In ecosocialist issues, beyond being carbon-based life-forms, we need to consider how the market for carbon offsets is materially not identical to carbon markets. The larger issue of value-form and rents has within it a problem of connecting socially necessary labor-power. Energy transitions to renewable energy within the climate crisis objectives will not be met by carbon markets, especially under neoliberalism. Climaterentierism is a thing.
A factory worker sells their labor-power (their ability to operate machines and assemble products) to the factory owner. The factory owner pays them a wage, but the value of the products they produce is greater than the wage they receive.
Matt Huber claims that:
Marx discusses how surplus value is distributed among interest-bearing/merchants capital, etc. but he has no concept of “rentier capital” (Kohei Saito’s term).
———————————-—
Although the combination of words “rentier capitalism” was never used by Karl Marx himself,
…it is compatible with the Marxist idea of surplus value extraction.
In his early works, Karl Marx juxtaposed the terms “rentier” and “capitalist” to argue that a rentier tends to exhaust his profits, whereas a capitalist must perforce re-invest most of the surplus value in order to survive competition. He wrote, “Therefore, the means of the extravagant rentier diminish daily in inverse proportion to the growing possibilities and temptations of pleasure. He must, therefore, either consume his capital himself, and in doing so bring about his own ruin, or become an industrial capitalist”.[6]
Later in life, including in the manuscript later published as Capital, Vol. 3 Marx tended to further distinguish so-called rentiers into interest-bearing (finance) capitalists and a separate class of landowners, arguing that the interest from invested capital and rent from private land were economically different.[7] He did however in various places, including a letter to Friedrich Engels acknowledge that at some point finance capital might come to own all land and in doing so eliminate the separate landlord class.[8] It is a matter of ongoing debate as to whether or not this has come to pass.[9]
Current usage of the term ‘rentier capitalism’ describes the gaining of ‘rentier’ income from ownership or control of assets that generate economic rents rather than from capital or labour used for production in a free competitive market.[11]
Gemini:
The theory of the value-form and Marx’s analysis of rent provide crucial insights into the dynamics of what is now termed “rentier capitalism”:
Rent as Unearned Income: Marx’s concept of rent highlights how a portion of the surplus value produced in the economy can be appropriated by owners of specific assets (primarily land in his original analysis) simply due to their ownership and control over these assets, rather than through their own productive labor. This aligns with the core idea of rentierism – deriving income from ownership or control of assets.
Monopoly and Scarcity: Both differential and absolute rent are predicated on forms of monopoly – either natural (fertility, location) or social (private ownership). Rentier capitalism thrives on the creation and exploitation of scarcity, whether it’s in land, natural resources, intellectual property, or even financial capital. The value-form, expressed as price, reflects these underlying conditions of supply and demand influenced by scarcity and control.
Financialization and Rent: While Marx focused on land rent, the logic can be extended to other forms of rent in a financialized economy. For example, interest on loans can be seen as a form of rent on money-capital. Similarly, profits derived from the control of essential infrastructure or digital platforms can exhibit rent-seeking characteristics when these entities possess significant market power and extract value without a corresponding level of productive contribution in a competitive market.
Intellectual Property and Rent: Contemporary discussions of rentier capitalism often emphasize the role of intellectual property rights (patents, copyrights, trademarks). These create artificial scarcity and allow owners to charge “rent” for the use of ideas and creations, potentially hindering innovation and broader economic activity. From a value-form perspective, the price of goods and services protected by IP includes this element of rent, which is not directly tied to the socially necessary labor-time of their reproduction.
The “Having” vs. “Doing” Distinction: As some contemporary theorists of rentier capitalism argue, the focus shifts from “doing” (productive activity, innovation) to “having” (ownership of rent-generating assets). The value-form, as it manifests in prices and profits, can obscure the underlying sources of income, making it difficult to distinguish between returns to genuine productive activity and returns to the exercise of ownership and control over scarce assets.
In essence, Marx’s analysis of value-form and rent lays the groundwork for understanding how certain actors in a capitalist economy can accumulate wealth not primarily through the creation of new value but through the appropriation of existing or potential value by virtue of their control over key assets. This is a central characteristic of what is meant by rentier capitalism. The value-form, particularly as it develops into the price-form, becomes the mechanism through which these rents are realized and circulated within the economy.
Marx on absolute rent might disagree and Gemini produces this opinion when thinking of carbon markets:
The relationship between carbon markets and rentier capitalism is a subject of ongoing debate and scrutiny. While carbon markets have the potential to contribute to climate change mitigation, their design and implementation must be carefully considered to avoid reinforcing rentier dynamics, exacerbating inequalities, and undermining genuine efforts to decarbonize the economy.
