By Brett Christophers (Verso 2020)
Who is a rentier? What is rentierism?
“Arqiva, a private telecommunications company, “makes money, in other words, thanks to what it controls rather than what it does, and the money handed over by its customers is accordingly remuneration not for something received – a raw material, product or service – so much as for something accessed or used. The word typically used to refer to such an access or usage payment is rent (the transmission sites, spectrum and towers are essentially being rented out); and Arqiva, insofar as such rents are its lifeblood, is what is typically referred to as a rentier.
“[I]n essence, rent, at least as understood in this book, is payment to an economic actor (the rentier) who receives that rent – and this is the key factor – purely by virtue of controlling something valuable. The ‘something’, whatever it happens to be, is referred to generically as an ‘asset’: an ‘item of value owned’ (to borrow the standard dictionary definition) that is valuable precisely in view of the fact that control over it endows the owner with the capacity to generate future income.
“A construction company though “is not a rentier; it earns money not for controlling the asset, but for creating it. The letting fee, by contrast, is rent, and the landowner a rentier, since she receives payment only because she is the owner of the house and thus has the capacity to charge someone for the right to occupy it.
“Some – housing, telecommunications infrastructure, digital platforms – are physically constructed, in virtual if not real space; others – intellectual property rights, outsourcing contracts – are purely legal rather than physical constructs; and others still – land, natural resources – are not constructed at all, but simply exist spontaneously.
“Whatever its particular qualities, however, there must be an asset for there to be rent. Rent is income to which control of a valuable asset is in some sense fundamental, and a rentier is the recipient of such income. No asset, no rent, no rentier.
“For a form of capitalism structured by contrast around ‘having’ – rentier capitalism, in other words: a mode of economic organization in which success is based principally on what you control, not what you do – the balance sheet is the be-all and the end-all.
Rentier capitalim “exists widely – but, I will argue, is manifest in an especially advanced and stark form in Arqiva’s territory of operation, the United Kingdom, where it has taken shape over the course of the past four decades, during the era of what is commonly described as ‘neoliberalism’.
“Not only do different writers have different things to say about rent and rentierism; the object of their analysis is often not even the same. But this should not surprise us. Of all key economic terms and concepts, arguably none has been put to such varied terminological and theoretical use over the years as ‘rent’… Marx’s rent was essentially everyone else’s rent: payment to monopoly control of land.
Crucially, this first understanding of rent has been dramatically widened in the period since Marx and his predecessors were writing. Rent remains, by this expanded understanding, payment for monopoly control of an asset, but the asset need not be land; it can be anything, if control of that thing generates some kind of access or usage payment.” David Harvey asks:
But what are we to make of rent-seeking through ownership of intellectual property rights?
“For [Thomas] Piketty, rent is ‘remuneration for ownership of [an] asset, independent of any labor’.
“Not only, some heterodox writers argue, is rent asset-based income; it is income associated with the extraction rather than creation of value. The rentier, that is to say, is considered a parasite; asset control enables her to arrogate to herself value created elsewhere…” Rutger Bregman, for instance, “has written vividly of rentiers ‘sucking the rest of us dry’… [F]or the likes of Michael Roberts, many contemporary Western economies, including the UK’s, are rentierist specifically in the sense that they ‘[live] off the productive development of other countries’.”[1]. Such a critiques echos Lenin’s. “The export of capital … 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.[2]
“Within mainstream (‘orthodox’) economics, rent is defined not on the basis of the type of asset in relation to which it represents a payment – land rents, financial rents, and so forth – but instead by the quantum of market power enabling its derivation: it is the profit attainable specifically due to a dearth of market competition.
“Rents defined in this orthodox sense may derive from control of an asset, but, crucially, they need not… “the Economist provides one example where asset control is absent: ‘A soccer star may be paid $50,000 a week to play for his team when he would be willing to turn out for only $10,000, so his economic rent is $40,000 a week’.”[3]
Does monopoly control, “combined with asset scarcity, guarantee income generation? No. An asset – a new, patented production technology, say, or a mineral fuel resource – can be scarce and in principle valuable; but the proprietor’s commercialization of it can nonetheless encounter competition of a degree that precludes rents from being earned.
“Rent-bearing assets, in short, are those characterized by monopoly power not just in ownership or control – the heterodox emphasis – but also in terms of their commercialization on the market…Monopoly control of an asset is for naught economically if the owner lacks the power to monetize that asset in market exchange.
“The definition of rent I use here, then, is effectively a hybrid of the heterodox and orthodox: income derived from the ownership, possession or control of scarce assets under conditions of limited or no competition.
