Two new books reveal how our economy is increasingly oriented around the interests of asset owners – and increasingly uncaring about the fates of everyone else.

As the COVID-19 crisis grinds on, it’s increasingly clear that the UK’s broken economy – an economy based on the extraction of rent – is deepening the pain. In August, people were prematurely cajoled back to the office, amid rising panic at the ‘hollowing out’ of city-centres built on inflated commercial property values. In September, students were herded back into overcrowded university accommodation, which duly became the epicentre of the second wave. Many suspected that this predictable disaster was allowed to unfold at least partly because of the dependence of universities and private landlords on rental income from student halls.

Meanwhile, the divide between private renters and homeowners yawns ever wider. While buy-to-let landlords have been able to access mortgage holidays, their tenants struggle with escalating rent debt. Social movements are gearing up to resist evictions after the temporary ban was lifted. While the government’s stamp duty holiday has helped house prices to bounce back, there is no sign whatsoever that jobs and living standards will do the same.

Housing itself is just the most egregious tip of a very large iceberg. Everywhere you look, COVID-19 is widening the gulf between those who own assets and those who owe debts. Buoyed by central bank interventions, capital markets have seen the promised ‘V-shaped recovery’ – but for everyone else, this is now a distant fantasy. Our economy and our politics seem increasingly oriented around the interests of asset owners, and increasingly uncaring about the fates of everyone else.

Vast sums are siphoned off to failing private providers – including £12 billion for our disastrous test-and-trace system – while government quibbles over the relatively tiny amounts needed to ward off outright destitution (£65 million for Greater Manchester to weather its local lockdown, £21 million a week to feed hungry children). Rishi Sunak might be trying to revive the old chestnut that “there is no money left”. Yet increasingly, people are beginning to suspect that the problem isn’t the amount of money available, but where that money goes. This is intimately bound up with the question of where power lies.

Two very different new books aim to help build our understanding of this landscape, and how we can navigate it to build a new economy. ‘Rentier Capitalism’ by geographer Brett Christophers (out on 17 November from Verso Books) is a serious and detailed study of how the UK economy became dominated by rent extraction. What does this mean? Christophers combines the orthodox economic understanding of ‘rent’ – essentially, excess profits beyond what would be achieved in a competitive marketplace – with the heterodox understanding, which focuses on ownership and control of assets.

Accordingly, he defines rent as “income derived from the ownership, possession or control of scarce assets under conditions of limited or no competition”. It’s debatable how much is really added by the orthodox emphasis on competition – or whether it’s entirely coherent to mash up heterodox and orthodox analytical frameworks in this way. But, leaving these theoretical debates aside, the real heart of Christophers’ argument – and what makes this book so important – is the emphasis on ownership.


‘Rentier Capitalism: Who Owns the Economy, and Who Pays for It?’ by Brett Christophers (Verso, 2020)

Christophers meticulously documents how the ‘commanding heights’ of the UK economy – its most successful sectors, from finance and property development to pharmaceuticals and utilities – are all riddled with rentierism. Most intriguing is a chapter on ‘contract rents’, in which he argues that the entire outsourcing industry is a textbook example of rentier capitalism. The likes of Serco, he argues, are not experts in actually doing anything. They are experts in winning government contracts – essentially, monopolies on the delivery of public goods, which provide guaranteed flows of income (rent) for years or even decades. These contracts are the assets on which their shareholder value is based.

One might be tempted to respond that a contract to deliver a service feels somehow different from, say, a piece of land or an energy resource: the former is, at least in theory, a reward for work, while the latter is simply a gift from nature, allowing the lucky owners to profit with no work whatsoever. This is a much more clear-cut case of unearned rent. Yet recent events have given Christophers’ argument a new relevance. Watching Serco’s profits soar as its calamitous test-and-trace system crumbles around our ears, the extractive nature of its business model has been laid bare for all to see.

Christophers’ dual emphasis on asset ownership and low competition also illuminates how we got into this mess, and the nature of the system we need to change. He argues that neoliberalism was never really about free markets, as is often assumed: it was about private ownership. In this respect, the rhetoric of neoliberalism never matched the reality. Markets for the control of assets were massively expanded by neoliberalism, through processes such as privatisation. But this was never accompanied by any serious efforts to promote competition in those markets. Instead, successive governments allowed ownership and control of assets to concentrate in the hands of a small number of big players.

One partial exception to this was housing, where the Right to Buy ‘bought in’ large swathes of the middle classes to this economic model. This helps to explain why it has endured politically for as long as it has. As Keir Milburn argues in ‘Generation Rent’, it also helps to explain why that political consensus is now fracturing along age-related lines, as young people are locked out of the housing wealth accumulated by their forebears. Or, as Christophers puts it: “Nothing today bespeaks exclusion from the ‘common wealth’ more than being locked out of home ownership – and nothing bespeaks the likelihood of remaining excluded more than paying half of one’s income in rent.” Without fundamental change to the UK’s economic model, these divisions will surely only continue to grow.

‘Rentier Capitalism’ does not have much to say about what this change should look like – although it does end with a few pointers. But then, this is not really a book about solutions. It is a careful and compelling argument about the nature of the problem, an important and urgent contribution to our understanding of modern capitalism. Yet its analysis raises the question: if our entire economy is structured to concentrate wealth and power in the hands of an ever-shrinking ownership class, how can we hope to challenge this power effectively? It is this question that concerns the authors of ‘Unions Renewed’, Alice Martin and Annie Quick (out now from Polity Press).

