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#rentier capitalism
scavengedluxury · 3 months
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The UK state today is better understood with respect to its role in mediating between rentiers and renters. Its primary objective, to paraphrase Marx, is to support the common affairs of the whole rentier establishment.
Failure to recognise the new nature of Britain’s economy was one reason why many people couldn’t understand why the Tory right desired a hard Brexit. If the UK’s productive capitalists, engaged in extensive trading relationships with the continent, were firmly opposed to Brexit, why, it was asked, were the Tories – the party of capital – in favour of leaving the EU? The answer is that the Tories were no longer the party of productive capital. They had become the party of the rentier.
This results in two strategic imperatives. The first is to enhance the climate for investment in rent-generating assets. It is necessary that assets such as land and infrastructure be presented as things that investors can and want to own. Vertically integrated electricity systems, for example, must be divided into separate generation, transmission and distribution assets, which can be invested in independently of one another. Public land must be sold free from requirements to develop affordable housing, or to do so within a specified timescale.
Second, governments must sustain renters’ ability to pay rents to rentiers. If users cannot pay their bills, assets such as water or gas networks will rapidly stop making money and become unattractive to investors. If the post-war Keynesian state supported workers’ ability to buy the products of their labour, the modern state is now helping renters to pay rents.
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Sympathy for the spammer
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Catch me in Miami! I'll be at Books and Books in Coral Gables on Jan 22 at 8PM.
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In any scam, any con, any hustle, the big winners are the people who supply the scammers – not the scammers themselves. The kids selling dope on the corner are making less than minimum wage, while the respectable crime-bosses who own the labs clean up. Desperate "retail investors" who buy shitcoins from Superbowl ads get skinned, while the MBA bros who issue the coins make millions (in real dollars, not crypto).
It's ever been thus. The California gold rush was a con, and nearly everyone who went west went broke. Famously, the only reliable way to cash out on the gold rush was to sell "picks and shovels" to the credulous, doomed and desperate. That's how Leland Stanford made his fortune, which he funneled into eugenics programs (and founding a university):
https://www.hachettebookgroup.com/titles/malcolm-harris/palo-alto/9780316592031/
That means that the people who try to con you are almost always getting conned themselves. Think of Multi-Level Marketing (MLM) scams. My forthcoming novel The Bezzle opens with a baroque and improbable fast-food Ponzi in the town of Avalon on the island of Catalina, founded by the chicle monopolist William Wrigley Jr:
http://thebezzle.org
Wrigley found fast food declasse and banned it from the island, a rule that persists to this day. In The Bezzle, the forensic detective Martin Hench uncovers The Fry Guys, an MLM that flash-freezes contraband burgers and fries smuggled on-island from the mainland and sells them to islanders though an "affiliate marketing" scheme that is really about recruiting other affiliate markets to sell under you. As with every MLM, the value of the burgers and fries sold is dwarfed by the gigantic edifice of finance fraud built around it, with "points" being bought and sold for real cash, which is snaffled up and sucked out of the island by a greedy mainlander who is behind the scheme.
A "bezzle" is John Kenneth Galbraith's term for "the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." In every scam, there's a period where everyone feels richer – but only the scammers are actually cleaning up. The wealth of the marks is illusory, but the longer the scammer can preserve the illusion, the more real money the marks will pump into the system.
MLMs are particularly ugly, because they target people who are shut out of economic opportunity – women, people of color, working people. These people necessarily rely on social ties for survival, looking after each others' kids, loaning each other money they can't afford, sharing what little they have when others have nothing.
It's this social cohesion that MLMs weaponize. Crypto "entrepreneurs" are encouraged to suck in their friends and family by telling them that they're "building Black wealth." Working women are exhorted to suck in their bffs by appealing to their sisterhood and the chance for "women to lift each other up."
The "sales people" trying to get you to buy crypto or leggings or supplements are engaged in predatory conduct that will make you financially and socially worse off, wrecking their communities' finances and shattering the mutual aid survival networks they rely on. But they're not getting rich on this – they're also being scammed:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4686468
This really hit home for me in the mid-2000s, when I was still editing Boing Boing. We had a submission form where our readers could submit links for us to look at for inclusion on the blog, and it was overwhelmed by spam. We'd add all kinds of antispam to it, and still, we'd get floods of hundreds or even thousands of spam submissions to it.
One night, I was lying in my bed in London and watching these spams roll in. They were all for small businesses in the rustbelt, handyman services, lawn-care, odd jobs, that kind of thing. They were 10 million miles from the kind of thing we'd ever post about on Boing Boing. They were coming in so thickly that I literally couldn't finish downloading my email – the POP session was dropping before I could get all the mail in the spool. I had to ssh into my mail server and delete them by hand. It was maddening.
