In his latest book, Technofeudalism, the maverick academic-turned unlikely Minister of Finance-turned enfant terrible of European politics Yanis Varoufakis argues that capitalism has ended. It has not, however, been destroyed by the workers of the world – it has been killed by capital itself. The idea, in a nutshell, is the following. As a response to the combined effect of the privatisation of the internet on the one hand, and the nearly no-strings-attached way with which states have injected eye-wateringly large sums of money into banks and large businesses after the 2008 financial crisis on the other, rent has supplanted profit as the main driver of the global economy. As Varoufakis put it, “Insane sums of money that were supposed to re-float our economies in the wake of the financial crisis and the pandemic have ended up supercharging big tech’s hold over every aspect of the economy.” Against the backdrop of a privatised digital world, post-2008 and then post-2020 public investments into the economy have not stimulated growth, because they have not triggered increased investments. Instead, they have enabled “cloudalists” to become digital rentiers, capable of exercising passive control over workers; over users who de facto work for them for free (by sharing and generating precious data); and crucially, over old-school capitalists.
The reference to feudalism is quite literal: capitalists, according to Varoufakis, are still doing very well, but they are no longer running the show. They have turned into (very well-off) vassals, who have to pay their dues to techno-feudal lords (Amazon; Google; Apple; Meta) – say, in order to selling and/or advertise on such platforms. The reason why this is the case is that rent-based capital has, just like under pre-industrial feudalism, supplanted profit-based capital as the driver of the economy. The fundamental system is no longer one where the capitalist extracts value from workers to generate as much profit as possible and be competitive in the market; re-invests in new machineries, technologies, etc., in order to make profit extraction ever more efficient; and thereby generates growth and innovation. It has rather become one where big tech bosses act like feudal lords – rentiers who own digital, rather than natural, “land” and can extract value (albeit in slightly different ways) from everyone who want or need to use their platforms. Like medieval lords, their power and wealth comes from sheer rent – for which, in a certain sense, they do not need to “do” anything.
Varoufakis is no naïve (not on all fronts, at least) so he qualifies this claim in several ways. Most importantly, people like Elon Musk and Zuckerberg still project a businessman-like image of hyper-activism, innovativeness, insatiability, and creativity. They appear to be constantly after “the next big thing.” This is not just for show: of course they compete, and of course competition requires coming up with new ideas. But many feudal lords were not lazy, either: competing for power and dominance is hard work – yet, it is still different from the competition based on profit and market dynamics which constitutes the backbone of capitalism.
The most interesting idea in the book is how the metaphor of feudalism (although he doesn’t see it as a metaphor at all, of course) enables us to see the connection between two particularly prominent phenomena of the last couple of decades. On the one hand, the incredible rise in inequality and the idea that we are ever more under the power of an ever richer, ever more dominant few. On the other, the common perception that we are more and more isolated from one another – that “the algorithm” and echo chambers send down distorted and distorting rabbit holes. Varoufakis suggests that the rent-based digital power of big tech is the connection: these new overlords are both the new rent-based aristocracy – thus explaining the rise in inequality – and the atomisation and customisation of our experiences on their platform is the result of their own special brand of the “Divide et Impera” strategy:
“Imagine the following scene (…). You are beamed into a town full of people going about their business, trading in gadgets, clothes, shoes, books, songs, games and movies. At first, everything looks normal. Then you begin to notice something odd. It turns out that all the shops, indeed every building, belong to a chap called Jeff. He may not own the factories that produce the stuff sold in his shops, but he owns an algorithm that takes a cut for each sale and he gets to decide what can be sold and what cannot.
(…) Except that isn’t all. Jeff (…) also owns the dirt you walk on, the bench you sit on, even the air you breathe. In fact, in this weird town everything you see (and don’t see) is regulated by Jeff’s algorithm: you and I may be walking next to each other, our eyes trained in the same direction, but the view provided to us by the algorithm is entirely bespoke, carefully curated according to Jeff’s priorities. Everyone navigating their way around Amazon – except Jeff – is wandering in algorithmically constructed isolation.
This is no market town. It is not even some form of hypercapitalist digital market. Even the ugliest of markets are meeting places where people can interact and exchange information reasonably freely. In fact, it’s even worse than a totally monopolised market – there, at least, the buyers can talk to each other. Not so in Jeff’s realm, where everything and everyone is subject not to the disinterested invisible hand of the market but to an algorithm that works for Jeff’s bottom line and dances exclusively to his tune.” (The longer version of this description can be read here)
Some of Varoufakis’s critics on the left find that this reading idealises the market, and encourages a nostalgic view of market competition as something good, dynamic, egalitarian even. Unlike classical liberals, however, those on the traditional left have always seen markets as the very basis of capitalist class domination. I understand this concern – but I must say I don’t really care much about whether Varoufakis is right or whether, for better or worse, we are still living under capitalism (see also another similar line here).
I find the insight that we no longer live in a common market – which of course relies on a set of intuitions that have been around for a while and have been hinted at by many, but which has never been spelled out quite as clearly – uniquely valuable regardless: it’s this specific opacity that we have we fight against, because we operate in a social world where we can no longer even rely on having the same benchmarks, the same reality in front of us. Depending on how we use the digital platforms of the cloud-based overlords, we end up having a different perceptions of…well, potentially everything. Against this background, the individualistic exhortation to “pierce our bubble” and try to get out of our echo chambers is just as futile as the idea that climate change will be solved by me learning to recycle a little bit better. The problem is systemic: this is the special way in which cloudalists consolidate their dominance.
This might be the end of capitalism; it’s transformation into something even more sinister; or simply a new brand of global market economy. Maybe Varoufakis’s technofeudalism is yet another seriously mistaken prediction of capitalism’s death. Yet the idea that fighting it requires grappling with how to escape collectively from “carefully curated isolation” remains a crucial insight. If only we knew how.
{ 66 comments }
Brian 03.25.24 at 3:24 pm
Two days ago on Isaac Arthur’s SFIA podcast/YouTube show, at the end of his update on the Fermi paradox, he did a good bit for an AI based company. This company offers a service to endlessly demand that your data be scrubbed from data vendors in the cloud using privacy laws.
I can say though, without having used it, that my own experiment was decidedly… mixed. When I eliminated the ability of big tech to do collect such data I had problems.
I could no longer find a Walmart store nearby with products I was looking for. Why? Because Walmart assumes that the big tech data is correct and I can’t override it to tell it what area I want. (Even though they have a city/zip search.) So I could only get stores near where the isp comes out into the physical world, hundreds of miles away.
The strangest feature was that I got served ads for Falls, false eyelashes and drag suits to look female. I figured out that my Gmail was probably leading Google to a Metadata conclusion based on my connections. I had written a paper and a few blog posts about how XX brains could get into an XY body, and vice versa. So I was connected by my Gmail with people who wrote me about their feelings about this.
Additionally, the fact that Yanis included Elon in this rentier group I objected to. (I first got this from Steve Keen talking with Yanis. Of all the people on the planet, Elon has been more of a capitalist innovator than anyone else, in multiple fields.
I know that Yanis includes him due to Elon’s purchase of Twitter. But Twitter, out of all of big tech, is the least profitable. Twitter’s inflated market cap pre-acquisition came from its utility as a DNC tool for winning elections and shaping public opinions. That made its advertising model into a system where political donations were made to the DNC by corporations giving advertising dollars to Twitter. But the performance of Twitter returns on ad dollars was never very good.
Yanis’ thesis breaks down for Twitter because most of Twitter is bots. The rest of the lurker freeloaders mostly can’t be identified. The New blue check model that has immediately been copied by other providers is less identified it first appears. The assumption people make is that the cost of a blue check prevents bots. But this is wildly wrong. Instead it just gets rid of the freeloader bots, replacing them with bots that are controlled by moneyed interests through PR firms. 1000 followers posting AI or canned responses and likes costs ~$10,000 a month plus the fees of the firm. Chickenfeed for advertising budgets. And the political campaigns that led the way on this are leading again, along with the mainstream media.
steven t johnson 03.25.24 at 4:25 pm
The end of capitalism suggests to me the end of the business cycle, for one. And if not precisely the end of unemployment, then end of businessmen determined that high wages=low profits. Yes, it does imply the end of fixed capital investment only when the rate of profit promises, ultimately, more return after such investment than likely from other sources. I suppose Varoufakis is arguing that the rents from digital are so high that the money paid to tech are crowding out investment in mere things. But if there is a trend toward a secular decline in general rate of profits, you need to consider alternate explanations to assess the validity of this one, no? I’m not seeing the rest myself.
Otherwise it seems that the old conservative notions of how fair competition is the cornucopia=capitalism are back again. Further, the trendy notion of rents as being all manner of market defects attributable (ultimately) to government interference, including such vague “things” as regulatory capture or public education, really anything other than actual rent on land and buildings (forget mineral wealth!) seems to be working too.
The observation that the algorithm mocks Hayekian fantasies about the information of a free market leading to the best of all possible worlds is true enough. But I thought reality had already mocked that sufficiently and the fact it’s getting even more pervasive is not quite such fresh news. It seems to me to emphasize it too much overlooks how much damage the monopolization and elimination of things like news media are doing.
reason 03.25.24 at 4:27 pm
You know, this communication channel isolation, corresponds to another sort of isolation that I often worry about, residential isolation. There are lots of indications that residential sorting is getting worse. And political polarization is part of that residential sorting. They are saying fewer people are marrying people with different political views. It used to be that neighbourhoods included a vast variety of people and views. Not any more. This is not driven so much by policy as by self sorting. I’m not sure that I know what the solution is, to be honest. But it worries me.
engels 03.25.24 at 8:59 pm
There’s a tendency on parts of the left to react to anyone saying that today’s landscape is new, different or worrying in some way of romanticisng normal capitalism and it irritates the hell out of me. Neoliberalism came in for the same treatment in some quarters.
