I would classify “rentiers” as conservers as opposed to most other people who are essentially money-excretors - they blow out money as fast as they get it (or faster, carrying a debt-burden) and it is mostly wasted on consumer baubles. They can be a ballast to the economy while also serving as an object for scorn. Talking like this about wealth down at the marina would be considered “poor form.” Especially in the midst of telling about having to yet again replace your twin $90K diesel engines in your yacht. And that entity in your center, “government,” is often composed of fools, clowns and charlatans standing in the social space that real governance should occupy. And yes, they have been coopted by the Oligarchs, the uber-rich who are not really in the ownership class, they are usually “new money” lacking real roots in place or society. Of course you are searching for an easy tap into the great money-river, with its massive flow of wealth, but are not sure how to connect. Quite simple - teeny slice off each market transaction.
Thank you for your comment, Kathleen. I actually woke up this morning with that exact realization - that I had missed noting the rentier's unique one-way flaw of cash in but not out. I went back and added a paragraph to that effect.
It appears I am in your “rentiers” class, with a huge estate, a natural area 6.22 acres situated in a city of almost 700,000 with lots of homelessness and poverty, it has no adjoining private properties, and I exist (retirement) on investment income. But there is more to “value” than commercial vs intrinsic. If people want a more sustainable relationship with the planet and other life, more people must become owners rather than spenders. On the spending side resides living beyond your income, in other words, accumulation of debt. Yes, the spenders need to be able to borrow that debt from someone, which is often from the savers, even if through intermediaries, banks, etc. And yes, the savers charge a fee of interest on the borrowed money. The answer is not to ban interest collection but rather to diminish the borrowing, the living beyond your income, whether financially or via generational theft (pushing govt debt down the road) or by building up an ecological debt - needing more planets to satisfy consumer wants (in the alleviation of boredom). Is the savers money-value not being used? It is held quite often as property assets. Would overall society improve if those assets were leveraged (mortgaged and the borrowed funds be employed in say, the production of more consumables)? People think of stocks and bonds as assets - they are debt assets rather than property assets. You think you “buy” a stock or bond or US T-bill, and the notion of “buying” seems to apply since you handed over money for it, but what you “purchased” is simply a promissory note or an imaginary portion of business ownership. People contort system value to think of these instruments of debt as financial assets that can be flipped on the market as prices rise or fall, but what has this done to the underlying value of money itself? As much as US$100T is flipped in credit and currency default swaps, mostly done with leveraged financing. Is there any real value trading hands here? If there was, a tiny part of a percentage fee could be put on these leveraged transactions to generate a useable fund for social improvement. Or perhaps there is no real value in that debt stream. Another possible revenue pool as I have written before, is a fee on the oxygen that people steal from the commons to burn their fuels. In any case, I would put a circle for Nature on one side, with the circle for savers next to that and possibly a small junction between them, then the circle for government co-joined with spenders. I would put producers as a bar beneath the whole diagram, as primary production, especially agriculture, is converting direct inputs into bot necessary and unnecessary goods. Consumption, waste generation and entropy are another bar over everything else. Real governance, rather than notional ideologies, should be regulating the extraction/production/consumption trajectories to minimize waste, inferior products and unnecessary consumption. But then you face the issue that relieving human boredom is the primary driver of the economy. Don’t beat up on the savers!
While I don't know what you are retired from, I see nothing in your comment that suggests you originally earned those savings simply on the basis of some claimed ownership. I must also be intentional about being clear on the purpose of my critical writing. It is less about disparaging the people who might be rentiers, and more about the system that makes this an acceptable way to accumulate wealth.
You presently live off of your investments - as do I. What choice do you have, if you are no longer working? This is not the same as the financial industry where entire careers are spent gambling with savings in order to grow obscene wealth by math alone.
You bring up a very good point about the confusion between assets and liabilities when it comes to buying debt. It is a contradiction that lies at the root of the problem. If Jack borrows a large sum of money from Jill and spends it on a grand vacation, Jack is happy - and has a liability. Whereas Jill, who no longer has the money that she had, holds this IOU that is an asset. Does that make her happy? I don't know.
As always, there's lots more to unpack in your wise words. Perhaps I will address more in good time. However, my most important feedback is this:
Much of the pushback that I receive is from people who seek success using measures that I apparently criticize. They believe that when I say number-based-values cannot be allowed to set the course for human civilization, then I am attacking them when they use number-based values.
