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wheat-dogg, raker of forests, master of steam1/30/2019 7:54:40 pm PST

For those who want a précis of his book Utopia for Realists, here’s Rutger Bretman’s opinion piece in The Guardian. He’s the historian who told off the bigwigs at Davos a few days ago.

No, wealth isn’t created at the top. It is merely devoured there
Rutger Bregman

So entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens - and everybody else.

In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.

He characterizes Facebook, Google, Uber, Airbnb and others as modern-day rentiers, who are every bit as guilty of living off the hard work of others as landlords and investment bankers. Like Piketty, he warns against the increasing divide between haves and have-nots worldwide, and reminds the haves what eventually happens when the have-nots get fed up.

Worth a read. I’ve got his book in my Kindle queue, and plan to read it once I finish Liu Cixin’s Three Body Problem trilogy.