Frustrated and furious, I started calling the phone numbers associated with these small businesses, demanding an explanation. I assumed that they'd hired some kind of sleazy marketing service and I wanted to know who it was so I could give them a piece of my mind.
But what I discovered when I got through was much weirder. These people had all been laid off from factories that were shuttering due to globalization. As part of their termination packages, their bosses had offered them "retraining" via "courses" in founding their own businesses.
The "courses" were the precursors to the current era's rise-and-grind hustle-culture scams (again, the only people getting rich from that stuff are the people selling the courses – the "students" finish the course poorer). They promised these laid-off workers, who'd given their lives to their former employers before being discarded, that they just needed to pull themselves up by their own boostraps:
https://pluralistic.net/2023/04/10/declaration-of-interdependence/#solidarity-forever
After all, we had the internet now! There were so many new opportunities to be your own boss! The course came with a dreadful build-your-own-website service, complete with an overpriced domain sales portal, and a single form for submitting your new business to "thousands of search engines."
This was nearly 20 years ago, but even then, there was really only one search engine that mattered: Google. The "thousands of search engines" the scammers promised to submit these desperate peoples' websites to were just submission forms for directories, indexes, blogs, and mailing lists. The number of directories, indexes, blogs and mailing lists that would publish their submissions was either "zero" or "nearly zero." There was certainly no possibility that anyone at Boing Boing would ever press the wrong key and accidentally write a 500-word blog post about a leaf-raking service in a collapsing deindustrialized exurb in Kentucky or Ohio.
The people who were drowning me in spam weren't the scammers – they were the scammees.
But that's only half the story. Years later, I discovered how our submission form was getting included in this get-rich-quick's mass-submission system. It was a MLM! Coders in the former Soviet Union were getting work via darknet websites that promised them relative pittances for every submission form they reverse-engineered and submitted. The smart coders didn't crack the forms directly – they recruited other, less business-savvy coders to do that for them, and then often as not, ripped them off.
The scam economy runs on this kind of indirection, where scammees are turned into scammers, who flood useful and productive and nice spaces with useless dross that doesn't even make them any money. Take the submission queue at Clarkesworld, the great online science fiction magazine, which famously had to close after it was flooded with thousands of junk submission "written" by LLMs:
https://www.npr.org/2023/02/24/1159286436/ai-chatbot-chatgpt-magazine-clarkesworld-artificial-intelligence
There was a zero percent chance that Neil Clarke would accidentally accept one of these submissions. They were uniformly terrible. The people submitting these "stories" weren't frustrated sf writers who'd discovered a "life hack" that let them turn out more brilliant prose at scale.
They were scammers who'd been scammed into thinking that AIs were the key to a life of passive income, a 4-Hour Work-Week powered by an AI-based self-licking ice-cream cone:
https://pod.link/1651876897/episode/995c8a778ede17d2d7cff393e5203157
This is absolutely classic passive-income brainworms thinking. "I have a bot that can turn out plausible sentences. I will locate places where sentences can be exchanged for money, aim my bot at it, sit back, and count my winnings." It's MBA logic on meth: find a thing people pay for, then, without bothering to understand why they pay for that thing, find a way to generate something like it at scale and bombard them with it.
Con artists start by conning themselves, with the idea that "you can't con an honest man." But the factor that predicts whether someone is connable isn't their honesty – it's their desperation. The kid selling drugs on the corner, the mom desperately DMing her high-school friends to sell them leggings, the cousin who insists that you get in on their shitcoin – they're all doing it because the system is rigged against them, and getting worse every day.
These people reason – correctly – that all the people getting really rich are scamming. If Amazon can make $38b/year selling "ads" that push worse products that cost more to the top of their search results, why should the mere fact that an "opportunity" is obviously predatory and fraudulent disqualify it?
