Review: Rentier Capitalism: Who owns the economy, and who pays for it?

By Richard Goulding (@richmg_)


Brett Christophers, Rentier Capitalism: Who Owns the Economy, and Who Pays for It?, Verso Books, October 2020.


Brett Christophers is a political economist and economic geographer at Uppsala University, Sweden. A well-respected academic whose research explores money, finance, law and housing, he has gained wider recognition in recent years for his dissection in The New Enclosure of how the mass privatisation of public land in Britain since the 1970s has fuelled speculative development while entrenching vested economic interests. In his latest book, Rentier Capitalism, Christophers goes further, arguing that much of what passes for capitalism today involves not innovative entrepreneurialism but the ability to extract rents from the control of scarce assets, with consequences for rising inequality, stagnant growth and a polarised society.


Analysing a range of industries from finance to digital platforms to oil, Christophers charts the extent to which rent-seeking practices in various guises act as the basis for much of the activity of businesses in Britain today. Christophers explores a wide range of the forms taken by economic rents, seeing rent as being rooted in the ability of rentiers to extract payments for the use of scarce resources. Some of these are familiar, such as the ownership of large parts of urban housing stock by private landlords. In other areas he goes further, taking into account the use of intellectual property regimes to stifle competition and ensure returns to established companies, or attempts to monopolise digital access to markets by firms such as Deliveroo, Amazon or Uber. While the benefits of this have for the most part flowed to corporations, Christophers observes how the use of the housing market as a complement to meagre pensions has helped entrench small-scale rentierism among a disproportionately older class of homeowners, building support for government policies aimed at the safeguarding of asset wealth.


Christophers wishes to distinguish himself from other critical authors of rentierism on the centre-left such as Thomas Piketty, Marianna Mazzucato and Guy Standing in two ways. First, he is wary of defining rent solely by being unearned income, seeing all capitalist profit as being derived from the private ownership of productive assets. Second, he sees it as vital to investigate how economic power is shaped not just through the ownership of assets but also how they can be commercialised through exchange, in keeping with his earlier books such as The Great Leveller which examined the role of law in structuring the operation of markets.


As a result, Christophers argues for the need to combine both mainstream and heterodox economic definitions of rent. In line with heterodox economists, the ability to extract rent is grounded in the ownership of scarce assets of some form. Crucially however, what enables the extraction of rent to take place in his theory is the ability to exploit monopoly power, allowing businesses to extract excess payments by being shielded from competition. Above all, for Christophers it is neoliberal reforms which have enabled firms to exert this power, whether through the stripping of regulations preventing the consolidation of markets by a small number of too-big-to-fail firms, privatisation regimes that have enabled firms to dominate control of infrastructure assets, or copyright regimes that have proliferated wildly to cover ever more market niches since the 1980s. For Christophers, this concentration of wealth into the hands of rentiers has both undermined productive innovation and weakened the bargaining power of labour against the owners of assets, deepening inequality while stagnating economic growth and productivity.


One aim for Christophers in making this argument is to broaden debates on the left beyond financialisation. Instead, he offers a structural account grounded in a tendency for rentiers to eschew risking their capital in production in favour of returns on their existing wealth, with financial securities just one subset of assets that are potentially available for rent extraction. While there have been exceptions to this trend, such as the social democratic era of the mid-20th Century, for Christophers this can be traced to the sheer destruction of the first and second world wars, with the demands of post-war reconstruction  requiring a state-led productive recovery to rebuild lost assets. As an alternative to rentier capitalism, Christophers argues for four major interventions, centred on state regulation to break up monopolies, a tax on asset wealth, support for state investment and public services, and the promotion where practical of decentralised community ownership of resources. For Christophers, the goal of these policies would not simply be to rescue a productive capitalism, but to move beyond it, removing the power of rentiers while ensuring the democratised and dispersed control of society’s asset wealth.


