Why Society’s Biggest Freeloaders Are at the Top

No, wealth isn’t created at the top. It is merely devoured there.

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By Rutger Bregman

This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet – on reflection – cannot be denied. The truth that we are living in an inverse welfare state.

These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world.

Now, we may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually all agree that wealth is created primarily at the top.

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So entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.

In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.

For those who know their history, the term “rentier” conjures associations with heirs to estates, such as the 19th century’s large class of useless rentiers, well-described by the French economist Thomas Piketty. These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend the rentier’s right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking. From Wall Street to Silicon Valley, from big pharma to the lobby machines in Washington and Westminster, zoom in and you’ll see rentiers everywhere.

There is no longer a sharp dividing line between working and rentiering. In fact, the modern-day rentier often works damn hard. Countless people in the financial sector, for example, apply great ingenuity and effort to amass “rent” on their wealth. Even the big innovations of our age – businesses like Facebook and Uber – are interested mainly in expanding the rentier economy. The problem with most rich people therefore is not that they are coach potatoes. Many a CEO toils 80 hours a week to multiply his allowance. It’s hardly surprising, then, that they feel wholly entitled to their wealth.

It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I’ll start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the International Monetary Fund and the Bank for International Settlements – not exactly leftist thinktanks – have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they gobble it up whole.

Don’t get me wrong. Banks can help to gauge risks and get money where it is needed, both of which are vital to a well-functioning economy. But consider this: economists tell us that the optimum level of total private-sector debt is 100% of GDP. Based on this equation, if the financial sector only grows, it won’t equal more wealth, but less. So here’s the bad news. In the United Kingdom, private-sector debt is now at 157.5%. In the United States, the figure is 188.8%.

In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It’s not creating anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however, is always the same: offer loans like it’s going out of style, which in turn inflates the price of things like houses and shares, then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you), and if the shit hits the fan, let Uncle Sam mop it up.

The financial innovation concocted by all the math whizzes working in modern banking (instead of at universities or companies that contribute to real prosperity) basically boils down to maximising the total amount of debt. And debt, of course, is a means of earning rent. So for those who believe that pay ought to be proportionate to the value of work, the conclusion we have to draw is that many bankers should be earning a negative salary; a fine, if you will, for destroying more wealth than they create.

Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields a similar revenue model. Take tax evasion. Untold hardworking, academically degreed professionals make a good living at the expense of the populations of other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers. One of the richest people in the world, Carlos Slim, earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The same goes for the Russian oligarchs who rose after the Berlin Wall fell, who bought up valuable state-owned assets for song to live off the rent.

But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely that makes us overlook their massive rent-seeking.

Take the pharmaceutical industry. Companies like GlaxoSmithKline and Pfizer regularly unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture medications that resemble what we’ve already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers, and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the result of a tiny pinch of innovation and fistfuls of rent.

Even paragons of modern progress like Apple, Amazon, Google, Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose.

Even more important, many of these companies function as “natural monopolies”, operating in a positive feedback loop of increasing growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult to compete with, because as they grow bigger, they only get stronger.

Aptly characterising this “platform capitalism” in an article, Tom Goodwin writes: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”

So what do these companies own? A platform. A platform that lots and lots of people want to use. Why? First and foremost, because they’re cool and they’re fun – and in that respect, they do offer something of value. However, the main reason why we’re all happy to hand over free content to Facebook is because all of our friends are on Facebook too, because their friends are on Facebook … because their friends are on Facebook.

Most of Mark Zuckerberg’s income is just rent collected off the millions of picture and video posts that we give away daily for free. And sure, we have fun doing it. But we also have no alternative – after all, everybody is on Facebook these days. Zuckerberg has a website that advertisers are clamouring to get onto, and that doesn’t come cheap. Don’t be fooled by endearing pilots with free internet in Zambia. Stripped down to essentials, it’s an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an astounding 64% of all online ad revenue in the US.

But don’t Google and Facebook make anything useful at all? Sure they do. The irony, however, is that their best innovations only make the rentier economy even bigger. They employ scores of programmers to create new algorithms so that we’ll all click on more and more ads. Uber has usurped the whole taxi sector just as Airbnb has upended the hotel industry and Amazon has overrun the book trade. The bigger such platforms grow the more powerful they become, enabling the lords of these digital feudalities to demand more and more rent.