https://pluralistic.net/2023/11/29/aethelred-the-unready/#not-one-penny-for-tribute
The quest for passive income is really the quest for a "greater fool," the economist's term for the person who relieves you of the useless crap you just overpaid for. It rots the mind, atomizes communities, shatters solidarity and breeds cynicism:
https://pluralistic.net/2023/02/24/passive-income/#swiss-cheese-security
The rise and rise of botshit cannot be separated from this phenomenon. The botshit in our search-results, our social media feeds, and our in-boxes isn't making money for the enshittifiers who send it – rather, they are being hustled by someone who's selling them the "picks and shovels" for the AI gold rush:
https://www.theguardian.com/commentisfree/2024/jan/03/botshit-generative-ai-imminent-threat-democracy
That's the true cost of all the automation-driven unemployment criti-hype: while we're nowhere near a place where bots can steal your job, we're certainly at the point where your boss can be suckered into firing you and replacing you with a bot that fails at doing your job:
https://pluralistic.net/2024/01/11/robots-stole-my-jerb/#computer-says-no
The manic "entrepreneurs" who've been stampeded into panic by the (correct) perception that the economy is a game of musical chairs where the number of chairs is decreasing at breakneck speed are easy marks for the Leland Stanfords of AI, who are creating generational wealth for themselves by promising that their bots will automate away all the tedious work that goes into creating value. Expect a lot more Amazon Marketplace products called "I'm sorry, I cannot fulfil this request as it goes against OpenAI use policy":
https://www.theverge.com/2024/1/12/24036156/openai-policy-amazon-ai-listings
No one's going to buy these products, but the AI picks-and-shovels people will still reap a fortune from the attempt. And because history repeats itself, these newly minted billionaires are continuing Leland Stanford's love affair with eugenics:
https://www.truthdig.com/dig-series/eugenics/
The fact that AI spam doesn't pay is important to the fortunes of AI companies. Most high-value AI applications are very risk-intolerant (self-driving cars, radiology analysis, etc). An AI tool might help a human perform these tasks more accurately – by warning them of things that they've missed – but that's not how AI will turn a profit. There's no market for AI that makes your workers cost more but makes them better at their jobs:
https://locusmag.com/2023/12/commentary-cory-doctorow-what-kind-of-bubble-is-ai/
Plenty of people think that spam might be the elusive high-value, low-risk AI application. But that's just not true. The point of AI spam is to get clicks from people who are looking for better content. It's SEO. No one reads 2000 words of algorithm-pleasing LLM garbage over an omelette recipe and then subscribes to that site's feed.
And the omelette recipe generates pennies for the spammer that posted it. They are doing massive volume in order to make those pennies into dollars. You don't make money by posting one spam. If every spammer had to pay the actual recovery costs (energy, chillers, capital amortization, wages) for their query, every AI spam would lose (lots of) money.
Hustle culture and passive income are about turning other peoples' dollars into your dimes. It is a negative-sum activity, a net drain on society. Behind every seemingly successful "passive income" is a con artist who's getting rich by promising – but not delivering – that elusive passive income, and then blaming the victims for not hustling hard enough:
https://www.ftc.gov/business-guidance/blog/2023/12/blueprint-trouble
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I'm Kickstarting the audiobook for The Bezzle, the sequel to Red Team Blues, narrated by @wilwheaton! You can pre-order the audiobook and ebook, DRM free, as well as the hardcover, signed or unsigned. There's also bundles with Red Team Blues in ebook, audio or paperback.
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If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2024/01/15/passive-income-brainworms/#four-hour-work-week
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Image: Cryteria (modified) https://commons.wikimedia.org/wiki/File:HAL9000.svg
CC BY 3.0 https://creativecommons.org/licenses/by/3.0/deed.en
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gynoidgearhead · 1 month
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moderation wage labor is inhumane and this is one functional reason social media is a fundamentally insolvent concept
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crankygrrl · 4 months
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*climbs on soapbox*
When I am Queen of Canada or Minister of Housing, whichever happens are first, I am going to REQUIRE all rental housing providers to make laundry facilities available to ALL TENANTS at NO CHARGE. I already pay you rent — paying for the privilege of keeping my clothes clean is USURIOUS. It is EXTORTIVE and it is WRONG.
Thank you for your time.
And if I can bankrupt all the rentiers further enshittifying rental housing by contracting laundry services in rental buildings for profit
GOOD.
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Remember, kids, no matter what economic model you believe in, landlords are the worst.
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if-you-fan-a-fire · 2 years
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“Handwriting On Wall Called Landlord A Pig,” Toronto Star. March 7, 1932. Page 2. ---- But Cadi Not Satisfied That Lady Roomer Was Writer ----- Remarks alleged to have been written by Mrs. Alexander Douglas on the walls of rooms she occupied in Simcoe St., referring to her landlord, Walter Moore, as a ‘pig-headed, square-headed pig,’ resulted in Mrs. Douglas appearing in women’s court to-day charged with malicious damage to property.
‘I suppose Mrs. Douglas had some reason,’ suggested Assistant Crown Attorney C. T. Snyder to Moore. ‘We shut off the gas,’ he replied.
‘How much did she owe?’ asked the crown. ‘Seventy-five cents,’ interjected the accused.
