Rentier Capitalism (2024)

FAQs

What is the concept of rentier capitalism? ›

Rentier capitalism is a term used to describe an economic system in which a significant portion of income is derived from the ownership of assets, such as land, natural resources, or financial capital.

In his new book, Standing says such workers are increasingly conscious of themselves as a class, in part because they see clearly what they're not: rentiers. Rentiers get their income not from labour but from rent on assets that they own or control.

Examples of rentier states include oil-producing countries in the MENA region including Saudi Arabia, United Arab Emirates, Iraq, Iran, Kuwait, Qatar, Libya and Algeria as well as a few states in Latin America, all of whom are members of OPEC.

A rentier is someone who earns income from capital without working. This is generally done through ownership of assets that generate yield (cash generated by assets), such as rental properties, shares in dividend paying companies, or bonds that pay interest.

Capitalism has many unique features, some of which include a two-class system, private ownership, a profit motive, minimal government intervention, and competition.

These include laissez-faire or free-market capitalism, anarcho-capitalism, state capitalism, and welfare capitalism.

Hazem Beblawi introduced a rentier state theory using three key characteristics. Firstly, in a rentier state, rent is the predominant income. Secondly, a substantial amount of that rent is gained externally, i.e. sustaining an economy in the absence of “a strong productive domestic sector”.

Crony capitalism is a term used to describe a capitalist economic system in which individuals or businesses with close ties to political leaders and government officials use their political connections to gain an unfair advantage in the marketplace.

Definitions of rentier. someone whose income is from property rents or bond interest and other investments.

Rentier state theory developed to explain the difficulty of diversifying economies, the bloating and inefficiencies of state institutions, the absence of democracy, the power of national security states, and patriarchal political cultures.

Is Mexico a rentier state? ›

Due to its competitive political system and strong non-oil export capacity, Mexico is not considered an oil Rentier State. Yet, the consistent and intensive use of crude oil has fundamentally altered the trajectory of its political economy.

When the British economist John Maynard Keynes anticipated the “euthanasia of the rentier” in his 1936 book The General Theory of Employment, Interest and Money, he was referring to a financial class that served no purpose other than to exploit scarce capital for its own benefit.

Instead, rentier-state political systems tend to be characterized by autocratic paternalism, with the government redistributing mineral wealth through free education and healthcare, infrastructural development, and systems of subsidies, particularly of energy and facilities.

Rentier is a class of people who derive their incomes from financial titles to property. Though the term makes an analogy with the old rent-earning class of great landowners, rentiers are characterized by their more distant relationship to the property they own.

Rentier capitalism describes a system where individuals and businesses with market power are able extract rent from everybody else including those employed at an hourly wage. The rent aspect includes an unwillingness to return some of these profits to the government to help provide public services.

A theoretical construct developed by Hazem Beblawi and Giacomo Luciani, which categorizes some countries in terms of their disproportionate reliance upon one or several inherited sources of rents, such as mineral resources, notably oil and gas.