What Capital Never Told You About Rent

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?

20 years is not ad infinitum.

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.

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.

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.

(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...)