The Threat of Rent Extraction in a Resource-constrained Future

Ecological economists aim to transform our economic institutions so that society can flourish within planetary boundaries. The central message of this article is that private rent extraction forms a key barrier to the realisation of that goal. I define rent as an economic reward which is sustained through control of assets that cannot be quickly and widely replicated, and which exceeds proportionate compensation for the labour of the recipient. I argue that unless we close opportunities for rent extraction, and socialise unavoidable rents, our governments will be compelled to pursue output growth, regardless of its environmental consequences, in order to prevent spiralling inequality and unemployment. The positive proposition in this article is that the concept of rent can help us to identify, and build democratic support for, the institutional transformations necessary to prepare for a resource-constrained future. Measures to reduce and redistribute rentier power could be emancipatory for the poorest in society, whilst making more feasible many proposals that have been advocated already in this journal, including reduced working hours and resource caps. By contrast, if environmental protections are introduced before opportunities for private rent extraction are closed, we could see intensified rent-seeking, asset price bubbles, poverty and economic insecurity.