No, no, no.
My fight is with the system that demands this thinking, and the way that the system rewards it at the cost of all other human values like integrity, justice, compassion, joy, artistry, etc. etc. My dream objective is to prepare pockets of humanity for the time when the numbers-based value system fails, not to beat people up for pursuing the best possible life by whatever means society says are acceptable.
OK, I see your point, savers and owners and rentiers are not contained in each other. But they can have overlaps, and certainly spenders/consumers have little overlap with those. Your concentric circles is still wrong. Rentiers don’t necessarily stand between government and producers. Nature is the foundation below all; the economy is an externality to nature. That is a flat bar across the bottom. Next up are producers, esp agriculture which takes earth, water and sunlight to produce food. The fingers of rentiers can reach into and leverage that output. Producers make goods which are physical things. This may or might not include service economy, but productivity is zero when what is left of our economy is people selling insurance, flowers and pizza to each other. Then there is the consumption/disposal layer - consumers degrade produced goods into a lower entropy state and eventually into landfills. This perpetual waste allows space for more production, and the throughput is expected to growth exponentially as we add more planets to the supply-side (not). Government like rentiers is an amorphous entity not occupying a useful layer but which have fingers into almost every pie. Real (competent) non-ideologic governance could provide meaningful management of the entire system. Other social systems such as Steiner’s Three Fold Social Order could be an improvement.
As for the rentiers, if that class is composed of the financial manipulators, I would prefer to trash that entire nonsense. I would even toss the income tax system so those tax preparers can find a real job. I could even see eliminating bank’s ability to do fractional-reserve banking (creating money out of thin air). Instead of outlawing indenture and interest payments, I would tell the banks to pay at least a percentage more for deposits than they charge for loans or they lose the fractional-reserve system. That helps encourage saving over borrowing. The financial markets could be obsoleted by closing stocks and bonds secondary trading. If you want G.E. stock as an investment, you buy from G.E. - you buy direct from G.E. and sell it back if you leave it. No secondary market! Same for bonds. No trading, no leveraging, no default swaps (should say “swamps”), no derivatives. The proliferation of this time of financial manipulation is part of the neo-liberal joy of “economic freedom,” to be able to financially manipulate the entire economy (the total collective human enterprise) for your personal gain. This brings happiness?
This is great feedback. I fear you are misunderstanding my concentric circle diagram, but that is on me for not making the meaning of my diagram clear enough. The point is not that Rentiers stand between Government and Producers. The idea of the diagram is that:
1. Governments sometimes act like Rentiers (and Producers and Consumers).
2. Rentiers sometimes act like Producers (and Consumers).
3. Producers sometimes act like Consumers.
4. And we all exist within Nature.
The suggestion you made for alterations are good points, but they speak to a different diagram with a different purpose.
The humanistic side of me won't argue with your call to eliminate wealth-by-math, the fractional reserve system, or middlemen of every stripe.
As for the elimination of income tax, I'll back that one to. In fact, one of the greatest movements against rentiers was based on the work of Henry George, who proposed that ALL present taxes should be eliminated, and there should only be one tax: a Land Value Tax on the value of the land (not structures on it). This makes perfect sense. The planet belongs to everyone. If you claim ownership of some piece of that, you should pay everyone else for that privilege.
The idea of a land tax has problems in two areas. One, in the case that all land is owned, why is wealth extracted from each piece of land and distributed to the others? The other issue is that to pay this tax, which is in effect a reverse mortgage that you pay to the collector until the last of its value is forfeited, the owners would be incentivized to extract monetary value from that land, likely diminishing its value to both the commons and nature, especially if the owner is trying to maintain a natural area. Then what - charge admission for people to see it? This appears to be a scheme to monetize the intrinsic value of land. A better approach is in Steiner’s Three Fold Social Order, in which the death tax is 100% which attributes to the education system which in turns directly funds student’s venture into life after schooling. Even if your circle diagram represents levels of income in the various groups, producers are most often at the farthest reaches of the economy, because of low wages in industry and agriculture being an exemption to the overall economy with no paid wages for the farmer and below-subsistence wages for transient pickers in society’s coercion to force down food prices.