Think back a minute to the definition of a rentier: someone who uses their control over something that already exists in order to increase their own wealth. The feudal lord of medieval times did that by building a tollgate along a road and making everybody who passed by pay. Today’s tech giants are doing basically the same thing, but transposed to the digital highway. Using technology funded by taxpayers, they build tollgates between you and other people’s free content and all the while pay almost no tax on their earnings.

This is the so-called innovation that has Silicon Valley gurus in raptures: ever bigger platforms that claim ever bigger handouts. So why do we accept this? Why does most of the population work itself to the bone to support these rentiers?

I think there are two answers. Firstly, the modern rentier knows to keep a low profile. There was a time when everybody knew who was freeloading. The king, the church, and the aristocrats controlled almost all the land and made peasants pay dearly to farm it. But in the modern economy, making rentierism work is a great deal more complicated. How many people can explain a credit default swap, or a collateralised debt obligation? Or the revenue model behind those cute Google Doodles? And don’t the folks on Wall Street and in Silicon Valley work themselves to the bone, too? Well then, they must be doing something useful, right?

Maybe not. The typical workday of Goldman Sachs’ CEO may be worlds away from that of King Louis XIV, but their revenue models both essentially revolve around obtaining the biggest possible handouts. “The world’s most powerful investment bank,” wrote the journalist Matt Taibbi about Goldman Sachs, “is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

But far from squids and vampires, the average rich freeloader manages to masquerade quite successfully as a decent hard worker. He goes to great lengths to present himself as a “job creator” and an “investor” who “earns” his income by virtue of his high “productivity”. Most economists, journalists, and politicians from left to right are quite happy to swallow this story. Time and again language is twisted around to cloak funneling and exploitation as creation and generation.

However, it would be wrong to think that all this is part of some ingenious conspiracy. Many modern rentiers have convinced even themselves that they are bona fide value creators. When current Goldman Sachs CEO Lloyd Blankfein was asked about the purpose of his job, his straight-faced answer was that he is “doing God’s work”. The Sun King would have approved.

The second thing that keeps rentiers safe is even more insidious. We’re all wannabe rentiers. They have made millions of people complicit in their revenue model. Consider this: What are our financial sector’s two biggest cash cows? Answer: the housing market and pensions. Both are markets in which many of us are deeply invested.

Recent decades have seen more and more people contract debts to buy a home, and naturally it’s in their interest if house prices continue to scale new heights(read: burst bubble upon bubble). The same goes for pensions. Over the past few decades we’ve all scrimped and saved up a mountainous pension piggy bank. Now pension funds are under immense pressure to ally with the biggest exploiters in order to ensure they pay out enough to please their investors.

The fact of the matter is that feudalism has been democratised. To a lesser or greater extent, we are all depending on handouts. En masse, we have been made complicit in this exploitation by the rentier elite, resulting in a political covenant between the rich rent-seekers and the homeowners and retirees.

Don’t get me wrong, most homeowners and retirees are not benefiting from this situation. On the contrary, the banks are bleeding them far beyond the extent to which they themselves profit from their houses and pensions. Still, it’s hard to point fingers at a kleptomaniac when you have sticky fingers too.

So why is this happening? The answer can be summed up in three little words: Because it can.

Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he had the biggest army in Europe. It’s no different for the modern rentier. He’s got the law, politicians and journalists squarely in his court. That’s why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised within an inch of her life if she checks the wrong box.

The biggest tragedy of all, however, is that the rentier economy is gobbling up society’s best and brightest. Where once upon a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it’s insane. We are forking over billions in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts.

One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire. Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child’s growth, so the rentier drains a country of its vitality.

What innovation remains in a rentier economy is mostly just concerned with further bolstering that very same economy. This may explain why the big dreams of the 1970s, like flying cars, curing cancer, and colonising Mars, have yet to be realised, while bankers and ad-makers have at their fingertips technologies a thousand times more powerful.

