Rentier capitalism

This article is about Rentier capitalism. For other uses, see Rentier.

Rentier capitalism is a concept in Marxist and heterodox economics to refer to rent-seeking and exploitation by companies in capitalist systems.^[1][2][3] The term was developed by Austrian social-geograph Hans Bobek,^[4] describing an economic system that was widespread in antiquity and still widespread in the middle east, where productive investments are largely lacking, the highest possible share of income is skimmed off from ground-rents, leases and rents and thus in many developing countries, rentier capitalism is an obstacle to economic development. A rentier is someone who earns income from capital without working. This is generally done through ownership of assets that generate yield (cash generated by assets), such as rental properties, shares in dividend paying companies, or bonds that pay interest.^[5]

Usage by Marxists

Although the combination of words "rentier capitalism" was never used by Karl Marx himself, it is compatible with the Marxist idea of surplus value extraction. In his early works, Karl Marx juxtaposed the terms "rentier" and "capitalist" to argue that a rentier tends to exhaust his profits, whereas a capitalist must perforce re-invest most of the surplus value in order to survive competition. He wrote, "Therefore, the means of the extravagant rentier diminish daily in inverse proportion to the growing possibilities and temptations of pleasure. He must, therefore, either consume his capital himself, and in doing so bring about his own ruin, or become an industrial capitalist".^[6]

Later in life, including in the manuscript later published as Capital, Vol. 3 Marx tended to further distinguish so-called rentiers into interest-bearing (finance) capitalists and a separate class of landowners, arguing that the interest from invested capital and rent from private land were economically different.^[7] He did however in various places, including a letter to Friedrich Engels acknowledge that at some point finance capital might come to own all land and in doing so eliminate the separate landlord class.^[8] It is a matter of ongoing debate as to whether or not this has come to pass.^[9]

Vladimir Lenin asserted that the growth of a stratum of idle rentiers under capitalism was inevitable and accelerated due to imperialism:

Hence the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by 'clipping coupons' [in the sense of collecting interest payments on bonds], who take no part in any enterprise whatever, whose profession is idleness. The export of capital, one of the most essential economic bases of imperialism, still more completely isolates the rentiers from production and sets the seal of parasitism on the whole country that lives by exploiting the labour of several overseas countries and colonies.^[10]

Current usage

Current usage of the term 'rentier capitalism' describes the gaining of 'rentier' income from ownership or control of assets that generate economic rents rather than from capital or labour used for production in a free competitive market.^[11] The term rentier state is mainly used not in its original meaning, as an imperialistic state thriving on labor of other countries and colonies, but as a state which derives all or a substantial portion of its national revenues from the rent of indigenous resources to external clients.

Guy Standing has claimed rentier capitalism has become predominant in capitalistic economies since the 1980s.^[12] Brett Christophers of Uppsala University, Sweden has asserted that rentier capitalism has been the foundation of the United Kingdom's economic policy from the 1970s onwards.^[13] With the return of high inflation to the United Kingdom in 2022, political economist William Davies surveys recent British economic events in light of rentier capitalism.^[14]

See also

• Crony capitalism
• Financialization
• Parasitism (social offense)
• Rentier state
• Rent-seeking

References

1. Peter Frase (7 July 2011). "Slouching towards rentier capitalism".
2. Monbiot, George (29 August 2011). "Academic publishers make Murdoch look like a socialist". The Guardian.
3. Dariush M. Doust (January–February 2010). "Rentier capitalism and the Iranian puzzle" (PDF). Radical Philosophy (159): 45–49.
4. https://ideas.repec.org/h/pal/palchp/978-1-349-05417-6_2.html Developed in the late 1950s by the Austrian geographer Hans Bobek in connection with a theory of ‘the main stages in socio-economic evolution from a geographical point of view.
5. Aligica, Paul Dragos; Tarko, Vlad (2014). "Crony Capitalism: Rent Seeking, Institutions and Ideology: Crony Capitalism". Kyklos. 67 (2): 156–176. doi:10.1111/kykl.12048. S2CID 154030054.
6. Marx, Karl (1932). "Third Manuscript: Private Property and Labor". The Economic and Philosophical Manuscripts. Moscow: Marx–Engels Institute – via Marxists Internet Archive. See also the article Economic and Philosophic Manuscripts of 1844.
7. Marx, Karl (1991). Capital: Volume 3. London: Penguin Classics. pp. 759–761.
8. Marx, Karl; Engels, Frederick (2010). Marx & Engels Collected Works, Volume 41: Letters 1860-1864. London: Lawrence & Wishart. p. 398.
9. Manning, F.T.C. (2022). "A Defence of the Concept of the Landowning Class as the Third Class". Historical Materialism. 30 (3): 79–115.
10. Lenin, Vladimir Ilyich (1963). "Imperialism, the Highest Stage of Capitalism". Lenin's Selected Works. Vol. 1. Moscow: Progress. pp. 667–766 – via Marxists Internet Archive.
11. Birch, Kean (6 February 2019). "Technoscience Rent: Toward a Theory of Rentiership for Technoscientific Capitalism". Science, Technology, & Human Values. 45: 3–33. doi:10.1177/0162243919829567.
12. Standing, Guy. The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay, London: Biteback (2016)
13. Christophers, Brett (12 August 2020). "The PPE debacle shows what Britain is built on: rentier capitalism". The Guardian. London, United Kingdom. ISSN 0261-3077. Retrieved 27 December 2020.
14. Davies, William (30 May 2022). "This age of inflation reveals the sickness ailing Britain's economy: rentier capitalism". The Guardian. London, United Kingdom. ISSN 0261-3077. Retrieved 30 May 2022.

Bibliography

• Robert Pollin, "Resurrection of the Rentier", in New Left Review 46, July–August 2007, pp. 140–153.
• Michael Hudson. Financial Capitalism v. Industrial Capitalism. The Other Canon Conference on Production Capitalism vs. Financial Capitalism (Oslo, 3–4 September 1998).
• Karl Marx, "The Economic and Philosophical Manuscripts", Institute of Marxism–Leninism in the Union of Soviet Socialist Republics, 1932. The Economic and Philosophical Manuscripts
• Karl Marx, "Theories of Surplus-Value", Progress Publishers, 1863. Economic Manuscripts: Theories of Surplus-Value by Karl Marx 1863
• Vladimir Lenin, "Imperialism, the Highest Stage of Capitalism", Lenin's Selected Works, Progress Publishers, 1963, Moscow, Volume 1, pp. 667–766. Lenin: Imperialism, the Highest Stage of Capitalism'
• Ahmed Henni, Le capitalisme de rente: De la société du travail industriel à la société des rentiers. Paris: Harmattan, 2012.
• Guy Standing, The Corruption of Capitalism Why rentiers thrive and work does not pay (2016)