1 00:00:00,520 --> 00:00:04,160 Speaker 1: Hi, this is Mia. So before we get to today's episode, 2 00:00:04,400 --> 00:00:07,480 Speaker 1: last Friday, the rank and file of the Burgerville Workers Union, 3 00:00:07,520 --> 00:00:10,600 Speaker 1: which is the country's first successful fast food union, went 4 00:00:10,640 --> 00:00:13,520 Speaker 1: on strike against a campaign of disciplinings and firings of 5 00:00:13,600 --> 00:00:17,320 Speaker 1: primarily trans and POC workers by the bosses who are 6 00:00:17,520 --> 00:00:20,520 Speaker 1: once again trying to crush the union. The strike has 7 00:00:20,520 --> 00:00:23,040 Speaker 1: worked so far, but they need support from the community 8 00:00:23,120 --> 00:00:26,120 Speaker 1: to help pay workers and help these people feed their 9 00:00:26,120 --> 00:00:29,520 Speaker 1: families so they can continue fighting the boss's capitalism and 10 00:00:29,520 --> 00:00:32,880 Speaker 1: building democracy in the workplace. You can go to Bitley's 11 00:00:32,880 --> 00:00:35,760 Speaker 1: Slash Burger Defense to do it. To their funds, we 12 00:00:36,040 --> 00:00:39,400 Speaker 1: will have links to that description. And yeah, thank you 13 00:00:39,440 --> 00:00:47,519 Speaker 1: all so much, and now on to the show. It's 14 00:00:48,320 --> 00:00:50,960 Speaker 1: it's a solo meda episode if it could happen here 15 00:00:51,120 --> 00:00:54,080 Speaker 1: the podcast where things fall apart and sometimes we've put 16 00:00:54,080 --> 00:00:57,600 Speaker 1: them back together. I'm your host, Mia Wong, and today 17 00:00:57,640 --> 00:00:59,480 Speaker 1: we're going to be talking about why the rent is 18 00:00:59,480 --> 00:01:03,440 Speaker 1: so high? Now, Okay, there's there's a lot of sort 19 00:01:03,440 --> 00:01:06,200 Speaker 1: of ways that you could in theory approach this question, 20 00:01:07,160 --> 00:01:10,520 Speaker 1: and I decided that I think one of the most 21 00:01:10,600 --> 00:01:12,760 Speaker 1: useful approaches to it is you take a sort of 22 00:01:13,880 --> 00:01:16,760 Speaker 1: a more a more sort of historical and theoretical approach. 23 00:01:17,959 --> 00:01:20,840 Speaker 1: And I think the start of any kind of sort 24 00:01:20,880 --> 00:01:23,600 Speaker 1: of theoretical approach to rent is by asking what rent 25 00:01:23,680 --> 00:01:28,120 Speaker 1: actually is. And the answer to this, and this is 26 00:01:28,160 --> 00:01:31,720 Speaker 1: something that is that is relatively consistent across most of 27 00:01:31,840 --> 00:01:34,560 Speaker 1: sort of classical political economy, and and you see this 28 00:01:34,880 --> 00:01:38,399 Speaker 1: in some of sort of geoclassical economics, is that the 29 00:01:38,440 --> 00:01:42,640 Speaker 1: thing that's special about rent is that rent, unlike you know, 30 00:01:42,760 --> 00:01:46,760 Speaker 1: anything else, is money that you get because you own something, 31 00:01:46,840 --> 00:01:50,440 Speaker 1: not because you you know, have produced anything. And this 32 00:01:50,560 --> 00:01:55,559 Speaker 1: means that you know, the landlord does not produce anything 33 00:01:55,600 --> 00:01:58,320 Speaker 1: of value at all. All they do is extract value 34 00:01:58,320 --> 00:02:03,680 Speaker 1: from other sectors of the economy. Now, this has a wide, 35 00:02:03,760 --> 00:02:07,920 Speaker 1: wide variety of sort of political and social effects. Mark 36 00:02:08,000 --> 00:02:10,560 Speaker 1: saw the landowning class as an obstacle to the development 37 00:02:10,600 --> 00:02:14,000 Speaker 1: of capitalism. And this is an idea. The idea of 38 00:02:14,000 --> 00:02:17,560 Speaker 1: that again, landowners specifically as a class that is different 39 00:02:17,960 --> 00:02:20,240 Speaker 1: from the sort of capitalist class or the working class, 40 00:02:22,520 --> 00:02:26,120 Speaker 1: hinders the growth of capitalism is an idea that a 41 00:02:26,200 --> 00:02:29,519 Speaker 1: lot of different people across the basically the entirety of 42 00:02:29,560 --> 00:02:33,520 Speaker 1: the political spectrum have shared at various times and this 43 00:02:33,720 --> 00:02:37,280 Speaker 1: causes some very very strange alliances. Particularly in places like 44 00:02:37,360 --> 00:02:40,480 Speaker 1: Latin America, you still have economies that are you know, 45 00:02:40,760 --> 00:02:44,359 Speaker 1: not entirely based, but economies that have enormous landowners who 46 00:02:44,440 --> 00:02:47,320 Speaker 1: drive sort of vast portions of both the economy and 47 00:02:47,440 --> 00:02:52,160 Speaker 1: of the sort of political process. And in Latin America, 48 00:02:52,200 --> 00:02:54,000 Speaker 1: and this is true in a lot of other places, 49 00:02:55,160 --> 00:02:57,560 Speaker 1: it was not uncommon for you to get what's known 50 00:02:57,560 --> 00:03:01,200 Speaker 1: as developmentalism, which is an ideology based on using essentially 51 00:03:01,240 --> 00:03:05,720 Speaker 1: protectionist measures, things like terroriffs, sometimes capital controls, restrictions on 52 00:03:05,800 --> 00:03:08,760 Speaker 1: kinds of investment that foreign companies can do. Sometimes I 53 00:03:08,800 --> 00:03:11,680 Speaker 1: mean just straight up the nationalization of natural resources in 54 00:03:11,760 --> 00:03:17,240 Speaker 1: order to develop an industrial economy. Now, developmentalism, as our 55 00:03:17,400 --> 00:03:20,560 Speaker 1: most sort of alliances against the