey Mouse works incentivized Walt Disney to create Mickey. That was a obviously a good thing. Rent-collecting on Mickey Mouse now a century later isn't incentivizing anything except for extra profits to a megacorp, and limiting others' ability to build off of Walt's work. That's obviously a bad thing.
If you build a SaaS, and you collect rent from it, more power to you. If your grandchildren's grandchildren don't need to work because they're still collecting rent, we've messed something up.
TL;DR: rent seeking != parasitic. Both are distinct economic concepts.
The short definition is "seeking to increase one's share of existing wealth without creating new wealth." In this context, "creating new wealth" has a specific definition as well. Sitting on a SaaS service, or charging license fees for software I wrote a decade ago isn't it. Building a house and getting paid for clearly is.
Rent-seeking is usually bas, but it isn't always bad. Creating wealthy early on in your life, and then sitting on passive wealth generation feels okay to me. However, if you have a legacy family where wealth was last created 500 years ago, and everyone is extracting wealth by virtue of having been born into the right family, that's not okay. Your values may differ. That's okay too. Values differ between individuals and cultures.
Land is actually the main thing Adam Smith was talking about, with other things being extensions by analogy from that.
The "profiting from regulation" sense of "rent" is an extension of the plain meaning of "rent", but not mainly what Smith was actually talking about at all. Not sure if Smith in his time and place even talked about the "regulatory" aspect. Ordinary rent in it's plain meaning is what he was mainly talking about. The others are extensions by metaphor or analogy from it!
Adam Smith quotes:
> "The whole annual produce of the land and labour of every country, or what comes to the same thing, the whole price of that annual produce, naturally divides itself, it has already been observed, into three parts; the rent of land, the wages of labour, and the profits of stock; and constitutes a revenue to three different orders of people; to those who live by rent, to those who live by wages, and to those who live by profit. These are the three great, original, and constituent orders of every civilised society, from whose revenue that of every other order is ultimately derived."
[The three divisions of income you speak of -- "the rent of land" is pretty clear, this isn't a weird meaning of 'rent' but the plain one!]
> "As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce."
> "The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give."
> "The landlord demands a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own. "
Writing a book and selling copies of it is a perfect example of a productive activity. How on earth writing a book can be construed as a "passive" activity?
A clear example of non-productive (parasitic) activity is renting real state that you inherited. You are extracting, continuously, a lot of money from society without having ever produced anything of value. I do not understand by what crazy mechanism this is regarded as a socially acceptable thing to do.
If you inherit an expensive property in your twenties, and you stop studying and live off rent, then yes, you have become an unproductive "parasite".
If, otherwise, you rent the property for a couple of years while you finish your studies and save some money for reforming it before going to live there (or sell it)... then of course you are not a parasite.
Let's say I live out of rent from my mid-30s.
In the first case, it's because my rich father died and I inherited; in the second case, it's because I worked 10 years as a highly successful professional, which allowed me to buy the property.
Am I a parasite in the first case? Am I a parasite in the second?
Variant: am I a parasite if instead of having inherited / buying property, I inherited / bought a large amount of stock in index funds and I live off market returns?
But if, at the end of your life, your contribution has been grossly negative, then I guess that you have been.
Listen, I don't even think that being a small-scale parasite is a morally horrendous thing. If you are happy, that's OK, you are not really hurting anybody. I'm just very sad that all of our cities are teeming with large-scale ones!
Why do you think they are qualitatively different?
If you rent out an office building, like me, you have tenants, you have to do maintenance, you have risks.
I also have a Saas with clients that I want to keep happy by improving the service proactively. I have free websites with a lot of very useful information and a tasteful amount of ads. That requires work. For mee it's stress free work as I don't have many deadlines, but that was the goal.
I don't know why you think I'm a parasite. I am providing a service. If the users of that service are happy, then what is exactly is the problem?
By the way, I rebuilt the office building myself. It took over 2 years. It took all my evenings and weekends, it was funded by my own money and a small loan from a bank that I paid back. I also built the office I'm sitting in right now from the ground up. I even made the desk myself. I worked hard to get where I am and I enjoyed doing it.
I don't consider myself a parasite for choosing to focus on stress free work with recurring revenue. It's not easy. It's not lazy. It's a choice.
If my investments yield enough for me to live on, that's my business and my doing.
I do not understand why do you say it is involuntary, however? In a democratic country the amount of taxation is agreed upon by the majority.
If that amounts to me "parasitically" rent-seeking, then I'm sorry. I'm all in on that plan.
No one is saying every person has to labor everyday of their life. Get rid of the distortions of the current set up and you will very likely have meaningful savings when you reach a reasonable retirement age.
I am not in favor of UBI. In my experience, you are never given anything for free in this universe. An entire society dependent on the "welfare state" for life support? What if you say the "wrong thing" or think the wrong thing according to the "welfare state" that is putting food on your table and paying the rent?