The UK Puzzle

The last post didn’t do justice to the seriousness of the question it raised. It was a rather self-indulgent whinge at the rage most of us Brits feel about the English upper-class twits who pollute our political culture. We think ours is a democracy – when, deep down, we know that it is no such thing and are humiliated by the realisation.

I had actually wanted to bring the story slightly up-to-date with a few comments about how managerialism (in both the private and public sectors) had somehow managed to insinuate a semi-feudal element into our organisational systems. In schools and the health system – as well as the industrial and financial sectors – the power of managers seems to have become all-pervasive - for no obvious reason.

We experience this in the workplace as a malevolent form of bullying – but we need to be more aware of the real evil which is senior managers taking millions in buy-back share options which artificially inflate share prices to their (short-term) benefit

I was, of course, aware that the Netherlands, as an old Imperial power, posed an immediate threat to my argument about class and Empire - but Boffy (my old friend and fellow-blogger) was soon on the trail and suggesting that the real issue is the development of what Christopher Bett calls “rentier capitalism”

Governments enable and support rents and rentiers in many ways -they help shield assets from competition – through the granting and enforcement of strong Intellectual Property rights, for example. They also shield rents from tax, most notably via generous treatments of capital gains and of income from property.

The main problems with rentier capitalism are twofold. First, rentiers are inclined to sit on and sweat their income-generating assets, rather than innovate; it is a recipe for economic stagnation. And second, because incomes accrue disproportionately to the asset-owning elite, it is an engine for growing inequalities of both income and wealth. You only have to look at the London housing market to see that process in action.

Rentier capitalism is not unique to contemporary Britain. It exists, and has existed, much more widely, geographically and historically. But, courtesy of policies that have been almost unimaginably rentier-friendly since the 1970s, the UK is rentier capitalism’s apotheosis, where its prototypical ills – vast inequalities combined with entrenched stagnation – are on full display.

“Let’s talk about the real money,” George Monbiot wrote in 2014. “The Westminster government claims to champion an entrepreneurial society, of wealth creators and hard-working families, but the real rewards and incentives are for rent.”

I’ve taken this table from Bett’s 2020 book on the subject to explain the multiple forms which rent extraction takes these days. When we talk about “the economy” we are simply unaware of what I agree with Boffy is a dramatic new form of extractive power.

Table P.1 Forms of contemporary rentierism

Asset	Primary means of gaining asset control	Principal income streams
Financial	Creation of credit money by private banks Acquisition of financial assets in primary and secondary markets	interest Dividends Capital gains
Natural resource reserves	Leasing agreements with mineral rights owners	Product sales
Intellectual property	Registration of rights (e.g. to patents, trademarks) with state intellectual property	Product sales Royalties
Digital platforms	Organic creation	Commissions Advertising fees
Service contracts	Bidding processes (various)	Service fees
Infrastructure	Privatization of state-owned enterprises licensing by government	Service fees Licensing fees
Land	Acquisition in markets Privatization of public-sector landholdings	Ground rent

Not enough of us understand these now forms of power – the question, however, is how exactly such developments account for the implosion of political power in the UK?

One book which may help answer the question is The Neoliberal Age? Britain since the 1970s ed A Davies and B Jackson et al (2021)