Rent

Abstract

Rent is defined by the power-based means from which it is collected, which is in contrast to profit — the other type of surplus — which is collected on the basis of competition. Under the conditions of competition, capitalist producers are forced to reinvest their profits in order to remain competitive, which serves as a motor for growth, as opposed to rent-based economies where the so-called ‘capitalists’, more accurately rentiers, are under no duress to reinvest their surplus as, owing to a power relation, they have guaranteed returns. When the rentiers base themselves are at the centre of state productions, like in the oil-run Gulf States, they constitute a ‘state class’ from which they secure access to those rents and insulate themselves from competition. Elsenhans believes a rent-based system destroys the efficiency and growth gains that capitalism achieves, and that capitalism must by saved from the rentiers. The concept is fundamental to understanding his critique of the current economic system.