Yet it doesn’t have to be this way. Tollgates can be torn down, financial products can be banned, tax havens dismantled, lobbies tamed, and patents rejected. Higher taxes on the ultra-rich can make rentierism less attractive, precisely because society’s biggest freeloaders are at the very top of the pyramid. And we can more fairly distribute our earnings on land, oil, and innovation through a system of, say, employee shares, or a universal basic income.

But such a revolution will require a wholly different narrative about the origins of our wealth. It will require ditching the old-fashioned faith in “solidarity” with a miserable underclass that deserves to be borne aloft on the market-level salaried shoulders of society’s strongest. All we need to do is to give real hard-working people what they deserve.

And, yes, by that I mean the waste collectors, the nurses, the cleaners – theirs are the shoulders that carry us all.

Originally published at the Guardian here.

2017 April 15

Order ‘Utopia for Realists: How We Can Build the Ideal World‘ by Rutger Bregman

Translated from the original Dutch by Elizabeth Manton

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  • Rick Derris

    Excellent article!

  • Daniel Seed

    I think you nailed it, politics lacks imagination and vision of any sort, we can change the economy and society in 101 ways but the mainstream only gives one view and debates the minor

    • Happy Taxpayer

      Can you list the 101 ways?

      • Farmer Giles

        Look up Henry George. I think his ideas, with a bit of modification, could be a suitable remedy.

        In a nutshell, George proposed that all taxes be derived from wealth not from productivity. Any person or business that attempts to develop, innovate, or produce something pays no taxes whatsoever. Taxes are paid exclusively by “rentiers” as described in this article.

        • Happy Taxpayer

          Yes am quite aware of Georgism. So when are you establishing your Georgist party to enter politics to bring it imagination and vision?

          • SCIdirector

            The Green Party in the United States has two very strong components in its platform that come out of the insights of Henry George: (a) land value taxation; and (b) value capture. These measures fall short of George’s full program calling for the elimination of all taxation except that of the full taxation of the rents of all natural monopolies. But, at least one political party is on the right track.

          • Farmer Giles

            A fair point, but I think that politics is largely a coalition of the Rentier class, and as such is and always will be an impediment rather than a facilitator to significant systemic change of any sort.

            Our best hope lies in the

  • Happy Taxpayer

    “It will require ditching the old-fashioned faith in “solidarity” with a miserable underclass that deserves to be borne aloft on the market-level salaried shoulders of society’s strongest. All we need to do is to give real hard-working people what they deserve.”

    What does this mean? And how will we “give real hard-working people” what they deserve? What about people who can’t work because they have a disability or an illness?What about sole parents? What is the mechanism? Very good article in some ways but light on the details of what you would replace the rentier economy with.

    • Itamar Serafim Silva

      Great or any wealth is created by works. But these workers have few acces to wealth.
      Why? Because for the market people are like bananas, the more there is, there less they worth.
      Inequality is caused by surplus of working hands, man. Nobody can deny this. Ideology never solved inequality problems. Countries with the lowest inequality rates all had the lowest birth rate in past decades.
      It is impossible create and maintain social equality when there is competition in the job market.

  • Little did I know that the “next evolution of economics” was simply a return to Marxism (or close to it anyway). This piece ignores over a century of further insight.

  • heeeeei

    Basically the article alludes to the fact that all loans to developing countries support rentiers, who are only interested in the interest and capital and not on real productivity on the ground because if the loans created wealth, then they should have been paid by now? If they did not create wealth, should they be repaid and from what? Dismantling the rentier system, which is supported by very powerful rentiers is going to be a challenge? Do not know what happened to Tony Blair’s suggestion for a 100% debt write off? Even we in Africa come up with grand schemes like NEPAD to support the rentier system? “Doing God’s work” my foot, I did not know that God is a banker?

  • heeeeei

    Wait a minute, in Africa self proclaimed God’s workers are bankers who pay no taxes????

  • “No, wealth isn’t created at the top. It is merely devoured there.”

    Indeed! Great wealth is a black hole into which all other wealth eventually disappears.

