Mapping modern economic rents: the good, the bad, and the grey areas

Abstract

There is increasing consensus that modern capitalist economies suffer from excessive rent extraction in both financial and real economy sectors. However, scholars have yet to develop a coherent analytical framework for identifying the common characteristics of modern economic rents. In particular, there has been little attention paid to distinguishing 'good' rents - key to innovation and growth - from 'bad' forms which contribute to economic stagnation and inequalities of wealth and income. This paper takes some first steps in this direction. We first review the existing rent theory most pertinent to this distinction, including classical political economy, the early twentieth century institutionalists, neoclassical perspectives and Keynes's analysis of financial rentiers. Secondly, we map and conceptualise some key stylised features of modern rents, drawing on descriptive empirical evidence. We then identify the key questions that these developments raise for rent theory, elaborating a new research and policy agenda.