Slaves to the Asset

By Brett Christophers

The period since the global financial crisis has seen increased recognition, sparked in particular by the work of Thomas Piketty, that contemporary capitalism is increasingly ‘rentierist’ in nature – dominated by the control of scarce rent-generating assets such as land, infrastructure and digital platforms.

It is also increasingly accepted that the UK is the archetype of such a rentier economy. Having pursued the privatization of public assets further arguably than anywhere else, the country is reaping the consequences in terms of entrenched rentier ascendancy and power.

In most discussions of rentier capitalism, work is conspicuously absent. This is easy to explain. Work, it is said, is what happens in ‘productive’, non-rentier capitalism. Rentiers, by contrast, do not work. Their income is derived not from doing something – working – but exclusively from controlling something – the scarce asset, whatever that asset happens to be. It is in this sense that rentier incomes are said to be ‘unearned’ incomes, in contradistinction to the earned incomes of productive capitalists and those employed by them.

Yet the reality is much less clear-cut. Assets such as land, infrastructure and digital platforms do not generate income automatically and independently – they need to be put to work. Modern rentier capitalists often have huge workforces: National Grid, which earns rents from ownership and control of UK electricity and gas transmission and distribution networks, has over 20,000 employees; Google, which earns rents from ownership and control of global digital-media platforms, has over 100,000 employees.

And, much as those on the left are loath to admit it, even those at the top of rentier institutions often work – in Rutger Bregman’s words – ‘damn hard’. ‘Countless people in the financial sector’, Bregman says, by way of example, ‘apply great ingenuity and effort to amass “rent” on their wealth’. In short: ‘There is no longer a sharp dividing line between working and rentiering’ – if, indeed, there ever was.

The problem of rent is not that rentierism does not require effort – that rents are ‘unearned’.  The problem is that different types of work vis-à-vis rent-generating assets are differentially valued by our existing society and economy.

At one end of the spectrum are those who create, acquire or protect from competition the assets that generate income. Examples would be financial sector ‘quants’ who dream up exotic new derivative instruments, oil industry executives who sign lucrative concession agreements with resource-rich nation-states, intellectual property lawyers who secure long-term patent protections for new medicinal attributes, or property developers who acquire permissioned sites from public-sector bodies with surplus land portfolios to be disposed of.

At the other end of the spectrum are those who ‘merely’ sweat, day to day, the assets thus created/acquired/protected: the much larger numbers of individuals who arrange for the clearing and settlement of financial trades, who pump the oil, who manufacture the medicines, and who arrange for the leasing of the property.

Indeed, so given over to rentierism today are economies such as the UK’s, and so vast are the differences in financial rewards to those at the different ends of the rentier employment spectrum, that class now is arguably more about one’s working relationship to rent-generating assets than one’s working relationship to the traditional ‘means of production’.

For many, if not most, UK workers, the ‘means of production’ are now neither here nor there. What matters – to their pay cheque, their class status, and to wider patterns of income and wealth inequality – is the working position they occupy in respect of the proprietary assets that their employers control and monetize.

And if we need better theories (of class and inequality) to confront these new realities, we clearly also need better policies, shaped by fresh ideas. As Philippe Askenazy argues in his forthcoming book, Share the Wealth, recent decades have seen the ascendancy in the West of an ideology (‘proprietarianism’) that downplays or flatly denies ordinary workers’ contribution to wealth generation while venerating the contribution of rentiers – the proprietarians.

To close the material gaps between those who sweat assets and those who create/acquire/protect them, Askenazy maintains, it is necessary first to close the ideational gap – to reevaluate work of different kinds, and what it is that different workers do.

The coronavirus crisis, at least in its early months, has appeared to prompt something of such a reevaluation. If the inequalities of rentier capitalism are to be meaningfully addressed, the momentum behind such rethinking will clearly need to be sustained.