Today our discussion comes from our archived seminar: A Hard Look at Rent and Rent Seeking, recorded in December 2020. Our Talk is hosted by our Director of Education, Ibrahima Drame, who is joined by Dr. Michael Hudson and Mr. Pepe Escobar. Our
talk today was jointly hosted by us at the Henry George School and the International Union for Land Value Taxation.
Dr. Hudson is the president of the Institute for the Study of Long Term Economic Trends, and professor of economics at the University of Missouri–Kansas City and the School of Marxist Studies at Peking University, in China.
Mr. Escobar is a Brazilian journalist with extensive experience in Southeast Asia and the Middle East. He is the author of several books on globalization: Globalistan, Empire of Chaos, and many more.
When economists try to determine what fairness looks like in the economy, they will often view this through rent, or rent-seeking behavior. When most people hear rent, they think of their monthly payment to their landlord. While this is a useful comparison, when economists use the term “rent” it means something a little different.
In economics, rent is referred to as a payment or income earned more than what is required to keep a resource or factor of production in its current use. Usually, when rent-seeking occurs, there is an element of exploitation or asymmetric balance of power.
Rent-seeking doesn’t just occur between individuals, or employers and employees. It can also exist between countries, or within systems.
Rent can help explain why the US economy has become so unequal, and why China is developing so rapidly. Is it possible for America to reindustrialize? Has corporate power and financialization created a vicious cycle of inequality? Has China’s government and financial system gained an advantage as the US’s has stagnated. Our guests today hope to answer these questions and provide insights into how rent-seeking impacts macroeconomic trends.
Dr. Hudson is a consultant to governments across the world for nations like Latvia, China, and Iceland. Pepe is the editor-at-large for Asia Times and is a veteran geopolitical analyst. I can’t think of two better people to host this discussion.
Together we discussed how the US lost its competitive edge, how China ascended at such a rapid rate, and why an over-reliance on financialization tends to lead to inequality.