Without strong regulation and a focus on real emission reductions, carbon markets risk becoming another avenue for rent-seeking behavior within a rentier capitalist system.
——————
The Intersection of Carbon Markets and Rentier Capitalism:
Several arguments suggest how carbon markets can become intertwined with rentier dynamics:
New Forms of Rent-Seeking: Some argue that carbon credits, offset schemes, and climate-driven conservation easements can create new forms of rent. Entities that own land suitable for carbon sequestration (e.g., forests) or develop projects that reduce emissions can generate and sell carbon credits, potentially deriving significant income from these assets. This income is tied to the control and ownership of these carbon-sequestering or emission-reducing “assets” rather than traditional productive activities.
Monopolization and Control: If a few large entities gain control over significant portions of the carbon credit supply or the land and resources needed for carbon offset projects, they could potentially exert market power and extract rents by controlling the price and availability of these credits. This aligns with the concentration of asset ownership characteristic of rentier capitalism.
Financialization of Nature: Carbon markets can lead to the financialization of nature, where environmental resources and processes (like carbon sequestration) are commodified and traded as financial assets. This can shift the focus from intrinsic ecological value to their potential for generating financial returns, potentially prioritizing rent extraction over genuine environmental benefits or the needs of local communities.
Exacerbating Inequalities: Critics argue that carbon markets might disproportionately benefit those who already own land or have the capital to invest in carbon offset projects, potentially exacerbating existing inequalities. For example, large landowners might profit from selling carbon credits generated from their forests, while local communities or smaller actors might be excluded or even negatively impacted by these projects.
Focus on “Having” over “Doing”: Brett Christophers, in his book Rentier Capitalism, argues that modern capitalism increasingly relies on “having” (ownership of assets) rather than “doing” (production). Carbon markets, particularly offset schemes, can be seen as an example where companies can “have” the right to continue polluting by purchasing offsets, rather than fundamentally changing their production processes to reduce emissions at the source.
Greenwashing and Lack of Real Emission Reductions: If carbon markets, especially voluntary ones, lack robust regulation and verification, they can become avenues for greenwashing. Companies might purchase cheap, low-quality offsets that don’t represent real or additional emission reductions, allowing them to claim climate action without making significant changes to their polluting activities.
This can be a form of rent-seeking by allowing continued harmful practices under the guise of environmental responsibility.
Gemini
Temporary Carbon Storage markets bypass environmental responsibility and produce profit (as de facto rent-seeking) making something that can construct surplus value.
Marx’s work on rent was based on his studies of the statistical reports published after the Russian Agrarian Reform of 1861. The importance of the Russian case on Marx’s thinking is highlighted in Engels’ ‘Preface’ to the third volume of Marx’s Capital, which draws a parallel between the influence of Russia’s diverse land tenure system on Marx’s analysis of rent and the role of England on his analysis of industrial wage-labour.
In the seventies Marx engaged in entirely new special studies for this part on ground-rent. For years he had studied the Russian originals of statistical reports inevitable after the “reform” of 1861 in Russia and other publications on landownership, had taken extracts from these originals, placed at his disposal in admirably complete form by his Russian friends, and had intended to use them for a new version of this part. Owing to the variety of forms both of landownership and of exploitation of agricultural producers in Russia, this country was to play the same role in the part dealing with ground-rent that England played in Book I in connection with industrial wage-labour. He was unfortunately denied the opportunity of carrying out this plan.
[…]
We have at least learned this much: According to Mr. Loria, the Marxian theory of surplus-value is absolutely incompatible with the existence of a general equal rate of profit. Then, there appeared the second volume and therewith my public challenge precisely on this very point. If Mr. Loria had been one of us diffident Germans, he would have experienced a certain degree of embarrassment. But he is a cocky southerner, coming from a hot climate, where, as he can testify, cool nerve is a natural requirement. The question of the rate of profit has been publicly put. Mr. Loria has publicly declared it insoluble. And for this very reason he is now going to outdo himself by publicly solving it.
This miracle is accomplished in Conrads Jahrbücher, neue Folge, Buch XX, S. 272 and following, in an article dealing with Conrad Schmidt’s already cited pamphlet. After Loria learned from Schmidt how commercial profit was made, he suddenly saw daylight.
