As Harvey noted long ago in The Limits to Capital (1982), class power is increasingly articulated through rental payments, and his work here helps us understand the material basis of the ‘rentier economy’. Economic rent, as Michael Hudson emphasises, can take the form of licensing fees, interest on savings, dividends from stock, or capital gain from selling a property or land, but is primarily drawn from housing and property. This is the profit one earns simply by owning something; an ‘unearned increment’, which to the financier or capitalist is, ‘earned in their sleep’.
21 As Hudson argues, rental incomes are an unproductive ‘free lunch’ stolen from the economy at large, forcing an ever-higher proportion of income to be spent on rent and basic social subsistence. Writing presciently of the US in 2006, Hudson saw a ‘new road to serfdom’ in an empire of debt: ‘In the odd logic of the real estate bubble, debt has come to equal wealth’.
22 Just as the rich, he says, require an abundant supply of the poor, so does the rentier class require an abundant supply of debtors. But this dynamic is fictitious, and inherently unstable, in the sense that the parasitic financial system destroys the host’s ability to pay the debt.