MisterMr 03.25.24 at 10:55 pm
IMHO: what Varoufakis describes is a situation where the wage share is low, and therefore the profit share is high, but this high profit share does not stimulate new investiment and price competition, but rather acquisitions, mergers, monopolies and non-price competition (like marketing).
Both the tendence to monopolies and the non price competition cause a situation where there are apparent “rents” and rate of profit is low even if the profit share is high (because the “rents” are capitalised in financial pseudocapital, so total wealth increases, so the return on wealth falls).
This also causes high increases in financial wealth, and big financial unbalances.
This is nothing new, and might end badly, but is not due to the specificity of “algorithms”, it is just what used to be called “late stage capitalism”.
Capitalism might well enter a very big crisis and then reemerge, perhaps with China on top instead than the USA, so maybe instead of “late stage” it would be better “at the end of a long cycle”, but the meaning is the same.
Jake Gibson 03.25.24 at 11:44 pm
I have thought for a while that the end point of all economic systems is feudalism. So this mostly makes sense to me.
JPL 03.26.24 at 12:18 am
I think it is important to distinguish between the justification of attempts to state (i.e., express) principles belonging to an objectively existing norm, and, on the other hand, the dependency structure of an objectively existing and ideal system of principles (e.g., a system of ethical principles), part of the “dependency structure of the world”, including the world of purposeful adaptive action, which we strive to discover. (As we have done with fundamental mathematical principles.) People are capable of appealing to an ideal system of ethical principles (functioning as norms), even if they are usually unable to state or describe those principles explicitly. What happens in the real-world economic activities that people currently describe under the label of ‘capitalism’, profit- or rent-taking and much else, is rife with violations of ethical principles. Philosophers, I think, can help us by trying to state or describe with care the ethical principles that are being violated, and contrast those statements with law statements that are accurately descriptive of the intentions and effects of the bad things the power-holders, with access to “insane sums of money”, are doing. In order to change the world in the right direction, one first has to interpret the problem; in other words, to understand it. The understanding of the problem is fundamental. I hope you are not as pessimistic as you seem to sound.
(BTW, I heard Jason Stanley on the TV the other day, after giving a fine analysis of bad behaviour in the political world of “fascist” impulses, protesting that as a philosopher he was not in the business of offering solutions. But I think he could have helpfully gone further and given us a few relevant general principles, at least, even if he didn’t want to “tell us what we ought to do”.)
Raven Onthill 03.26.24 at 12:00 pm
It’s strange; I just ran a blog post on the conversion of capital into rental property. Without quite buying into Varoufakis’ entire thesis, he is surely right that this is going on; our betters do not want to work – they just want to sit back and collect rent.
– Neo-Feudalism, Anti-Capitalism
engels 03.26.24 at 3:13 pm
Btw I suspect much of the heat this generates is because of a perceived political dimension: if capitalism is devolving into an authoritarian system anyway then that complicates the “liberal” (Democrat) opposition to (Republican) “fascism”. Which leads me to wonder: who is really romanticising capitalism here?
steven t johnson 03.26.24 at 5:11 pm
engels@9 The answer to your question is, the people who romanticize democracy, especially I think the people who romanticize how morally improved “we” are today. The critique of neoliberalism that I remember was largely about how it was undemocratic, not capitalist.
LFC 03.26.24 at 8:21 pm
As a non-expert on any of this, it seems to me the metaphor Varoufakis is pushing has some flaws. As a preliminary matter, he would need fairly clear definitions of “rent” and “profit,” which, judging from the OP’s summary at least, it’s not evident that he has. Marx, of course, thought the source of profit was surplus value extracted from human labor-power, but non-Marxist economists don’t accept that definition, though they themselves have arguably never had a very convincing account of where profit comes from.
Definitional issues aside, there are problems with the analogy to “feudalism” (which a medievalist historian would obviously be better placed to elaborate on than I am). Just to mention one (in the interest of time), there wasn’t all that much cash/coin floating around Europe in the high Middle Ages. In the particular times and places where vassalage existed, vassals probably (?) “paid” lords more often with military service than money; as for peasants, they might pay, depending on the particular arrangement, with a share of the harvested crop rather than (or in addition to) dues. I guess if one wanted, one could draw an analogy between 21st-cent. tech platforms and 12th-cent. (or for that matter, in later centuries) land, but it seems somewhat strained. Worth noting that capitalists always have paid for advertising, whether in the pre-digital era, in print media and TV (as they still do), or now on Amazon etc.
KT2 03.26.24 at 11:07 pm
Compute inequality is here.
The Cloud Maker. The Land Makers.
The OP quotes… “As Varoufakis put it, “Insane sums of money that were supposed to re-float our economies in the wake of the financial crisis and the pandemic have ended up supercharging big tech’s hold over every aspect of the economy.”
Are left right authoritarian fascist reactions relevant to capital running amok and have they have enabled … “cloudalists” to become digital rentiers, capable of exercising passive control over workers; over users who de facto work for them for free (by sharing and generating precious data); and crucially, over old-school capitalists.”?
A boiling frog problem from a techo perspective. Because: compute. Compute hardware makes the cloud and defines the land.
Here is an example for readers to ponder… the big tech bosses have to get hold of compute such as “This system-on-a-chip (SoC) combines CPUs and GPUs and is rated at 1,000 teraflops (also written as TFLOPS or TOPS), which gives it four times the performance of its predecessor,” … “Nvidia is currently valued at over two trillion dollars, joining only a handful of companies that have achieved a market capitalization over a trillion dollars. ”
“https://www.motortrend.com/features/nvidia-gtc-2024-ai-gpu-self-driving-cars-conference-live-blog/”
“As of March 2024, Huang’s net worth was estimated to be $81.7 billion by Forbes, making him the 17th richest person in the world.[4]” Wikipedia.
As reported in the linked article Nvidia’s Jensen Huang – a techo not a politician “… said Huang. he is generally positive about how things will play out in China and that “the world is not adversarial.” … – “BYD [Chinese car maker] also intends to leverage Nvidia technology from “car to cloud” including using Nvidia’s Isaac robotics and Omniverse platforms to build “digital twins” at every state of the vehicle manufacturing, from the design of the factories all the way through to the retail experience and after sales support.” … “So, what does this all mean for you, the American car consumer? For now, not much. While Nvidia’s supercomputing power will soon be in the car, and involved in all stages of planning, design, manufacturing, sales, and support, the company’s slickest AI-powered hardware and software will hit the streets of Beijing and Shanghai before coming to Detroit or L.A.”
I appreciate the raw compute. Software not so much. The math! wows me. I do not believe Nvidia is politically right left authoritarian fascist nor fools. It is just that the raw compute is from cradle to grave now in comms, food, health, transport socals etc etc. Encompassing “every state of the vehicle manufacturing, from the design of the factories all the way through to the retail experience and after sales support.”. Watch out FANGS.
So I actually think Varoufakis, and Miriam miss a vital physical reality. Raw power of compute. Miriam says “They have turned into (very well-off) vassals, who have to pay their dues to techno-feudal lords (Amazon; Google; Apple; Meta)” and if the FANGS aren’t careful they will become vassals to providers of compute. Nvidia is imo in a position to extract rent from the cloudalists. Or as Snow Crash may scifi it – excersize a back door. Already Bunny Huang has developed hardware verification which will maybe cover the sneaky Snow Crash scenario harware backdoors – “This hardens existing micro-scale self-test verification techniques by ruling out the existence of extra circuitry that can hide a hardware trojan with a test bypass. Thus, self-test techniques used in conjunction with IRIS can ensure the correct construction of security-critical hardware at all size scales.”
“Infra-Red, In-Situ (IRIS) Inspection of Silicon” by Andrew ‘bunnie’ Huang
“Not so in Jeff’s realm, where everything and everyone is subject not to the disinterested invisible hand of the market but to an algorithm that works for Jeff’s bottom line and dances exclusively to his tune.” From my techo perspective, all the Jeff ‘s (FANGS) actually have is software and the customers. What if Nvidia spends it’s $12bn next year on xhip fabrication and made products and made the biggest ML compute ?- easily manufactured if Nvidia decided to.
Who has power over the cloud hence potentially the algorithm??? The cloud maker… “NVIDIA’S MARKET DOMINANCE AND COMPETITORS” …”As of now, Nvidia is the undisputed market leader in SOTA AI chips and has the high margins to show for it. OpenAI used Nvidia’s A100s to train the model behind ChatGPT, and now plans to use its latest H100s as part of Microsoft’s Azure supercomputer.89 Meta too has used H100s for its Grand Teton AI supercomputer, but OpenAI’s ChatGPT alone is predicted to bring in a revenue of $12 billion for Nvidia over the next year. Nvidia cites its strong relationship with Taiwan Semiconductor Manufacturing Company as critical to the company’s success: “In a speech given at TSMC founder’s retirement celebration, NVIDIA CEO Jensen Huang said that “without TSMC, there would be no NVIDIA today”.”
https://ainowinstitute.org/publication/policy/compute-and-ai (long article worth a read)
China gaining Taiwan and TSMC?
Now there’s a cloudy problem.
I want 1) my data, 2) a tobin like compute equality function, and 3) human readable algorithms and verified hardware.
