Big Ideas:
The Rentier Party
Friday, 17 June 2011

Last week, Paul Krugman published a column that caught my eye. I don’t read Krugman as a rule, because I already agree with what he has to say, and it irks me that anyone who doesn’t wields any influence in Washington or elsewhere. But I read Friday’s column because its title, “Rule by Rentiers,” not only coincided with my own ideas but struck the same new note: “rentiers.” It had occurred to me only days earlier that the Republican Party, which used to be the party of business, had become the party of rentiers. As Krugman suggests, it’s not just Republicans. It’s political elites everywhere in the West. All seem to be in the pockets of wealthy people whose wealth no longer derives from personal effort.

A word about the word, which means the opposite of its English false-cognate. Rentiers, unlike renters, own things, and their income is derived from the “profits,” or surplus revenue, that their properties generate, whether they be farms, mines, or investment portfolios. (You might say that the French simply looked at the rental process from the other side; a rentier is someone who rents property out; our renters pay rent — to rentiers.)

I don’t mean to demonize rentiers. There may be nothing admirable about living on interest and dividend payments, but there’s nothing shameful about it, either. The mystery, though, is why leaders are attending to rentiers on the one subject that rentiers care nothing about, jobs. In the rentiers’ paradise, there would be no workers, only robots. There may be nothing wrong with that prospect, either. But surely in any discussion of serious social issues such as employment and health care, a class with every reason not to sympathise with workers ought to have a very limited voice at best.

Yesterday, an even fresher insight blossomed on the one that I shared with Paul Krugman. The men and women who run this countries large corporations (whether as executives or board members) are often members but always agents of the rentier class. That is why they are paid without any regard to their firms’ official profitability. Corporations are only incidentally commercial nowadays. They’re primarily strip mines for wealth whose operations are protected from outside interference by the executive class. It is the same with the big bankers. None of these people is any more interested in business as we know it than a medieval duke.

I don’t fear rentiers themselves. They’re not, as a rule, very bright — that’s how they dragged us into the credit collapse of 2008. As oligarchs, they have little solidarity except when under attack; getting them to agree is like herding cats. Except with regard to two things: the sanctity of contract in good times and an entitlement to bailouts in bad times.

The problem is that American campaign-finance laws have allowed the rentier class to buy the allegiance of the political class. The rentiers are the only people who can foot the bill of our preposterously bloated campaign-advertising programs. Rentiers also fund the think tanks that foment voter dissatisfaction with progressive causes. Rentiers have little interest in the social questions, such as abortion and same-sex marriage, that mobilize Republican Party supporters. But their spokesmen have astutely welded socially conservative issues to the economically regressive ones that mean a great deal to rentiers, and in this they are helped by the fact that economic progressives tend to be social progressives as well.

The only hope for a progressive party in America is to develop a genuine and knowledgeable passion for every kind of business except the conglomerate kind (which is no business at all). An economy of healthy businesses is the sine qua non of healthy societies generally, and it’s time for progressives to stop looking down their noses at people who are driven to earn money by making things and providing services. And to stop confusing these people with the three-card monte artists of Wall Street and their coupon-clipping (oh, for the days!) patrons.