Economist Philip Soos argues our current
system is a racket designed to generate free banquets for the rentier
class. Spend a few minutes and read the compelling analysis. It’s a crackerjack
article. First posted in Independent Australia.
WHEN THE infamous duo
of Abbott and Hockey came to power in 2013, they embarked upon a polarising
rhetoric of “lifters” versus “leaners” separating
Australians into one of two camps.
The split was a
simple one: those who earn and engage in productive activity, indicated by
making a revenue or wage and hence paying income tax, in contrast to those who
pay no net income tax, mostly social welfare recipients.
In Australia, the Duncan Storrar episode once again brought
attention to this rhetoric. It expanded into a moral uproar with those who
believe the poor should be provided more assistance, and those who think such people
are a useless economic deadweight on society.
Earned versus unearned wealth and income
There is only one
small problem.
The notion that the
rich have earned all their wealth and income is completely false. Not only is
it false, it is obviously false when one considers the issues at hand. Although
the mass media and intellectuals often assert the rich must have become so by
cause of effort, the available economic theory and documentary evidence, readily
available, demonstrates otherwise.
Overwhelmingly, the
pathway to riches is not through earned wealth and income but that which is
unearned. The 18th century physiocrats
and the later classical economists from Adam Smith to John Stuart Mill to
Karl Marx, ultimately finding its peak
expression in Henry George, argued for a clear
difference between earned and unearned wealth and income. The term economic
rent was used to identify this distinction. Those who make their living off
economic rent are called rentiers.