  • MilkywayAndromeda

    I just the added the book to my list of books to buy.
    This phrase nails it nicely [The fact of the matter is that feudalism has been democratised.
    By the way… ☺
    https://uploads.disquscdn.com/images/a43ee5c6306c56a1ba4a5abe5864f1637266f50f020d8d3add063cb463827f4a.png ]

  • SCIdirector

    It is certainly true that with very few exceptions every society around the world is dominated by rentier interests. The differences are differences of degree only. Where the commitment to social democracy (or democratic socialism) is strongest, the effects are mitigated by public goods and services (e.g., housing subsidies, free medical care, free education, etc.). In the United States, however, there is the lingering myth of “rugged individualism” that ignores the role of government in the conquest and subsequent give-away of the public domain to private interests. Inherited, landed wealth has stood as a counter to “equality of opportunity” outcomes in the U.S. since its founding. Most of the leading figures of the founding generation (and earlier generations) engaged in land speculation as a primary form of business activity. Speculation in land became integral to the “American System,” a dominant component of our societal DNA.

    One needs to look more deeply at the history of the financial system to fully understand why the huge financial institutions are today viewed as predatory rentiers. I recommend reading what Adam Smith wrote about the role of the Bank of Amsterdam, which served global economic participants as a deposit bank rather than as a lending institution. The Bank of Amsterdam institutionalized full reserve banking, issuing certificates of deposit that circulated as the global currency. Depositors actually paid the Bank a fee to hold their money for them. Eventually, this system broke down. The charter of the Bank of England introduced fractional reserve banking, with government relyiing on its taxing powers to guarantee redemption of specie to depositors. And, in the final assault on honest money, the connection between currency in circulation and the Bank of Amsterdam’s “receipt money” system was completely severed. The paper currency issued today by central banks is essentially a promise to pay nothing in particular.

    The establishment of not-for-profit publicly-owned banks on the model of the Bank of North Dakota in the United States is one reform to the financial system that would reign in some of the excesses of the financial system. Local currency networks is another. Requiring commercial banks to disengage from investment banking is yet another. Many monetary reformers are seeking political support for direct government issuance of “debt free” money.

    Earlier comments refer to the proposals of the American political economist Henry George as essential responses to the ongoing concentration of income and wealth, as well as the boom-to-bust character of all economies. Henry George accurately forecasted what would occur absent the adoption of the reforms he embraced. Hopefully, his insights will find growing influence before we once again experience a devastating global financial and economic collapse.

  • Shaun Johnston

    If it is true that the largest lumps of money change hands more slowly and if it’s only when money changes hands that it contributes to prosperity and happiness, then a policy that increased the velocity of money might solve many problems, including the undue accumulation of wealth by passive rent-seekers. I propose a combination of an added government-imposed 10% inflation per year plus a VAT of -2%. That is, the value of money involved in all transactions recorded digitally would increase by a “sales” “tax” of 2%. For your wealth to increase you’d have to be part of a community within which money changes hands rapidly. If you just sit on money, ie have $billions salted away, it rapidly loses value.

  • Basic Income Guarantees (BIG) vs Job Guarantees

    The Job Guarantee: Delivering the benefits that Basic
    Income only promises


    “The BIG proposal is a compassionate but
    paternalistic policy that does not ultimately deliver
    the jobs that those at the bottom of the economic ladder
    want. The JG proposal by contrast is based on
    several core considerations

    1) it acknowledges what people want and accommodates those

    2) it designs a program that delivers greater
    macroeconomic stability, and

    3) it helps redefine the meaning and nature of work,
    helping transform the economy to a more just and
    humane system.”

    Modern Monetary Theory in Canada

  • Rudi

    Excellent article, particularly liked the explanation of bankers working (genuinely) very hard and seeing themselves as value creators when they (in most cases) are not. Have just bought Bregman’s book – we need more of this kind of thinking!

  • Well, half true. If the rentier puts assets at risk, then a profit is warranted as a return to risk. Unfortunately, state tax and financial policies often enable rent-seeking far above that justified return. Our central bank policies over the past 30 years have been a boon to asset holders at the expense of those who must rent those assets.

