In this paper the authors make a critical distinction between inequalities arising from profits and wages and inequalities arising from rents, following Sorensen and 19th century economist Ricardo. Their new contribution is to articulate how rents are especially important in post-communist capitalist transition. Without the concept of rents, the mechanisms of corruption cannot be understood. The authors identify three types of rent-seeking behavior, which can be observed in any capitalist country, that play a particularly important role in post-communist transition: (i) market capture by political elites; (ii) state capture by oligarchs; (iii) capture of oligarchs by autocratic rulers through selective criminalization and the redistribution of their wealth to loyal new rich.
SzelényiI.“The New Grand Bourgeoisie under PostCommunism. Central Europe, Russia and China Compared”Working Paper No. 2010/632010HelsinkiUnited Nations University, World Institute for Development Economic Research
See Weber (1978) pp. 43-44. Clearly all this is very close to the concept of Acemoglu and Robinson (2012).
Solow (2014) calls this rent of super managers a “sort of adjunct to capital”.
See Oliver (1995) and Conley (1999) demonstrating that the major difference between whites and blacks is not in earned income but inherited wealth.
Until1995Hungary pursued privatization through open tenders and ipos in which foreign investors competed with each other. See Eyal Szelényi and Townsley (1998) Mihalyi (2001) King and Szelényi (2005).
In2012the combined revenue from all kind of property and (net) wealth as a percentage of gdp was in the range of 0.3% (Estonia Mexico) and 3.9% (uk). https://stats.oecd.org/Index.aspx?DataSetCode=REV accessed 9 July 2015.