Capitalism Was Built on Rent, Not Profit — and AI Is the Next Enclosure
What Capital Never Told You About Rent
Simon Quarmby and the author argue that rent extraction, not profit, built the modern world: from the enclosure of the commons to Big Tech's bid to meter intelligence. Profit is earned by creating value; rent is extracted by controlling access. Today's AI infrastructure repeats the same pattern — enclosing shared resources, creating dependency, and charging forever. The result is a world approaching Total Rent, a problem for everyone regardless of class.
Every invoice you have ever paid contains rent you cannot see.
- fwlr
Charging rent on capital was historically called “usury”, and was denounced by everyone from Aristotle to Aquinas, from Moses to Buddha to Muhammad. I suspect they had the right of it, which poses some problems for our present society, fractally composed of usury (as the article aptly outlines).
- jstanley
> There is no more intrinsic reason for the scarcity of capital than there is none for the scarcity of air.
You're suggesting that capital holders restrict the supply of capital so that they can extract rent on it? And if they didn't do that we'd just have unlimited capital and everybody would get to be arbitrarily rich?
Then what do capital holders get out of restricting the supply? Wouldn't they rather be arbitrarily rich instead?
> Every claim on human effort that exits the productive system as rent is a claim that cannot circulate internally, cannot pay workers fairly, cannot fund the next big idea or reduce the cost of the next product.
What? Why? When you pay rent do you think your landlord isn't going to spend that money?
- tzs
> Patent holders don’t reinvent a drug each time it is prescribed. Yet they all extract value ad infinitum, because they hold positional claims on these resources.
20 years is not ad infinitum.
- epistasis
These are very good ideas for much more of the populace to digest and internalize. I'm not sure how many will.
And much of the popular critique of capitalism is driven by those who don't distinguish between profit and rent, when in fact the near entirely of the extraction that is causing inequality is from rent extraction and not "profit" as used in this piece. Especially when it comes to real estate, which is most people's largest expense, growing, and one of the biggest political challenges we face today. (Broad homeownership has created a lot of people that benefit from increasing residential housing costs, or at least don't see any problems with them).
Glad to see Schumpeter get mentioned, as Schumpeterian rents are perhaps defensible for a while, I think.
- mwkaufma
Pretty milquetoast analysis which I'm sure ruffles the feathers of all the landlords in the peanut gallery on this site, but what's really objectionable is the periodic terrible AI-generated images.