The only thing I’m afraid of is I won’t get 1 & 2, nor 3.
Hmmm… back to politics? Or geopolitics. Economics will just keep the score.
J-D 03.26.24 at 11:55 pm
I don’t understand the question ‘Where does profit come from?’ or ‘What is the source of profit?’ Some things have sources; some don’t. Some things come from somewhere (literally or metaphorically); some don’t. What makes people think that profit is the type of thing that has a source, or comes from somewhere? It doesn’t seem that way to me.
I am not competent to evaluate the work, but in 1994 was published a book by a medieval historian (Susan Reynolds) Fiefs And Vassals: The Medieval Evidence Reinterpreted which argued that the concepts of fiefdom and vassalage as latterly understood did not exist in the medieval period (or most of it) but were concepts retrospectively imposed on the language of earlier documents by later clerks.
MFB 03.27.24 at 8:41 am
I think Varoufakis is an optimist.
Under feudalism the lords and their vassals had some interest in the survival of their serfs.
Robots do not need such attention, and humans just get in the way of robots. Robots good, humans bad.
Why else develop autonomous electronic killing machines?
TM 03.27.24 at 9:04 am
“It turns out that all the shops, indeed every building, belong to a chap called Jeff. He may not own the factories that produce the stuff sold in his shops, but he owns an algorithm that takes a cut for each sale and he gets to decide what can be sold and what cannot.”
Why isn’t this best described as monopoly capitalism as Marx and many others understood it? And if it really needs a new label because of that “algorithm” thing (which I am very skeptical of – it’s really not the case that “owning an algorithm” is what makes Jeff rich) then why call it “feudalism”, why liken modern hyper- or postcapitalism to a poorly understood (as J-D 13 points out) social arrangement of a long ago time and society that we simply lack the imagination to comprehend? Feudalism here serves merely as a slogan for something really anachronistic. But why is this algorithm thing anachronistic? What is the substance of this feudalism analogy?
As far as I can make out from the OP, the main economic claim is that the new feudalists don’t invest in productive capitalist endeavors any more, they only collect rents. Does Varoufakis provide any verifiable data to support this claim?
Is he reviving the controversial distinction between “productive” and “parasitic” capital (“Schaffendes vs. raffendes Kapital”) which Marx has already debunked?
The postcapitalist feudalism metaphor suggests a substantial change in the organization of the means of production. Marx (in his very schematic historic account) argued that capitalism supplanted feudalism because it was far more efficient and productive. Postcapitalist neofeudalism is inefficient and unproductive, if I’m getting this right. How then does it manage to supplant capitalism?
MisterMr 03.27.24 at 12:56 pm
@LFC 11 and J-D 13
My understanding is that in ricardian economics (not just Marx) there is surplus value that is always “extracted” from labor, and this is divided between “profit” extracted through technologic advantages of scales in industrial manufacturing, “rent” based on control of limited (usually natural) resources, and “interst” (from financial loans).
But for example if a pair of socks costs 10$, and of these 7 are wages, and 3 surplus value which go as 2 of profit proper, whereas the last 1 goes into taxes that are used to pay interest on government bonds, this last 1$ (interest) is still “extracted” from worker (on the assumption that workers “should” get the whole 10$).
In modern day economics, the assumption is not that the workers should get the whole added value, but rather that competition pushes down profits to an optimal profit rate, that happens at full employment.
Therefore “rents” are conceptualized as a level of profits that is higer than the “optimal” one.
Of course there is no way to know empirically what is this ideal level (and in fact it is also impossible to determine it theorethically, that was the problem of the Cambridge capital controversy and in practice the only real difference between ricardian/marxian/neoricardian models of the economy and modern “neoclassical” ones).
So modern day economists, who see that profits tend to stay high and are not pushed down by competition, will assume that this is caused by some sort of monopoly and therefore is “rent”, but they can’t define this in a consistent way.
The “romanticized” view of capitalism is that capitalism should have few rents, and to converge to this supposed “optimal” rate of profit.
But if we look at history there were many periods with low wage shares (or high surplus shares), but still low profit rates, this was not uncommon before WW2.
The apparent contradiction between a high profit share but a low profit rate is what made Marx build his theory of the tendential fall of the rate of profit, that is based on very dubious expectations about technological progress, nad I think is wrong. But the apparent contradiction is alive and well and can be explained as a tendence to monopoly IMHO, or other financial (non technological) explanations.
LFC 03.27.24 at 2:36 pm
J-D @13
I am familiar (in a general not detailed way) with the Reynolds book. It was controversial among historians when published. Idk what the status of the controversy is today.
On the question of profit and where it “comes from,” see the not-recent but prob still
helpful discussion in R. Heilbroner, Marxism For and Against, p. 114. “Unwilling to attribute profits to the transfer of wealth from one class to another, bourgeois economists have struggled in vain to explain profits, not as a transient monopoly return or an evanescent technological advantage, but as a persistent, central feature of the system of capitalism.” (italics omitted)
steven t johnson 03.27.24 at 3:54 pm
J-D@13 A moment’s thought could rephrase the issue to ask such questions as, what determines the level of the rate of profit, both for enterprises or the overall economy? What will cause changes in the overall rate of profit? And, is profit in effect a zero-sum game, so that somebody’s profits are always someone else’s losses? Is it true that making investment decisions on prospective profit rates and liquidation of asset to terminate profit losses, either a direct or loss of better opportunities elsewhere, the optimal way for society at large? Or, is there an overall harmony of interests discovered by capital markets, so that today’s arrangements are the Final Society, one that can go on forever?
These are all meaningful questions, even if hard to answer. So far as I can tell, economics eschews such questions, and tacitly assumes the question of the source of profit to be uninteresting or maybe just something that happens. This strikes me as cynicism not science, and I fear fundamentally irrationalist to boot. Skepticism seems to me to always be conservative, if not virulently reactionary. I can’t think of any occasion when the argument answers were impossible and undesirable helped anything but the status quo.
MisterMr@16 I don’t think Smith or Ricardo had a concept of surplus value, even though they had a labor theory of value.
And the second paragraph seems to say economics has a theory about what constitutes full employment, which I’m not sure it does.
And in the third paragraph (skipping over the presentation of the Cambridge capital controversy which I suspect is somewhat idiosyncratic,) I’m pretty sure the general outcome is not economics agreeing capital markets etc. can’t make optimal decisions for society, that is, the Saltwater Cambridge still won and still shares common ground with the Freshwater school (aka University of Chicago.) But modern economics does seem to hold the higher profits that mark rents are always the product of market interference (except land titles are never regarded as such, even if they are key to land rents, which I still find to be omitted in most economics) usually in the end some form of government action. The only school of economics that has any use ever for government interference is pretty much the Keynesian and its successors, which compromise with the other schools to some degree or other. What economics can’t do consistently I think is devise a way to ensure “fair competition.”
The fourth paragraph talks of a romanticized view of capitalism but this is actually a programmatic statement. One version, the so-called classical (which in this contesxt includes Marx and some phrases of Keynes,) aims at reforming society including by government. It is in wide disrepute, except for polemical purposes for which Adam Smith is a prophet from God. The other finds limiting government except in the defense of property especially against other states the path to earthly justice (and if the lazy and wicked aren’t happy about that, good.)
The fifth paragraph is confusing because it seems to assume there are more or less equal numbers of wage workers and profit takers. In what sense are there low profit rates when there are very few owners taking all the profits? It seems like this is saying that growth rates are low because profit rates are not inspiring/permitting capital accumulation?
The last paragraph seems to assume Marx cobbled up a tendential fall in the rate of profit for ideological reasons, rather than disagreeing with Smith, Malthus, Ricardo et al. over the explanation of said fall. The fall in the rate of profit was held to be an explanandum. Trying to explain the business cycle is not a priority in economics, true. Still, the notion of a “tendency to monopoly” or finance sucking up the mass of profits however implicitly supposes that the profits from actual production are lower than the paper profits of finance. And projecting this as a tendency is saying the rate of profit from industry has a secular tendency to fall. As to the notion that technological progress is unlimited and will always permit capitalist growth (so this is indeed the Final Society) I think Marx was an admirer of Alexander von Humboldt. And for that reason he did not believe that science would always solve all problems and cheapen raw materials and raise labor productivity with machinery, even if he didn’t hold with Ricardo’s soil fertility theory of the declining rate of profit. It seems to me yours are the dubious expectations about technological progress.
Michael J Allen 03.27.24 at 5:03 pm
Unfortunately Fiefs And Vassals: The Medieval Evidence Reinterpreted is not in print or available at the NYC or Brooklyn libraries. One used copy for about $45 is available from Friends of Berkeley Library, so either cut out from there or donated.
I’ve bought used books through Amazon that turned out to be cut out library books but didn’t seem like they should have been.
MisterMr 03.27.24 at 5:25 pm
@steven t johnson 18
So I’m not going into a point-by-point answer, but two points about the difference between classical (LTV) and neoclassical economics and the theory of the falling rate of profit:
In the orthodox, neoclassical theory, there is a logical problem because the determination of the rate of profit, the price of capital, and the wage share are interdependent, and that markets tend to reach this specific equilibrium (which happens at full employment, which is when wages equal marginal productivity of workers).
The Cambridge capital controversy consisted in Sraffa (whose economic model is a form of LTV) noting that in reality those three variables cannot be determined and it is all circular, which implies that there isn’t either a natural rate of profit, nor a natural wage share.
