Tag: profits

Technofeudalism: Taxing Rent

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I’ve just finished Chapter 5 of Technofeudalism by Greek economist Yanis Varoufakis, and I can’t recommend it enough. Retiring from being a professional economist, I’d paused reading economic fare in favour of philosophy and fiction. Recently, I picked up Hobbes’ Leviathan and Graeber’s Bullshit Jobs, but this one called to me. I recall when it was released. I read some summaries and reviews. I heard some interviews. I thought I understood the gist. I did. But it goes deeper. Much deeper.

I considered Technofeudalism or Feudalism 2.0 as more of a political statement than a sociopolitical one. Now, I know better. Rather than review the book, I want to focus on a specific aspect that occurred to me.

In a nutshell, Varoufakis asserts that with Capitalism, we moved from a world of property-based rents to one of profits (and rents). We’ve now moved past this into a new world based on platform-based rents (and profits and property rents). Rent extraction yields more power than profits, again reordering power structures. Therefore, I think we might want to handle (read: tax) rents separately from profits.

Audio: NotebookLM podcast discussing this topic.

A Radical Proposal for Modern Taxation

Introduction: The Old Dream Reawakened

Economists have long dreamt of a world in which rent — the unearned income derived from control of scarce assets — could be cleanly distinguished from profit, the reward for productive risk-taking. Ricardo dreamt of it. Henry George built a movement upon it. Even today, figures like Thomas Piketty hint at its necessity. Yet rent and profit have grown entangled like ancient ivy around the crumbling edifice of modern capitalism.

Today, under what some call “technofeudalism,” the separation of rent from productive profit has become not merely an academic exercise but a matter of existential urgency. With rents now extracted not only from land but from data, networks, and regulatory capture, taxation itself risks becoming obsolete if it fails to adapt.

Thus, let us lay out a theoretical and applied map for what could — and arguably must — be done.

I. The Theoretical Framework: Defining Our Terms

First, we must operationally define:

  • Profit: income generated from productive risk-taking — investment, innovation, labour.
  • Rent: income generated from ownership or control of scarce, non-replicable assets — land, intellectual property, platforms, regulatory privilege.

Key Principle: Rent is unearned. Profit is earned.

This distinction matters because rent is an economic extraction from society’s collective value creation, whereas profit rewards activities that enlarge that pie.

II. Mapping EBITA: Where Rent Hides

EBITA (Earnings Before Interest, Taxes, and Amortisation) is the preferred metric of modern corporate reporting. Within it, rents hide behind several masks:

  • Property rental income
  • Intellectual property licensing fees
  • Monopoly markups
  • Platform access fees
  • Network effect premiums
  • Regulatory arbitrage profits

Parsing rent from EBITA would thus require methodical decomposition.

III. Theoretical Approaches to Decomposing EBITA

  1. Cost-Plus Benchmarking
    • Estimate what a “normal” competitive firm would earn.
    • Treat any surplus as rent.
  2. Rate-of-Return Analysis
    • Compare corporate returns against industry-normal rates adjusted for risk.
    • Excess returns imply rent extraction.
  3. Monopolistic Pricing Models
    • Apply measures like the Lerner Index to estimate pricing power.
    • Deduce the rentier share.
  4. Asset Valuation Decomposition
    • Identify earnings derived strictly from asset control rather than active operation.
  5. Economic Value Added (EVA) Adjustments
    • Assign a competitive cost of capital and strip out the residual super-profits as rents.

IV. Toward Applied Solutions: Imposing Sanity on Chaos

In theory, then, we could pursue several applied strategies:

  1. Mandated Rent-Adjusted Reporting
    • Require corporations to file a “Rent-Adjusted EBITA” metric.
    • Auditors would have to categorise income streams as “productive” or “rentier.”
  2. Differential Taxation
    • Tax normal profits at a competitive corporate rate.
    • Tax rents at punitive rates (e.g., 70-90%), since taxing rents does not distort incentives.
  3. Sector-Specific Rent Taxes
    • Levy special taxes on land, platforms, patents, and monopoly franchises.
    • Create dynamic rent-extraction indices updated annually.
  4. Platform Rent Charges
    • Impose data rent taxes on digital platforms extracting value from user activity.
  5. Public Registry of Rents
    • Create a global registry classifying rents by sector, firm, and mechanism.
    • Provide public transparency to rent-seeking activities.

