The real “takers” in America are not poor people dependent on welfare, but the unproductive, rent-extracting rich....
As Mike Konczal and many others have argued, profits should be distinguished from rents. “Profits” from the sale of goods or services in a free market are different from “rents” extracted from the public by monopolists in various kinds. Unlike profits, rents tend to be based on recurrent fees rather than sales to ever-changing consumers. While productive capitalists — “industrialists,” to use the old-fashioned term — need to be active and entrepreneurial in order to keep ahead of the competition, “rentiers” (the term for people whose income comes from rents, rather than profits) can enjoy a perpetual stream of income even if they are completely passive....
All of this suggests that, if we want a technology-driven, highly productive economy, we should encourage profit-making productive enterprises while cracking down on rent-extracting monopolies, whether they are natural products of geography and geology (real estate and energy and energy and mineral deposits) or artificial (chartered banks, professional licensing associations, labor unions, patents and copyrights). This is a valid distinction between “makers” and “takers.”
Unfortunately, with the exception of some leftist and liberal economic thinkers who distinguish “rentier capitalism” or “financial capitalism” from “industrial capitalism,” conventional political discourse doesn’t distinguish among profit-earning “makers” and rent-extracting “takers.”AlterNet
Rents come in as many kinds as there are rentier interests.
America's Problem: Private Sector Parasites
Michael Lind | Salon
"The rent is too damn high" — in more ways than one.
Michael Hudson gets a chorus without being named.
5 comments:
Is a tax a rent? It is by necessity, as it is described. But not all rents are bad rents.
For any species a biological tax is exerted on any sane individual in rearing children. If this does not happen the species tends to extinction.
Surely as humans we praise the good life of the retired population.
Therefore an effective transfer of wealth from producers to non-producers must take place for life, growth and well-being of a species to be possible. This can be agreed and to be even motif of pride the first as the last are the loved ones, both hope and future.
This can be a justification for state taxes. State taxes can be consolidated into a Social Tax and the Social Tax can be equated to the transfer to public domain of produced wealth in the amount of (all - producers)/all as a basic number.
A country with say 150 million people with 100 million producers needs a basic 1/3 tax on income, (150-100)/100.
Producers should pay in the amount that non-producers are supposed to receive. People should interpret taxes as a signal of transfer from private to public to be distributed for children and retired The target of public collection of tax should not be collect money indeed but coordinated effort giving real results.
Producers must not only pay but also make real product by coordinating through public organizations expressing the universality of citizenries in countries. The function of tax is then threefold, to signal the transfer from producers to non-producers, from private to public domain, and the desired level of public coordination in total coordination..
This can be used to create in the real world a minimum income or rent for every children or retired. This must include all that is desirable as public infrastructure, health and education. And of course the same amount of real wealth should be available to producers on the condition that they coordinate themselves to do so.
The minimum national income effectively realized for all citizen must be taken as the first criterion to assess the coordination capabilities of both government and organization management.
National societies expressed as States distinguish themselves for the minimum real income that is in fact realized for every citizen. It is not GDP per person that matters most. What defines the human development of a country is minimum income for all.
Is a tax a rent?
Taxation is not a form of economic rent. See Wikipedia-Economic Rent
This is what Lind says:
"Last but not least, taxes are rents paid to territorial governments for essential public services, including military and police protection."
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Frankly, while I found the posts linked to (by Mike Konczal and Peter Frase) quite thought-provoking (and paralleling in some measure the ideas of Michael Hudson), for me Lind missed the mark.
For him, there are two classes of capitalists: the bad ones (the FIRE), who exploit the good ones (the industrial, commercial and presumably service).
Workers should team up with the good capitalists, is the implicit suggestion.
What Lind seems to ignore is that there is no real difference between a FIRE capitalist and a "good" capitalist.
Konczal, for one, has given examples: GE which is both industrial and financial.
As a follow-up to my previous comment: Daron Acemoglu (probably best described as a center-right economist) has this to say about unions (which Lind equates to cartels):
"Faced with a trade union
exercising monopoly power and raising the wages of its members, most economists would
advocate removing or limiting the union’ ability to exercise this monopoly power, and this is certainly the right policy in some circumstances. But unions do not just influence the way the labor market functions; they also have important implications for the political system. Historically, unions have played a key role in the creation of democracy
in many parts of the world, particularly in Western Europe; they have founded, funded and supported political parties, such as the Labour Party in Britain or the Social Democratic parties of Scandinavia, which have had large impacts on public policy and on the extent of taxation and income redistribution, often balancing the political power of established business interests and political elites."
Or
"In most situations, unions clearly create economic distortions by pushing the wages of their members up relative to non-unionized employees. Unions may also create other distortions, like discouraging employers from adopting certain technologies and efficiency-
enhancing practices. As a result, reducing the power of unions to push up wages is often mainstream economic advice."
Ironical, isn't it?
Ironical, isn't it?
Not really. It shows that democracy and capitalism are incompatible forces. This is the dialectic now being played out on the stage of world history.
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