If there is no natural wage share, wages must be defined as a share of total productivity, which in practice is what the LTV does, so removing that assumptions from neoclassical economics moves us back (or forward) to a form of LTV.
About the falling rate of profit, I agree that the falling rate of profit was an empirical reality in Marx’s time, it is not that he was making things up, he just disagreed with others on why it was happening.
But Marx’s theory was still very technology based, he assumed that as technology improves the overall capital/output ratio of the economy increases, and by “capital” he literally meant the cost of production of machinery.
My opinion is instead that there is an increase in the value of capital, but this is due to financial/monopoly reasons not for technological reasons.
So overall I think you are agreeing with me but not with Marx.
KT2 03.27.24 at 9:59 pm
Stikes struck out, execpt for state protection of capital and the technofuedalists. “Sometimes You Either Strike or Accept Death”.
Maria said “Yet the idea that fighting it requires grappling with how to escape collectively from…”…
… “familiar package of “reforms,” a word I use to mean “devastating attacks.” With minor variations, this is the formula that has long been advanced in every Republican-controlled state. The entire South is already “right to work,” making it more difficult to build and sustain private sector unions, and the entire public sector nationally is “right to work” thanks to a 2018 Supreme Court ruling, and the next steps, in red states, are to meticulously dismantle the ability of public sector unions to bargain and take in dues and engage in political action and generally to act like organizations that have any useful purpose whatsoever. Part of the reason that Republicans do this is because they are the faithful servants of capital and undermining the power of labor is forever one of their central goals. And another part of the reason they do it is because public sector unions—”
From “Sometimes You Either Strike or Accept Death”
“Fair? Ugatz fair!”
HAMILTON NOLAN
MAR 14, 2024
https://www.hamiltonnolan.com/p/sometimes-you-either-strike-or-accept?
J-D 03.27.24 at 10:42 pm
The value of something is what it is worth. That is what the word means. By definition, something is always worth exactly what it is worth, neither more nor less; its value is its value, just that. How, then, could there possibly be any meaning to ‘surplus value’?
Again, meaningless: if I buy a pair of socks, there is no way of calculating what fraction of the price of that one pair of socks goes to wages. No accountant or economist can do the necessary calculations.
Neither do I. For what it’s worth, Wikipedia cites a Guardian article which reports that Susan Reynolds’ work contributed to British historians using the word ‘feudalism’ less often; for what it’s worth, to my non-expert understanding she seemed to be making a good case; but I cited the book not because I think it settles the point but because I think it shows that isn’t settled that the common notions of fiefdom and vassalage reflect medieval realities.
If the sentence quoted is representative, then, No, it is not helpful at all in answering my question which, to repeat myself, was ‘What makes people think that profit is the kind of thing that comes from somewhere?’
I find meaning in the question ‘What is profit?’ and I answer it ‘Profit is equal to revenues less costs’. I suppose somebody who wanted to could rephrase the answer as ‘Profit comes from revenues in excess of costs’, but I think that makes it less clear, not more.
LFC 03.27.24 at 10:52 pm
Michael J Allen @19
Out of curiosity, I just checked quickly on abebooks, and there’s a used copy of Reynolds, Fiefs and Vassals, for $35 plus shipping.
https://www.abebooks.com
engels 03.28.24 at 12:46 pm
he would need fairly clear definitions of “rent”
I haven’t read Varoufakis but here is Brett Christophers’: “income derived from the ownership, possession or control of scarce assets under conditions of limited or no competition”.
https://journals.sagepub.com/doi/full/10.1177/2043820619878060
Miriam Ronzoni 03.28.24 at 1:41 pm
he would need fairly clear definitions of “rent”
He actually has a whole chapters on definitions, and dwells quite a lot on how difficult it is to distinguish between rent, profit, and capital, because there is a sense in which they are the same thing.
At pp. 187-189 he defines the two as:
RENT
Rent is any price paid by a buyer above the price which most closely
reflects the exchange value of the commodity (1.1.2). An equivalent
definition of rent is as monies paid for a commodity in excess of the
minimum price necessary for that commodity to have been
produced. Four types of rent are prevalent under capitalism:
2.3.1 Financial Rent
2.3.2 Ground Rent
2.3.3 Monopoly Rent
2.3.4 Brand Rent
Financial Rent refers to payments to financiers (e.g., bankers) in
excess of the minimum interest necessary to motivate them to
provide the loan. Financial rent also includes returns from
speculating in share, real estate and derivative markets, in private
equity, etc.
Ground Rent predates capitalism and comes close to (though it
does not coincide with) the everyday use of the word ‘rent’: any
payment for leasing land over and above the minimum (which may
tend to zero) that would be necessary to motivate its owner to lease
it.
Monopoly Rent obtains due to low or non-existent competition
(oligopoly or monopoly) which allows a seller to extract from
consumers payment in excess of the commodity’s exchange value.
In common parlance, the monetary equivalent of monopoly rent is
known as a ‘mark-up’ (or ‘price-cost margin’) that the seller can
charge the customer over and above a commodity’s exchange
value.6
Brand Rent is a form of monopoly rent which the seller can extract
from consumers who are motivated to pay for a branded item or
service more than its exchange value, e.g. in pursuit of status
signalling or ownership of positional goods (i.e. goods desired not so
much for themselves but, rather, for the fact that others cannot own
them, e.g. a limited-run print or an antique vase).
PROFIT
Profit is the portion of the revenue capitalists retain after they have
paid wages to workers, ground rent to landlords, interest and
financial rent to financiers plus fees to professionals (e.g. marketers,
advertisers), helping them build up brand rents.
Miriam Ronzoni 03.28.24 at 1:49 pm
And here is the passage about how difficult it is to distinguish between profit and rent:
Under capitalism, grasping the meaning of rent, and
distinguishing it from profit, is much harder – a difficulty I witnessed
first-hand when as a university teacher I would struggle to help my
students spot the difference between the two.
Arithmetically, there is no difference: both rent and profit amount to
money left over once costs are paid for. The difference is subtler,
qualitative, almost abstract: profit is vulnerable to market
competition, rent is not. The reason is their different origins. Rent
flows from privileged access to things in fixed supply, like fertile soil
or land containing fossil fuels; you cannot produce more of these
resources, however much money you might invest in them. Profit, in
contrast, flows into the pockets of entrepreneurial people who have
invested in things that would not have otherwise existed – things like
Edison’s light bulb or Jobs’s iPhone. It is this fact – that these
commodities were invented and created and so can be invented and created again but better by someone else – that renders profit
vulnerable to competition.
When Sony invented the Walkman, the first mobile and personal
hi-fi, it raked in substantial profits. Then competition from imitators
whittled Sony’s profits away until, eventually, Apple rode in with its
iPod to dominate the market. In contrast, market competition is the
rentier’s friend. If Jack owns a building in a neighbourhood that is
being gentrified as a result of what others do, Jack’s rents will
increase even if he does nothing – he, literally, gets wealthier in his
sleep. The more enterprising Jack’s neighbours are, and the more
they invest in the area, the larger his rents.
Capitalism prevailed when profit overwhelmed rent, a historic
triumph coinciding with the transformation of productive work and
property rights into commodities to be sold via labour and share
markets respectively. It was not just an economic victory. Whereas
rent reeked of vulgar exploitation, profit claimed moral superiority as
a just reward to brave entrepreneurs risking everything to navigate
the treacherous currents of stormy markets. Nevertheless, despite
profit’s triumph, rent survived capitalism’s golden age in the same
way that remnants of the DNA of our ancient ancestors, including
long-extinct serpents and microbes, survive in human DNA.
Capitalist mega-firms, like Ford, Edison, General Electric, General
Motors, ThyssenKrupp, Volkswagen, Toyota, Sony and all the others,
generated the profits that outweighed rent and propelled capitalism
to its dominance. However, like remora fish living parasitically in the
shadow of great sharks, some rentiers not only survived but, in fact,
flourished by feeding on the generous scraps left in profit’s wake. Oil
companies, for example, have raked in gargantuan ground rents
from the right to drill on particular plots of land or ocean beds – not to
mention the unearned privilege to damage the planet at no cost to
themselves.
Miriam Ronzoni 03.28.24 at 1:52 pm
And finally (I promise), his definition of “cloud rent” (the rent that dominates under the system of “Technofeudalism”): rent that must be paid for access to (digital trading) platforms and to the cloud more broadly.
TM 03.28.24 at 1:52 pm
Thanks Miriam 25. “payments to financiers in excess of the minimum interest necessary to motivate them to provide the loan”, “any payment for leasing land over and above the minimum (which may tend to zero) that would be necessary to motivate its owner to lease it”. Do we need to know bankers’ and property owners’ mental states to calculate these? Who thinks that these definitions can be actually applied in the real world in a consistent way?
Does Varoufakis make an attempt at quantitative estimation, and if yes what numbers does he come up with?