“With mainstream economists, we can agree that market power is integral to rent and rentierism. But this condition, though necessary, is not sufficient, since monopoly profits can of course also be achieved without the control of scarce assets – for instance, in the case of cartelized or highly concentrated industries. Meanwhile, with heterodox scholars ranging from Harvey to Piketty, we can agree that control of scarce assets is also integral to rent and rentierism – but this condition is not itself sufficient either, because the owner of such assets may nonetheless be subject to competitive forces in the shape, for example, of substitute products or services. Both as asset proprietor and in putting the asset to commercial use, the rentier sweats monopoly from every pore.
“[W]hat capitalist income is not rent? What capitalist not a rentier?
“Ultimately, like all important economic concepts, ‘rent’ is blurred at the margins. There are no cut-and-dried distinctions. Most economic production of goods or services contains rentier elements.
“Not all capitalists are rentiers…. Where rent is being earned, meanwhile, it is unlikely to be the case that all of the rentier’s income takes the form of rent… Few assets, if any, generate income automatically; they ordinarily need to be put to work. This holds even for real estate, the archetypal rentier asset.
“In general, we can state: rent is typically only part of a rentier’s income rather than its totality… Rentierism consists therefore in scarce and exclusively controlled assets being not just leveraged in production but substantively so – that is, in such a way as to materially influence the nature of the economic activity and the amount of income it generates. In any event, in all of the forms of economic production investigated in this book, control of an asset is fundamental; without it, income-generation would be at least severely compromised, and in many cases inconceivable.
marginal, residual or ephemeral phenomenon within capitalism… Marx that under nineteenth-century industrial capitalism, the landed rentier hadn’t yet passed into the night, but instead was still capable of extracting a share of the surplus value created by workers in production… Keynes believed that
under the right circumstances, financial rentierism would soon dissipate… [H]is argument was that a greater abundance of capital – something of which he was strongly in favour – would bring about the euthanasia of the financial rentier.
“Meanwhile, orthodox economics treats rent as an aberration from an idealized norm, a phenomenon of the historical and theoretical margins. The entire mainstream edifice is structured around the expectation that competition will ultimately and ordinarily prevail in a market system.
“Yet the reality of the early twenty-first century clearly belies all three – Marx, Keynes, and the mainstream. Land rents haven’t faded away. Nor have financial rents. And nor – contra the mainstream – have rents in general. Rentierism has proven itself to be incredibly stubborn. It is a much more important phenomenon to contemporary capitalism than Marx or Keynes could ever have imagined, and than mainstream economics allows.”
In Rentier Capitalism, “the primary implications of the rentier dominance of contemporary capitalism are identified. Rentierism stifles innovation, depressing the dynamism of capitalist economies. And rentierism is a major mechanism producing inequality in our society.
“In most countries of the West, most of these various forms of rent are paid to corporate entities – either the state or, as is overwhelmingly the case, capitalist corporations. This, in itself, is striking: when we use the term ‘rentier’, it typically conjures an image of an individual – one living comfortably and passively off inherited wealth; but the reality is that most rentiers are not individuals, but institutions. More precisely, the reality is that contemporary rentierism, in terms of the overall scale of rents being ‘earned’, is a predominantly corporate rather than individual or household affair.
“In examining rentier capitalism in the UK, it explores a mode of economic organization that, by all accounts, is increasingly dominant across advanced capitalist economies more generally.”
“Central to this issue were land and landowners. Noting the historical fact – some would say curiosity – that traditional agrarian classes ‘either led or survived every major political upheaval that opened the way to the modern capitalist state, not only in Europe but in North America and Japan as well’, Perry Anderson has argued that nowhere did those tenacious traditional landowning classes prosper, both politically and economically, from the transition to capitalism more than in the UK: ‘The English estate-holders had no rivals in this regard.’ For reasons including the particular thoroughness with which peasants were divorced from the means of production in the countryside, agriculture in the UK assumed a capitalist cast more rapidly and more comprehensively than anywhere else in Europe.
So, consequently, did the nation’s major landowners, who by at least a century in advance of the Industrial Revolution had become what Anderson describes as ‘a capitalist stratum proper’.[4]
When industry arrived on the scene, the UK’s landed-property establishment succeeded to a remarkable degree in reshaping the emergent industrial bourgeoisie in its own image … [T]he landed rentier class retained its superiority; industry and the industrial bourgeoisie were subordinate… Indeed, between 1809 and 1879, approximately 90 per cent of British millionaires were landowners.[5] Industry, for all its raw productivity, was not even in second place. Beneath landowning, notes Anderson, ‘came commerce rather than manufacturing’, not just socially, but also ‘economically’.[6]
Needless to say, undisputed landowner dominance did not last forever. Times were changing. But when a new dominant bloc eventually came to the fore, it was another rentierist bloc? By the nineteenth century, London had eclipsed Amsterdam as the world’s leading financial centre[*].
