If only Corbyn talked about RENTS instead of waffling on about PROFITS

Corbyn was on the telly just now, muttering about the "obscene profits" made by privatised utilities. By doing so he misses the point and lays himself open to the knee-jerk Tory response, for example from The Telegraph:

Jeremy Corbyn will take Britain back to the 1970s by nationalising industries, forcing wage caps on businesses and giving huge power to the unions if he gets into power, a leaked copy of Labour's draft manifesto reveals.

The 43-page document, obtained by the Daily Telegraph, shows that Mr Corbyn plans to nationalise energy, rail and mail and will introduce a 20:1 pay cap for businesses...

Nationalising "industries" generally and the government running them is always a disaster, of course, we know that.

There's nothing wrong with a genuine business making large profits. If VW make a million good quality, affordable family cars and make a thousand pounds profit from each one, good luck to them. Nobody's forced to buy a new VW, you can buy a second hand one, buy from another manufacturer, or arrange your life so you don't need (another) car etc. If VW fuck up with the 'emissions scandal' (a storm in a teacup if you ask me), they make a loss. Tough.

Punishing successful businesses regardless of how they earn their money is a stupid idea anyway, or else we'd punish VW (or their British equivalent) for making good cars and reward them for the 'emissions scandal'.

But if you think about the list of things he'd like to (re)nationalise*, you'll realise that the bulk of their so-called profits are not profits in the economic sense or the cost-accounting sense. They are "rents".

Rents are notoriously difficult to define, but you know 'em when you see 'em.

1. You are stuck with one water supplier, you have to use their services (although this is sensibly alleviated with price caps). In the absence of these, they could double or treble water and sewage charges and 99% of people would just pay up.

2. You can choose from a small number of gas and electricity suppliers, they themselves don't make super-profits and shouldn't be the target here but the people selling oil, coal and gas to the power stations are very much collecting rent (natural resources). The National Grid on the other hand really does have a monopoly as between power stations and end users, it only exists because the UK government set it up back in the 1920s and 1930s, no private enterprise could ever have achieved that (the biggest problem is getting rights of way over land, not the technical stuff).

3. If you work in any larger town, you have to get in by public transport, they can set their season ticket prices at a large chunk of the extra salary you can earn by working in town and not stacking shelves in the village shop.

4. The Royal Mail (used to) have a monopoly on posting letters and unless you are couriering urgent stuff a short distance, they still do in practical terms. I'm all in favour of bottom-up privatisation i.e. allowing private businesses to deliver letters, but a top-down privatisation i.e. sell off of The Royal Mail with all its criminally undervalued land and buildings merely to generate fees for merchant bankers was a straightforward scam.

5. Urban land is the largest chunk of rent in any modern economy, Corbyn gave that less importance**, but we know that banks get most of their income by acting as debt collectors for land sellers, so they are just collecting rent. This is why the largest salaries and largest salary discrepancies are in businesses that primarily collect rent (banks, insurance and privatised utilities etc). If VW are happy to pay their chairman ten million quid a year, good luck to them, that's a spat between bosses and shareholders and doesn't affect the price of VW cars or even the wages of VW workers.

* Of course, most of our so-called privatised utilities are still state-owned. The German national railway owns our railways, the Spanish government owns our airports, the French national electricity company owns our water companies etc, heck knows what the Norwegian Sovereign Wealth Fund and the Arabs own.

** The "rents" which Corbyn would never mention are the obscene salaries which a few public sector fat cats pay themselves, as well as everybody working for a government department that has no reason to exist in the first place, but that's Socialists for you.

There are endless examples of rents and rent-seeking, they add up to about 50% of the whole economy, so he could double most people's disposable income if he either eliminated them or taxed and redistributed them (preferably by reducing or eliminating taxes on earnings and output).

Here endeth today's rant.