Sashas 03.28.24 at 2:43 pm
I am not an economist. But wouldn’t it be fairer to say that rent is when I pay you for access to an asset but you retain the asset and all rights to it at the end of our transaction, while I retain nothing? This seems to clearly match Ground Rent and Cloud Rent. It also IMO matches Financial Rent, in that the asset involved is liquidity. Monopoly Rent feels like a similar concept, but somewhat different. The rentier earns primarily from the exclusivity of their product, so I guess I literally pay for access to the restricted whatever-it-is on top of the price of the thing itself. I guess I can kind of see Brand Rent as well, as a natural monopoly that then works like Monopoly Rent. I find Brant Rent much less objectionable than the others, because I don’t generally feel bad about buying a branded item. I will pay a premium for a marker of reliability–an established brand can make the case to me that they take product safety seriously (or whatever reliability metric is most relevant)–and I don’t feel like I have experienced a renting relationship. I don’t feel like I’m paying for access, so much as I’m saying “I trust you, and buying from someone I trust is worth $X to me”.
steven t johnson 03.28.24 at 3:16 pm
“Rent is any price paid by a buyer above the price which most closely
reflects the exchange value of the commodity…” To me, it seems we could easily replace “exchange value” with “price,” except that would make it plain that rent in this usage is a tag for any price deemed by the writer to be unusually high. I have no idea why Varoufakis and others would imagine that any given commodity would have just one price for goods and services, implicitly because they are somehow identical. I don’t think that’s literally the case even for intermediate producers’ goods, which are after all a large part of developed economies. The existence of geography alone would impose transportation costs ending in different prices.
“Brand Rent” confuses rent I think with the notion of non-reproducible goods. So far as I can tell, such goods (or services, scientific genius or movie star charisma is not freely reproducible either) are wildly variable in price precisely because there is no movement of capital driving prices to an equilibrium. In some cases like collectibles such as baseball cards prices are largely fixed by handbooks as I understand it. I know utility theories of value are still the norm. But for goods such as these the fundamental irrationality of “utility” is manifest, at least to me. Psychological “explanations” such as “utility” do not seem to me to lead to relative price stability in physical capital. Again, that seems to me to be omitting a lot of the economy from economics.
The OP has been very helpful, convincing me not to prioritize reading this book (likely that means, never.) Personally I suspect Varoufakis is just copying this loosy goosy mis-usey of “rent” from economics, especially the trendy pop stylists. Right wingers love this I think and no doubt it is tempting to think you can judo the concept against them. But I don’t think trying to turn an opponent’s arguments inside out is that easy, nor do I believe it to be very effective rhetoric.
J-D@22 is what I think of as an obtusion, a pretense you just don’t understand the point. Moving on from the display of mystification at the notion “where does profit come from?” begins a host of questions both essential and sensible, the attempt to dismiss value by dictionary—-and a personal dictionary at that!—fails spectacularly, given labor theories of value involve the division of labor, not just prices. At any rate, J-D does offer a theory of where profit comes from, it’s “revenues less costs…” The original phrase, “buy cheap, sell dear” was better style. The notion that explaining profit for one firm is equivalent to explaining profit for a whole economy is a classic example of the fallacy of composition. It’s like saying two families could survive by each working for the other as chauffeur and cook.
MisterMr@20 Sraffa’s Production of Commodities by Means of Commodities was published in 1960 (though I gather it was begin in the late Twenties.) Sraffa published very, very little. It was more Joan Robinson who started the controversy with an article on the aggregate production function back in 1953, with others like Paul Samuelson contributing the literature.
More importantly, “If there is no natural wage share, wages must be defined as a share of total productivity, which in practice is what the LTV does, so removing that assumptions from neoclassical economics moves us back (or forward) to a form of LTV.” It seems to me that economics whether “neoclassical” or not mostly does not address the distribution of labor beyond the claim that employment is determined by the utility of work for the worker. Nor does it address the issue of what determines the level of profit, despite the fact that the wage share depends on it. I can’t agree economics and the classical economists (again, in this context that puts Marx with Smith and Ricardo) are fundamentally identical.
“But Marx’s theory was still very technology based, he assumed that as technology improves the overall capital/output ratio of the economy increases, and by ‘capital’ he literally meant the cost of production of machinery.” This seems very confusing. Marx’s explanation of the tendency of the rate of profit to fall did indeed assume the accumulation of capital would increase production. You seem to be quarreling here not just with Marx, but Adam Smith most of all. (Accumulation of capital is a form of division of labor, which increases productivity, even if Austrians feel compelled to invent “time-preference.”)
But of course the thing is, Marx’s explanation of the tendency of the rate of profit to fall is the issue. If you want the 19 year old Econ 101 student’s stupid version, as the supply of capital increases, the price goes down, which is, the profits go down. So far as I know, Marx explicitly held that excess profits from technological innovation was a driver of accumulation, which point does not seem to me to be refuted. But nor do I know that Marx denied that accumulation of capital could be accumulation of current technology. And I do not know that Marx denied that growth could come from acquisition of previously external goods and service, like the commons or profits from slave trading. The point is, there’s no reason I know of to assume Marx meant some sort of self-generating technological advance would constantly work.
As I noted before, Marx did not assume that capital accumulation would constantly cheapen the cost of raw materials and increase labor productivity and lower the cost of the reproduction of labor power, thereby permitting an endless expansion of capital. (Again, due I think to the influence of von Humboldt and Liebig and even the grain of truth in Ricardo’s differential rent, though Marx was not as explicit as a Green today would be.) If I understand it correctly, he held those to be counteracting tendencies to the tendency of the rate of profit to fall. As near as I can tell, Marx’s assumption that the tendency was for the rate of profit to fall tacitly assumes that technological innovation is not guaranteed. If it was the law of the tendency of the rate of profit wouldn’t be a law. The vagaries of accumulation and innovation imply to my eyes that business cycles cannot be clock-like, that’s all. Economics may assume this (paging Julian Simon?) but not I think Marx.
I have zero understanding of what financial reasons could be, not even to understand whether you’re trying to explain growth or crisis?
LFC 03.28.24 at 3:49 pm
Miriam Ronzoni: thank you for the quotes.
J-D @22
I take Heilbroner’s point or part of it to be that, as noted in one of the quoted passages above, profit is vulnerable to competition. So in a competitive market economy where firms compete via price, it’s not clear why they wouldn’t keep undercutting each other until there is no excess of revenue over costs. So realizing that, they may “decide” to compete in other ways (via so-called product differentiation, for example). And even competitive markets are only imperfectly so. Still, it’s not clear that these are fully satisfying explanations for the existence of profit as a persistent feature of capitalism. That is what I take to be (without going back to check) at least part of Heilbroner’s point in the sentence I quoted that you found unhelpful. (Caveat: IANAE, which in case you need it spelled out, means: I am not an economist.)
engels 03.28.24 at 3:55 pm
Rent: owning a well in a desert and charging everyone else for water
Profit: buying land in the desert, paying people to dig wells and haul water, and selling it (back to them) for more than you paid
Both are basically scams but at least in the second case you end up with more wells, and people with no land/money to buy water have the option of hauling it for you instead of just dying of thirst.
JPL 03.28.24 at 10:57 pm
@Miriam Ronzoni, 25, 26, 27:
So, based on these very interesting comments, we can recognize two types of economic interactions, differing in terms of the modal component of a causal analysis: 1) interactions in which, on the provider’s side, there is the offering of a “reason to buy” the product, commodity, service, etc., and on the consumer’s side freedom of choice and voluntary action, to “take it or leave it”, with price determined, more or less, by a process of free negotiation; and 2) interactions in which, on the consumer’s side. there is a necessity to buy or pay for the product or service, etc., i.e., where there is a high degree of absence of freedom of choice (“must have it”), and this power differential allows (this is a modalized causal relation) the provider to unilaterally increase the price (or “exchange value” as determined by a critical independent observer) beyond what the commodity or service would normally bring in. Inherent in this situation is an element of coercion, and, in the absence of constraints, it allows an exploitative response by the power holder. The solution to this problem would seem to be, in view of the current amorality of typical power-holders, to place legal limits on pricing responses in economic situations of type (2).
An example of excessive and coercive profit-taking would be what I think is called “price-gouging”, as, e.g., happened during the pandemic when supply-chain disruptions caused temporary scarcity in essential products, and providers “jacked up the price”, causing unneeded suffering. Examples of exploitative rent-taking could be: licensed databases for access to scholarly and scientific journals, university tuition, and prescription drugs. (The last could be considered “price-gouging”, although the necessity condition on the side of the consumer is pretty much permanent. Some of these “necessities” are public goods, and should be made available universally free of charge out of government revenue. That’s an issue for another day, but that’s the kind of thing that would “make America great”, not some abstract idea of “dominance” over somebody other than you.)
J-D 03.29.24 at 12:03 am
If somebody wants to ask ‘Why is profit a persistent feature of capitalism?’ then it is possible that the sentence you quoted is a useful contribution to finding an answer; but that wasn’t my question. My question was ‘What makes people think that profit is the kind of thing that comes from somewhere?’
I ask the name of the capital of Burundi; you offer me a name for the capital of Rwanda; what you tell me may be entirely accurate, but accurate or not it is entirely irrelevant.
LFC 03.29.24 at 4:22 am
@J-D
Social and economic phenomena, of which profit is one, don’t just appear magically from the head of Zeus, do they? They all “come from somewhere,” in an admittedly loose sense of that phrase; they all have sources of one sort or another. Or so I would think.
J-D 03.29.24 at 5:36 am
‘Value’ means what something is worth, so the only way I can understand the term ‘exchange value’ is as meaning what something is worth in an exchange which, in turn, I can only understand as meaning what something is exchanged for or, in other words, its price. I can’t figure out how ‘exchange value’ could mean something different from ‘price’: if the price is the exchange value, then there’s no meaning in discussion of whether a price reflects (or does not reflect) exchange value.
