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Rentiers

Definitions of Rentier on the Web (via google):
  • A person whose income comes mainly from rent on land or, more broadly, from assets rather than labor. (Pronounced "Ron' Tee Yay".) — www-personal.umich.edu/~alandear/glossary/r.html
  • He is a person living on income received from fixed investments. — www.indiainfoline.com/bisc/jmfr.html
  • someone whose income is from property rents or bond interest and other investments  — wordnet.princeton.edu/perl/webwn
  • A rentier is a person who lives on the income from property, bond interest, or other investment and is not personally involved in its operation. — en.wikipedia.org/wiki/Rentier


Jeff Smith: What the Left Must Do: Share the Surplus

The much and justifiably criticized corporation is in essence its corporate charter, given value by limiting the liability of managers, directors, and investors. It’s worth at least the cost of the insurance payments not made by the corporation, which would equal the costs imposed upon worker, customer, and nature. As the “need” arises, legislatures extend limited liability even further: Congress legally lowered the greater risk of nuclear power to benefit Westinghouse, of the Valdez oil transport spill for Exxon, and the Y2K software design bug for Microsoft. Politicians define legally “safe” amounts of polluted air and water for GM and Monsanto, keeping safe the wealth of those responsible.

Not to be outdone by any legislature, the Supreme Court has ruled in favour of compensating landowners for environmental “takings”, but has remained silent about landowners compensating the public for any “givings”, as when site values skyrocket near a new light rail stop. Molly Ivins wrote,
"Henry George must be in his grave spinning' like a cyclotron. We, the people at large, make the land more desirable; and then the landowners want us to pay them because we won't allow them to poison the air or to pollute the rivers." (1995 March)
That’s how great fortunes are made: by sloughing off private costs (which become “negative externalities”) while soaking up public benefits (some “positive externalities”). Land titles, corporate charters, and other privileges – mere pieces of paper – are worth trillions each year. The corporations – from the Federal Reserve to Exxon (both founded by the “oiligarchy”) – that receive these privileges make their owners rich or richer. Their wealth is not compensation for the exertions of either labor or capital, not profit in the market from output, but rent from present lobbying of legislatures or past conquest of others’ lands. Thus laws (“privilege” means “private law”) funnel multi-trillions of dollars each year from the many to the few.

Rentiers become the elite or rise higher up among the upper echelon, the puppeteers of our puppet state. Their ranks grow with every techno-advance that spurs a new monopoly and pushes up locational values. Read the whole article

Is There a Conspiracy in the Teaching of Economics and History within the American Education System? an interview with Mason Gaffney

MG: Generically, it goes back thousands of years: every system that divides mankind into rentiers and proles requires a rationale. Those with leisure have time and resources to provide it: sometimes directly, but usually through hired guns.

The need became more acute in the USA during and after the Progressive Era, with its development of the secret ballot and direct democracy. Voters could no longer be bought or intimidated directly; they had to be brainwashed. The device used was to replace the older Classical Political Economy (Quesnay, Adam Smith, Ricardo, Mill, and Henry George) with "Neo-classical Economics," which blurred all distinctions between producers and rentiers.

Henry George was the clear and present danger that triggered off the work of early neo-classicals, especially in America, but also around the world. He was not just an economic writer but a political force. He was nearly elected mayor of New York, a key position in US national politics. He communicated well with masses of people: a few who understood his reasoning, and a mass who got the general idea and resonated with his personality. He had an ethnic constituency, the Irish-Americans of New York, who carried his ideas into the Irish-English conflict, a springboard for a worldwide anti-colonial movement. He and they carried his ideas into Vatican politics, triggering off the 1891 Encyclical, "Rerum Novarum," a defining turning point in the social action views of the Catholic Church. His followers grew strong in the Radical wing of the Liberal Party in England, had a deep influence on Edwardian politics, culminating in the disempowerment of the House of Lords in 1911.

TPR - So, it goes back farther than Henry George's detractors. Who would you say was the first "professional" economist?

MG - Thomas Malthus was perhaps the first person to teach a subject of that name, although earlier writers, including church writers, said a lot about it. Thomas Aquinas had been highly influential; so had Aristotle.

TPR - They were paid to keep quiet about the land question?

MG - No more than anyone else. They lived in a society dominated by landowners.

  • Adam Smith spent his life on the payroll of the Duke of Buccleuch, as tutor for His Grace's son. Landowners were so very secure, some of them could let their house intellectuals tweak their noses with radical ideas - probably found it entertaining. It was later, after universal manhood suffrage, that the landowners got nasty and conspiratorial and defensive, and went about brainwashing the electorate.
  • Ricardo and Von Thuenen were independently wealthy, and could afford to indulge their passion for ideas, objectively.
  • Mill was a prodigy who built an enormous reputation, and had civil service tenure, before he ventured radical ideas about land ownership.
  • A.R. Wallace, too, had a towering rep. as a biologist before venturing into public policy. Had he not done so, he would still be as famous as Darwin, as originally he was.

All this time there was a large majority of small intellects who catered to the landed interest. Nassau Senior was one. The weight of their numbers was enough to offset their mediocre attainments, and cast Mill as an eccentric loner, an impractical ideal ist, as well as a sissy who favored women's rights.  ... read the whole interview

Michael Hudson and Kris Feder: Real Estate and the Capital Gains Debate

Economic policy should distinguish between activities which add to productive capacity and those which merely add to overhead This distinction elevates the policy debate above the level of merely carping about inequitable wealth distribution, an attack by have-nots on the haves, to the fundamental issues. What ways of getting income deserve fiscal encouragement, and how may economic surpluses best be tapped to support government needs? Policies that subsidize rentier incomes while penalizing productive effort have grave implications, not only for distributive justice and social harmony, but also for economic efficiency and growth. Read the whole article

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