Private sector parasites - Salon.com: The real "takers" in America are not poor people dependent on welfare, but the unproductive, rent-extracting rich.
How rich "moochers" hurt America - Salon.com: The 3-point plan of wealthy landlords, lenders and insurance providers -- the true "takers" threatening the nation.
Defeating useless rich people - Salon.com: Taming wealthy, unproductive "moochers" will require a populist campaign to stop them. Here's how we can do it.
Michael Lind explains:
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Rents come in as many kinds as there are rentier interests. Land or apartment or rental-house rents flow to landlords. Royalty payments for energy or mineral extraction flow to landowners. Interest payments on loans flow to bankers and other lenders. Royalty payments on patents and copyrights flow to inventors. Professions and guilds and unions can also extract rents from the rest of society, by creating artificial labor cartels to raise wages or professional fees. Tolls are rents paid to the owners of necessary transportation and communications infrastructure. Last but not least, taxes are rents paid to territorial governments for essential public services, including military and police protection.
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He continues with how charging too much will stifle the rest of the economy, and proposes
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All of this suggests that, if we want a technology-driven, highly productive economy, we should encourage profit-making productive enterprises while cracking down on rent-extracting monopolies, ...
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He faults the Left for indiscriminately attacking corporations, and he faults left-of-center people for looking the other way at professional organizations.
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On the right, the greatest triumph of the rentier interests has been to redefine "capitalist" to mean, not productive entrepreneur or successful industrial company executive, but "anybody who makes money" — a category that includes not only investors in productive enterprises but also rentiers and a third category of speculators in unproductive assets (Picasso paintings and Persian rugs, as opposed to machine tool factories).
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The biggest rentiers he identifies as the FIRE (finance, insurance, real estate) sector, though it does not include energy/mineral interests or professional organizations.
Going to the second article,
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The Rentier Agenda consists of low taxes on rentiers, the privatization of infrastructure and social insurance, and a macroeconomic policy that favors creditors rather than debtors, including debtor businesses and debtor governments.
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ML discusses each one.
Lowering taxes on capital-gains income has given the financial sector a LOT of money to play with, and the recent economic bubbles suggest that it now has too much money.
Privatizing natural monopolies is sought by certain financial rentiers who hope to have continual sources of income without much effort, so they fund the campaigns of sympathetic politicians.
Anti-inflation policy? That's because as creditors, the financial rentiers don't want all the debts to them to be inflated away. The reverse would actually be good for them.
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Indeed, because rising wages in tight labor markets can sometimes contribute to economy-wide inflation, the creditor class can tolerate or even approve of high levels of sustained unemployment that devastates much of a nation's population while depriving productive businesses of great numbers of consumers.
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ML concludes that we need an "anti-rentier alliance" to fight the rentier class. He goes into more detail in the third article, proposing increasing taxes on various forms of rentier income like capital gains and real-estate sales, severance taxes on natural resources, and stronger regulation of banks and the like, including outlawing usurious interest.
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If these Anti-Rentier reforms were undertaken, then genuinely productive American businesses would be freed from many costs imposed on them by the "private parasites" who are far greater threat to its future than America's public sector. ... The typical rich American should be an innovative industrialist or technologist, not a Wall Street financier or a guy with a parking-meter monopoly. Super-rich bankers would be as rare as super-rich public utility executives.
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As he notes, "Americans have tamed rentier industries before", notably a century ago when the US had similar problems.
Looking more broadly, I think that there is good reason to believe that US history moves in cycles. Arthur Schlesinger I and II had identified several
cycles of American history, something I'd originally posted on in
this post.
L = liberal periods of reform
C = conservative periods of retrenchment
1776-1788 -L- Liberal Movement to Create Constitution
1788-1800 -C- Hamiltonian Federalism
1800-1812 -L- Liberal Period of Jeffersonianism
1812-1829 -C- Conservative Retreat After War of 1812
1829-1841 -L- Jacksonian Democracy
1841-1861 -C- Domination of National Government by Slaveowners
1861-1869 -L- Abolition of Slavery and Reconstruction
1869-1901 -C- The Gilded Age
1901-1919 -L- Progressive Era
1919-1931 -C- Republican Restoration
1931-1947 -L- The New Deal
1947-1962 -C- The Eisenhower Era
1962-1978 -L- Sixties Radicalism
1978-???? -C- Reagan Reaction, Gilded Age II
Both
US Political Realignments and
Amending the US Constitution tend to be associated with liberal periods.
Where are we now? I think that Gilded Age II is a good name for our current era, with its growing economic inequality, financial speculation, and the like. Michael Lind's idea of the rise of economic rentiers fits right in.
Is there any prospect of an end? We could get some hints by looking at the previous one. It ended in a big economic slump, and it was followed by the Progressive Era, an era which featured reforms like what ML talked about.
So could the same happen this time around? We have a big economic slump, but nothing comparable to the Progressive Era. The Occupy movement seemed like the start of one, but it fizzled out, though some of its activists are still active.
Play with an interactive version of this chart at