V. The Political Reality: Clouds on the Horizon

Needless to say, the aristocracy of the digital age will not go gentle into this good night. Rentiers — whether in Silicon Valley, the City of London, or Wall Street — are deeply entwined with the political machinery that might otherwise regulate them.

Yet the costs of inaction are higher. If rent extraction continues to eclipse productive activity, the very legitimacy of markets — and democracy — will erode into cynicism, stagnation, and oligarchic decay.

Conclusion: The Choice Before Us

Separating rent from profit is not merely a technocratic tweak. It is a radical act — one that could reorient economic activity away from parasitic extraction and back toward genuine value creation.

In a world where algorithms are castles, platforms are fiefdoms, and data is the new serfdom, reclaiming the ancient dream of taxing rent is no longer optional. It is, quite simply, the price of our collective survival.

The Trolley Problem of For-Profit Healthcare:

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Loops of Death and Denial

The trolley problem is a philosophical thought experiment that pits action against inaction. In the original version, a person faces a choice: a trolley hurtles down a track toward five people tied to the rails, but a lever allows the trolley to be diverted onto another track, where one person is tied. The dilemma is simple in its grotesque arithmetic: let five die or actively kill one to save them. A perennial favourite of ethics classes, the trolley problem is most often used to explore Consequentialism, particularly Utilitarianism, and its cool calculus of harm minimisation. Over the years, countless variations have been conjured, but few approach the nightmarish reality of its real-world application: the for-profit healthcare system in the United States.

With the recent death of UnitedHealthcare CEO Brian Thompson, the trolley dilemma takes on a new and morbid relevance. Let’s reframe the challenge.

The Healthcare Trolley Loop

Picture the trolley again on a bifurcated track. The lever remains, as does the moral agent poised to decide its fate. This time, the agent is Brian Thompson. The setup is simple: one track leads to the deaths of five people, and the other is empty. But here’s the twist: the trolley doesn’t just pass once in this version—it’s on a loop. At every interval, Thompson must decide whether to pull the lever and send the trolley to the empty track or allow it to continue its deadly course, killing five people each time.

But Thompson isn’t just deciding in a vacuum. The track with five people comes with a financial incentive: each life lost means higher profits, better quarterly earnings, and soaring shareholder returns. Diverting the trolley to the empty track, meanwhile, offers no payout. It’s not a single moral quandary; it’s a recurring decision, a relentless calculus of death versus dollars.

This isn’t just a metaphor; it’s a business model. For-profit healthcare doesn’t merely tolerate death—it commodifies it. The system incentivises harm through denial of care, inflated costs, and structural inefficiencies that ensure maximum profit at the expense of human lives.

Enter the Shooter

Now, introduce the wildcard: the shooter. Someone whose loved one may have been one of the countless victims tied to the track. They see Thompson at the lever, his decisions ensuring the endless loop of suffering and death. Perhaps they believe that removing Thompson can break the cycle—that a new lever-puller might divert the trolley to the empty track.

Thompson is killed, but does it change anything? The system remains. Another CEO steps into Thompson’s place, hand on the lever, ready to make the same decision. Why? Because the tracks, the trolley, and the profit motive remain untouched. The system ensures that each decision-maker faces the same incentives, pressures, and chilling rationale: lives are expendable; profits are not.

The Problem of Plausible Deniability

The shooter’s actions are vilified because they are active, visible, and immediate. A single violent act is morally shocking, and rightly so. But what of the quiet violence perpetuated by the healthcare system? The denial of coverage, the refusal of life-saving treatments, the bankruptcy-inducing bills—all are forms of systemic violence, their harm diffused and cloaked in the language of economic necessity.

