Rentier capitalism is a concept in

Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...

and

heterodox economics Heterodox economics is a broad, relative term referring to schools of economic thought which are not commonly perceived as belonging to mainstream economics. There is no absolute definition of what constitutes heterodox economic thought, as it i ...

to refer to

rent-seeking Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effi ...

and exploitation by companies in capitalist systems. The term was developed by Austrian social geographer Hans Bobek describing an economic system that was widespread in antiquity and still widespread in the Middle East, where productive investments are largely lacking and the highest possible share of income is skimmed off from ground-rents, leases and rents. Consequently, 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 financial markets, a share (sometimes referred to as stock or equity) is a unit of equity ownership in the capital stock of a corporation. It can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Sha ...

dividend A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex ...

-paying companies, or bonds that pay

interest In finance and economics, interest is payment from a debtor or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct f ...

Usage by Marxists

Although the combination of words " rentier

capitalism Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...

" was never used by

Karl Marx Karl Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet '' The Communist Manifesto'' (written with Friedrich Engels) ...

himself, it is compatible with the

idea of

surplus value In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to manufacture it: i.e. the amount raised through sale of the product minus the cost of the materials, plant and ...

extraction. In his early works,

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". Later in life, including in the manuscript later published Das 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. He did however in various places, including a letter to

Friedrich Engels Friedrich Engels ( ;"Engels"
''Random House Webster's Unabridged Dictionary''.Vladimir Lenin Vladimir Ilyich Ulyanov ( 187021 January 1924), better known as Vladimir Lenin, was a Russian revolutionary, politician and political theorist. He was the first head of government of Soviet Russia from 1917 until Death and state funeral of ...

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'
n the sense of collecting interest payments on bonds N, or n, is the fourteenth letter of the Latin alphabet, used in the modern English alphabet, the alphabets of other western European languages, and others worldwide. Its name in English is ''en'' (pronounced ), plural ''ens''. History ...
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.

Current usage

Current usage of the term 'rentier capitalism' describes the gaining of 'rentier' income from ownership or control of assets that generate

economic rent In economics, economic rent is any payment to the owner of a factor of production in excess of the costs needed to bring that factor into production. In classical economics, economic rent is any payment made (including imputed value) or bene ...

s rather than from capital or labour used for production in a free competitive market. 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.Standing, Guy
''The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay''
London: Biteback (2016) Brett Christophers of

Uppsala University Uppsala University (UU) () is a public university, public research university in Uppsala, Sweden. Founded in 1477, it is the List of universities in Sweden, oldest university in Sweden and the Nordic countries still in operation. Initially fou ...

, Sweden has asserted that rentier capitalism has been the foundation of the United Kingdom's economic policy from the 1970s onwards. With the return of high

inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...

to the United Kingdom in 2022, political economist William Davies surveys recent British economic events in light of rentier capitalism.

References

Bibliography

* Robert Pollin, "Resurrection of the Rentier", in ''New Left Review'' 46, July–August 2007, pp. 140–153. * *

, "The Economic and Philosophical Manuscripts", Institute of Marxism–Leninism in the Union of Soviet Socialist Republics, 1932
The Economic and Philosophical Manuscripts
*

, "Theories of Surplus-Value", Progress Publishers, 1863
Economic Manuscripts: Theories of Surplus-Value by Karl Marx 1863
*

Vladimir Lenin Vladimir Ilyich Ulyanov ( 187021 January 1924), better known as Vladimir Lenin, was a Russian revolutionary, politician and political theorist. He was the first head of government of Soviet Russia from 1917 until Death and state funeral of ...

, "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) {{Use dmy dates, date=February 2019 Capitalism Marxist terminology

Usage by Marxists

Current usage

See also

References

Bibliography