“Since determining value by means of labour-time is to the advantage of those capitalists who invest a greater portion of their capital in wages, the unproductive” (read commercial) “capital can derive a higher interest” (read profit) “from these privileged capitalists and thus bring about an equalisation between the individual industrial capitalists… For instance, if each of the industrial capitalists A, B, C uses 400 working-days and 0, 400, 200 constant capital respectively in production, and if the wages for 400 working-days amount to 50 working-days, then each receives a surplus-value of 50 working-days, and the rate of profit is 400% for the first, 33.3% for the second, and 20% for the third capitalist. But if a fourth capitalist D accumulates an unproductive capital of 300, which claims an interest” (profit) “equal in value to 40 working-days from A, and an interest of 20 working-days from B, then the rate of profit of capitalists A and B will sink to 20%, just as that of C, while D with his capital of 300 receives profit of 60, or a rate of profit of 20%, the same as the other capitalists.”
With such astonishing dexterity, l’illustre Loria solves by sleight of hand the question which he had declared insoluble ten years previously. Unfortunately, he did not let us into the secret wherefrom the “unproductive capital” obtained the power to squeeze out of the industrialists their extra profit in excess of the average rate of profit, and to retain it in its own pocket, just as the landowner pockets the tenant’s surplus-profit as ground-rent. Indeed, according to him it would be the merchants who would raise a tribute analogous to ground-rent from the industrialists, and would thereby bring about an average rate of profit. Commercial capital is indeed a very essential factor in producing the general rate of profit, as nearly everybody knows. But only a literary adventurer who in his heart sneezes at political economy, can venture the assertion that it has the magic power to absorb all surplus-value in excess of the general rate of profit even before this general rate has taken shape, and to convert it into ground-rent for itself without, moreover, even having need to do with any real estate. No less astonishing is the assertion that commercial capital manages to discover the particular industrialists, whose surplus-value just covers the average rate of profit, and that it considers it a privilege to mitigate the lot of these luckless victims of the Marxian law of value to a certain extent by selling their products gratis for them, without asking as much as a commission for it. What a mountebank one must be to imagine that Marx had need to resort to such miserable tricks!
Rentier capitalism is a concept in Marxist and heterodox economics to refer to rent-seeking and exploitation by companies in capitalist systems.[1][2][3] The term was developed by Austrian social geographer Hans Bobek[4] describing an economic system that was widespread in antiquity and still widespread in the Middle East, where productive investments are largely lacking and the highest possible share of income is skimmed off from ground-rents, leases and rents. Consequently, in many developing countries, rentier capitalism is an obstacle to economic development. A rentier is someone who earns income from capital without working. This is generally done through ownership of assets that generate yield (cash generated by assets), such as rental properties, shares in dividend-paying companies, or bonds that pay interest.[5]
And as a last resort we can bury woody biomass to lock it into permanent sequestration (wood vaults). Companies like Kodama are building business models around carbon offset markets for this work.
Carbon market proponents claim:
Proponents claim that while carbon offset schemes have challenges, currently, they are one of our best options to address the climate and deforestation crises. They argue that offsets are necessary for the so-called ‘hard-to-abate’ emissions, and offset projects provide important funding to combat deforestation. Criticising companies investing in offset projects is, they argue, counterproductive.
Reality check:
Every argument the industry makes in favour of carbon offsets must be confronted with a significant body of evidence showing that they do not actually do what they claim to do. The logic of carbon offsetting does not work: there are significant structural flaws; it is based on false equivalences, and the offset industry is riddled with conflicts of interest. Moreover, protecting forests and other ecosystems, which is clearly necessary, is not the same as establishing carbon offset projects. The conflation of these two issues has been a core fallacy in the debate. The former can be done far better if we get rid of the latter, as we discuss below.
Offsets are used to prevent regulatory action by governments
While the industry often argues that without carbon markets, corporations would ‘do nothing’, this narrative overlooks the fact that governments can compel industries to act. In fact, it is due to substantial corporate lobbying – including at UN climate events – that governments have been pushed to accept the notion that more regulation is unnecessary because polluting industries acting voluntarily and according to market incentives is more ‘efficient’. Offsets constitute a significant part of this narrative. The offsetting industry has created a dangerous illusion that the market is helping solve the climate and deforestation crises. The very problems that were created by the market and market-based policy assumptions in the first place.
Offsetting ‘hard-to-abate’ emissions
The industry heavily promotes the use of offsets to address the so-called ‘hard-to-abate’ emissions. Emissions that companies claim are difficult for them to decrease. However, there is no clear understanding or transparency around what constitutes a ‘hard-to-abate’ emission, and the concept is open to abuse. In cases where emissions reduction measures are more expensive than buying carbon credits, companies can simply consider them as ‘hard-to-abate’ emissions. By doing so, companies can avoid taking actual measures needed to reduce emissions. There is ample evidence(opens in new window) that the current use of carbon credits is not linked to hard-to-abate emissions.
Flattened housing supply is more about refinancing in a rent-producing financial ‘market’.
is she a member of the lumpenproletariat:
