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Bringing the social structure back in: a rents-based approach to inequality

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  • Kerstenetzky, Celia Lessa

Abstract

Motivated by a perceived lacuna in theoretical discussions on income inequality, this paper explores an approach based on the place in that inequality of economic rents. Although widely recognized as a subject to be considered in relation to inequality, rents are still failing to receive a conceptually and theoretically unified treatment. In fact, although accepted as an element in the distribution branch of economics, economic rents have been subject to a somewhat incomplete treatment, especially when it comes to understanding the origin in wealth ownership. This blind spot invites cross-disciplinary collaboration as a means of elucidation. So, in this paper, I review and systematize scattered conceptual and theoretical contributions on the subject drawn from the literatures of both economics and sociology. Briefly, while economics delineates the market phenomenon giving rise to rents, sociology sheds light on the influence of background social structure on both the supply and demand blades of the ‘market scissor’. This is to some extent reminiscent of Marx’s class struggle analysis; but Marx’s original view is amplified by the sociological perspectives I review here, as the latter identify and conceptualize rents earned by labour in addition to those earned by capital. Two ideas that sprang from my reading of the sociological perspectives should be placed at the very core of a rents-based approach to inequalities. The first is that the normal functioning of markets does not make economic rents disappear; the second is that all earnings are relative, so that rents, including negative rents, are a vital part of everyone’s remuneration in contemporary capitalist economies. An outline of a rents-based theory of inequality is proposed and normative and policy consequences of undertaking this move are hinted at.

Suggested Citation

  • Kerstenetzky, Celia Lessa, 2020. "Bringing the social structure back in: a rents-based approach to inequality," LSE Research Online Documents on Economics 106533, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:106533
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    File URL: http://eprints.lse.ac.uk/106533/
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    References listed on IDEAS

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    1. Veblen, Thorstein, 2009. "The Theory of the Leisure Class," OUP Catalogue, Oxford University Press, number 9780199552580 edited by Banta, Martha.
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    4. José Gabriel Palma, 2019. "Behind the Seven Veils of Inequality. What if it's all about the Struggle within just One Half of the Population over just One Half of the National Income?," Development and Change, International Institute of Social Studies, vol. 50(5), pages 1133-1213, September.
    5. Jacob S. Hacker & Paul Pierson, 2010. "Winner-Take-All Politics: Public Policy, Political Organization, and the Precipitous Rise of Top Incomes in the United States," Politics & Society, , vol. 38(2), pages 152-204, June.
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    More about this item

    Keywords

    inequality; economic rents; social structure; capital; social surplus;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • N0 - Economic History - - General

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