John Q 03.29.24 at 6:22 am
I had a go at some of this a few years ago, arguing that the valuation attributed to “intangibles” was an indication of monopoly power (the returns to which are usually referred to as “rents”).
https://crookedtimber.org/2020/08/11/intangibles-monopoly/
Should point out that the long-term real rate of interest has risen to around 2 per cent: unclear whether this is a temporary response to Fed policy or a response to new investment opportunities associated with AI
Peter T 03.29.24 at 9:56 am
Susan Reynold’s basic conclusions – that ‘feudalism’ in practice was a very messy affair, more regulated by kinship and oaths and notions of representation and role (see her Kingdoms and Communities) than by any kind of neat legal pyramid – are widely accepted in the field.
Looking back to medieval economies – which essentially worked on land and rent (peasant raises crop – lord gets some, church gets some, state gets some; peasant lives on remainder) – is useful first because the shares are very obviously determined by relative power and second, and more mysteriously, overall growth in productivity is clearly greater when the peasants do NOT get to retain all the crop (ie in areas where lordship is weak or absent), but weaker if they retain too little. The lords are doing something, apart from indulging in their usual violence and luxury consumption. One recent examination of this is Chris Wickham’s The Donkey and the Boat, on the mid-medieval Mediterranean economy (warning – it’s grounded in a huge amount of archeological data, so is heavy reading)
Tm 03.29.24 at 11:45 am
Sashas: „But wouldn’t it be fairer to say that rent is when I pay you for access to an asset but you retain the asset and all rights to it at the end of our transaction, while I retain nothing?“
The rent I’m most familiar with is the rent I pay for my apartment. Yes I pay for access without ownership but I think it’s more useful to say that I pay for a service, the service of having a place to live in good condition. Likewise when I rent a car, I pay for the service mobility. When I pay for a train ride, I also pay for a mobility service. We could say that we pay for access to the train, we rent a seat on the train for a limited time. We don’t usually say that, neither do we say that we rent a room in a hotel. We pay for a service.
The cost of providing these services (including capital investment and maintenance) can be determined. Whatever they charge in excess of the cost, the fair price, is it profit or rent?
In the case of the rental dwelling, it is a fact that providers often charge far more than the fair price. They are able to do so for several reasons. There is a scarcity of housing, often due to scarcity of land, in many large cities, and there is also a general power imbalance between property owner and renter. The housing market, like the health services market for example, doesn’t work like the idealized markets of mainstream economics where supply and demand balance each other and buyers and sellers negotiate fair prices.
Land rent plays a role due to land being a scarce resource but I don’t think it’s a main factor. The real issue is that a place to live is a necessity and not optional so owners can get away with charging excessive rents unless there are laws and regulations to prevent that.
And if it is the case that rents have become more excessive in recent decades, then the reasons are likely political: a weakening of renter protections and a decrease in public housing. Public entities like municipalities used to actively intervene in the housing market by owning and providing at fair prices a large fraction of the housing stock. Under neoliberal ideology, many cities reduced their building activity and even sold off much of their property to profit oriented investors. This is all well known and we know in principle what to do about it.
Jon Rudd 03.29.24 at 1:16 pm
Personal ties of allegiance and reciprocal obligations were two vital characteristics of medieval feudalism (Marc Bloch’s Feudal Society is still worth consulting on the subject). Neither characteristic is evident in “technofeudalism”. “Techno-Oligarchy” seems a more appropriate term.
steven t johnson 03.29.24 at 2:31 pm
Seeing this now…Miriam Ronzoni@26 “…profit is vulnerable to market
competition, rent is not…. Rent flows from privileged access to things in fixed supply…”
The common ground between Varoufakis and innumerable Henry Hazlitts lies in the phrase “privileged access.” All you have to do is concede government interference with the market is the source of the privilege and you can be James Buchanan decrying government monopoly on schools, etc. What you decide is a “privilege” is just a matter of personal taste in politics, but we all know privilege is bad. (I will not contest claims Varoufakis has good taste.)
Aside from the difficulties of defining fair price as somehow different from market prices and the difficulties of devising any effective schemes for fair competition in markets and the difficulties in defining monopoly or “monopoly power,” there is the conceptual problem that “fixed supply” is not even a thing in the sense purported in the quotation. In the short run, all supply is fixed. Investing in fixed and circulating capital to increase supply of any good or service takes time. But we all know this, that’s why price gouging is held to be a concept, even by its defenders. But worse for Varoufakis, in the long run, there is no fixed supply. Consider the classic case of land. The price of land in cities goes up, then suburbs and shopping malls are built and Amazon develops mail order in lieu of renting brick and mortar stores. Perhaps Varoufakis cleans up his arguments later but I’m not rushing to the bookstore to see.
Peter T@38 Susan Reynolds’ basic conclusions seem to me to be the motte. I am doubtful there is any real world society that operates neatly according to its legal code or accepted political theory. To be meaningful, Reynolds needed to demonstrate that the legal rationalizations (as in, systematizing and making consistent and making practical and finding abstract principles to describe in useful ways) were not just simplifications but falsifications. I have no idea whether she succeeded but people who wish to deny the existence of larger social structures than the nuclear family no doubt found it a good reason to stop using the term feudalism, not least because they didn’t want to encourage the revolutionary aspirations for overthrowing feudalism. That’s too much like encouraging revolutionary aspirations of any kind. For some, the status quo by definition is good and that includes the status quo in western Europe from say, 800 to 1500. But maybe such conservatism is entirely lacking in the modern academy?
“…second, and more mysteriously, overall growth in productivity is clearly greater when the peasants do NOT get to retain all the crop (ie in areas where lordship is weak or absent), but weaker if they retain too little.” Less productivity when the labor force is physically stressed by poverty induced by lords and clergy taking too much of their food is not mysterious to me. Nor is it mysterious to me that when the lords take a lot of their crop the peasants often increase production so they will have enough left. And for that matter it’s not terribly mysterious to me that peasants will not produce much beyond subsistence if the level of development is low enough they don’t see any goods and services worth growing a surplus to trade for. I don’t think this is your field of expertise but what experts are somehow finding this mysterious?
LFC 03.29.24 at 5:59 pm
steven t johnson @41
In other words: you’ve taken a work of history you haven’t read and proceeded to assume that those who liked or agreed with it did so for purely political reasons having nothing much to do with its thesis. Also, a strawman, since what reputable historian wants to deny the existence of social structures larger than the nuclear family? In short, contemptuous and unwarranted dismissal masquerading as revolutionary rectitude.
engels 03.29.24 at 6:24 pm
the rent I pay for my apartment…I pay for a service, the service of having a place to live
“Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.”—Rousseau
steven t johnson 03.29.24 at 7:23 pm
LFC@42 “…what reputable historian wants to deny the existence of social structures larger than the nuclear family?” In this very thread we are told Susan Reynolds wrote a whole book denying feudalism and no one has defended her against the libel. She’s reputable nonethless, despite an extraordinary thesis. Another historian cited in this thread, Chris Wickham, wrote a book The Inheritance of Rome which is best encapsulated as denying the western empire really fell and we need to see Rome in the so-called Dark Ages. He’s reputable. Every historian who talks of “modernity” instead of capitalism denies there are such things, which is most of the reputable ones, even though “modernity” is some peculiar undefined condition that doesn’t have parts to analyze. Plus of course, every historian who rejects the grand narratives.
Sure, no bigger than the nuclear family is hyperbolic…but that’s not really the criticism, is it? The real problem is not the flambuoyant exaggeration, it’s the accuracy with which the ox is gored.
bold'un 03.29.24 at 11:59 pm
Maybe we also need to distinguish between ‘rent’ and ‘toll’: rent involves some sort of contract that I have agreed (e.g. a lease or loan), while a toll is imposed on me sometimes by government (taxes, licences…) and sometimes by private companies (e.g. Visa or MC, cetain utilities).
The web has introduced new network effects, though these have always existed. It made sense for a farmer to take his goods to a single well-attended market rather than trying to negotiate with buyers one by one. There would be more costs and no expected gain for buyers or sellers if three smaller market venues were competing for the same farmer’s and buyers’ attentions. History shows that platforms can seem stable for a long time and then suddenly face extinction/disruption. So platform fees can feel like a ‘toll’ but are in fact ‘profits with a moat’.
J-D 03.30.24 at 12:39 am
That seems like par for the course.
John Q 03.30.24 at 1:51 am
It would be good for someone to write an all-purpose book with the title “It’s More Complicated Than That”. Everyone should buy it and put it on to the desk next to the skull saying Memento Mori.
Then, with that ever-present reminder, we could all go back to talking in terms of the oversimplified concepts we all use to make sense of history, economics and life in general: the Middle Ages, the nuclear family and so on.
J-D 03.30.24 at 2:29 am
So you would think: hence my question, Why do people think that?
There is a natural link between your choice of metaphor and a confusion of thinking. The contrast you suggest between things magically appearing from the head of Zeus and things coming from somewhere is a false one. Things appearing magically from the head of Zeus is not the opposite of things coming from somewhere (and therefore a fair way of characterising a position attributable to people who, like me, question the applicability of the idea of coming from somewhere); rather, things appearing magically from the head of Zeus is an example of things coming from somewhere, namely the head of Zeus.
Since you’ve introduced a metaphor from myth, I’m going to roll with that: there are myths from many parts of the world about the theft of fire. Although they vary in detail, they are all answers to the question ‘Where did fire come from?’ (it came from the sun, it came from a volcano, it came from the home of the gods–or there are more fanciful answers in some myths). By contrast, information from contemporary fire scientists is that the ignition of a fire requires fuel, heat, and an oxidising agent (commonly atmospheric oxygen). I suppose one might say in a loose sense that fire ‘comes from’ the combination of fuel, heat, and an oxidising agent, but why would we want to use the phrase so loosely? Does it make things clearer? I think it does the reverse. Again, fire investigators often seek and sometimes find answers to the question of what ignited a fire (an electrical fault? lightning? intentional arson?) and at which spot the fire originated. Their answers could, I suppose, be phrased in terms of where the fire ‘came from’ in a loose sense, but again I don’t think that makes the answers any clearer: the reverse, if anything.
