4 Economic Rent
4.1 Digital Rent
Birch
Big Tech ecosystems are important techno-economic sites of new and emerging forms of digital rentiership.
Big Tech is characterized by the emergence of new and specifically digital forms of rentiership, defined as the construction and extraction of value through the techno-economic extension of ownership and/or control over assets, often resulting from some artificial or natural scarcity, quality, or productivity
We outline four emerging forms of digital rentiership in Big Tech ecosystems reflecting the similarities and diversities in Big Tech firms themselves:
‘enclave rents’ created through the control of ecosystems;
‘expected monopoly rents’ created through the performative fulfilment of future narratives;
‘engagement rents’ constituted via rankings and metrics that differentiate users by their engagement with digital services and products; and
‘reflexivity rents’ obtained by exploiting ecosystem rules and norms.
Birch (2021) Big Tech: Four Emerging Forms of Digital Rentiership
4.2 CEO compensation is a rent
Tooze
The fact that CEO compensation has grown much faster than the pay of the top 0.1% of wage earners indicates that CEO compensation growth does not simply reflect a competitive race for skills (the “market for talent”) that would also increase the value of highly paid professionals more generally. Rather, the growing pay differential between CEOs and top 0.1% earners suggests the growth of substantial economic rents (income not related to a corresponding growth of productivity) in CEO compensation. CEO compensation does not appear to reflect the greater productivity of executives but their ability to extract concessions from corporate boards—a power that stems from dysfunctional systems of corporate governance in the United States. But because so much of CEOs’ income constitutes economic rent, there would be no adverse impact on the economy’s output or on employment if CEOs earned less or were taxed more.