  • Alexander Zatko

    It reminds me of another article published in the Guardian:

    Aid in reverse: how poor countries develop rich countries


  • Patrick cardiff

    But the evidence is irrelevent. He sets out to describe the rich as
    churning financiers responsible for most of the wealth – OK, it’s a hypothesis.
    But then he falls into the same trap of using diffuse findings, a cited
    citation from a “venerable” site – the Economist, from the “Macro Head-Scratching”
    literature, to try to prove his point. This is a good example of the loss of
    logic in our discipline when empiricism relies on numbers so biased in
    aggregation that they could mean anything. Three phrases: aggregation bias, spurious
    correlation, false dichotomy. You can find “associations in data,” and maybe results
    will even be written up, without showing the standard errors, but no, this is
    not truth.

    And no sorry, “economists” are never in agreement! I know this is a
    generality but it’s easily proved. Productivity is not synonymous with salary. Productivity
    is output per input and if you’re “going National on my ass” you better get the
    units right! On second thought, please define and specify, measure repeatedly,
    and then we’ll talk. Please do not categorize “economists” any some way. It
    would help not to categorize at all.

    People who think it’s OK to quote national percentages as if they were truisms,
    immediately, statistically or economically useful: Please stop. It’s has become
    an insult to our intelligence. Find useful aggregates!

    The effect of finance on us? CEOs are not arbitragers. Wall Street types may
    work like fiends for their filthy lucre just because others do, they drank the
    Kool aid, and/or their initial endowments are microscopic compared to the
    captains of industry who are, indeed, the wealth generators, but not in the way
    our author thinks.

    My house doubles in value over 5 years through no mechanism but the
    existence of someone willing to pay that new value when I’m ready to sell. Nothing
    was input, nothing was output: but overnight I’m sitting on a bigger pile. Where
    I live has more to do with my wealth than “my CEO” originating the mortgage. “My
    CEO” gets a little bit of every transaction but there are lots of transactions
    and we’re talking dollars. Call it a shell game. Wealth is appreciation. The engine
    of assessment keeps capitalism going. This is not something new. Why are we
    treating it new? Are we searching for some justification to protest? The real
    problem is that wealth is not consumed – not returned to society as expenditure;
    it merely accretes as savings. It’s on the books, but it’s not doing anything
    for other people. It is like the yacht in the harbor. It is the ownership of
    the idle rich. To say that the rich are workers is give a very bad name to
    workers. Real workers take joy and pride in physical labor – I know the author
    understands that because you can tell from his words, but it’s so much more
    simpler than all this. Follow the money!

  • capacitated

    I rent a room in an overcrowded (11 ppl in small 3BR) house from someone who doesn’t own the house. He rents it from an absentee landlord, lets his adult daughter, her boyfriend, and their infant live in the house for free, lives for free himself, and charges the rest of us enough rent to cover his costs.

  • umbrarchist

    No mention of Consumerism and Depreciation. What kind of car did Adam Smith drive? What kind of TV did Karl Marx watch? We buy things that did not exist back than but economists do not talk about the Depreciation of all of the Consumer Junk. That is what runs our treadmill.


  • Rudya

    Nice article. However, the root cause of these problems is the debt based monetary system.


    • SimoneNonvelodico

      Without going into some rather delusional claims, he’s not saying something much different. He talks a lot about over-lending money, which ties into what you may also know as ‘fractional reserve’. A good way to limit lending would be to limit fractional reserve.

  • Charles Cranmer

    1. If we confiscate the wealth of everyone who takes a risk and succeeds, who is going to take that risk? Then where will the jobs come from for those who simply want to work (create)?

    2. In case you haven’t noticed, the US mortgage industry was almost totally nationalized under Obama. The vast majority of mortgages are held or guaranteed by Fannie, Freddie, or the VA / FHA. Banks aren’t bleeding homeowners, DC bureaucrats are.

    • SimoneNonvelodico

      The point is that if getting rich is what your typical investment fund does, *we want to discourage that*. If you can make money by building things and selling them you’re creating wealth. If you’re just moving money around then that is also a necessary service, but only within reasonable limits. Lending a bit of money gives breath to the economy. Lending too much money enslaves it into debt. But if you can become richer the more money you lend (and get back with interest), you won’t stop at that optimal amount, you’ll just push further. And we don’t want that to happen. The entire point of a regulated economy is to create a system of rules in which personal convenience is the same as the society’s good, so that people will be pushed by their ambition to do things that are beneficial to everyone. We forbid robbery because while that can make the robber richer, it doesn’t make SOCIETY richer. This is the same.