I already pointed out that the simple explanation that profits equal revenues less costs could be rephrased (less clearly) as ‘profit comes from the excess of revenues over costs’, so in a loose sense of ‘comes from’ I could understand and answer the question ‘Where does profit come from?’ but why would I want to, when the result is not greater clarity but the reverse?
J-D 03.30.24 at 2:43 am
Yes, and in ordinary language, the way people generally talk about it and the way people will naturally by default understand you if you talk about your situation, the rent for an apartment doesn’t refer to an excess of revenues over costs (which is what profit normally means) but to the gross amount you pay, the price or (from the point of view of the owner) the revenue (with no deduction of costs).
I have no doubt that it would be possible to look at the account books of a car rental service, observe the total costs it incurred over an accounting period (perhaps a year, or a quarter) and its total revenues over the same period, and thereby observe how much profit (or loss, let’s not forget that possibility) it has made over that same accounting period.
I seriously doubt that it it possible to attribute (in any non-arbitrary way) a fraction of its costs to providing one particular rental to one particular client. I don’t think it can be done: and therefore, although we might know how much revenue it derived from that one particular rental, I don’t believe we can reliably calculate a figure for the profit it made from that one rental. I don’t believe it’s possible to calculate for one rental of one apartment, either.
Tm 03.30.24 at 12:41 pm
J-D: „ I don’t believe it’s possible to calculate for one rental of one apartment, either.“
We can determine the cost of building and maintenance of the whole building, and apportion that cost to the individual apartments (which is easy because they are all similar). We can compare that to the rent charged. I don’t see your problem. In any case, I’m more interested in the global view: how much profit are the owners of rental properties able to squeeze out of renters? It must surely be possible to estimate that amount for a whole economy. Varoufakis might have offered such an estimate to support his arguments.
Regarding your terminological point: I was referring to Sasha’s suggested definition of rent as paying for access, which includes renting an apartment. The English language does make it difficult to even discuss the question of rent because the term is so ambiguous (in German there is „Miete“ for renting a home or car, which is not ambiguous). Varoufakis refers to „ground rent“ which is distinct from renting an apartment in that it doesn’t include building and maintaining property. I think it’s strange to not include rent in the other sense in the discussion. The value of real estate far exceeds the value of the bare land and for the large part of the population who are renters, rent is the single biggest expense they incur. It would be strange for Varoufakis to not discuss this.
Jan Wiklund 03.30.24 at 6:15 pm
There are many kinds of rentierism, says Brett Christophers, of which platforms is one. Still, banks in UK and Sweden take more than 50% of all business profit.
Christophers’s book at https://www.versobooks.com/products/871-rentier-capitalism
engels 03.30.24 at 6:39 pm
It’s impressive that critics coming from such a range of perspectives—Marxology, mainstream liberal economics, ordinary language philosophy—are all able to conclude Varoufakis is wrong without having read him.
JPL 03.31.24 at 12:07 am
When I took courses in economics, I was puzzled by the fact that something called the “profit motive” was taken as essentially axiomatic, thus constituting a limit on the possibilities of human nature. I was puzzled because, perhaps sadly, that supposedly universal component of the capacity for action was apparently lacking in me. But I notice that there is not anything called a “rent motive”, (or a “rent-taking ” motive). So, I want to suggest that economists adopt a more useful technical term instead of “profit motive”, namely, “moneylust”, since this reason for initiating action is common to both the cases, where there is change of ownership of a product (where the product to be sold can be valued in terms of costs of production and labour), as well as interactions where ownership is retained by the provider of a service (and where the provider can freely increase the price without adding any value).
In systems of communal land tenure, where ownership of land can not be bought or sold or possessed by individuals, the “exchange value” of the land is zero, and thus moneylust wrt land is blocked. Problems that the whole community deals with, such as providing a water delivery system, are solved and provided by the whole community and nobody is making money off it at the expense of everybody else. Economic interactions are out of control (no autoregulatory mechanisms) here in the Eurosphere, but it doesn’t have to be this way.
LFC 03.31.24 at 1:11 am
engels @52
I, for one, did not say he was wrong. I said the metaphor he’s using seems to me flawed. That’s not quite the same thing. Were I to read the book, I might revise that reaction.
J-D 03.31.24 at 2:29 am
Well, there’s your first problem already. Maintenance is a recurring cost–it’s possible to find out how much was spent on maintenance in each accounting period (year, quarter, what-have-you); but it’s not the same for the cost of initial construction. How do you apportion that across accounting periods?
Not similar enough! If they vary in nothing else, they will (in many buildings) vary in area and (in practically all) in height. The total area and height of the building will affect both the initial cost of construction and the costs of maintenance, but not in accordance with the kind of linear function which will allow for an uncontroversial straightforward apportionment.
Economists do estimate what they call a ‘profit share’ and a ‘wage share’ for an entire economy. I’m not sure in detail how they do this, although I can imagine (perhaps wrongly) the rough outlines of an approach. There’s no way, however, that they can be using the same method of calculation as is used for calculating the profit of an individual operation is calculated.
It’s also unclear what sort of conclusion you want to draw from that kind of calculation. Suppose I tell you the profit share for the national economy of your country, or my country, for the last year calculated was X%. Well, so what? How high, or how low, do you think it should be?
eg 03.31.24 at 1:11 pm
First let me say that I am grateful that Varoufakis has written this book and that Miriam has posted about it. The comments here seem to me to be evidence that the subject inspires thinking about socioeconomic issues in ways that are both interesting and useful.
I suspect that Varoufakis is using the term “technofeudalism” at least in part for the emotional reaction “feudalism” still has the power to cause in readers — after all, who wants a return to such an arrangement? It seems to me to have been, at the very least, a successful rhetorical gambit.
Where economic rent is concerned (in all its forms) it seems also to me that the old (is it too strong to say almost forgotten? Permanently and purposely obscured by the marginalists and the neoclassical orthodoxy?) classical distinction between earned and unearned income remains useful.
Finally, thank you in particular tm@39 for the comments (perhaps in the spirit of Henry George?) about the role governments used to play in separating the provision of low-income housing from the market, the abandonment of which is apparently central to our current homelessness and housing affordability crises. It is an observation I am at pains to bring to the public discourse here north of the border (primarily in the comments section under pieces in the Globe and Mail) with, frankly, little success, neoliberalism apparently having eaten the brains of my interlocutors along with those of policymakers, think-tankers and pundits everywhere.
steven t johnson 03.31.24 at 1:51 pm
engels@52 “It’s impressive that critics coming from such a range of perspectives—Marxology, mainstream liberal economics, ordinary language philosophy—are all able to conclude Varoufakis is wrong without having read him.” There are no credentialed “Marxologists” in the comments, critical or favorable. And the only thing close to it is dismissed.
Plus, strictly speaking, I haven’t concluded Varoufakis is wrong. I have concluded I see no reason to rush to read (much less buy) yet another sociopoliticoeconomicocultural secular critique of the epoch that will finally replace all those politically outmoded ideas. Presumably the first of those outmoded ideas is Marxology, as in the list above. The notion of rent as unfair competition that ruins capitalism is quite widespread, including on the right, and the excerpts generously quoted by the OP are not impressive. Even more to the point, the reason we are expected to listen to Varoufakis is SYRIZA but I think SYRIZA was an ignominious betrayal. So yes, I am not well disposed to a plea to read Varoufakis.
ozajh 04.01.24 at 6:20 am
Miriam @26 (quoting Varoufakis).
Whereas rent reeked of vulgar exploitation, profit claimed moral superiority as
a just reward to brave entrepreneurs risking everything to navigate
the treacherous currents of stormy markets.
Surely in many countries, until quite recently it was the other way around. In the UK until the 20th Century, for example, the Landed Aristocracy were rentiers first and foremost, and they despised the trading and manufacturing classes.
Sashas 04.01.24 at 4:05 pm
@Tm (39)
Thank you for your response! I see you making a couple of terminology distinctions that I want to address, plus you’ve raised (as have others in this thread) the notion of objectively fair prices. (My comments below started as a specific response to you and immediately drifted to be more general–I’m not trying to put words in your mouth.)
Access to an asset vs payment for a service:
I think I would draw this distinction, but I would draw the line between the two at who holds the asset during the contract. At no point do I ever sit behind the wheel of a taxi (payment for a service), but I do possess my rental car while I am renting it and I could conceivably drive off with it. I am just contractually obligated to give it back. (access to an asset) I would personally lean towards using “rent” to describe an access-to-asset relationship and not a payment-for-service relationship. Renting an apartment is access-to-asset. I’m living in (possessing) the apartment during the lease. “Owning” a video game these days is a fun hybrid in that I possess the software installed on my computer but the game company retains possession of their servers and both are required to actually play the game.
Profit vs Rent:
I still don’t get this distinction, and I really think it comes down to the definition of rent. If we stick with defining rent as the marginal price above the “fair/market” price resulting from scarcity (which seems to be the predominant definition being used in this thread), then it feels like we are relying very heavily on having (A) a shared notion of what the fair/market price is, and (B) the ability to distinguish what results from scarcity. I’m not sure I buy either A or B. Profit itself seems to be defined as similar to rent but susceptible to market forces, which seems underdetermined. Susceptible how? The cost of my apartment seems to change in response to the market, although I don’t have the expertise to tell how or to tell how that is different from profit.
