Friday, October 21, 2016

Michael Hudson — Rentier Capitalism – Veblen in the 21st century

As the heirs to classical political economy and the German historical school, theAmerican institutionalists retained rent theory and its corollary idea of unearned income. More than any other institutionalist, Veblen emphasized the dynamics of banks financing real estate speculation and Wall Street maneuvering to organize monopolies and trusts. Yet despite the popularity of his writings with the reading public, his contribution has remained isolated from the academic mainstream, and he did not leave a “school.” The rentier strategy has been to make rent extraction invisible, not the center of attention it occupied in classical political economy. One barely sees today a quantification of the degree to which overhead charges for rent, insurance and interest are rising above the cost of production, even as this prices financialized economies out of world markets.
Michael Hudson
Rentier Capitalism – Veblen in the 21st century

See also

L. Randall Wray, Veblen’s Theory of Business Enterprise and Keynes’s Monetary Theory of Production, <i>Journal of Economic Issues</i>

1 comment:

GLH said...

If you want to know what economic rent is buy ink for a printer. You get ten cents worth of ink for twenty five dollars. Now that is economic rent!
An example of conspicuous consumption is Nike.
"The campaign for land taxation and even financial reform faded from popular discussion as socialists and other reformers became increasingly Marxist and focused on the industrial exploitation of labor." Why is it so hard to see that Marx was paid by the rentiers to guide people's attention away from them and to divide and conquer the industrialist and labor. Oh, educated incapacity.