land and elite, are 56 00:03:20,800 --> 00:03:25,840 Speaker 1: politically messy. It draws on a range of ideologies from 57 00:03:25,919 --> 00:03:29,400 Speaker 1: you know, like pretty right wing nationalists, some very very 58 00:03:29,480 --> 00:03:34,000 Speaker 1: very scary people technically developmentalists, to liberal and also centrisfactions 59 00:03:34,639 --> 00:03:38,640 Speaker 1: whose sort of productive and social base is in a 60 00:03:38,640 --> 00:03:41,480 Speaker 1: specific kind of sort of domestic capitalists who's interested in 61 00:03:41,480 --> 00:03:46,360 Speaker 1: sort of producing stuff locally, and also to people like 62 00:03:46,400 --> 00:03:49,920 Speaker 1: Bolivia's Evo Morales, who is you know, broadly considered a socialist, 63 00:03:49,920 --> 00:03:53,120 Speaker 1: although I think his commitment to anything like socialist politics 64 00:03:53,200 --> 00:03:56,400 Speaker 1: is tenuous at best. But all of these sort of 65 00:03:56,480 --> 00:04:00,000 Speaker 1: political groups can and do, and have various times work together. 66 00:04:00,000 --> 00:04:03,120 Speaker 1: So this is actually one of the bases of Morales 67 00:04:03,240 --> 00:04:05,480 Speaker 1: as well. I guess it's not really Moralysis Party anymore. 68 00:04:05,520 --> 00:04:11,440 Speaker 1: But even Morales's MS, which was a very sort of 69 00:04:11,480 --> 00:04:14,120 Speaker 1: explicit alliance between sort of left wing social movements and 70 00:04:14,160 --> 00:04:19,279 Speaker 1: then more sort of moderate centrist factions who were effectively developmentalist. 71 00:04:20,320 --> 00:04:23,479 Speaker 1: This is a sort of a representation of a very 72 00:04:23,800 --> 00:04:27,200 Speaker 1: common like kind of developmentalist politics, which is again this 73 00:04:27,320 --> 00:04:29,920 Speaker 1: alliance between sort of left and capitalist factions who ally 74 00:04:30,000 --> 00:04:33,600 Speaker 1: gets like large landowners on the basis that feudalism, which 75 00:04:33,640 --> 00:04:35,040 Speaker 1: is which is usually the way that like the sort 76 00:04:35,040 --> 00:04:37,840 Speaker 1: of the power of large landowners is conceived, is an 77 00:04:37,960 --> 00:04:42,640 Speaker 1: enemy to both of them. Now, this isn't how sort 78 00:04:42,640 --> 00:04:47,520 Speaker 1: of develop like states that use developmentalist strategies have to work. Germany, 79 00:04:47,600 --> 00:04:50,480 Speaker 1: for example, uses a lot of developmentalist techniques to industrialize 80 00:04:50,480 --> 00:04:52,880 Speaker 1: in the late eighteen hundreds. But you know, the old 81 00:04:52,960 --> 00:04:56,400 Speaker 1: landowning class, the old sort of like like German aristocracy, 82 00:04:56,560 --> 00:05:00,159 Speaker 1: is allied with the capitalists in Germany and the to 83 00:05:00,279 --> 00:05:02,359 Speaker 1: you know, the two classes, the sort of German aristocracy 84 00:05:02,400 --> 00:05:05,720 Speaker 1: and the capital's class effectively birge. On the other hand, 85 00:05:06,360 --> 00:05:11,560 Speaker 1: landowning classes are often implacably hostile to industrialization, and countries 86 00:05:11,560 --> 00:05:14,640 Speaker 1: that essentially annihilated the landowning classes by carrying out land 87 00:05:14,680 --> 00:05:18,640 Speaker 1: reform tend to perform better economically than their counterparts who 88 00:05:18,720 --> 00:05:21,760 Speaker 1: left a landowning class intact, which contributed to the enormous 89 00:05:21,760 --> 00:05:24,159 Speaker 1: success of the economies of countries like China and Japan, 90 00:05:24,240 --> 00:05:27,520 Speaker 1: Taiwan and Vietnam, who, despite their enormous sort of ideological 91 00:05:27,560 --> 00:05:30,200 Speaker 1: and political differences, all carried out land reform in the 92 00:05:30,240 --> 00:05:35,600 Speaker 1: twentieth century were rewarded with eventually by very very powerful 93 00:05:35,600 --> 00:05:38,600 Speaker 1: and large scale industrial economies. But you know, you might 94 00:05:38,640 --> 00:05:40,440 Speaker 1: be saying, ya, you've kind of put the cart in 95 00:05:40,440 --> 00:05:43,760 Speaker 1: front of the horse here. You've talked about, you know, 96 00:05:44,000 --> 00:05:46,479 Speaker 1: you've gone into some of the sort of political effects 97 00:05:46,520 --> 00:05:52,520 Speaker 1: of rent first, but you haven't actually, you know, explained 98 00:05:52,560 --> 00:05:56,640 Speaker 1: how rent actually works. And so that is what I'm 99 00:05:56,640 --> 00:06:00,440 Speaker 1: going to do next. And to explain how rent works, 100 00:06:00,480 --> 00:06:03,760 Speaker 1: I'm going to turn to an unusual source, the work 101 00:06:03,880 --> 00:06:08,480 Speaker 1: of the Great Venezuela and anthropologist Fernando Corneal. Corneal' is 102 00:06:08,520 --> 00:06:12,400 Speaker 1: a fascinating character. He studied anthropology at my alma mater, 103 00:06:12,440 --> 00:06:15,920 Speaker 1: the University of Chicago under Terrence Turner, a guy who 104 00:06:15,960 --> 00:06:18,039 Speaker 1: I think ninety nine percent people have never heard of before, 105 00:06:18,080 --> 00:06:21,400 Speaker 1: but is probably most famous now for being also you know, 106 00:06:21,760 --> 00:06:23,960 Speaker 1: also teaching David Graeber and being a sort of major 107 00:06:24,000 --> 00:06:28,880 Speaker 1: influence on his work now. Unlike David Graber. While Corneal 108 00:06:29,240 --> 00:06:31,640 