To understand rentier capitalism, one first needs to understand rent. Rent is income generated by virtue of exclusive ownership or control of a scarce asset of some kind. A rentier is the recipient of this income: the individual or, more commonly, corporation that controls the asset. Rentier capitalism is an economic order organised around income-generating assets, in which overall incomes are dominated by rents and economic life is dominated by rentiers. Fundamentally orientated to “having” rather than “doing”, it is based on a proprietorial rather than entrepreneurial ethos.
The main problems with rentier capitalism are twofold. First, rentiers are inclined to sit on and sweat their income-generating assets, rather than innovate; it is a recipe for economic stagnation. And second, because incomes accrue disproportionately to the asset-owning elite, it is an engine for growing inequalities of both income and wealth.
A quick primer on.
Rentier capitalism is both the counter-point to the notion that capitalism “promotes innovation” and, arguably, the ultimate end-goal of capitalism in general; the only reason entrepreneurial capitalism exists in our current economic order is to either transform into rentier capitalism over the long-term (ref. e.g. Amazon, Uber), or to be bought out and added to the asset holdings of someone else (ref. e.g. the FAANG-buyout-oriented business plan of every single tech “startup” nowadays). In other words, the innovation in-and-of-itself is not the goal; obtaining assets you can then charge rent on is.
And the broader point here is that this is not a “natural” state of affairs; it exists because of intentional policy choices by governments.1 Things like antitrust law specifically exist to as instruments developed the last time rentier capitalism threatened to swallow the world, in an attempt to prevent it happening again. But these laws only work when they’re enforced, and in the last few decades, they haven’t been. At least not where it counts.
And so… this.