This is a much shorter, more accessible affair – but it packs an impressive breadth and depth of thinking into its 140 pages. It argues that the changing nature of capitalism – specifically, the rise of financialisation and rentierism – poses major challenges for traditional trade union organising models. But at its heart is a bold claim: unions can reinvent themselves and build the social power to truly challenge financialised capital. Indeed, they are the only actors in the economy who can.

Like Christophers, Martin and Quick point the finger at rentier power as a cause of low pay, high inequality and declining worker power. But their reasoning for this is in some ways more innovative and interesting. Christopher focuses mainly on the outsize market power of corporations to squeeze labour and dictate terms. He also points out the growing divide between a small minority of highly-paid professionals tasked with protecting assets (think lawyers, accountants and executives) and a huge precariat who do the actual work. But Martin and Quick argue that rentierism disempowers workers by its very nature. If companies can make money by sweating assets, including through various forms of financial engineering and landlordism that do not rely directly on the labour of their own workers, the power of levers like strike action is drastically reduced.

This, of course, poses much deeper questions: if profit under capitalism is no longer only about the labour relation (and it’s worth noting that this is a claim some Marxists would dispute), how far are models of the economy built on the factories and mines of the nineteenth century still relevant? Do we need to reorient our compasses beyond the world of work altogether? As both books argue, rentier capitalism feeds off multiple kinds of exploitation – of customers by suppliers of energy and water; of borrowers by lenders; of tenants by landlords. What these all have in common is the exploitation of those who don’t own capital or resources by those who do.

In response, Martin and Quick argue that we need a more expansive concept of trade unionism – one rooted in solidarity with the whole working class, “expanding the bargaining unit” out beyond the workplace to the communities and citizens who are also being exploited by finance capital. Care workers should make common cause with those they care for and their families; railway workers should organise with passengers; energy workers should ally with energy consumers and local residents. They cite inspiring examples of unions and social movements organising around rent and debt – from the Chicago teachers demanding affordable housing to the El Barzón movement, campaigning for debtors in Mexico.


‘Unions Renewed: Building Power in an Age of Finance’ by Alice Martin and Annie Quick (Polity Press, 2020)

Both books highlight economic democracy as the ultimate answer to rentier power. Martin and Quick define this as “moving power for economic decision-making from those who own capital to a much broader group – the workers, renters and carers, from whom capital owners profit.” But – as they do later acknowledge – it’s also about democratising the ownership of capital itself. As Christophers notes, transforming ownership of assets would mean that “society’s economic resources would be subject to much more dispersed and democratic control than they are under capitalism.”

There is much more to be unpacked on what democratising ownership really means. Martin and Quick – understandably, given their focus on trade unions – talk primarily in terms of worker ownership. But, if we accept that the labour relation may not always be the primary site of exploitation under rentier capitalism, are there sectors where worker power just isn’t the answer? If the socialist argument is fundamentally that ownership and control should be in the hands of those who truly create value, has modern capitalism morphed to such an extent that this no longer necessarily means wage-labourers in a given industry?

Perhaps the most obvious example is big tech. Companies like Facebook and Google tend to rely on a relatively small number of highly-paid knowledge workers, while their business model rests on extracting value from the data of millions of users – accruing massive unaccountable power in the process. Worker ownership of these companies might not get us very far towards a more just economy. Co-operative ownership by the platform’s users just might – or, perhaps, public ‘data trusts’, turning this asset into a shared resource rather than a private commodity. Likewise, the best examples of democratic banking tend not to be worker-owned: they are either public banks, or community and consumer-led co-operatives.

Of course, there are plenty of sectors where labour is still the source of value and the key site of exploitation – with care being an obvious example. Even in the tech sector, beneath the shiny apps and platforms, companies like Uber and Amazon still rely to a substantial extent on exploiting the labour of drivers and warehouse workers. Here, worker empowerment is still the right response to the injustice at play.

An understanding of rentier power also raises the question of exactly what we need to democratise. Martin and Quick deploy the traditional socialist language of “the means of production”, while Christophers hints at the need to go beyond this. Many successful rentiers are essentially gatekeepers to the resources we need to live a good life and participate in society – housing, energy, water, broadband access. The fact that they are essential is both what makes them such a reliable source of profit, and what makes this profiteering so morally unacceptable. Accordingly, much new thinking on the left – from energy democracy to universal basic services – is really about democratising the means of subsistence, or perhaps the means of wellbeing.

Arguably, these resources should be taken out of the market altogether, treated as basic universal rights rather than commodities. Democratic ownership should be less about socialising the rents these assets generate, and more about eliminating the potential for rent extraction altogether. Ultimately, it should be about reorienting our economy towards meeting human needs. The language of production and productivity isn’t always particularly helpful in this context – indeed, for activities like care, it is almost irrelevant.

These are interesting conceptual questions, but the authors of ‘Unions Renewed’ would rightly respond ‘so what?’ Their focus – relentless and refreshing – is on what, practically, we can do when faced with seemingly unchallengeable rentier power. The challenge they pose is: if not unions, who?

In today’s somewhat bleak political landscape, we need to get serious about building strong counterweights to the power of extractive rentier capital. We need to be smarter about finding sources of leverage and using them to create change – and we need to start somewhere. It’s a formidable challenge; but, as both of these books powerfully demonstrate, it is one of the defining challenges of our age.

Image: Images Money, CC BY 2.0