Speaker 1: was at the University of Chicago, he tried to get 109 00:06:31,640 --> 00:06:34,280 Speaker 1: permission from the Cuban government to go do field work 110 00:06:34,279 --> 00:06:36,640 Speaker 1: in Cuba, and you know, so he gets to Cuba 111 00:06:36,640 --> 00:06:38,520 Speaker 1: and he's like negotiating with the government and the government 112 00:06:38,520 --> 00:06:41,279 Speaker 1: tells him to fuck off. So okay, he tries to 113 00:06:41,320 --> 00:06:44,960 Speaker 1: go back to the US. But Immigration and Nationalization Services, 114 00:06:45,000 --> 00:06:48,400 Speaker 1: the i INS, which is basically the predecessor of like 115 00:06:48,640 --> 00:06:51,800 Speaker 1: Immigration Services ICE in the Border Patrol i INS was 116 00:06:51,800 --> 00:06:53,840 Speaker 1: sort of dissolved in two thousand and three when the 117 00:06:53,960 --> 00:06:57,679 Speaker 1: sort of like I don't know exactly what the technical 118 00:06:57,760 --> 00:07:00,479 Speaker 1: term for it is, but with the consolidation of of 119 00:07:00,480 --> 00:07:04,400 Speaker 1: the Department of Homeland Security, which is really truly a 120 00:07:04,440 --> 00:07:05,839 Speaker 1: thing that I think we tend to think it was 121 00:07:05,880 --> 00:07:09,600 Speaker 1: only present, but is actually about twenty years old, and 122 00:07:09,720 --> 00:07:14,240 Speaker 1: I am older than it was. Also, you know, this 123 00:07:14,320 --> 00:07:17,280 Speaker 1: sort of outside the episode is like an enormously fascist 124 00:07:17,800 --> 00:07:20,640 Speaker 1: institution that centralized an enormous amount of sort of political 125 00:07:20,680 --> 00:07:25,440 Speaker 1: power in these like terrifying surveillance and police bureaucracies. But 126 00:07:26,120 --> 00:07:28,240 Speaker 1: you know, okay, so they're back back back back to 127 00:07:28,280 --> 00:07:30,680 Speaker 1: the Fernandic coordineal story. So he guys to go back 128 00:07:30,680 --> 00:07:33,200 Speaker 1: to the US, but Ans, which is the predecessory for 129 00:07:33,240 --> 00:07:37,280 Speaker 1: all this stuff, like arrest him immediately and they deport 130 00:07:37,400 --> 00:07:40,880 Speaker 1: him and ban him from the US on the grounds 131 00:07:41,200 --> 00:07:45,600 Speaker 1: that he was that they suspected him of being a 132 00:07:45,680 --> 00:07:51,720 Speaker 1: quote subversive agent. Now, and again I cannot emphasize this enough. 133 00:07:52,240 --> 00:07:55,960 Speaker 1: The sequence of events here is that he tries to 134 00:07:56,040 --> 00:07:59,000 Speaker 1: go to Cuba and the Cuban government tells him to 135 00:07:59,040 --> 00:08:01,840 Speaker 1: fuck off, and so he goes back to the US 136 00:08:02,320 --> 00:08:04,880 Speaker 1: and the US government is like, oh, yeah, no, this 137 00:08:05,000 --> 00:08:07,360 Speaker 1: guy through the Cuban government just refused to let to 138 00:08:07,400 --> 00:08:09,640 Speaker 1: do field work. This this this guy is definitely a 139 00:08:09,680 --> 00:08:14,440 Speaker 1: Cuban agent. So his entire sort of like life gets 140 00:08:14,440 --> 00:08:16,400 Speaker 1: derailed by this. He wants up I think back in 141 00:08:16,480 --> 00:08:19,560 Speaker 1: Venezuela for a while. I think it takes like twenty 142 00:08:19,560 --> 00:08:22,160 Speaker 1: almost like twenty years for him to be able to 143 00:08:22,160 --> 00:08:24,600 Speaker 1: get back to the US and finish his PhD. But 144 00:08:24,920 --> 00:08:26,360 Speaker 1: you know, when he does and sort of be in 145 00:08:26,440 --> 00:08:29,720 Speaker 1: the process of this, he becomes a very very famous, 146 00:08:29,720 --> 00:08:35,360 Speaker 1: as well respected anthropologist. Now when now was it you Chicago, 147 00:08:35,440 --> 00:08:37,240 Speaker 1: like all of the people who sort of trained Corneal 148 00:08:37,320 --> 00:08:39,760 Speaker 1: that that whole generation and really like the whole sort 149 00:08:39,800 --> 00:08:42,800 Speaker 1: of school of anthropology that he came from, which is 150 00:08:42,920 --> 00:08:45,400 Speaker 1: a very very interesting school that if if you want 151 00:08:45,440 --> 00:08:48,920 Speaker 1: to like read about this kind of stuff, I read 152 00:08:49,000 --> 00:08:52,480 Speaker 1: David Graeber's Towards an Anthopological Theory of Value. I might 153 00:08:52,480 --> 00:08:54,320 Speaker 1: do an episode on it at some point later, but 154 00:08:54,400 --> 00:08:57,760 Speaker 1: all of that stuff is gone. But but I ran 155 00:08:57,800 --> 00:08:59,880 Speaker 1: into a professor who knew him back in the day, 156 00:09:00,120 --> 00:09:02,720 Speaker 1: and he told us that Corneil was. You know, on 157 00:09:02,720 --> 00:09:04,280 Speaker 1: the one hand, very is back to the academic like 158 00:09:04,360 --> 00:09:07,400 Speaker 1: very sort of like upstanding, like member of the academic 159 00:09:07,440 --> 00:09:11,360 Speaker 1: communitee also incredibly popular as like a partier who just 160 00:09:11,400 --> 00:09:14,520 Speaker 1: get absolutely wasted and start dancing on tables. This guy 161 00:09:14,720 --> 00:09:20,040 Speaker 1: absolutely rips, you know, and I think a very few 162 00:09:20,040 --> 00:09:22,000 Speaker 1: people outside of anthropology you've ever heard of him. But 163 00:09:22,040 --> 00:09:24,760 Speaker 1: in anthropology, Corneil is important enough to like, if you're 164 00:09:24,800 --> 00:09:26,640 Speaker 1: right about the state, you at