I’m reminded of the Game Theory 101 classic, the Ultimatum Game. In this 1-shot, 2-player game, the first player is handed $10 and instructed to make an offer to the second player for the distribution of the money between them. The second player may either accept (in which case both walk away with the money as offered) or reject (in which case both players leave with $0). At what point does the first player’s take become rent?
Peter T 04.02.24 at 11:30 am
Coming back a bit late – Sasha’s last comment @59 seems spot-on to me: rent and profit are defined in terms that rest on subjective notions of fairness or on unquantifiable distinctions. My earlier historical point about aristocratic rents (“mysteriously, overall growth in productivity is clearly greater when the peasants do NOT get to retain all the crop…” is that rent is conceived as pure dead weight yet, like ‘junk dna’, does seem historically to have contributed to productivity growth in some non-obvious way (there were some improving landlords, but it is very evident that in medieval times almost all were more interested in violence and display than anything else).
re@58 – up until the 1870s the British aristocratic landlord very often invested in industry and trade, but also in his acres – which were very profitable indeed. The cult of the gentleman did not exclude the pursuit of wealth (in eastern Europe the distinction was more marked, but careers in the state bureaucracies and armies were eagerly sought, and alliances with industry not despised (eg the Prussian ‘marriage of iron and rye’).
engels 04.03.24 at 12:53 pm
“Varoufakis is wrong to say we’re re-entering feudalism, because we never really left it, because there’s no real difference between capitalism and feudalism or profit and rent”—is this what the majority of people here think?
Tm 04.04.24 at 10:01 am
Engels 52 and 61: Have you read the book and if yes what do you think? Btw I don’t think I made a judgment about the book, which I haven’t read, I did raise some questions, in particular concerning the empirical basis of his claims.
MisterMr 04.04.24 at 11:58 am
About “rents”. The general idea is that there is competition in the market, so for example if Toyota pays 100 to build a car, it would sell it at 110, or perhaps 120, but not more, because otherwise Wolkswagen will sell their cars for cheaper and steal Toyota’s market share. So this kind of price competition keeps profits low.
But exactly how low, and what is the “fair” share of profits? Orthodox economics has a theory about this, but is confused and very dubious, whereas older models like the LTV simply do not assume that there is a “fair” share of profits and instead assume that workers will be kept at subsistence wages, so fair share my ass.
Now, let’s say that Toyota and Wolkswagen will not produce their cars at a cost of 100 and then sell them at 110, but instead they produce at a cost of 100 and sell at 200.
Is this possible? Yes, because the car industry has very high barriers on entry, and price competition is not that efficient: for example, suppose that Toyota sells at 200, and Wolkswagen sells at 180: Wolkswagen sill sell a bit more, but it’s taking a 20% loss on each sale, so unless it sels 25% + than Toyota it is not worth the effort to Wolkswagen to sell at less, and it is instead rational to sell al 200.
But this creates a problem: both Toyota and Wolkswagen sell at 200 and have a nice profit share of 50%, very high, but they have no incentive to increase their production (because to sell more they would have to lower price, which is not economically advantageous to them). So where are they going to reinvest their profits?
Note that this is just the underconsumption problem seen from another angle.
If Wolkswagen, Toyota etc. reinvest their profits in non-productive endeavours (e.g. they create a real estate branch, or invest into their distribution chain etc.) they will pump up the price of entry in those other markets too, and in the meanwhile the price of entry in their market is already huge, and they control distribution too, etc.
So they essentially reinforce their monopoly power.
The “value” of their capital at this point increases, in a way that doesn’t represent the purely productive needs, but the fact that they can block the access at their own market.
Thus their apparent profit rate falls, creating the apparence of a falling rate of profit, eve if their profit share is in facts quite high.
However the problem is, if this situation of high profit shares is somehow normal, and was disguised until the 80s from the fact that, essentially, governments taxed the hell out of capitalists (my opinion), or if instead is a new developement caused from the fact that, e.g., digital technologies have huge scale advantages.
MisterMr 04.04.24 at 5:50 pm
(this is a rather OT comment, just for Marx nerds)
@steven t johnson 30
Marx wrote confusingly about the “tendency of the rate of profit to fall”, so there have been many different interpretations of what he means. My understanding is that the correct interpretation came out after Sraffa, because Marx could not solve the problem of different capital intensity in various branches of production in a satisfactory way, so capital intensity, AKA organic composition of labor, was difficult for marxian (or ricardian) economists to tackle.
That said, my understanding is this (expressed in “real” values and not in “labor” values to make the explanation simplier):
In the period T1, the average worker produces 100$ of stuff yearly, using fixed machinery equivalent to 100$, and his wage is 50$.
The profit share is 50%, whereas the profit rate is 50/(100+50) = 33%
(because wages are paid each time period, they count as 50$ of fixed immobilized capital).
Some years later, in the period T2, the average worker produces 200$ of stuff, using fixed machinery equivalent to 500$, and is paid 70$.
The profit share increases to 65%, but because of the big increase in fixed capital, the profit rate falls to 130/(70+500) = 23%.
There really isn’t a reason this should happen, unless one assumes that technology always leads to more capital intensive (capital/output) ratios, however this is a way to explain a falling profit rate with an increasing profit share, which is what was happening during Marx’s life.
Jorm 04.05.24 at 12:32 pm
Why is it that no definitions of Capitalism ever mentions capital, ie. credit. I propose capitalism is a system where capital, credit, is priced in a free market. Free market meaning just how that old reprobate Milt Friedman defined it.
Using this view the emergence of negative interest rates indicated the end of capitalism. Negative interest rates destroy money. A profound and fundamental rejection of the very idea of Capitalism. It’s over. It’s just that nobody has noticed.
steven t johnson 04.06.24 at 11:42 pm
The difficulty is not in distinguishing rent from profit. Rentiers get paid first (not that they’re guaranteed renters but when they do, they’re paid upfront.) Capitalists in principle make outlays, produce goods and services, then upon sale they hopefully pocket the difference, which is the profit. Bankers loan money capital and get paid more money back (not guaranteed either, despite the many laws, liens and garnishments and collaterals) regardless of whether the borrower made money, and that’s called interest.
Even these simple categories can overlap. A successful peasant family can lend money in a technologically simple economy. A successful entrepreneur can “invest” in a a bank. And a banker can be a silent partner in a firm producing goods and services. Even a workers family can make capital gains when the expiring older generation dies and the house gets sold (capital gains not guaranteed.) Rent can be for land with or without buildings or for agriculture or for mineral resources, which most certainly includes oil and natural gas. Note that fixed capital is often involved in such rentals.
What you cannot do, at least judging from the inability I’ve seen for anyone to do successfully, is come up with some cockamamie notion of “rent” that implies some unfair practice, like “prive above value” (this was copied from Michael Hudson’s latest, by the way, who gave a shout out to Varoufakis, see Naked Capitalist.) The goal apparently is to find some way to reform capitalism without actually abolishing it. For what it’s worth, Varoufakis does not seem to accept the notion of absolute rent, a quantity of rent that really is due to monopoly due to private ownership of land, something they aren’t making anymore. Of course being anti-Marxist is more of a recommendation in most people’s eyes, not something to raise an eyebrow over.
And speaking of Marx, MisterMr.@64, which I just saw, omits the Marxian observation that when a single firm introduces new innovations, for a period it can make a higher than normal profit rate compared to those other firms. So far as I know, Marxian economics does not insist that these innovations must be in the form of fixed capital…but judging from the economic history of the last few centuries it does seem to be the prevailing tendency. Marxian theory I think also talks about the role of variable capital, meaning raw materials and wages largely (and other circulating capital expenses?) If I follow correctly Marxian economists hold that innovation in fixed capital might lower those costs *and raise the profit rate for that firm above the norm until competitors catch up (and some will.) Capitalist competition causes this process to recur, but the inevitable differences in unpredictable innovation etc. means it can’t be metronomic.
(As to Sraffa, quite aside from Sraffa’s Standard Commodity being a construct that exemplifies the average capital intensity, Sraffa’s system has equilibrium prices being determined by simultaneous equations. It is far beyond my competence to prove this is either valid or invalid to describe dynamic economies with actual change…but sorry I am so perverse as to not be convinced by arguments I can’t be sure are even relevant. I suppose you will deem this an appeal to ignorance.)
The thing is, cumulatively, this way of approaching the historical behavior of a profit-driven system offers an understanding of why capitalism does tend over long periods to accumulation of fixed capital, even if only in certain areas and periods; a short term explanation of the industrial or business cycle or crisis or whatever you wish to call it that works better than underconsumption “theories” or notions about government interference*; a long-term prognosis that suggests capitalism is not the inevitable culmination of society ordained by either God or the Laws of Nature (on the grounds ultimately that growth can’t go on forever in this form, because technology is not guaranteed to spontaneously generate itself.) This last may be the most objectionable but no other society has been eternal, why should this one be? If you throw in that Marx’s view also provides explanations for rapid changes in employment, the opposition between wages and profits and for that matter the tendency for immiseration, you have a winner I think.
(Even if you think absolute immiseration is not a trend, I say even if you arbitrarily look only at the metropoles, the survival of poverty in rather wealthy countries needs explanation other than the inferiority of the poor I think. If you look at the world, the trend to immiseration is not nearly so imperceptible, I also think.)
Comments on this entry are closed.