Wednesday, January 17, 2007
The Rentiers. posted by Richard SeymourFinance capital has a dominance today that even Lenin could not have foreseen. It is the primary form of ownership in the world economy today, and is the dominant part of any ruling class. ITV has this evening presented an hour-long 'documentary' (more of an apologetic tease) about "the city". It had the fake concern of a consumers affairs programme, although it ought to have been a Crimewatch special. Much of it was concerned with interviewing some particularly privileged employees of investment banks and fund managers and so on. The details of their grotesque lives are both celebrated and mocked. They revel in their preposterous sense of entitlement, their willingness to flaunt what they have procured for themselves, and most especially their narcissistic competition with other upper middle class creatures. One or two commentators are allowed to say some mean things about them. The viewer is invited to gasp when someone being offered a £100,000 bonus complains that it is like working for a charity, or when someone sues a bank because they only offered him one million when he thought his market value was seven million. Of course, I'm sure you are aware that there are legal firms in the city whose income is obtained by suing companies who have made bogus redundancies before bonus time - they take it very seriously, because a city bonus is not only a life's income for many people, but also on account of that a tremendous indicator of status. The creeps, of course, are permitted to defend themselves: "Oh yah, it takes a very particular kind of pahson to get to the top and stay there, y'know. It's a lot of hard wahk, but it's maistly abite the pahson." And: "People on the outside don't see us working our butts off, the long hours, the sleepless nights...". And: "Of course my salary is legitimate. I bring money into this institution, and they pay me an income reflecting that contribution."
There's a lot of macho flashing, and chest-puffing from this crowd. Their stupendously large incomes allow luxury expenditure on outrageously priced homes, which drives up the price of housing, and rent, for the rest of us. The reason your average Londoner is liable to end up paying up to sixty per cent of her income on accomodation is precisely because of this disgusting housing market we have (partially fed by the dearth of fit accomodation provided through the council). Each year there are salivating announcements from the big estate agents, bragging of an increase in house prices (which rose overall last year by 18.1%, a sum which will be paid for by anyone trying to get onto the 'property ladder' with a mortgage), especially prime London property for rent (which last year rose by a whopping 11.1%, a sum which will be paid for by the forty percent of Londoners who are neither full homeowners, nor have a mortgage). And as the economy spirals downward, those hundreds of thousands who have been conned into getting an unsustainable mortgage will pay with their houses. Undoubtedly this privileged layer of employees of finance-capital is also partially responsible for the dramatic increase in domestic service labour since 1978. Yet, these people are only the averagely intelligent sociopaths and misfits that capital finds useful.
It's the people they don't interview that are more interesting. The people who have never been employees of anything in their lives, who are doing things like 'eco-tourism' (buying up the Brazilian rain forests, islands in the Seychelles and so on), and who wouldn't dream of actually discussing this with a national television audience. No nouveau-riche vulgarity about this lot - they are the rulers, after all. And they are the ones to watch out for. One commentator on the programme, a modestly liberal writer, pointed out that under Blair, the wealth of the top 1,000 people in the country tripled. Most of this, he said, was 'made' on their behalf by the city, which is to say that the biggest owners in the entire country paid some extremely exclusive companies with fingers in every pie in the world to manage their assets (money or land) for them. These companies in turn secured for them the largest possible share of the surplus generated by people doing actual productive work (that still happens, you know). In other words, the funds are transferred to them through rent paid on ownership, either as massive shareholders or as landowners. Obviously, this is an ideal-type - there is no pure 'rentier class', since these guys will also have involvements in industrial capital, chairmanships, non-executive positions and so on. But you could say that this class of people favours policies that are likely to enhance all forms of rent, and are in a far better position than most to ensure they can achieve it. The financialisation of the world economy under the rubric of neoliberalism has brought some increased risk, but principally it has sped up and amplified the transfer of wealth to the richest.
Keynes warned about the rapacity of the rentiers, particularly the enormous turmoil they were prepared to put societies through to obtain their loot, and he at one point suggested the socialisation of investment, in a Board of National Investment whose role would be to manage aggregate demand and sustain full employment by channeling investment into useful, long-term development. This is a policy with revolutionary implications if taken seriously, and one that he resiled from in practise. For, to socialise investment is to take the profits out of the hands of the capitalist class and dictate to them what will be done with it. To take their profits and direct them into a plan that doesn't even have the virtue of reflecting their interests, that in fact owes itself to some democratic consideration, rather undermines the whole point about them being the ruling class. And even the capitalist class, with its matchless humanitarianism, would think this a high price to pay for full employment, a more equitable distribution of wealth and domestic peace.
Yet, we are living in an era where the rentiers are far more salient than in Keynes' day, and given the paucity of corporatist approaches, it would seem appropriate to take the call for socialising investment to its logical, revolutionary, conclusions. Or you can wait for the system to fall in your heads.