least have to like 165 00:09:26,840 --> 00:09:30,680 Speaker 1: mention him. And you know, that doesn't necessarily mean that, 166 00:09:30,720 --> 00:09:33,080 Speaker 1: like most of the people who say the words that 167 00:09:33,120 --> 00:09:35,240 Speaker 1: the Magical State, which is the name of his sort 168 00:09:35,240 --> 00:09:38,439 Speaker 1: of famous book, actually have read it. But I did 169 00:09:38,480 --> 00:09:42,880 Speaker 1: read this book. I've read this book multiple times and 170 00:09:43,800 --> 00:09:49,199 Speaker 1: it's really really interesting. Now. The Magical State, Nature, Money, 171 00:09:49,200 --> 00:09:52,120 Speaker 1: and Majority in Venezuela is probably most famous as a 172 00:09:52,160 --> 00:09:55,520 Speaker 1: history of the Venezuelan state, but that doesn't mean that 173 00:09:55,559 --> 00:09:59,280 Speaker 1: it's sort of exclusively about that history, and in fact, 174 00:10:00,280 --> 00:10:04,040 Speaker 1: you know it, it really can't be. In order to 175 00:10:04,160 --> 00:10:08,920 Speaker 1: think about the Venezuelan state, you have to think about oil. 176 00:10:10,559 --> 00:10:14,200 Speaker 1: But you also can't think about oil in the way 177 00:10:14,280 --> 00:10:17,080 Speaker 1: that most histories of oil think about it, which is 178 00:10:17,080 --> 00:10:20,000 Speaker 1: a story about sort of like high geopolitics. Right. If 179 00:10:20,040 --> 00:10:21,760 Speaker 1: you look at the history of oil, right, it's about 180 00:10:21,760 --> 00:10:27,000 Speaker 1: like high geopolitics and like prospecting and like trekking oil 181 00:10:27,040 --> 00:10:30,040 Speaker 1: prices over time, and you know, the sort of most 182 00:10:30,040 --> 00:10:32,480 Speaker 1: famous book in this genre is Daniel Jurgen's The Prize, 183 00:10:32,480 --> 00:10:37,200 Speaker 1: which is a fine book, but it shares in this 184 00:10:37,320 --> 00:10:40,280 Speaker 1: sort of tendency to you know, kind of you know, 185 00:10:40,600 --> 00:10:43,440 Speaker 1: unless they're writing about like a guy going prospecting, right, 186 00:10:43,480 --> 00:10:46,440 Speaker 1: there's this tendency to sort of ignore the sort of 187 00:10:46,520 --> 00:10:50,760 Speaker 1: material characteristics of oil and the sort of political effects 188 00:10:50,840 --> 00:10:53,320 Speaker 1: of the extraction process, and a lot of other aspects 189 00:10:53,320 --> 00:10:57,720 Speaker 1: of oil that are very very important. And what Corineal 190 00:10:57,840 --> 00:11:03,640 Speaker 1: realizes is that oil is intricately tied to sort of 191 00:11:03,640 --> 00:11:07,160 Speaker 1: the political conception of nature, to systems of landownership, and 192 00:11:07,160 --> 00:11:12,080 Speaker 1: also to Venezuelan state craft. Now this may seem a 193 00:11:12,080 --> 00:11:15,040 Speaker 1: bit far afield, but in order to understand oil, you 194 00:11:15,200 --> 00:11:19,720 Speaker 1: have to think about rent and rent extraction. And that's 195 00:11:19,720 --> 00:11:22,080 Speaker 1: what Corneal does in ways that are both sort of 196 00:11:22,120 --> 00:11:24,600 Speaker 1: profoundly interesting and I think, in a lot of ways 197 00:11:24,600 --> 00:11:38,440 Speaker 1: profoundly ahead of his time. So Corneal, like us, asked 198 00:11:38,440 --> 00:11:43,080 Speaker 1: the question what actually is rent? Now? For you know, 199 00:11:43,559 --> 00:11:48,719 Speaker 1: Corneal goes through rent and a lot you know, and 200 00:11:48,920 --> 00:11:50,959 Speaker 1: it like goes through what you could, I guess called 201 00:11:51,040 --> 00:11:53,439 Speaker 1: economic history of concessions of rent, right, starting with the 202 00:11:53,440 --> 00:11:58,160 Speaker 1: classical economists. Uh, we're not that interested in the classical 203 00:11:58,160 --> 00:12:01,640 Speaker 1: economists because quite frankly, if you're if I don't know, 204 00:12:01,679 --> 00:12:04,520 Speaker 1: if you're running into a neo Ricardian analysis of what 205 00:12:04,600 --> 00:12:07,480 Speaker 1: rent is like I don't know, you're you're already a specialist, 206 00:12:07,600 --> 00:12:11,000 Speaker 1: like stuff is stuff, stuff is happening for you, thus 207 00:12:12,960 --> 00:12:16,599 Speaker 1: quite interesting, quite odd, but where we're mostly going to 208 00:12:16,640 --> 00:12:20,320 Speaker 1: ignore them because the original classical economists' work has it's 209 00:12:20,440 --> 00:12:23,760 Speaker 1: it's largely not the way people think about this now, 210 00:12:24,000 --> 00:12:27,959 Speaker 1: and to the extent that people sort of claim to 211 00:12:28,080 --> 00:12:32,120 Speaker 1: be derivatives of like these people that people claiming the 212 00:12:32,120 --> 00:12:36,760 Speaker 1: lineage of Adam Smith, like, eh, that's kind of sketchy. 