Competition is a panacea to most economists. So surely expanding markets would enable more competition and in turn benefit us all. But reality hasn't lived up to the theory argues José Miguel Ahumada. Far from eliminating these excess profits or 'rent', neoliberalism expands opportunities for rentierism intrinsically, and this force shapes our lives and freedoms.

I

We tend to think of inequality and precariousness as just a monetary problem that can be solved through redistributing income. While that is part of the solution, that view obscures the fact that is not only personal income the issue at stake, but a general trend of society toward multiplying the areas for rent production and exctraction. Think, for example, of Oriana, an Uber worker. Oriana has to pay between 25% and 30% of the income generated to her digital landlord – in return for this rent, she receives only the right to access work.

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Rents for working, rents for her health, rents for services, rents for debt, and so on.

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When she arrives home, she must pay her private landlord a rent that has been systematically increasing for more than a decade while the quality of her home continues to deteriorate. If she gets sick, Oriana knows that drug prices are exorbitant, due to the increasing patent protections. She also knows that services and goods that were once public access, such as education, health, and recreational spaces, are now privately managed, charging rents for the right to access them. With a salary that has been stagnating for three decades, it is increasingly difficult for her to afford her material life, so she resorts to borrowing money from banks, entering into a relation of quasi-servitude by debt as the interest grows.

Oriana’s central problem here is not only her income, but the multitude of rents she must pay in various areas of her economic and social life: rents for working, rents for her health, rents for services, rents for debt, and so on. This opens up a question that has been addressed by several scholars: how has rent-seeking expanded so widely throughout the economy?

For almost half a century we have been guided by policies focused on liberalising markets, stimulating competition among suppliers, and guaranteeing an economic order that allows prices to just represent the marginal cost of the production of commodities. Indeed, one of the great promises of neoliberalism was, precisely, to be a force that would eliminate any rent in the economy.

How to explain this tension between what the discourse promises and reality? I will argue that it is capitalist competition itself that generates rents in ever-increasing parts of our lives: competition, far from preventing rentiers, helps them to be born. In order to understand how this works, we need to rethink what market competition and rent production mean.

II

The 1980s saw the emergence of a marriage between libertarian philosophical thought and the neoclassical school in economics. The neoclassical school was emphatic in pointing out that prices above the market equlibrium corresponded to inefficiency as the producer is being unfairly rewarded for their effort.

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The global strategy of opening markets since the 1980s was viewed as synonymous with reducing these unearned profits, and forcing a productive use of the surplus. If rent is inefficient, and free markets are efficient, then free markets would abolish rents.

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