Donald Trump and his family, according to the careful reporting of David Kirkpatrick at the New Yorker, are reported to have amassed $4 billion since the start of his presidency through a dizzying panoply of schemes, most of which appear to be designed to pump up the value of his assets (crypto holdings, his golf clubs and hotels, and so on). In addition, investigators have alleged that Trump has used his position to manipulate the stock market to enrich himself, that he has seized massive amounts of congressionally appropriated money, and that he seems intent on converting the Internal Revenue Service into an instrument of self-enrichment. All of these alleged methods of wealth extraction depend directly on Trump’s political position and exemplify an intensification of the widely documented phenomenon of politically engineered asset-price inflation that has been so marked over the last couple of decades.

For the economist Stephen Maher, however, there is not much to see here. In a critique of my recent Sidecar blog post entitled “No Substitute,” he states that “the notion that productive investment is giving way to unproductive speculation” is a “left shibboleth,” of which he offers both a conceptual and an empirical critique. Conceptually, says Maher, “Rent is a deduction from the total output produced across the economy,” and therefore “it cannot expand without limit,” although what exactly this limit is, and how we would know it had been reached, is left undisclosed. Empirically, Maher adduces the fact that major tech companies invest heavily in new technologies and have earned mostly the average rate of profit and therefore are not rentiers.

This critique mis-specifies the view it purports to engage. Indeed, it neglects to even mention the central concept upon which that view is based: political capitalism. The political capitalism thesis is quite different from what Maher terms variously neofeudalism, rentier capitalism, or monopoly capitalism. Pace Maher, it fully acknowledges that Big Tech has been competitive and has engaged in investment. As Robert Brenner and I put the point in “The Long Downturn and its Political Results”: “Certainly, the big tech companies would like to be monopolists and they have gone to great lengths to secure direct state support for their effort. But the fact remains that the enterprises of the tech sector continue to be subject to the competitive constraint, dependent on investment and highly rivalrous terms of technical advance.” The point is rather that intertwined with the productive economy, and dragging it down, is an unproductive predatory and extractive sector in which rates of return are based primarily on political relationships rather than productive investment. Does Maher really deny this? It is difficult to see on what basis he would do so.

What of Maher’s conceptual critique? Maher says that rents can only exist through the establishment of “market advantages that can’t be competed away.” But since there is competition, for Maher, it therefore cannot be the case that rentier activities are consistently more profitable than productive activities because, if they were, capital would flood into the rentier sector, and this would equalize the returns across the two through competition. In other words, over the medium term rents should disappear.

The central problem with this critique is that it presumes that rents are distorted market relationships. Because this is Maher’s starting point, he can only conceive of them as a manifestation of monopoly power. (This is one of the reasons why he mistakenly conflates the thesis of political capitalism with that of monopoly capitalism.) But there are many forms of rent that have nothing to do with markets and therefore do not depend on monopolies.

One obvious example of this is the direct appropriation of tax revenue for private purposes, examples of which are all over the headlines. The Trump administration, the Trump family, and politically connected insiders allegedly do not use market power to charge higher prices for their products than they otherwise would be able to do and thereby collect a “monopoly rent.” Instead, according to extensive reporting, most recently by David Kirkpatrick in the New Yorker, they funnel funds directly from the Treasury to themselves and their group. Decisive for the Trump group is political power, not a favorable market position, nor even ownership. Although this is certainly not the only instance of political capitalism, and the true economic significance of Trumpian plunder awaits empirical study, it has the advantage of showing the mechanism at work and the need for new conceptual tools to understand it. Maher insists, if his title is to be taken seriously, that we live in the age of “hypercapitalism,” a “strong, profitable, dynamic, and competitive system.” Plus ça change, plus c’est la même chose. Someone really should tell the growth rates outside of tech the good news.