213 00:12:37,520 --> 00:12:39,680 Speaker 1: Is that we're going to turn to Corneal's analysis of 214 00:12:39,720 --> 00:12:44,080 Speaker 1: the way that neoclassical economics thinks about rent. Now. Corneal 215 00:12:44,120 --> 00:12:45,880 Speaker 1: someone who has spent a lot of time in the 216 00:12:45,920 --> 00:12:48,720 Speaker 1: sort of literature of like oil pricing and sort of 217 00:12:48,760 --> 00:12:52,040 Speaker 1: theories the sort of price formation and the state of 218 00:12:52,080 --> 00:12:54,120 Speaker 1: the market or the effect of political actors on it, 219 00:12:54,160 --> 00:12:57,680 Speaker 1: et cetera, et cetera, et cetera, and he argues that 220 00:12:57,679 --> 00:13:02,040 Speaker 1: there's basically two ways of thinking about rent. In terms 221 00:13:02,080 --> 00:13:06,400 Speaker 1: of a commodity like oil. There is a macroeconomics view 222 00:13:06,400 --> 00:13:09,400 Speaker 1: in which the rent someone who owns oil extracts when 223 00:13:09,440 --> 00:13:11,439 Speaker 1: people have to buy it from them, you know. Okay, 224 00:13:11,440 --> 00:13:13,439 Speaker 1: so like like if if if you're a landowner, right, 225 00:13:13,800 --> 00:13:16,240 Speaker 1: you get rent because you own the thing, and then 226 00:13:16,240 --> 00:13:19,600 Speaker 1: people have to like take it like people need it. 227 00:13:19,760 --> 00:13:21,439 Speaker 1: You have it, so you get to extract rent from 228 00:13:21,440 --> 00:13:25,160 Speaker 1: it just by virtue sort of having it in the 229 00:13:25,200 --> 00:13:32,600 Speaker 1: in the microeconomics view, when someone like pays the rent, right, 230 00:13:33,120 --> 00:13:35,840 Speaker 1: what that is is they're paying for what's called natural 231 00:13:35,880 --> 00:13:39,760 Speaker 1: capital or capital that's you know, provided by nature that 232 00:13:39,880 --> 00:13:42,600 Speaker 1: someone now owns through like the miracle of private property. 233 00:13:43,040 --> 00:13:46,160 Speaker 1: And so for these people, rent isn't something that's extracted 234 00:13:46,200 --> 00:13:49,080 Speaker 1: at all. Right, it's just someone getting paid for their capital. 235 00:13:49,120 --> 00:13:53,240 Speaker 1: Because the way that they think about, you know, about 236 00:13:53,280 --> 00:13:55,680 Speaker 1: something like oil, is that they think oil is just 237 00:13:55,720 --> 00:13:59,760 Speaker 1: sort of natural capital. Now, okay, it's like this is 238 00:13:59,800 --> 00:14:01,520 Speaker 1: this is in some sense, you know, I was like, okay, 239 00:14:02,040 --> 00:14:04,520 Speaker 1: who cares about this? This is kind of like this this 240 00:14:04,559 --> 00:14:09,880 Speaker 1: seems very obvious. But there's also a macroeconomics perspective which 241 00:14:09,880 --> 00:14:14,679 Speaker 1: is very different. And the macroeconomics perspective holds that you know, 242 00:14:14,760 --> 00:14:17,760 Speaker 1: rent isn't a payment for capital at all. It's something 243 00:14:17,840 --> 00:14:22,480 Speaker 1: paid to landowners by capitalists, and the rent that these 244 00:14:22,560 --> 00:14:26,840 Speaker 1: landowners get is basically the difference between you know, what 245 00:14:26,880 --> 00:14:28,840 Speaker 1: it costs you to get the oil out of the 246 00:14:28,960 --> 00:14:30,600 Speaker 1: you use sort of the landowner to get the oil 247 00:14:30,600 --> 00:14:32,240 Speaker 1: out of the ground, and what it costs the person 248 00:14:32,280 --> 00:14:34,600 Speaker 1: who has the highest price of production to get the 249 00:14:34,640 --> 00:14:37,720 Speaker 1: oil out of the ground. Now, okay, for reasons that 250 00:14:37,760 --> 00:14:40,480 Speaker 1: are very complicated that I can't get into here, basically, 251 00:14:40,520 --> 00:14:43,720 Speaker 1: the person who is like the worst at getting oil 252 00:14:43,760 --> 00:14:45,640 Speaker 1: out of the ground is the person who sets what 253 00:14:45,640 --> 00:14:50,200 Speaker 1: the price of oil is. So you know, the sort 254 00:14:50,240 --> 00:14:53,000 Speaker 1: of like highest possible extraction price tends to be the price. 255 00:14:53,080 --> 00:14:57,160 Speaker 1: And then you know, the micro the sort of macroeconomic 256 00:14:57,480 --> 00:15:01,440 Speaker 1: analysis of what rent is, right is that it's a 257 00:15:01,480 --> 00:15:04,600 Speaker 1: thing that capitalists pay to landowners who own natural resources, 258 00:15:04,640 --> 00:15:06,360 Speaker 1: and the amount of money they get is based on 259 00:15:06,400 --> 00:15:10,360 Speaker 1: how much cheaper it is for like that you know, 260 00:15:10,480 --> 00:15:12,760 Speaker 1: that landlord to get their oil out of the ground 261 00:15:12,760 --> 00:15:15,040 Speaker 1: than it is for like the landlord who's like the 262 00:15:15,080 --> 00:15:18,200 Speaker 1: worst at this. And this is a real question, right. 263 00:15:18,360 --> 00:15:21,920 Speaker 1: The question is is someone who's getting rent paid to them, 264 00:15:22,200 --> 00:15:25,800 Speaker 1: is that rent payment for capital that they own, or 265 00:15:25,920 --> 00:15:28,960 Speaker 1: is it money from capitalists that capitalists have to pay 266 00:15:29,000 --> 00:15:32,760 Speaker 1: to a non capitalist class. And Corneal's answer is like, well, 267 00:15:32,800 --> 00:15:36,360 Speaker 1: obviously rent is distracted from cirplus value because because landowners 268 00:15:36,400 --> 00:15:41,680 Speaker 1: don't produce value. But there's two different sort of places 269 00:15:41,880 --> 00:15:45,560 Speaker 1: that they can get this value from. And this is 270 00:15:45,560 --> 00:15:47,800 Speaker 1: where we have to get into something that's kind of weird, 271 00:15:48,760 --> 00:15:53,240 Speaker 1: and that is the two different kinds of rents. But okay, 272 00:15:53,400 --> 00:15:55,200 Speaker 1: before we get into the two kinds of different rents, 273 00:15:55,200 --> 00:15:58,360 Speaker 1: do you know what else? There's two different kinds of Yeah, 274 00:15:58,400 --> 00:16:01,080 Speaker 1: that's right. It is the products and services that support 275 00:16:01,080 --> 00:16:14,240 Speaker 1: this show. And we're back. I hope you have enjoyed 276 00:16:14,840 --> 00:16:17,520 Speaker 1: both of the different kinds of products and services that 277 00:16:17,520 --> 00:16:22,480 Speaker 1: support the show. And okay, I promise you two kinds 278 00:16:22,480 --> 00:16:24,560 Speaker 1: of rents, and I'm now going to give you two 279 00:16:24,640 --> 00:16:29,240 Speaker 1: kinds of rent. So the two kinds of rent, there 280 00:16:29,320 --> 00:16:33,480 Speaker 1: is something called differential rent, and differential rent is kind 281 00:16:33,480 --> 00:16:36,240 Speaker 1: of close to the sort of macrocive we talked about earlier. 