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

Kerstenetzky, Celia Lessa (2020) Bringing the social structure back in: a rents-based approach to inequality. Working paper (50). International Inequalities Institute, London School of Economics and Political Science, London, UK.

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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.

Item Type: Monograph (Working Paper)
Official URL: https://www.lse.ac.uk/International-Inequalities/I...
Additional Information: © 2020 The Author
Divisions: International Inequalities Institute
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HC Economic History and Conditions
Date Deposited: 11 Sep 2020 07:57
Last Modified: 17 Sep 2020 23:07
URI: http://eprints.lse.ac.uk/id/eprint/106533

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