While Rentier Capitalism presents convincing evidence of the extent to which rent-seeking has become a central aspect of the British economy, the book’s structural account of rent as a driving force in contemporary capitalism is less persuasive. Christophers sidesteps the traditional controversies over how to untangle productive from unproductive economic activity, viewing this distinction as dubious and moralising. Instead, he draws together critical and orthodox accounts by emphasising the need to take seriously the role of market conditions in enabling the extraction of economic rent, defined as the ‘income derived from the ownership, possession or control of scarce assets under conditions of limited or no competition’.[1] But it is difficult to see what would not be classed as rent extraction under this definition, given that real world markets are not perfectly competitive, and are characterised by inefficiencies, inequalities, and imbalances of power. Recognising this, Christophers argues that rent-seeking should be seen as a matter of degree along a spectrum of activity, with rentierism emerging when assets are mobilised in such a way as to ‘materially influence the nature of economic activity and the amount of income it generates’.[2] While this qualifies his claim, it nonetheless feels oddly circular; begging the question as to what would count as a material influence in restructuring economic activity for the extraction of rent.


This ambiguity raises questions for how we should understand the relation between competition, capitalism and the market. Making the case for taking markets seriously in political economy is another of Christophers’ aims, particularly through his insistence on the need to analyse how rent extraction is mobilised through the ability to commercialise assets. Throughout the book, market power is nonetheless discussed in terms of monopoly power, implicitly defined through a departure from the state of perfect competition. The essence of markets appears to remain that of free and equal exchange between individual property owners, even if these transactions face collective action problems and evolving conditions over time. Real markets are more than this however, organising relations of power and labour that have historically been predicated on the violent dispossession of subaltern classes from non-market means of subsistence, from the slave trade to modern-day expulsions. Christophers of course does not claim to provide an exhaustive account of the ills of capitalism. In arguing that much of ‘what we call “capitalism” is, or inevitably becomes, rentierism’[3], there nonetheless still seems left an ironically under-theorised representation of markets themselves that abstracts from these histories, obscuring potential non-rentier forms of market power.


Questions over what is left out in this account also seem apparent towards the end of the book, in which Christophers analyses current events, including the Brexit referendum, through the lens of rentier capitalism. The poverty and stagnation created by rentierism has, in his telling, created a class of people excluded from society and seeking outlets for protest currently filled by the political right. Perhaps. But what is missing from the analysis is any discussion of ‘race’, racism or nationalism, all essential to an understanding of authoritarian populism in Britain and elsewhere. Christophers is hardly alone in this, with other prominent theorists of neoliberalism such as David Harvey, Will Davies or Wendy Brown offering similarly colour-blind accounts. As pointed out by academics Tilley and Shilliam however, drawing on writers such as Sylvia Wynter, the ‘fiction’ of race has been fundamental to the ideology of markets as they have developed throughout recent centuries, with the rights of the free property owner of classical political and economic theory developed in exclusion to supposedly particularistic claims of gendered, racialised others. Recognition of themes of what some call racial capitalism – most recently exposed by the disproportionate exposure to illness and death of minority ethnic groups in Britain over the course of the Covid pandemic - need not be incompatible with a theory of rentierism, but it is not immediately obvious that the concept of monopoly provides the analytical traction Christophers gives it in his account.


That said, Christophers’ in-depth investigation of rent-seeking as at the core of much of what passes for business practice in Britain remains valuable. An example of the contradictions of a process in which rent-seeking and production are in reality intertwined since the book’s publication can be seen in the case of the high street brand Boohoo, recently slammed by an independent review into low pay and unsafe conditions in the factories of its Leicester suppliers. Hitting the headlines amid a scandal of the spread of Covid in Leicester factories last year, these are conditions often common among the disproportionately minority ethnic workforces upon which much of modern British manufacturing depends, conditions that seem difficult to ascribe to rentierism alone. The firm has recently expanded, acquiring the Debenhams brand name – but not its stores – and moving into Manchester’s real estate market by becoming a developer, buying up the Northern Quarter’s Sunshine Studios and planning to convert the former warehouse Ancoats Works into offices. Christophers is right to highlight the extent to which rent-seeking behaviours are embedded into Britain, and his book should start a welcome debate, even if tensions in the argument remain as a structural theorisation of contemporary capitalism.




[1] Christophers, B. (2020) Rentier Capitalism: Who owns the economy, and who pays for it? London: Verso.  p. xxiv.

[2] Rentier Capitalism pp. xxvi

[3] Rentier Capitalism pp. 409



Richard Goulding is a housing researcher based in Manchester.


Image credit: "Marlsbro House, Newton Street, Manchester" by Stephen Richards is licensed under CC BY-SA 2.0


This article was made possible due to support from the Rosa Luxemburg Stiftung.


19 February 2021