282 00:16:36,960 --> 00:16:39,880 Speaker 1: So differential rent is rent that's set by the price 283 00:16:39,920 --> 00:16:43,480 Speaker 1: of production on the market right now, as we sort 284 00:16:43,480 --> 00:16:46,720 Speaker 1: of mentioned, prices tend towards the highest price of production. 285 00:16:46,760 --> 00:16:48,560 Speaker 1: It's set by the people who are worse of producing it. 286 00:16:49,040 --> 00:16:51,320 Speaker 1: And differential rent is the rent that the rest of 287 00:16:51,360 --> 00:16:54,280 Speaker 1: the market gets by costing it by you know, by 288 00:16:54,400 --> 00:16:56,840 Speaker 1: it costing less for them to extract oil than it does, 289 00:16:57,440 --> 00:17:00,720 Speaker 1: you know for someone who's like the worst at extracting oil. 290 00:17:03,480 --> 00:17:06,760 Speaker 1: Corneil explains this in terms of it. For a long time, 291 00:17:06,800 --> 00:17:09,040 Speaker 1: the US was sort of the price leader of oil, 292 00:17:09,440 --> 00:17:11,280 Speaker 1: and it was the price leader of oil because the 293 00:17:11,320 --> 00:17:15,359 Speaker 1: American like property right system is so absolutely bonkers that 294 00:17:15,480 --> 00:17:17,240 Speaker 1: it makes it really really hard. You have to like 295 00:17:17,560 --> 00:17:20,520 Speaker 1: you have to like individually negotiate with like every person 296 00:17:20,560 --> 00:17:23,399 Speaker 1: who owns a cow pasture a Nebraska in order to 297 00:17:23,440 --> 00:17:26,360 Speaker 1: sort of like extract oil from them. And this makes 298 00:17:26,359 --> 00:17:29,640 Speaker 1: the production process like very expensive. And so everyone else 299 00:17:29,680 --> 00:17:32,560 Speaker 1: in the world is getting this differential rent because they 300 00:17:32,560 --> 00:17:39,119 Speaker 1: have like a less completely like just wild system of property. 301 00:17:39,520 --> 00:17:42,480 Speaker 1: So the product of this is that everyone else is 302 00:17:42,480 --> 00:17:44,639 Speaker 1: getting differential rent because it's way cheaper for them to 303 00:17:44,640 --> 00:17:46,840 Speaker 1: produce oil than it is for the US to produce oil. 304 00:17:47,359 --> 00:17:50,240 Speaker 1: So differential rent is a product of your efficiency, right. 305 00:17:50,400 --> 00:17:53,040 Speaker 1: It's how it's an amount of money that's based on 306 00:17:53,080 --> 00:17:54,600 Speaker 1: sort of the price of oil, and it's based on 307 00:17:54,640 --> 00:17:57,080 Speaker 1: how much better, you know, because you're st selling the 308 00:17:57,119 --> 00:17:59,720 Speaker 1: oil at like the same price, right, But the amount 309 00:17:59,800 --> 00:18:02,280 Speaker 1: that you get, you know, the amount of rent that 310 00:18:02,320 --> 00:18:04,760 Speaker 1: you get, is the difference between how much it costs 311 00:18:04,840 --> 00:18:06,440 Speaker 1: you to get this oil out of the ground and 312 00:18:06,480 --> 00:18:10,760 Speaker 1: how much it costs like some sort of American dip 313 00:18:10,760 --> 00:18:12,840 Speaker 1: shit you as to spend all this time negotiating with 314 00:18:13,359 --> 00:18:16,800 Speaker 1: like thirty thousand individual landowners in the US to do it. 315 00:18:17,840 --> 00:18:21,280 Speaker 1: So that that's differential rents. But there's also something called 316 00:18:21,320 --> 00:18:26,280 Speaker 1: absolute rent. Now, absolute rent is very, very very different 317 00:18:27,200 --> 00:18:32,120 Speaker 1: from from differential rent because absolute rent is not really 318 00:18:32,160 --> 00:18:35,439 Speaker 1: determined by sort of production prices or like the market 319 00:18:35,520 --> 00:18:38,800 Speaker 1: or supply and demand at all. Absolute rent is determined 320 00:18:38,800 --> 00:18:42,640 Speaker 1: by the social power of the landowner. And this has 321 00:18:42,840 --> 00:18:46,400 Speaker 1: really interesting effects, right because again absolute rent isn't based 322 00:18:46,440 --> 00:18:50,280 Speaker 1: on the production process and is instead based on you know, 323 00:18:51,400 --> 00:18:54,479 Speaker 1: the social it's it's it's a social product of power 324 00:18:55,760 --> 00:18:59,960 Speaker 1: and this, you know, this, this means that landlords and 325 00:19:00,040 --> 00:19:02,920 Speaker 1: rent extractors can do something that capitalists aren't supposed to 326 00:19:02,960 --> 00:19:05,440 Speaker 1: be able to do. They can get profits that are 327 00:19:05,560 --> 00:19:07,960 Speaker 1: larger than the general rate of profit, and they can 328 00:19:08,040 --> 00:19:11,800 Speaker 1: do it just by virtue of being powerful and owning land. 329 00:19:13,280 --> 00:19:15,400 Speaker 1: And this has a bunch of very very weird knock 330 00:19:15,400 --> 00:19:18,359 