I would classify “rentiers” as conservers as opposed to most other people who are essentially money-excretors - they blow out money as fast as they get it (or faster, carrying a debt-burden) and it is mostly wasted on consumer baubles. They can be a ballast to the economy while also serving as an object for scorn. Talking like this about wealth down at the marina would be considered “poor form.” Especially in the midst of telling about having to yet again replace your twin $90K diesel engines in your yacht. And that entity in your center, “government,” is often composed of fools, clowns and charlatans standing in the social space that real governance should occupy. And yes, they have been coopted by the Oligarchs, the uber-rich who are not really in the ownership class, they are usually “new money” lacking real roots in place or society. Of course you are searching for an easy tap into the great money-river, with its massive flow of wealth, but are not sure how to connect. Quite simple - teeny slice off each market transaction.
Thank you for your comment, Kathleen. I actually woke up this morning with that exact realization - that I had missed noting the rentier's unique one-way flaw of cash in but not out. I went back and added a paragraph to that effect.
It appears I am in your “rentiers” class, with a huge estate, a natural area 6.22 acres situated in a city of almost 700,000 with lots of homelessness and poverty, it has no adjoining private properties, and I exist (retirement) on investment income. But there is more to “value” than commercial vs intrinsic. If people want a more sustainable relationship with the planet and other life, more people must become owners rather than spenders. On the spending side resides living beyond your income, in other words, accumulation of debt. Yes, the spenders need to be able to borrow that debt from someone, which is often from the savers, even if through intermediaries, banks, etc. And yes, the savers charge a fee of interest on the borrowed money. The answer is not to ban interest collection but rather to diminish the borrowing, the living beyond your income, whether financially or via generational theft (pushing govt debt down the road) or by building up an ecological debt - needing more planets to satisfy consumer wants (in the alleviation of boredom). Is the savers money-value not being used? It is held quite often as property assets. Would overall society improve if those assets were leveraged (mortgaged and the borrowed funds be employed in say, the production of more consumables)? People think of stocks and bonds as assets - they are debt assets rather than property assets. You think you “buy” a stock or bond or US T-bill, and the notion of “buying” seems to apply since you handed over money for it, but what you “purchased” is simply a promissory note or an imaginary portion of business ownership. People contort system value to think of these instruments of debt as financial assets that can be flipped on the market as prices rise or fall, but what has this done to the underlying value of money itself? As much as US$100T is flipped in credit and currency default swaps, mostly done with leveraged financing. Is there any real value trading hands here? If there was, a tiny part of a percentage fee could be put on these leveraged transactions to generate a useable fund for social improvement. Or perhaps there is no real value in that debt stream. Another possible revenue pool as I have written before, is a fee on the oxygen that people steal from the commons to burn their fuels. In any case, I would put a circle for Nature on one side, with the circle for savers next to that and possibly a small junction between them, then the circle for government co-joined with spenders. I would put producers as a bar beneath the whole diagram, as primary production, especially agriculture, is converting direct inputs into bot necessary and unnecessary goods. Consumption, waste generation and entropy are another bar over everything else. Real governance, rather than notional ideologies, should be regulating the extraction/production/consumption trajectories to minimize waste, inferior products and unnecessary consumption. But then you face the issue that relieving human boredom is the primary driver of the economy. Don’t beat up on the savers!
How did you ever equate savers with rentiers?
While I don't know what you are retired from, I see nothing in your comment that suggests you originally earned those savings simply on the basis of some claimed ownership. I must also be intentional about being clear on the purpose of my critical writing. It is less about disparaging the people who might be rentiers, and more about the system that makes this an acceptable way to accumulate wealth.
You presently live off of your investments - as do I. What choice do you have, if you are no longer working? This is not the same as the financial industry where entire careers are spent gambling with savings in order to grow obscene wealth by math alone.
You bring up a very good point about the confusion between assets and liabilities when it comes to buying debt. It is a contradiction that lies at the root of the problem. If Jack borrows a large sum of money from Jill and spends it on a grand vacation, Jack is happy - and has a liability. Whereas Jill, who no longer has the money that she had, holds this IOU that is an asset. Does that make her happy? I don't know.
As always, there's lots more to unpack in your wise words. Perhaps I will address more in good time. However, my most important feedback is this:
Much of the pushback that I receive is from people who seek success using measures that I apparently criticize. They believe that when I say number-based-values cannot be allowed to set the course for human civilization, then I am attacking them when they use number-based values.
