5 Rentier Capitalism
So where does capital go in a stagnant world economy? ‘As countries have deindustrialized, they have also seen a massive build-up of financialized capital, chasing returns to the ownership of relatively liquid assets rather than investing long-term in new fixed capital’. The process is one of constant disinvestment away from productive capital ‘and falling long-term interest rates, as the supply of loanable funds far outstrips demand’. The outgrowth of finance capital has in turn fed asset-price bubbles, delivering a periodical mirage of wealth effects to richer households, enabling them to boost their consumption. When bubbles burst, these same households tend to ‘withdraw from consumption to pay down their debts, generating long periods of economic malaise’.footnote20 This dynamic of stagnation-financialization is what underlies the rentierization of capitalism, and not the other way around, as Christophers claims. In the face of stagnant growth rates, capital accumulation becomes a largely zero-sum redistributive conflict in which investment flees to the safety of rentierism. Neoliberal reforms did not originate this process, though they certainly magnified it by removing restrictions to monopoly profits and facilitating bubble-induced capital gains. As in pre-capitalist societies, the rhythms of productive growth are now increasingly subordinate to the rentier dynamics of finance and mercantile activity, though this time the underlying cause is not the smothering grip of the rentier, but capitalism’s own productive exhaustion.
The problem is that, as rentierism takes over, capitalism looks less and less like itself.
To determine whether a society merits the label ‘capitalist’ or not, the crucial question is what sets the pace of societal reproduction. If, as Christophers claims, rentierism has indeed become the dominant logic, displacing productivity growth and creative destruction as the central principle of social organization, then the capitalist mode of production has become subservient to something else. In which case, to speak of ‘rentier capitalism’ would be a misnomer—we would need a new term for it.
‘Of course, there’s plenty of evidence for this still being capitalism or mostly capitalism’, writes McKenzie Wark in Capital is Dead. The question, rather, is ‘whether an additional mode of production is emerging and whether it is qualitatively different enough to call it something else’.
‘So the bad news is: this is not capitalism anymore, it’s something worse. And the good news is: capital is not eternal, and even if this mode of production is worse, it is not forever. There could be others.’
So what is the latest monster that class society has engendered? Wark baptises it the vectoralist mode of production.
Recent technological advances have made information extremely cheap and abundant, raising the problem of ‘how to maintain forms of class inequality, oppression, domination and exploitation, based on something that in principle is now ridiculously abundant’. To resolve this contradiction, a new mode of production has morphed out of capitalism, one based on the control of what she calls ‘vectors of information’, an abstraction that designates the ‘infrastructure on which information is routed, whether through time or space’.
If the ownership and control of the means of production confer upon the capitalist the power to organize labour, then ownership and control of the vector gives the vectoralist the power to organize the means of production themselves, through ‘patents, copyrights, brands, trademarks, proprietary logistical processes and the like’. For Wark, much of the power and property of the world’s largest corporations is now in vectoral form.
Importantly, the vectoralist class is a ‘new kind of ruling class’, that does not appropriate a quantity of surplus value so much as ‘exploit an asymmetry of information’.
The result is ‘not just a rentier bubble of speculation spooling out of the “real economy”’, but something worse, because information has ontological properties that change the commodity form in qualitative ways. Once created, information ‘is infinitely replicable, cheap to store, cheap to transmit’, which means that its commodification needs artificial means of enclosure, like intellectual property. As the commodity escapes its material limits and private property moves into such a high level of abstraction, everything becomes up for grabs, even privacy: ’we have run out of world to commodify. And now commodification can only cannibalize its own means of existence, both natural and social.
In short, capitalism is dead and vectoralism is feasting on its corpse.