Economic Rents and the History of Capitalism
Lately, I’ve been interested in the economic history of our civilization. It seems to me that you can trace ownership and capital back much further than our usual understanding of the essentially Marxian model of Western history which progresses through well-defined eras of Feudalism -> Mercantilism -> Capitalism. I think that the economic models of rent and debt pervade all history from ancient times to the present.
First Came Debt
David Greaber’s magisterial work, Debt: the First 5000 Years, inspired my argument. Scarcity created debt; it also created rent. As societies attempted to alleviate scarcity of resources, they discovered that trade between the Haves and Have Nots could be incentivized through an organized system of debt – originally taking the form of social obligation, later the form of currency exchange, and often physical coercion or chattel slavery. Creation of wealth was not the intended function, but survival of society required it. Accumulation of wealth by creditors was an unplanned side effect. When these creditors realized they could gain wealth by charging (money or labor) for resources to which they controlled access, they became rentiers. In medieval Europe (and other feudal societies as well), land was the original scarce resource: serfs, peasants, tenant farmers, paid rent to the baronial rentier – either via currency or indentured servitude. In England, this movement started with enclosure.
Leaving the Farm
Villages became cities, the marketplace expanded, and more services started being rendered – both to those baronial lords and their tenant laborers. Products of labor were perceived as more “marketable” when the laborers were thought to possess certain skills, or perhaps certain cultural and personality profiles. Education, originally a religious activity, became important. It is noteworthy that market activity in this increasingly complex world was never intended to decrease scarcity of the resource, but only to increase the wealth of its owner. The markets subsidized the rentier — the owner of capital.
Mercantilism to Capitalism
Europe, in the 17th century, was becoming increasingly market oriented. Thanks to increased trade, especially maritime, products controlled by rentiers in England, Holland, Spain, France, could be efficiently exchanged (for a price that some could pay) among themselves. For sure, labor was necessary to produce these commodities and laborers must be kept alive and reproduce – at the minimum level required to maintain production. There grew up, among these “developed” economies, a quest for ever-cheaper labor sources. Hence, colonialism – if the supply of labor could be increased without equivalent increase in debt for the rentier, the rentier’s wealth would proportionally increase. Then came technology.
Technology Must be Invented
Creativity and “talent” clearly became necessary for capital to thrive, more rents needed. So, from the 18th century in Europe, education became important not only for the quality of traded products, but for investment in future increases in productivity – via invention. Education itself became subject to licensing (by rentiers, now including universities) by owners of social and intellectual capital. What began with steam and water power has now evolved into artificial, agentic intelligence for labor productivity. However, as of 2026, it is still not apparent who owns the rights to all that AI. Some creators claim their property has been stolen by AI, others seem not to be concerned. The crux of the issue still is the question: “Who benefits from increased productivity?” Is reduction of scarcity the goal? Or is it increasing the wealth of a few owners of capital? It is a problem of social morality – and, ultimately, political power.
Rents in the 21st Century
Any analysis of economic rents in our modern world must start with a clear understanding of where real scarcities exist. This seems to me to be a matter of distribution more than technology. We want to think that the technology gods (having ruled the 20th century, at least) are bound, by forces of nature, to bring about some continuous betterment to the world’s population – we call this “progress.” But we learn, upon study, that knowledge, reasoning, scientific inquiry, and political will, are the true scarce resources in today’s world. Who owns the rights to these properties? Can they be bought? And, at what price? And, after arriving at a marketable price, can the cost be reasonably socialized? Is society at large debtor or creditor? David Graeber’s anarchism seems, on its face, to be too reductionist – but then Marx also had too restricted a vision of civilization (much too 19th century Euro-centric). Distribution seems to me to be the key. Progress must be measured against human need – not financialized in stock valuations. It could be measured in lifespan, or quality of life indicators. And wealth need not be used primarily for extraction and exploitation – of the planet or its inhabitants. Instead, measure profit by social/ecological gain in the broadest sense, not by some individuals’ personal benefit.
We Are All Rentiers, Then …
In the 19th and 20th centuries, we Westerners tended to separate the world into Haves (technologically advanced but still resource scarce) and Have Nots (resource scarce from exploitation by the Haves). Karl Marx was a genius at articulating that world view. He had been preceded by David Ricardo, who first conceived the principle of rents. But to limit the definition of capital to some abstract commodity – invested, produced, and sold in the market – has led us to a world where labor, as expressed by the Labor Theory of Value (LTV), becomes a scarce resource itself. Yet we know that sometimes (even often) there is labor surplus. AI is threatening this situation now. LTV does imply that labor constitutes capital – not necessarily antagonistic to capital. Marx, at his core, was a redistributionist. Indeed, rents are collected by all as a condition of humanity. We’re all rentiers, we own our knowledge, our skills, our labor. They are our property, and we can sell them at a price the market will bear. It is not economics that prevents ownership of those resources, but political power. The feudal baron could exploit the serf only until the serf gained his own property – his agency. And how did that happen? The serf paid off his debt to the baron when the baron became convinced that he had no further ability to coerce labor from the serf – that was a side benefit of enclosure, not a burden. Of course, it’s more complicated than that, but an acknowledgement that even the labor of the serf was a form of capital — given some enforcement power (the King?) — rendered the feudal baron relatively powerless in the face of competition. In short, political power enabled ownership of capital. The rentier class was expanded, not contracted. And so it goes – to this day, and into the future.
— William Sundwick
Warp and Woof 