Speaker 1: on effects. Right. If you've ever seen landlords talk about rent, right, 331 00:19:18,359 --> 00:19:21,840 Speaker 1: you've seen the consequences of this. These people genuinely believe 332 00:19:21,840 --> 00:19:24,600 Speaker 1: that they have a sort of moral right to returns 333 00:19:24,920 --> 00:19:27,360 Speaker 1: with no risk all of the time, and that all 334 00:19:27,400 --> 00:19:29,880 Speaker 1: of society should be structured in such a way as 335 00:19:29,880 --> 00:19:32,399 Speaker 1: to guarantee that they have this free income that they 336 00:19:32,480 --> 00:19:35,320 Speaker 1: do fucking nothing to do other than own buildings, and 337 00:19:35,400 --> 00:19:37,400 Speaker 1: it should be guaranteed, you know, it should be structured 338 00:19:37,440 --> 00:19:40,840 Speaker 1: to guarantee this by forcing tenants to pay rent no literally, 339 00:19:40,880 --> 00:19:45,360 Speaker 1: no matter what is happening, you know, like regardless of shit, 340 00:19:45,480 --> 00:19:50,680 Speaker 1: like I don't know, a pandemic. Now. The other sort 341 00:19:50,720 --> 00:19:53,960 Speaker 1: of important difference is that is that absolute rent does 342 00:19:54,000 --> 00:19:56,240 Speaker 1: not obey the laws of supply and demand. It is 343 00:19:56,280 --> 00:19:58,840 Speaker 1: a product of social power, you know, it's the power 344 00:19:58,880 --> 00:20:02,120 Speaker 1: of land ownership itself health, and it's also sort of 345 00:20:02,160 --> 00:20:04,320 Speaker 1: the power you know that the social power is. It's 346 00:20:04,320 --> 00:20:06,760 Speaker 1: not just purely the product of light ownership. It's also 347 00:20:06,760 --> 00:20:09,560 Speaker 1: a product of the organization of the land owning class 348 00:20:09,680 --> 00:20:12,120 Speaker 1: and the extent to which they're backed by the state 349 00:20:12,160 --> 00:20:15,160 Speaker 1: and you know, a sort of militaries as polices, and 350 00:20:15,720 --> 00:20:18,760 Speaker 1: this causes economists who are attempting to use supply and 351 00:20:18,840 --> 00:20:24,680 Speaker 1: demand to explain rent to get very very important events 352 00:20:25,040 --> 00:20:27,840 Speaker 1: very wrong. One of the things that Corneal points out 353 00:20:27,920 --> 00:20:30,560 Speaker 1: is that Maurice Aidelman, who is a very very famous 354 00:20:30,560 --> 00:20:36,200 Speaker 1: oil economist, predicts in nineteen seventy two that the price 355 00:20:36,240 --> 00:20:42,240 Speaker 1: of oil is going to collapse based on oversupply and competition. Instead, 356 00:20:42,920 --> 00:20:45,280 Speaker 1: the price of oil between nineteen seventy three and nineteen 357 00:20:45,280 --> 00:20:48,840 Speaker 1: seventy four increases by four hundred percent because oil produces 358 00:20:48,880 --> 00:20:53,080 Speaker 1: banned together to exercise their power, and this organization, known 359 00:20:53,080 --> 00:20:57,480 Speaker 1: as OPEK becomes a genuine world power. Here's here's how 360 00:20:57,520 --> 00:21:01,440 Speaker 1: Corneil puts it. The sharp inc of nineteen seventy three 361 00:21:01,480 --> 00:21:04,360 Speaker 1: and nineteen seventy four in oil prices did not result 362 00:21:04,400 --> 00:21:07,639 Speaker 1: from a world shortage of oil. It was rather the 363 00:21:07,680 --> 00:21:11,160 Speaker 1: outcome of a long historical process by which OPEC nations, 364 00:21:11,320 --> 00:21:15,119 Speaker 1: acting as landowners, developed the means to extract a rent 365 00:21:15,160 --> 00:21:17,760 Speaker 1: on the basis of their ownership of the oil fields, 366 00:21:18,880 --> 00:21:22,439 Speaker 1: an absolute rent in addition to the differential rents they 367 00:21:22,480 --> 00:21:25,600 Speaker 1: had collected in the past. In nineteen seventy three, a 368 00:21:25,680 --> 00:21:29,920 Speaker 1: seat of converging political and economic conditions helped establish their 369 00:21:29,920 --> 00:21:33,679 Speaker 1: collective ability to restrict the world's supply of oil. With 370 00:21:33,800 --> 00:21:37,040 Speaker 1: this power, Opek felt entitled to set my market prices 371 00:21:37,040 --> 00:21:39,960 Speaker 1: of oil, thus freeing the level of rent from the 372 00:21:40,000 --> 00:21:44,480 Speaker 1: previous constraint of the market price. Now, rent itself, absolute 373 00:21:44,520 --> 00:21:47,840 Speaker 1: and differential would come to determine the market price of oil. 374 00:21:49,800 --> 00:21:52,199 Speaker 1: Now you may be asking yourself, VIIa, that this is 375 00:21:52,240 --> 00:21:56,879 Speaker 1: all well and good for describing the price of how 376 00:21:57,359 --> 00:22:00,199 Speaker 1: for describing how the price of oil changes? But what 377 00:22:00,200 --> 00:22:03,040 Speaker 1: does this have to do with me? And the answer 378 00:22:03,160 --> 00:22:06,280 Speaker 1: is that while Corneal is specifically focused on resource rents 379 00:22:06,320 --> 00:22:08,720 Speaker 1: for obvious reasons, he is doing a study of the 380 00:22:08,720 --> 00:22:12,480 Speaker 1: state of Venezuela, you can apply his analysis to the 381 00:22:12,520 --> 00:22:15,399 Speaker 1: kind of rent that we all pay. If you follow 382 00:22:15,600 --> 00:22:20,040 Speaker 1: Corneal's conclusions about absolute rent through to the American rental market, 383 00:22:20,560 --> 00:22:24,320 Speaker 1: it produces startlingly different conclusions about the source and sort 384 00:22:24,359 --> 