The Russian Fire Sale and the Rise of the Rentier#
In the 1990s, following the collapse of the Soviet Union, Russia underwent a “shock therapy” privatization that resulted in the largest transfer of public assets to private owners in human history. Ruthless opportunists like Roman Abramovich grabbed mines, oil refineries, and media outlets for pennies on the dollar. Abramovich’s stake in the oil company Sibneft, purchased for roughly $200 million, was later sold back to the government for $13.1 billion. This process created a new class of unimaginably wealthy oligarchs who did not build value through innovation, but captured it through the control of essential resources. This is the essence of “rent”: unearned income.
The Thesis of the Extractive State#
Neoliberalism fetishizes “competitive enterprise” while in reality rewarding “rent-seeking,” a process that turns shared public resources into exclusive private property. By installing “tollbooths” in front of essential services like healthcare, water, and transport, the system allows a parasite class to extract wealth from the public realm, leading to a state of private opulence and public squalor.
The Mechanics of Legalized Theft#
The Definition of the Economic Tollbooth#
Economic “rent” is the “private tax” charged by property owners above and beyond any actual investment or service provided. This is most visible in land ownership, where 70% of the cost of housing in the UK arises from the price of the land rather than the bricks and mortar. When a corporation “invests” in housing without laying a single brick, it is merely buying the right to charge others for access. Neoliberalism has expanded this frontier by privatizing public services built through the taxes and labor of generations, such as energy networks, libraries, and parks. The new owners place a “tollbooth” in front of these services, charging the public an access fee that is bundled with the price of the service.
The Cannibalization of Public Health#
The destruction of NHS dentistry in the UK serves as a perfect case study for the neoliberal “death by a thousand cuts”. Governments systematically underfunded the service, providing only a 1.2% annual real-terms increase when 4% was required to maintain standards. By introducing a contract that paid dentists “units of dental activity” regardless of the cost or skill required, the state ensured that treating the patients with the greatest need became a financial loss. Today, 90% of UK practices refuse new adult NHS patients, leading to “DIY dentistry” where citizens extract their own teeth or use superglue for fillings. This is not an accident of policy; it is a deliberate starvation of a public service to force the public toward private insurance.
The Financialization of Human Life#
“Financialization” describes the intrusion of financial elites and mechanisms into every aspect of life, turning even our social obligations into debt. Interest is the ultimate form of rent—an access fee for money. In the US and UK, students are no longer given grants but are forced into loans, accumulating massive debt that restricts their career choices and funnels their future earnings into the financial sector. This debt flow moves money from the poor to the rich, acting as a primary driver of global inequality. As taxes on the wealthy were slashed, the spending power of the state contracted, yet governments continued to squander billions on corporate bailouts and military “white elephants”.
Synthesis: Consuming What It Celebrates#
Neoliberalism claims to value the entrepreneur, but its economic ethic of rent-seeking actually consumes the very enterprise it celebrates. When society becomes reliant on private corporations to deliver water or electricity, those firms are “too big to fail,” insulating them from the risk that is supposed to be the hallmark of the market. The public is then saddled with the debts of failed “investors” while wealth continues its upward transfer. Since 1989, America’s super-rich have grown $21 trillion richer, while the poorest 50% have become $900 billion poorer. We have been told that a “rising tide lifts all boats,” but in the neoliberal era, the tide has only lifted the yachts.
