Making Capitalism Great Again? A Critique of the “Rentier Takeover” Thesis
Making Capitalism Great Again? A Critique of the “Rentier Takeover” Thesis
Michael Hudson argues that the industrial capitalism of a previous era has given way to a new form of financial capitalism. Today’s financial capitalists, unlike capitalists in Marx’s day, now claim their share of the surplus by passively extracting interest or economic rents…
what do y'all think of this? It makes some good points and Micheal Hudson is probably not right, but I have one criticism to make. One of his arguments that the richest people are still industrial capitalists (because they started businesses that do stuff), not finance capitalists, but as Cory Doctorow points out, those companies are basically just rentiers at this point. Amazon makes most of its money hosting other businesses on their site, "Meta" makes most of its money hosting being a middleman connecting advertisers and unpaid content creators poorly. Thus, it seems at least the emperial core has increased rentierism. This doesn't mean it's not built on peripheral industry and that reindustrializing the west would benefit average people, but it does seem to be good news about the decline of empire. Other thoughts?
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I can't really comment on the historical notes there about the dynamics of financial and industrial capital, but I definitely agree with you that none of those digital monopolies he cited could be classified mainly as industrial capital. Except maybe Wallmart, which is not digital (AFAIK), but is still mostly just a consumer-facing monopsony.
A few (possibly wrong) ideas here, but I believe that the existence of software has created the perfect conditions for rent-seeking, since software is incredibly cheap to reproduce and distribute, but can't effect change in the material world without expensive hardware or humans. Because of that, a corporation can consolidate a Doctorow's Chokepoint in a new market at light-speed, but the actual productive (and expensive) work-force mostly exists outside their employ.
And since the average worker doesn't have enough money for that much rent, the corporations make the most of it cannibalising smaller companies, with shit like Windows licenses for companies, paying to have your posts be read by your followers on Metabook, Google taking a massive cut on apps payments, or stores on Amazon having to pay to have their products appear when searched.
I'm not sure why Hudson, Doctorow and Varoufakis keep calling this "feudalism" but I don't think they're fully wrong in drawing a distinction between those two sections of the bourgeoisie, even if it can't be exploited for revolution.
Btw cory Doctorow is a tech enthusiast, anti-monopoly liberal. He is not a marxist.
the techno feudalism thing is really annoying to me but day's post isn't it either. also these companies are insurers and real estate speculators and landlords themselves
Yea the term is just a rebranding of imperialism but only to tech industries. It provides nothing of value.
Just a quick correction, this isn't written by Day. As noted in the forward, it is by JW Mason:
J. W. Mason is Associate Professor of economics at John Jay College, CUNY and a fellow at the Roosevelt Institute.
sure inaccurate phrasing worth clarifying, i did reference most of the stuff on there is reposts and translation in another comment
Techno feudalism is stupid, the rentier thesis is far better, Mason’s piece is interesting, but I don’t feel like it fully addresses it.
I don’t think Hudson or Doctorow have called it feudalism. Hudson says it’s finance capitalism which is worse than industrial capitalism. That makes me think of something, in Imperialism Lenin talks about how finance capital is the destiny of capital, and the that is the point at which capital stops being progressive. However, it’s foolish to try to return to pre-monopoly because the cycle will repeat. Doctorow says rentierism is carried over from feudalism and has had a great rise in the digital age. The early capitalists hated rentierism (just look at Adam Smith), but the ultimate goal of capitalists is to be a rentier because then they don’t have to do much for profits. Varoufakis is wrong because he doesn’t understand the definition of capitalism or how it can change.
Don't know much about Hudson, but Doctorow managed to avoid that one on his book AFAIK, but sadly started using it at least in his blog after his review of Varoufakis's book. Him and his followers often sound like they're trying to go back to the "free market capitalism" age like you describe (I'd put Taplin there too), but for the most part I think his analysis of current trends are often spot on and very useful.
After thinking a bit I also don't think I agree with Mason's argument that there is a "back and forth" between finance and industrial capital. He is correct that both have existed together since the beginning, Lenin himself even writes that, but I fail to see from his arguments that finance (stock market, real estate) hasn't become the dominant force over the past 100 years, or specially since 1991. Most of the top companies by marketcap (but not revenue) today mainly own IP or software, maybe cloud services in the case of Google and MS, or are literal holdings. There's still the occasional petroleum company, but that's a far cry when a majority of the population was employed in production and extraction rather than this "service economy" rentier maintenance thing we got going on.
This is what happens when you don’t read Lenin.
Where do you think that these tech monopolies money is? It's in the bank.
Lenin thesis was that when banks became monopolies, the finance capitalist took control of all the money capital from all society, industrial capitalists and workers, which still holds true.
The finance capitalist dictate where the money goes too, through credit. They literally plan the economy through the credits. It seems to me that you didnt read Lenin.
I did and agree with you. Besides their vast sums of investment from banks some of these corporations even have their own banking systems, and I wouldn't be surprised if some of their rent-seeking enterprises are the securities for their financial operations. What I disagree with the author (and I believe I agree with you here) is that the financial capital has in fact superseded and dominated the industrial capital, in which the latter has gone from being an useful tool and ally in the 20th century to basically an afterthought in the 21st.
I think the confusion may have happened because I did a long double negative there "I fail to see [...] that finance hasn't superseded industrial" because I was specifically disagreeing with the author, who was himself sort of disagreeing with the conclusions of Lenin's "Imperialism."