Boris Johnson’s remark about the ‘high skill, high wage future’ was certainly glib. It was arguably just some idea that popped into his head, more boosterish rhetoric of a golden future that will please sections of The Conservative Party. Especially the middle class, working class or lower earner supporters, as it plays on that very powerful emotion of hope for their children’s future.
There will be more electoral rhetoric from politicians to suggest things are being fixed and there will be a great future – the predictable grand talk of change. That the great machinery of government policy, Civil Service and Parliament are slowly beginning to deliver on a ‘better’ future.
Until we confront the reality of the UK economy, however, that hope will remain false and dangerously so.
This is serious
When this matters, it is about lives, futures. These cannot be empty words, soothing but dishonest rhetoric or fake manipulative pledges, if our politics and democracy are to have any true meaning. If we are to be a serious nation, serious about the service of our politicians, then our politics has to be more objective about this, as careers and life opportunities matter.
The problem is that a high skill, high wage future is currently pretty much impossible for most workers in the UK economy. Why? Because our economy is fundamentally designed to prevent, resist and restrict that possibility.
That is because it is mostly a rent seeking or rentier economy, the serious manifestations and implications of this will be explored in these next two articles.
Rent seeking and rentiers are something that many classical economists argued against and they agreed on the need for them to be abolished. From the supposed theoretical underpinnings of capitalism of Adam Smith, to Karl Marx, to Maynard Keynes. They all argued that the landlords, government corrupting vested interests and rentiers have to go, as they are the biggest barrier to economics operating as a liberating force for citizens.
What is rent seeking and who are rentiers? Well, rent seeking is the enclosing of a resource, a market, a service or facility that most citizens use by private capital and then using the resulting market dominance to control prices to extract rent and profit from users or customers. In a great many cases there is no choice for people but to pay for that product or service, as they cannot function without it, such as energy or water. It is a closed, exclusive, monopolised, cartelised or heavily controlled marketplace by rentiers. Who then seek unearned rent from citizens: rent seeking.
This is the reason the classical economists were so opposed to rentiers and landlords as they take large amounts of money from those who are economically active, industrious, enterprising and working. When they are economically inactive and take a great deal of the money which would liberate citizens in the form of rent for essentially doing nothing, other than owning something.
Whilst at the same time, the rentiers, vested interests and landlord class do not allow market forces to operate which would lower prices or allow users or customers (although a better word is citizens) the ability to negotiate or have influence over resources we all need and use. It also prevents the economically active from having a greater amount of the spoils of their economic activity through competition. This class of people also corrupt politicians and politics to serve their interests with favourable laws and policies, something the classical economists opposed too as it skews markets, public institutions, policy, law-making, allows exploitation, fosters corruption and prevents citizens being emancipated through their work and everyday existence as a person.
F*ck Business
Boris Johnson surprised many in the country with his infamous ‘F*ck business’ outburst during the Brexit debacle. This deeply shocked many traditional Conservative Party supporters, the business and corporate communities too. Many were astonished to hear such a thing from a Conservative prime minister of a political party widely considered to be the party of business and free enterprise. But the people who were incredulous that Johnson should say this have fundamentally misunderstood who and what the Conservative Party are.
The party of vested interests
They are not primarily the party of business or trade. They are the party of ownership.
They are the party of vested interests, the landed gentry, monopolists, cartels, the aristocracy, landlords, rentiers, imperialists and fascists. Fascists in the more traditional sense but also, through the complete blurring of economic, political and military power to serve private power over public interests or concerns.
This explains why Johnson can say what he said and still retain support in the party. It also explains why the so-called party of business and trade were just fine with the UK leaving the biggest marketplace in the world on very unfavourable terms though Brexit. Put simply, it is not the interests of business or trade that they primarily serve.
They are more the party of protectionists than the party of the market. This also explains, why so many Conservative MPs changed their position on the EU so readily, easily and quickly.
In fact as the last four decades prove historically, arguably the last four centuries, any rhetoric about the market, free enterprise or the private sector are normally a pretext for enclosing something off. Some public service, land, space, utility, an institution or marketplace, in order to hand it over to monopolists, vested interests, a cartel, rentier capitalists or private power. So that they can exploit the resources through a dominant and exclusive market position to extract as much rent as possible above any other public consideration. With the consumer very often having little to no choice but to accept this imposition of a rigged, monopolised or heavily managed marketplace.
They can do this with impunity too, because they have the legal, political and policing clout provided by the state to support their rigged market position. There are very few to no competitors and virtually no representation from citizens, who are completely emasculated. There is little to no regulation, no proper forum through which consumers or citizens can challenge this private power either individually or collectively and few to no protections for them from this rent seeking behaviour.
Why bother about Brexit?
Quantitative Easing (QE) has exacerbated and intensified this situation further in the last decade. The wealth of asset owners, rentiers and their ability to access huge amounts of government and taxpayer-backed money through QE, has let them buy more assets to extract more rent and profit. QE to the tune of close on a trillion pounds has turbo-charged inequality and the ability of vested interests to extract still more rent and profit at the expense of everyone else.
If that is your position, why be that bothered about Brexit? When you already have such controls over the economy and the ability to make money, lots of money, obscene levels of money? As the recent profiteering of the energy and inflation crises proves.
Energy producers can adjust prices to levels pretty much of their choosing in the UK. The government has done little to nothing for citizens, if anything it has assisted the vested interests more. What is more shocking is that the Labour Party, the party which claims to represent ordinary working families, is not exactly forcefully and consistently demanding actions be taken on these private monopolies or that energy is meaningfully confronted with longer term, citizen-serving solutions. Nor have they called for a blanket inflation matching pay rise or pension payments, in a time of record profits for rentier capitalists and corporations.
There are measures that the government can take on fuel and energy yet they refuse to do so, as does effectively The Labour Party. It makes you wonder, who do Parliamentarians serve? The citizens? Future generations? Or their corporate, oligarchical, private power, energy lobbyists, masters and donors?
Rentier capitalism
As Brett Christopher’s book, Rentier Capitalism, explores, it is not just the energy sector which suffers from this problem. Rentier capitalists monopolise access to any kind of property (physical, financial, intellectual) to gain significant amounts of unearned profit without contributing to society using resources we all require. In effect, they have erected tollbooths around the marketplace, around services even the physical world for the last four decades of all kinds, in order to extract from us excessive rent and profits.
This is why the asset owning class and rentiers are making billions in profits not just here but globally, whereas everyone else is having their income squeezed in rent. Rent extraction which is at times almost acting like a privately applied and controlled tax.
We continue with this exploration of rentier capitalism in the fifth and final part of this series, with a focus in more detail on why rentiers prevent a high skill, high wage future from ever being a possibility, but worse than that. How they are a lethally dangerous force which must be confronted and stopped for all our sakes.
Parts 2 & 3