Magistrate Patterson dismissed the charge on grounds that there was no evidence that the accused was the writer.
Irene Clegg, recently from Hamilton, was given until Thursday to dispose of her household good and return to that city when she appeared for sentence on a charge of keeping a resort.
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liberalsarecool · 4 months
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Rentier capitalism is malware. Housing scarcity is engineered.
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1995lahaine · 7 months
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like. succession is a ghost story. you might think it's logan doing the haunting but it isn't. you might then think kendall's the ghost but he isn't. except they both are but they're not the main ghosts. oh no no no the ghost is in fact the soon to be defunct american industry! but wait, you say, american industry is not dead! and the american company most certainly isn't! you're right. except you're wrong. the rules that american industry followed are DEAD because the board has changed the players have changed the rules have changed it is NOT the same game anymore! industry exists to prop up ASSET EXPLOITATION. industry is no longer the behemoth. it isn't industry it's all TECH it's data the things being bought and sold and profited from are not REAL. industry is dead! it's rentier capitalism! the era of visible wealth is gone! even the illusion of democracy is gone! we are in technocracy! we are in a rentier economy and the rules of life and who controls it is in the hands of technology and the owners of that technology!!!! the entire premise upon which the show appears to be built is dead!!! logan roy is going to die and when he does his entire empire will crumble. because it is INDUSTRY and industry is over!!! i don't know how many ways i can say this!!! i don't even know what i'm saying!!! the story (the succession of waystar royco leadership. which is to say the ghost of waystar. because the succession spells out the death-) is haunting itself.
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racefortheironthrone · 4 months
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Could the Iron Throne be able to issue bonds, to finance its expenses, instead of going to the Iron Bank for a loan?
A government issuing bonds is the same thing as the government taking out a loan. The main difference is that, in the case of issuing a bond, the government is spreading out its borrowing between many lenders by selling bonds on the open market to anyone who wants to buy them rather than having that loan owed to a single entity like the Iron Bank. This means that the government is less beholden to any one creditor and it's less likely that the government's creditors can use their economic leverage to affect government policy.
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The second advantage of structuring government debt through bonds is that it allows the government to break its total borrowing needs into smaller, more affordable units. Very few financial institutions would have had the capital to finance the £1,200,000 that made up the government's inaugural loan at the Bank of England in 1690 - but a lot more people could afford to lend the government £10, £25, £50, or £100 pounds.
Between this and later innovations in marketing bonds to the general public, the market for government debt was massively expanded. Not only did this create a class of rentiers who were now personally invested in the government's success, but it also immediately deepened the capital markets by creating a large supply of stable assets that could be bought and sold and borrowed against. While some of the shortcomings of the Hamilton musical and Chernow's biography have become more obvious in hindsight, they're not wrong about the impact of Hamilton's policies as Treasury Secretary on the development of the American economy.
The difficulty facing the Iron Throne in adapting an early modern system of government finance is that it doesn't have the state capacity to run this kind of an operation: it doesn't have a central bank to act as the government's marketer, issuer of banknotes, and lender of last resort; it doesn't have a sinking fund to manage the level and price of debt; it hasn't issued charters to merchant's guilds or joint-stock companies that could combine the small capital of individuals and thus more easily afford to buy bonds; and it doesn't have enough literate people who've studied accounting to staff a royal bureaucracy large enough to coordinate and keep records of all of this economic activity.
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vivi266 · 2 months
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forcing people to read marx at gunpoint so we can avoid the question "does owning the means of your production make you bourgeois?" when it's really a class relation typically and predominantly defined by the employing or other capital-holding classes, such as rentiers
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scavengedluxury · 7 months
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97 per cent of the funding to develop the Oxford vaccine came from public and charitable sources. Yet, having initially planned to license the technology openly, the university granted exclusive ownership rights to AstraZeneca, whose profits increased by £1.9 billion on pre-pandemic levels, or 122 per cent. Meanwhile, the UK consistently sought to block proposals to waive patent barriers at the World Trade Organisation in order to improve global vaccine access. It is hard to escape the conclusion that the UK deliberately privatised an asset of immense social and financial value that had been developed with public money.
Christine Berry and Laurie MacFarlane, The Conservatives’ political economy: ‘State rentier capitalism’ or old wine in new bottles?
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They're handing out patents for "inventions" that don't exist
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Today (Oct 16) I'm in Minneapolis, keynoting the 26th ACM Conference On Computer-Supported Cooperative Work and Social Computing. Thursday (Oct 19), I'm in Charleston, WV to give the 41st annual McCreight Lecture in the Humanities. And on Friday (Oct 20), I'm at Charleston's Taylor Books from 12h-14h.
