What Capital Never Told You About Rent

inshard

I am not seeing the connection. Whenever I hear capital and elites, it’s a clear red flag around lack of understanding. And just laziness about money. I think a lot of these voices would change if they just had 20% of [edited: discretionary] income auto-invested in equities from an early age.

MarkusQ

Marxist slop. Old school, apparently hand crafted bespoke slop, but slop nonetheless. (Labor theory of value, they got rich by stealing what was rightfully yours, lots of linguistic games, private ownership is the root problem, yada yada...)

jstanley

> There is no more intrinsic reason for the scarcity of capital than there is none for the scarcity of air. You're suggesting that capital holders restrict the supply of capital so that they can extract rent on it? And if they didn't do that we'd just have unlimited capital and everybody would get to be arbitrarily rich? Then what do capital holders get out of restricting the supply? Wouldn't they rather be arbitrarily rich instead? > Every claim on human effort that exits the productive system as rent is a claim that cannot circulate internally, cannot pay workers fairly, cannot fund the next big idea or reduce the cost of the next product. What? Why? When you pay rent do you think your landlord isn't going to spend that money?

epistasis

These are very good ideas for much more of the populace to digest and internalize. I'm not sure how many will. And much of the popular critique of capitalism is driven by those who don't distinguish between profit and rent, when in fact the near entirely of the extraction that is causing inequality is from rent extraction and not "profit" as used in this piece. Especially when it comes to real estate, which is most people's largest expense, growing, and one of the biggest political challenges we face today. (Broad homeownership has created a lot of people that benefit from increasing residential housing costs, or at least don't see any problems with them). Glad to see Schumpeter get mentioned, as Schumpeterian rents are perhaps defensible for a while, I think.

mrdependable

The problem with this is that the author has explained capitalism in a way that sounds harrowing to the wider public, but sensible to everyone holding any sort of power. These outcomes aren’t a side effect of the system; they are the system working as intended. Governments and corporations don’t want people that are comfortable and happy, they want people strapped to the yoke. The constant stress is them cracking the whip.

fwlr

Charging rent on capital was historically called “usury”, and was denounced by everyone from Aristotle to Aquinas, from Moses to Buddha to Muhammad. I suspect they had the right of it, which poses some problems for our present society, fractally composed of usury (as the article aptly outlines).

EarthBlues

Good essay with lots of interesting points. I especially liked how the author tried throughout to appeal beyond a narrow left-wing audience. Something that I noticed that might help clarify things: I think the author mixes two phenomena together: (1) Rents and (2) subjective vs objective property rights. Rents were pervasive in the middle ages. There are lots of black legends about medieval Europe, but we don't have to tell golden legends about it either. The whole economy if medieval Europe relied on people controlling land, then demanding goods and service in exchange for its use. That is Rent! It was often exceedingly exploitative and harsh! What changed in the modern era was a the decline of objective property rights. The way property was treated in law and fact went from "this is my farm, which is mine for farming, and it comes with these rights and obligations. That's the commons. I have these rights to it and these obligations to my lord and his other subjects in how I use it." This changed to "this is my property with which I can do what I see fit. I have no objective obligations to anyone else." Subjective property rights also existed before capitalism, but they completely eclipsed objective right in the early modern period. This increased economic productivity and growth on a scale that was not thought possible, but also, as the author notes, had serious negative consequences. The reason that this distinction matters is that you can absolutely abolish subjective property rights and still have rents. You can actually make them worse. If people are being extorted for access to some good, they will not care if it's done by a private company or a public administrator. I don't see how the author's framework of "personal property" overcomes the issue.

toaste_

>why the smartest move for capital right now is to compost it back into the systems sustainable wealth depends on Sure. In aggregate. See also: "Tragedy of the Commons" and "Everyone Will Not Just"< https://emilybook.org/2024/11/03/everyone-will-not-just/ > Without coordinated effort to limit that extraction it will continue until the resource is exhausted. An obvious conclusion is that one function of Government is to coordinating how much extraction is permissible or enforce fair dealing. Capital has spent a great deal of your collected rent persuading people that this idea is wrong and would lead to terrible harms.

tzs

> Patent holders don’t reinvent a drug each time it is prescribed. Yet they all extract value ad infinitum , because they hold positional claims on these resources. 20 years is not ad infinitum.

mwkaufma

Pretty milquetoast analysis which I'm sure ruffles the feathers of all the landlords in the peanut gallery on this site, but what's really objectionable is the periodic terrible AI-generated images.