Re: Some questions

[Doug Henwood <dhenwood@xxxxxxxxx>]

I've often heard of the rentier-industrialist split, but in fact one sees
almost no objection from industry big or small to the current
near-universal low-inflation policies in the OECD, and no interest in
demand stimulus. Is it because every capitalist yearns to be a rentier?

Doug

Doug Henwood [dhenwood@xxxxxxxxx]
Left Business Observer
212-874-4020


On Thu, 20 Jan 1994, Paul Davidson wrote:

> FROM:  Paul Davidson
> "      Economics Department
> "      523 Stokely Management Center     974-4221
> dear Doug: Sorry I have not responded to this very good query before -- but I
> had some computer problems. The rentier and profit recipients can be at odds wi
> th each other. Sidney Weintraub went into great detail on this in his 1958 book
> AN APPROACH TO THE THEORY OF INCOME DISTRIBUTION. In 1964 Davidson and
> Smolensky touched on this in Chapter 10 of our book AGGREBATE SUPPLY AND DEMAND
> ANALYSIS. One essential difference is that since rentiers are fixed income reci
> pients (receiving the fixed money costs of business as income) they do not
> want to see a  either a wag-price inflation or a profit-price inflation. The fo
> rmer erodes their income while reducing the real burden of fixed costs on
> profit recipients, while the latter swells profits while again reducing the
> real fixed costs of the firm. Either type of inflation puts the interest of
> rentiers in conflict with the interest of profit recipients. Paul Davidson
>
> Have a good day!