The for-profit model thrives on this plausible deniability. Its architects and operators can claim they’re simply “following the market,” that their hands are tied by the invisible forces of capitalism. Yet the deaths it causes are no less real, no less preventable. The difference lies in perception: the shooter’s act is direct and visceral, while the system’s violence is passive and bureaucratic, rendered almost invisible by its banality.

A System Built on Death

Let’s not mince words: the current healthcare system is a death loop. It’s not an accident; it’s a feature. Profit-seeking in healthcare means there is always a financial incentive to let people die. During the Affordable Care Act (ACA) debates, opponents of universal healthcare decried the spectre of “death panels,” bureaucrats deciding who lives and who dies. Yet this is precisely what for-profit insurance companies do—only their decisions are driven not by medical necessity or moral considerations, but by spreadsheets and stock prices.

This is the logic of capitalism writ large: maximise profit, externalise harm, and frame systemic failures as unavoidable. Healthcare is merely one example. Across industries, the same dynamic plays out, whether in environmental destruction, labour exploitation, or financial crises. The trolley always runs on tracks built for profit, and the bodies left in its wake are just collateral damage.

How to Break the Loop

The death of Brian Thompson changes nothing. The system will simply produce another Thompson, another lever-puller incentivised to make the same deadly decisions. Breaking the loop requires dismantling the tracks themselves.

  1. Remove the Profit Motive: Healthcare should not be a marketplace but a public good. Universal single-payer systems, as seen in many other developed nations, prioritise care over profit, removing the incentive to let people die for financial gain.
  2. Recognise Passive Harm as Active: We must stop excusing systemic violence as “inevitable.” Denying care, pricing treatments out of reach, and allowing medical bankruptcy are acts of violence, no less deliberate than pulling a trigger.
  3. Hold the System Accountable: It’s not just the CEOs at fault; the lawmakers, lobbyists, and corporations sustain this deadly status quo. The blood is on their hands, too.

Conclusion: The Real Villain

The shooter is not the solution, but neither is their act the real crime. The healthcare system—and by extension, capitalism itself—is the true villain of this story. It constructs the tracks, builds the trolley, and installs lever-pullers like Brian Thompson to ensure the loop continues.

When will it end? When we stop debating which track to divert the trolley toward and start dismantling the system that made the trolley inevitable in the first place. Until then, we are all complicit, passengers on a ride that profits from our suffering and death. The question isn’t who’s at the lever; it’s why the trolley is running at all.

Austrian Economics Bollox

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A citizen of the Internet shared this as if were gospel along with this comment:

Late Professor Steven Horwitz expanding on a Misesian theme. Monetary profit helps allocate resources to higher valued uses. Elsewhere, Mises spoke of profit in a broader sense, “profit” being the goal of every action. In any case, those familiar with what pundits (from the left mostly) tend to say about “profit” may be completely surprised by this take, since it is so contrary to what they often read and hear.

Of course, these are vapid words and wishful thinking. How and why do profits signal that value has been created? I dunno. They just do cuz I said so. The only thing that profits signal is a market that doesn’t understand the true cost of production and consumers can’t be bothered to do it themselves. Mattresses and shaving razor blades are two high-margin consumer goods with mattresses yielding 500 per cent profits and razor blades even higher. These profits represent economic rent and not value. The fact that imperfect information shrouds this excess does not make it ‘value’.

Regarding the mortgage market meltdown of 2007-08, there were houses being built into a market with no buyers. The same ‘value’ being created was demonstrably vapour. Say’s Law was off-target again. Supply does not create its own demand.

Is it no wonder that so many Capitalists are also Protestant Christians who believe in Bible tales as well? Even worse are the Christians who are not Capitalists but are exploited by Capitalism the same way they are exploited by their religion. I guess once you’ve profiled the gullible, you might as well just keep exploiting them until there is nothing left to extract.