Confessions of a Rentier

Most of the progressive thinkers and writers I look to for insight deprecate rentiers (or so I believe). I am a rentier. How should I feel?

Well I might choose to forgive myself. I tend to be good at that and I have found it to be good practice – guilt is a corrosive and unhelpful emotion. I think I got this from Eckhart Tolle [1] but I am not entirely sure.

Second I might plead conflicted humanity aka double-think. It does seem that being able to simultaneously sustain contradictory thoughts is an essentially human characteristic. I can believe that anthropogenic climate change seriously compromises our grandchildrens’ future but still fly. (Then again maybe it is unfair to have to assume responsibility for systemic problems for which we individually bear miniscule responsibility.)

Thirdly maybe there is definitional wiggle-room. Maybe if we define ‘rentier’ properly or analyse variations on the rentier theme there are helpful excuses for arguably destructive behaviour.

Not having time to write three articles today, I will stick with the third of these three interesting themes. At the risk of losing any reader who has made it this far, a short explanation of my rentier credentials is due. Part of my income is derived from rents on property that is part-controlled, one way or another, by me. Part of this goes to a company pension fund of which I am one of two members/ trustees and part to a company I co-own with my ex. Thence a proportion returns (or will return) to me. The rental properties are a bar, four small offices and two apartments.

That my assets are invested in this way is due to what I considered at the time (30 years ago) as good pensions advice around self-adminstered funds. Over the years as I have observed other peoples’ pension adventures (Mirror Group [2] onwards) this feeling has only strengthened. Economically (when such matters were uppermost in my mind) it performed well enough; but most importantly it has given me a degree of real control and some utility not characteristic of most pension investments. (For the sake of full disclosure [and to deter flaming] I should say we are talking about relatively small amounts here – certainly less than the equity that would have accumulated in my house in a leafy Thames Valley cul-de-sac had I stayed put.)

In order to explore the extent to which I should feel bad/ do something different, we need to return to the nature of rentier income and exactly why it might be deprecated.

Keynes talks about:”the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital” and suggests that “it would not be difficult to increase the stock of capital up to a point where its marginal efficiency had fallen to a very low figure” and hence bring about “the euthanasia of the rentier” [3]. He saw “the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work”. More learned Keynes scholars may know more about the mechanisms that he anticipated might bring about such improved and widened access to capital. Suffice to say we are nowhere near this nirvana. Access to capital-as-credit is still very much dominated by insiders.

Keynes refers to the rentier as “the functionless investor”. Maybe I can argue that in managing the extensive redevelopment of the property concerned I was ‘functional’ and instrumental in unlocking its latent value. Of course some of the seed capital came from equity in previous homes which had increased magically, due in no way whatsoever to any praiseworthy effort by me. (And which, by the by, could be captured effectively for the collective with a Site Value Tax [4]). Some, though, I would argue did come from the ‘sweat of the brow’.

So in summary Keynes hoped: “Thus we might aim in practice at an increase in the volume of capital until it ceases to be scarce, so that the functionless investor will no longer receive a bonus.”

Marx apparently never used the term ‘rentier capitalism’ (according to Wikipedia, hesitantly referred to in case Philip Cross has edited the relevant page [5]). In fact Marx contrasted rentiers, who exhaust/extract their profits (rent, interest), with capitalists who reinvest to stave off competition. So we can consider the term a more current usage, handy for those who wish to criticise certain aspects of capitalism without going the full monty. Marx’s distinction is arguably the key. Iran, for example, has been referred to as a rentier economy because one-third of its GDP is dependent on oil. But the key question is how the asset-rental is used. If Iran is living on it arguably they are a rentier economy; if they are reinvesting it in other future sources of surplus value arguably they are not.

And that’s pretty much the way I feel about my property empire. Except that I include the good things of life in my extended definition of surplus value. The things we cant put a monetary value on because they transcend exchange.

Finally, some questions for anyone who has soldiered on this far. What should I have invested in? I chose myself (to buy time to spend on fulfilling work), my family and then assets under close-control. I am tempted to diversify a little now. But how can I distinguish properly sustainable investments from greenwash? Or should I completely un-retire and attempt active surplus value creation until I drop dead in my tracks? And aren’t pensions meant to exhaust surplus value in elder care and world cruises?

What is clear is that until capital access is freed from the control of elite profiteers, and redirected towards productive investment, planetary survival and the wellbeing of the man on the Clapham omnibus, meaningful democracy will continue to elude us. As I have suggested in other articles [6], this could happen via the gradual enlightenment of sovereign states (direct spending on planet-strategic projects, QE variants, credit guidance); or it could provide the basic ethical framework for new cryptocurrencies – a no brainer value-set on which to base sustainable collective development. Or both.

But until such a brave new world comes to pass, we have to conduct our affairs within the current context. So I plead justifiable complicity. And look forward eagerly to constructive suggestions / answers to the questions posed above.


[1]: The Power of Now. Eckhart Tolle. Recommended to someone close to me who has still not read it. I read it and now bore her regularly – especially about what Tolle calls the pain body and giving yourself permission to walk away from pain (down to the pub if necesssary).

[2]: Still reverberating after 20 years: -rears-its-ugly-head-once-again


[4]: Such as that proposed by Feasta in 2012:



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