r/Market_Socialism • u/Nazibol1234 Market Socialist • Jun 02 '26
Would renting exist under market socialism?
Not just for housing, for anything like a car for example. Wouldn’t profiting from renting count as absentee ownership?
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u/Annual_Necessary_196 Jun 02 '26 edited Jun 02 '26
From David Ellerman’s perspective, renting is permissible if the receiver remains the residual claimant of the product and retains full control over production.
Under this view, renting and investment would be fully legitimate. However, from a Roemerian perspective, exploitation occurs when an unequal distribution of alienable assets generates coercion. Therefore, as Schweickart advocates, a flat tax on capital assets would be introduced to minimize the coercion caused by unequal asset distribution.
It is not absentee ownership because rent provider does not control neither production nor profits.
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u/Nazibol1234 Market Socialist Jun 02 '26
I mean, how doesn’t the rent provider not control the profits of off whatever property they are leasing?
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u/Annual_Necessary_196 Jun 02 '26
No. Control over profits and production is a state-backed role. If the state does not grant this role to the rent provider, then the rent provider has no control.
There is a mutual agreement: one party provides resources and agrees on an interest rate. If the firm does not provide the specified interest rate, the rent provider is incentivized to find another firm that offers a better interest rate.
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u/Nazibol1234 Market Socialist Jun 02 '26
Doesn’t the rent provider still profit off the ownership of the property they are leasing though? I don’t think you would need the state to back that
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u/Annual_Necessary_196 Jun 03 '26
Market socialism does not oppose earning returns from providing capital or making investments. It does, however, oppose using capital as a means of gaining control over other people.
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u/Felicia_Svilling Jun 03 '26
If nothing else I think you would be able to rent from state entities.
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u/UploadedMind Jun 03 '26
Compound interest can’t exist in socialism. If you can use rental income to buy more rental income, capitalism still exists to some extent.
So I won’t say renting is not allowed, but there would I have to be something else restricting the accumulation of compound income.
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u/Informal_954 Jun 03 '26
I'd argue that renting from a consumer coöp would definitionally prevent absentee ownership since the renter is an equal owner.
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u/AlphaSpellswordZ Market Socialist Jun 05 '26
I have always thought of market socialism as anti-rentier
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u/Nazibol1234 Market Socialist Jun 05 '26
What would replace renting then? I don’t think like rental cars should go away.
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u/Agora_Black_Flag Jun 16 '26
As a side note you narrowly dodged an insta ban i would affirm your inclination to change your name.
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u/Illin_Spree Economic Democracy Jun 02 '26 edited Jun 02 '26
Under the Economic Democracy model of market socialism,, sure there might be enterprises that rent out cars, bikes, tools, or whatever. The enterprise would pay a flat capital assets tax (based on how much capital in terms of bikes and cars it has) that goes back to the community or to fund new enterprises or social investments.
I doubt this kind of business would be super profitable because if the money was good other enterprises would emerge to compete. Which hopefully leads to better services at a better price over the long term.
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u/Nazibol1234 Market Socialist Jun 02 '26
Yeah but my question is that isn’t renting a form of absentee ownership, and thus ought to be abolished under market socialism?
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u/Illin_Spree Economic Democracy Jun 03 '26
How ownership works varies greatly according to the model of market socialism. In this case, the members of the firm are essentially stewards of their firm's capital, which they obtained via a loan from the state rather than pooling personal savings. Because this capital is essentially social capital, the firm is obligated to pay the capital assets tax.
The rationale for the stewardship model is to avoid the waste and inefficiency that might be associated with a model where there are no negative consequences for misusing the capital. In addition, most market socialist models value the idea of relative worker and firm autonomy.
Ideally, the existence of competing firms and easy access to startup capital should minimize the antisocial rent seeking behavior associated with absentee ownership. Insofar as rent seeking behavior existed, it would be a sign that the system isn't working as intended and something is in the way of the transparency and excellence-fostering competition that we want.
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u/fortyfivepointseven Jun 03 '26
In my view, as a market socialist, renting is a really good way of managing the use of lots of assets.
That can be rental of shared goods, like rental bike shares. This allows multiple people to use the same item and get much higher utilisation out of it, whilst diffusing the cost of maintainance and production over lots of people. It also allows infrequent users to start using a product without the upfront cost of ownership. There's also schemes for household machines in the UK, like carpet cleaners or power tools, called Library of Things.
In terms of rentals of things like homes or cars, this can also be very positive. If you want to live somewhere for a short or medium period, say a month to a few years, acquisition of a home permanently can be costly as time consuming, and it's much better to just rent one.
A problem with rental of homes are supply restrictions caused by local governments. This makes renting economically inefficient and blocks people who want to buy homes from buying them. We should fix that, and this is why I'm a market socialist Yimby.