Sunday, May 06, 2007

The Concept of Rent Seeking

Concepts & Issues: Rent Seeking: "To avoid misunderstandings, “rent” in this context has nothing to do with “rent” in the sense of rent for land or property. In the modern context of “rent seeking”, rent strictly speaking means financial income which is not matched by corresponding labour."

The author provides in this article a useful explanation of the concept of rent seeking except that tax-free land or property yielding a pure profit, surplus value, disposable surplus, or economic rent is the quintessential form of rent seeking and rent taking and the obvious original source of the concept.

In Marxist theory this is known as the 'primitive accumulation of capital'; in geonomics it is described as land monopoly or enclosurism.

'Rent', or profit above all costs, or income without work, is certainly the holy grail of capitalism and indeed of all privileged systems throughout history. It is of course, merely the institutionalised appropriation of the product of others' labor, ie slavery. This income, when transferable, becomes capitalised into what I call 'kapital' (assets, property) which i define as 'the kapitalised (or exchange-value) of a politically guaranteed unearned income (rent)'.

The push by corporations, industry, ideologists and major political parties for carbon trading and simultaneous resistance to the carbon tax is a major contemporary example of rent seeking. In effect, the corporations to which the 'carbon credits' ('license to pollute') are issued will achieve the virtual enclosure of the atmosphere. What was previously common will become the corporations' 'private property', and you will have to pay for access. This is a truly vast new global enclosure movement which will create a vast new pool of oppressive and exploitative kapital.

The carbon tax idea as an alternative is directly analagous to the idea of a land tax in dealing with land monopoly or land enclosure. It is at once both more equitable in explicitly recognising the equal right of all people to the natural common; and more efficient in realising the best and safest use of the common resource. For all these reasons, the introduction of the carbon tax is unfortunately unlikely as we can clearly see as we follow the debate. 'Kapital' controls the consciousness of the public, and must do so if it is to continue to exist.

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