No, no, no.
My fight is with the system that demands this thinking, and the way that the system rewards it at the cost of all other human values like integrity, justice, compassion, joy, artistry, etc. etc. My dream objective is to prepare pockets of humanity for the time when the numbers-based value system fails, not to beat people up for pursuing the best possible life by whatever means society says are acceptable.
OK, I see your point, savers and owners and rentiers are not contained in each other. But they can have overlaps, and certainly spenders/consumers have little overlap with those. Your concentric circles is still wrong. Rentiers don’t necessarily stand between government and producers. Nature is the foundation below all; the economy is an externality to nature. That is a flat bar across the bottom. Next up are producers, esp agriculture which takes earth, water and sunlight to produce food. The fingers of rentiers can reach into and leverage that output. Producers make goods which are physical things. This may or might not include service economy, but productivity is zero when what is left of our economy is people selling insurance, flowers and pizza to each other. Then there is the consumption/disposal layer - consumers degrade produced goods into a lower entropy state and eventually into landfills. This perpetual waste allows space for more production, and the throughput is expected to growth exponentially as we add more planets to the supply-side (not). Government like rentiers is an amorphous entity not occupying a useful layer but which have fingers into almost every pie. Real (competent) non-ideologic governance could provide meaningful management of the entire system. Other social systems such as Steiner’s Three Fold Social Order could be an improvement.
As for the rentiers, if that class is composed of the financial manipulators, I would prefer to trash that entire nonsense. I would even toss the income tax system so those tax preparers can find a real job. I could even see eliminating bank’s ability to do fractional-reserve banking (creating money out of thin air). Instead of outlawing indenture and interest payments, I would tell the banks to pay at least a percentage more for deposits than they charge for loans or they lose the fractional-reserve system. That helps encourage saving over borrowing. The financial markets could be obsoleted by closing stocks and bonds secondary trading. If you want G.E. stock as an investment, you buy from G.E. - you buy direct from G.E. and sell it back if you leave it. No secondary market! Same for bonds. No trading, no leveraging, no default swaps (should say “swamps”), no derivatives. The proliferation of this time of financial manipulation is part of the neo-liberal joy of “economic freedom,” to be able to financially manipulate the entire economy (the total collective human enterprise) for your personal gain. This brings happiness?
This is great feedback. I fear you are misunderstanding my concentric circle diagram, but that is on me for not making the meaning of my diagram clear enough. The point is not that Rentiers stand between Government and Producers. The idea of the diagram is that:
1. Governments sometimes act like Rentiers (and Producers and Consumers).
2. Rentiers sometimes act like Producers (and Consumers).
3. Producers sometimes act like Consumers.
4. And we all exist within Nature.
The suggestion you made for alterations are good points, but they speak to a different diagram with a different purpose.
The humanistic side of me won't argue with your call to eliminate wealth-by-math, the fractional reserve system, or middlemen of every stripe.
As for the elimination of income tax, I'll back that one to. In fact, one of the greatest movements against rentiers was based on the work of Henry George, who proposed that ALL present taxes should be eliminated, and there should only be one tax: a Land Value Tax on the value of the land (not structures on it). This makes perfect sense. The planet belongs to everyone. If you claim ownership of some piece of that, you should pay everyone else for that privilege.
The idea of a land tax has problems in two areas. One, in the case that all land is owned, why is wealth extracted from each piece of land and distributed to the others? The other issue is that to pay this tax, which is in effect a reverse mortgage that you pay to the collector until the last of its value is forfeited, the owners would be incentivized to extract monetary value from that land, likely diminishing its value to both the commons and nature, especially if the owner is trying to maintain a natural area. Then what - charge admission for people to see it? This appears to be a scheme to monetize the intrinsic value of land. A better approach is in Steiner’s Three Fold Social Order, in which the death tax is 100% which attributes to the education system which in turns directly funds student’s venture into life after schooling. Even if your circle diagram represents levels of income in the various groups, producers are most often at the farthest reaches of the economy, because of low wages in industry and agriculture being an exemption to the overall economy with no paid wages for the farmer and below-subsistence wages for transient pickers in society’s coercion to force down food prices.