‘When agrarian property lost its weight it was not industry but finance which became the hegemonic form of capital, in a City socially and culturally in many ways closer to the wealth of estates than of factories.’ In fact, landed property was only ever partially displaced by financial capital. As Anderson remarks, it is truer to say that what the late Victorian epoch actually saw in the UK was the emergence of ‘an increasingly integrated plutocracy’ populated principally by both financiers and ‘landed magnates’.[7]
In 2014, Doreen Massey and Michael Rustin argued that it was impossible to understand the contemporary UK unless one attended to the longstanding influence of financial and landed- property interests. Both of these sets of interests, Massey and Rustin emphasized, sought to profit primarily from ‘the holding of assets’ rather than from production and human labour (in other words, both were explicitly rentierist); and both were ‘utterly embedded in the British class structure’.[8] Massey and Rustin argued that over the longue durée, rent had ‘been more important in the mentality and practice of Britain’s ruling class than industrial production’.[9] In short, by historical disposition the UK – at least at the level of the capitalist class – is a rentier nation.
The early to mid twentieth century in the UK saw a substantive if far from complete subduing of the rentier… By mid-century, Hugh Dalton, then chancellor of the exchequer in a Labour government, felt sufficiently confident about the direction of travel to predict full land nationalization. [10] Meanwhile, the ‘Big Five’ clearing banks were controlled by the state to the extent of receiving ‘precise instructions from the Treasury concerning not only their liquidity but also their lending priorities’.
Since the end of the 1970s, UK banks and bankers have clearly awoken from that dream state, and have enjoyed a period of almost unimaginable riches – rudely interrupted in 2008, to be sure, but to the long-term cost not of the banks and bankers themselves but rather of the government and taxpayers…Aeron Davis and Catherine Walsh noted: ‘the UK economy has become more financialised and has gone through a more pronounced process of deindustrialisation than any of its major economic rivals’.[11] Such declarations are no longer seriously questioned. That the UK’s is a financialized economy is now more or less a stylized fact – a commonplace of current scholarship.
But it is not true. Or, rather, it is true only in small part: financialization represents only one vector of a wider structural shift in the UK economy under neoliberalism.
Financialization has been, at most, the leading edge of the economic transformation of the UK under neoliberalism. That overall process can be understood as one not of financialization, but rather of rentierization, whereby, to paraphrase Krippner, one might say that profits have increasingly taken the form of economic rents – including but not limited to financial rents – rather than income from trade or commodity production.
A careful assessment of relevant data sources confirms the fact that rent is indeed now dominant. The UK economy has been transformed into one in which control of exclusive assets is ever more critical. We have seen the development of a full-fledged national rentier capitalism – or, more exactly, a system of rentier capitalism centred on the UK, but extending well beyond its territorial borders. In the UK today, the leading corporations are largely rentiers, and the biggest sectors of the economy are largely characterized by rentier dynamics.
The commanding heights of 'UK plc’, as the nation’s commercial community as a whole is often
labelled, are dominated by rentiers. Every single one of the thirty companies with the largest market value traded on the LSE [London Stock Exchange] earns substantial rents of some kind. Rents are what the companies … are all designed to generate; rent is their shared raison d’être, and rentierism is embedded in their individual and collective DNA.
David Edgerton has observed: ‘Since the 1970s things have changed radically. Today there is no such thing as British national capitalism. London is a place where world capitalism does business – no longer one where British capitalism does the world’s business.’[12] This is entirely correct.”
Notes
1. M. Roberts, ‘The Rentier Economy’, 28 January 2013, at thenextrecession.wordpress.com.
2. V. Lenin, Imperialism, the Highest Stage of Capitalism (Sydney: Resistance Books, 1999 [1916]), p. 101.
3. See ‘Economics A–Z Terms’, at economist.com.
4. P. Anderson, ‘The Figures of Descent’, New Left Review I/161 (1987), pp. 20–70, at p. 28.
5. D. Cannadine, The Decline and Fall of the British Aristocracy (New York: Vintage, 1990), p. 91.
6. Anderson, ‘Figures of Descent’, p. 57.
*As of January 2025, London is ranked second among the dominant global financial centres.
7. Ibid., pp. 34, 57, 41. The only industrialists to figure in that plutocracy, Anderson writes, were brewers.
8. D. Massey and M. Rustin, ‘Whose Economy? Reframing the Debate’, Soundings 57 (2014), pp. 170–91, at p. 171.
9. M. Rustin and D. Massey, ‘Rethinking the Neoliberal World Order’, Soundings 58 (2015), pp.
110–29, at p. 129
10. B. Christophers, The New Enclosure: The Appropriation of Public Land in Neoliberal Britain (London: Verso, 2018), p. 110
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