00:22:26,680 Speaker 1: of nature of the so called housing crisis that are 385 00:22:26,720 --> 00:22:30,399 Speaker 1: traditionally presented. If rent levels are a product of the 386 00:22:30,400 --> 00:22:33,879 Speaker 1: social power of the landlord class, the behavior that's otherwise 387 00:22:33,920 --> 00:22:36,920 Speaker 1: inexplicable like landlords sitting on empty properties instead of renting 388 00:22:36,960 --> 00:22:41,840 Speaker 1: an amount at lower rates, suddenly become clear armed with 389 00:22:41,840 --> 00:22:44,080 Speaker 1: the backing of the state's secure at social power by 390 00:22:44,119 --> 00:22:47,199 Speaker 1: carrying out evictions, and with the state's implicit backing to 391 00:22:47,240 --> 00:22:51,520 Speaker 1: carry out technically illegal evictions, landlords can extract both differential 392 00:22:51,560 --> 00:22:54,879 Speaker 1: and absolute rents, allowing them to tell the market to 393 00:22:54,960 --> 00:22:58,320 Speaker 1: take a hike as setting ever increasing rents that renters 394 00:22:58,320 --> 00:23:00,520 Speaker 1: have no choice but to pay or be swept decided 395 00:23:00,560 --> 00:23:05,040 Speaker 1: in brutal anti homeless rays. This has massive consequences on 396 00:23:05,119 --> 00:23:09,240 Speaker 1: any potential strategy to reduce rent. Opek, remember, was able 397 00:23:09,280 --> 00:23:11,480 Speaker 1: to use its social power to increase the price of 398 00:23:11,520 --> 00:23:14,120 Speaker 1: oil by four hundred percent, even in a period where 399 00:23:14,119 --> 00:23:18,000 Speaker 1: the actual supply of oil was enormous, by pure virtue 400 00:23:18,000 --> 00:23:22,080 Speaker 1: of organization and the power of their landownership. While American 401 00:23:22,160 --> 00:23:24,840 Speaker 1: landlords is certainly weaker and less organized than Opek, their 402 00:23:24,880 --> 00:23:27,520 Speaker 1: social power is still such that increasing supply is not 403 00:23:27,600 --> 00:23:30,720 Speaker 1: guaranteed to drive down prices, because in a situation governed 404 00:23:30,760 --> 00:23:34,240 Speaker 1: by the extraction of absolute rent, rent is not determined 405 00:23:34,240 --> 00:23:41,080 Speaker 1: by prices. Prices are determined by rent. On the other hand, 406 00:23:41,240 --> 00:23:43,679 Speaker 1: this means that you can reduce rent by breaking the 407 00:23:43,680 --> 00:23:47,120 Speaker 1: social power of the landlord. And indeed, even in very 408 00:23:47,160 --> 00:23:50,879 Speaker 1: hot housing markets like Toronto and Los Angeles, this strategy 409 00:23:50,920 --> 00:23:55,199 Speaker 1: canon has worked. Tenets. Unions which deploy the power of 410 00:23:55,240 --> 00:23:58,399 Speaker 1: collective bargaining and the social solidarity of renters to combat 411 00:23:58,400 --> 00:24:02,840 Speaker 1: the power of landlords, have succeeded in reducing rents and 412 00:24:02,960 --> 00:24:06,240 Speaker 1: can and will continue to do so. But these efforts 413 00:24:06,240 --> 00:24:08,800 Speaker 1: are only the beginning of a process that finally answers 414 00:24:08,800 --> 00:24:12,080 Speaker 1: the question why are rents so high? If rents are 415 00:24:12,119 --> 00:24:14,360 Speaker 1: high because of the social power of landlords, the way 416 00:24:14,400 --> 00:24:16,600 Speaker 1: to bring rents down is to crush the batters completely 417 00:24:16,600 --> 00:24:19,639 Speaker 1: and appropriate them, to seize every last building and plot 418 00:24:19,640 --> 00:24:22,320 Speaker 1: of land from every landlord in the country and drive 419 00:24:22,400 --> 00:24:24,639 Speaker 1: them as a class from the political mainstream into the 420 00:24:24,680 --> 00:24:27,840 Speaker 1: pages of history. And then, and this is crucial, not 421 00:24:27,880 --> 00:24:31,240 Speaker 1: to replace them with another landowning class, or, as Leninist 422 00:24:31,280 --> 00:24:33,800 Speaker 1: proposed that it actually did replace them with the state. 423 00:24:34,640 --> 00:24:37,920 Speaker 1: Only by destroying the category of landlord, not by regulating 424 00:24:37,920 --> 00:24:40,920 Speaker 1: it or nationalizing it, can we finally escape the long 425 00:24:41,000 --> 00:24:44,440 Speaker 1: nightmare of rents and enter a world where people's ability 426 00:24:44,480 --> 00:24:47,359 Speaker 1: to live is determined not by the sort of capricious 427 00:24:47,400 --> 00:24:51,240 Speaker 1: and arbitrary will of a small class of landowners, but 428 00:24:51,400 --> 00:24:54,720 Speaker 1: on their human need for housing. This has been It 429 00:24:54,720 --> 00:24:58,400 Speaker 1: could happen here. You can find us in the usual places, 430 00:24:58,600 --> 00:25:02,960 Speaker 1: and yeah, go go into the worlds and make the 431 00:25:03,000 --> 00:25:10,199 Speaker 1: world without rent to reality. It could happen here as 432 00:25:10,240 --> 00:25:12,919 Speaker 1: a production of cool Zone Media. For more podcasts from 433 00:25:12,960 --> 00:25:16,080 Speaker 1: cool Zone Media, visit our website coolzonemedia dot com, or 434 00:25:16,160 --> 00:25:18,800 Speaker 1: check us out on the iHeartRadio app, Apple Podcasts, or 435 00:25:18,840 --> 00:25:21,840 Speaker 1: wherever you listen to podcasts. You can find sources for 436 00:25:21,880 --> 00:25:25,200 Speaker 1: It could Happen Here, updated monthly at coolzonemedia dot com 437 00:25:25,240 --> 00:25:27,120 Speaker 1: slash sources. Thanks for listening.