  • Lexi Mize

    Good stuff Mr. Bregman.

    Here’s a bit of satire that matches your sentiment: “Whatever you do Corporate America, make sure you reward your shareholders above and beyond your employees. Because it’s those
    shareholders who will stand by you when bad times come. It’s the shareholders who are loyal and trustworthy and deserve the fruits of your labor. Your employees? They’re just grist for your revenue mill. Grind them up as you go as you can always replace them. I applaud public ownership of corporations as this give us wealthy our ability to earn without the burden of responsibility. I am an upstanding rentier and usury agent and I stand and cheer your continued dedication to the escalation of my wealth at the expense of the working middle and working poor of this nation. Carry on!”

  • ajaxthegreat

    Excellent article! Should be required reading everyone.

  • Lexi Mize

    Here’s a thought on how to justify a rentier society: admit that all wealth requires protection.

    I have a bank account and you have a bank account. Mine is empty but yours is full of millions of dollars. I own a home and you own six. Now, I pay taxes to ensure we have an EPA, an FAA, a FTC, FEMA, FBI, and CIA and Social Security System and a military, and all the other things that being a US Citizen entitles me to. The amount of protection of my wealth that I expect — through government — is approximately equivalent to my taxation. Now the taxation on all your wealth, is that commensurate with the protection you expect and receive from living in the US?

    Here’s another way to look at it. You’re a billionaire. How much would you pay private services to protect your wealth? A private police force. A private army. Private services to keep your air and water pure, your roads and airways safe, electricity and gas running? How much would you have to pay to keep your private stock market and banking system in place? How much would you have to pay to maintain the entire system that has allowed you to collect your billions of dollars?

    The bottom line is the wealthy are not only wealthy because of what they’ve done or who they are. They are wealthy primarily because they live in a country that protects them and their wealth.

    If the rentiers of the world would charge us rent — maybe we should charge them a wealth protection fee.

  • zonmoy

    meaning the rich scum are just parasites on all the working people that are the real wealth creators

  • Colin Cook

    Here is a simpler explanation –
    And by the way, the wealthy do not ‘make’ money, they accumulate it; but banks, forgers and governments do make/create money.

  • Inevitably it is true that some amount of wealth is acquired through rent seeking, but surely not all. Why not focus on the problems with the system that allow rent seeking, instead of painting with such a broad brush as to include all those who are wealthy or earn a high income? BTW, rent seeking exists at all levels, see for example, the Davis-Bacon Act.

    Note as well that empirically, competition has rendered platform market power (that is not propped up by government in some way) short lived if the platform owner does not innovate in ways the please its customers and keep competitors at bay, see for example Microsoft Windows which just a few years ago was thought to be a durable monopoly.

  • Peter van den Engel

    Great article. Athough I would not classify the platform concepts mentioned; clever as they are; as freeloaders.

    The basic concept of the earning system is one based on natural physics. All traded values flow back into the center. When you own the center, everything is yours.

    In the case of Louis XIV this was taxes. In the case of shareholders it is no more than the value difference of the company and/or dividents. So renteneers are not freeloaders, because they get a return of investment.

    What you are talking about is basicly the primary function of the financial system connected to labor itself.

    So, the rightfull question we could ask ourselves is, does a system that thrives on an automatic perpetual machinery; like the moon revolving around the earth; has an endless monopoly in deciding who may consume/ and who may not. Or needs those amounts of money to consume it(him)self.
    In the first case it creates a decission making point that sits alone and has little knowledge; the feudal equation; in the second it’s clear no such thing is needed in that proportion.

    Its easy to see the system goes lame. But anyway, we created it ourselves.

    (and by the way, taxing is a bad idea too, because it makes labor unnecesarilly expensive)

  • mark nine

    I am SURE that if it were reversed this country would be prosperous….. NOT !!