Tuesday's Top 10 with NZ Mint: 'Rentier capitalism, takers and makers'; Delaying, denying and distracting on Auckland property; Cyprus' template for Europe; Dilbert

Here's my Top 10 links from around the Internet at 10 am in association with NZ Mint.

As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

See all previous Top 10s here.

My must read today is #1 on the idea of 'rentiers' and 'productive capitalists'. It's another way of looking at the issues.

1. Rentier capitalism - Michael Lind over at Salon has written this apparently old-fashioned piece about rentier capitalism where he says the real “takers” in America are not poor people dependent on welfare, but the unproductive, rent-extracting rich. HT JH in yesterday's Top 10.

This is an explanation that we used to see a lot of in the late 1800s and early 1900s. 

Not surprisingly, it coincided with the rise of Marxism and various labour movements.

It seems there are too many 'takers' and not enough 'makers'.

It's an interesting explanation for New Zealand. 

Our economic strategy seems to be for everyone to be a landlord. But who will be the tenant? And how will they pay?

Here's Lind:

If we want a technology-driven, highly productive economy, we should encourage profit-making productive enterprises while cracking down on rent-extracting monopolies, whether they are natural products of geography and geology (real estate and energy and energy and mineral deposits) or artificial (chartered banks, professional licensing associations, labor unions, patents and copyrights).

This is a valid distinction between “makers” and “takers.” Unfortunately, with the exception of some leftist and liberal economic thinkers who distinguish “rentier capitalism” or “financial capitalism” from “industrial capitalism,” conventional political discourse doesn’t distinguish among profit-earning “makers” and rent-extracting “takers.” Many progressives and populists indiscriminately denounce “big business” and “the corporations” as though a productive consumer electronics manufacturer were no different than a company that monopolizes the tolls from a privatized municipal parking meter system.

At the same time, the center-left, whose upscale supporters tend to be credentialed upper-middle-class professionals, tend to ignore the antisocial aspects of the rent-extracting schemes of the professional guilds — medicine, law and the professoriate — as well as of their elite accomplices, the credential-granting universities.

On the right, the greatest triumph of the rentier interests has been to redefine “capitalist” to mean, not productive entrepreneur or successful industrial company executive, but “anybody who makes money” — a category that includes not only investors in productive enterprises but also rentiers and a third category of speculators in unproductive assets (Picasso paintings and Persian rugs, as opposed to machine tool factories).

In today’s rentier-friendly conservative ideology, somebody who makes payday loans at usurious interest rates, gouges businesses with high insurance rates, or gets paid tolls from a privatized toll road is as much a “maker” and an “entrepreneur” and a “capitalist” as someone who puts together a team of inventors, engineers, workers and investors to apply 3-D printing to printing replacement body parts. All money-making enterprises are supposed to be equally productive and socially useful, for no other reason than they make somebody rich.

2. America's dying shopping centres - Here's the FT with a useful look at the problems in America's retail economy.

Robin Amjadi has hung up “Clearance Sale” signs at her store, Design Jewelry – not because she is closing, but because it is the only way to get visitors to stop in. Across the corridor, the shutters have gone up over a boutique by designer Betsey Johnson, and a fancy United Colors of Benetton. The lighting is meant to simulate shopping under the stars, but without open storefronts, the effect is just gloomy.

3. Deny, delay, distract - The National Government's decision not to approve the Auckland Unitary Plan and instead insist on three years of consultation is causing some to wonder if the government is serious about increasing housing supply.

The NZ Herald reports the Employers and Manufacturers Association wants the government to get things moving much more quickly.

Yet again a government governs in the interests of landowners, the old and the rich at the expense of the young and the poor. And the future.

4. 'The dangerous drift towards World War' - Ambrose Evans Pritchard is very worried again over at The Telegraph.

There is no doubt that Japan will fight. "We simply cannot tolerate any challenge now, or in the future. No nation should underestimate the firmness of our resolve," said Shinzo Abe, the hawkish premier bent on national revival.

After talking to Japanese officials in Tokyo over the last few days, I have the strong impression not only that they are ready to fight, but also that they expect to win, and furthermore that conflict may come at any moment.

"They are sending ships and even aircraft into our territory every day. It is intense provocation. We're making every effort not to be provoked but they are using fire-control radar. This is one step away from conflict and we are very worried," said a top government official.

5. The problem with Cyprus - Roger Bootle writes at The Telegraph about how Cyprus' problems are really just symptomatic of the problems in Europe.

Even if a deal over Cyprus is patched together without any haircuts imposed on depositors, and a fortiori if haircuts are imposed, the damage will have been done. EU authorities can blether on as much as they like about Cyprus being a special case with no implications elsewhere but people will not believe this.

Whenever and wherever the euro crisis reignites, there will be a flight of deposits out of the peripheral countries’ banks into Germany, in a repeat of the phenomenon witnessed last year, but on a larger scale. This would present the German authorities with a painful dilemma.

Could Cyprus be another Lehman’s? Or is it another Bear Stearns? The euro-zone authorities must tread warily. Intriguingly, this crisis has occurred while a much larger one continues to simmer further west. And Italy still doesn’t have a government.

6. Eurozone breakup edges ever closer - So says the FT's Wolfgang Munchau.

What happened last week is a fitting example of European political leaders, in a most unprofessional pursuit of narrow national interests, failing to defend the common good. The main risk I want to emphasise is, however, not a big accident. It might happen, of course. But I suspect the single biggest risk ultimately stems from the eurozone’s repeated policy errors. Their effect is slow but cumulative. Of those, the most damaging has been the policy of asymmetric adjustment through austerity.

Banks in Cyprus are falling now because the Greek state and Greek banks fell earlier, and because the eurozone forced a private-sector involvement. In Italy, it was also austerity that turned a recession into a depression. That, in turn, transformed an anti-euro, anti-establishment protest movement into the single largest political party in the Italian parliament at the last elections. There is a good chance that its leader, Beppe Grillo, could end up with an absolute majority if Italy were to hold another round of elections later this year.

7. Ripping off consumers - Here's Bryan Leyland at Stuff explaining how New Zealand's electricity consumers have been ripped off for years.

As a result of this flawed market and the associated "reforms" I - and others - have calculated that consumers have paid more than $4 billion more for electricity. On several occasions it has been demonstrated that the generators have manipulated the market without breaking the rules.

As a result, the market is seriously flawed and rips off the consumer. Many of the rules and regulations governing the industry have perverse outcomes.

8. The problem in Britatin - This 'recovery' in Britain is now worse than the Depression of the 1930s. Here's 6 charts showing that.

9. A template for the rest of Europe? - So says the Eurogroup President in this BusinessInsider piece.

10. Totally Stephen Colbert on the madness in North Korea.