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Patent trolls produce nothing except lawsuits. Unlike real capitalist enterprises, a patent troll does not “practice” the art in its patent portfolio — it seeks out productive enterprises that are making things that real people use, and then uses legal threats to extract rents from them.
One of the most prolific patent trolls of the twenty-first century is Landmark Technology, whose U.S. Patent №7,010,508 nominally covers virtually anything you might do in the course of operating an online business: having a homepage, letting a customer login to your site, or having pages where customers can view and order products.
Landmark shook down more than a thousand productive businesses for $65,000 license-fees it demanded on threat of a patent lawsuit.
But that reign of terror is almost certainly over. When Landmark tried to get $65,000 out of Binders.com, the victim’s owner, NAPCO, went to court to invalidate Landmark’s patent, which never should have issued.
A North Carolina court agreed, and killed Landmark’s patent. Landmark faces further punishments in Washington State, where the attorney general has sued the company for violating state consumer protection laws in a case that has been removed to federal court.
Landmark’s patent contains “means-plus-function” claims. These a rentier’s superweapon, in which a patent can lay a claim over an invention without inventing or describing it. These claims are almost entirely used in software patents, something that has been blessed by the Federal Circuit, America’s most authoritative patent court.
A means-plus-function patent lets an “inventor” patent something they don’t know how to do. If these patents applied to pharma, a company could get a patent on “an arrangement of atoms that cure cancer,” without specifying that arrangement of atoms. Anyone who actually did cure cancer would have to pay rent to the patent-holder.
-A Major Defeat For Technofeudalism: We euthanized some rentiers.
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My next novel is The Lost Cause, a hopeful novel of the climate emergency. Amazon won't sell the audiobook, so I made my own and I'm pre-selling it on Kickstarter!
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argyrocratie · 4 months
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"The rich already have more money on their hands than they can find profitable investments for; they’re not going to put more money into expanding productive capacity, because working people can’t afford to buy enough stuff to fully utilize existing industrial capacity. That’s why they wind up dumping money into FIRE economy speculative bubbles instead.
(...)
Capitalism is utterly dependent on waste production, financed by government spending, to absorb surplus investment capital and keep the wheels of industry turning. Government military procurement and investment in the automobile-highway-sprawl industry employ enormous amounts of productive capacity and capital that would otherwise be idle, and social spending increases the purchasing power of people who buy stuff and likewise keep the wheels turning.
And government debt is soaking up (and providing a minimum return on) trillions of dollars that would otherwise be dumped into the capital markets and make Black Friday look like the biggest bull market in history by comparison. U.S. bonds are, for capitalist rentiers, the equivalent of USDA subsidies that pay farmers to hold land out of use and thereby effectively turn idle farmland into a guaranteed real estate investment.
To show just how easy it would be to cut spending if those pointy-head gummint wonks would get out of the way, Mr. Dunning Kruger tries his hand at the Washington Post budget game:
By slashing military spending, getting the federal government out of education, raising the retirement age, and eliminating whole areas of spending, I was able to run a budget surplus starting in 2023 and move the federal government 163.2 percent of the way towards a sustainable budget. Hmmm. Looks like I have some room for tax cuts.
Congratulations, J.D.! You’ve removed hundreds of billions of dollars worth of demand from the economy (particularly would-be retirees who’ll wind up in the labor force either unemployed or driving down wages), dumped it in the laps of rentiers who already can’t find profitable things to invest in, caused the value of investment assets to collapse, and caused another Great Depression. Last time around, the only thing that saved American capitalism was a world war; let’s just hope they don’t use nukes in this one.
There’s a real solution that will make deficit spending and public debt unnecessary, but I don’t think J.D. will like it. It would involve abolishing all the state-enforced privileges and artificial property rights — like landlordism, intellectual property, and credit monopolies — that shift income from workers to property owners, and all the entry barriers and cartelizing regulations that shift income from consumers to business owners. There would be a lot less idle capital and idle industrial capacity, and a lot more demand for labor from the purchasing power of ordinary people."
-Kevin Carson, "No, Deficit Spending Isn’t the Problem…"
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azspot · 3 months
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Prevention of the re-imposition of New Deal rentier repression has long been a priority of both US political parties. Right-wing populism is just one inchoate reflex against financialization’s street-level consequences. The “establishment Republicans” are still committed to the rentier class, or what’s left of establishment Republicans after Trumpism. Likewise, the toothless, gerontocratic Democratic and Labor parties (now tactically “woke”) still carry water for finance capital, too.
Stan Goff
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