Rentier State

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Rentier State


an imperialist usurer state that enriches itself by exporting capital to other states, primarily those that are economically underdeveloped and dependent. The financial oligarchy of the rentier state appropriates a considerable portion of the national income of debtor states in the form of profits (interest and dividends) from direct capital investments, coercive loans, insurance, transport, and other services that it provides to these countries. The enrichment of the financial oligarchy of the rentier state at the expense of the peoples of other countries is one of the causes of the intensification of the contradictions of monopoly capitalism. The capitalized surplus value that monopolists of rentier states obtain in their own countries is used by them to extract huge profits in the debtor states; this surplus value is also a means of appropriating the result of the unpaid labor of the workers of these countries. “The rentier state is a state of parasitic, decaying capitalism” (V. I. Lenin, Poln. sobr. soch., 5th ed., vol. 27, p. 399).

Before World War I (1914–18) the major rentier states were Great Britain, France, and Germany. After World War II (1939–45) the USA became the main international exploiter and chief rentier state. At the end of the 1960’s the USA’s capital investments abroad exceeded the total foreign investments of all other imperialist states. Great Britain and France continue to be rentier states, as do Belgium, Ireland, the Netherlands, Portugal, Switzerland, and Sweden. The Federal Republic of Germany and Italy are in the process of becoming rentier states.

The further deepening of the general crisis of capitalism, the downfall of the imperialist colonial system, and the transformation of the world socialist system into a decisive factor in social development have led to the weakening of the positions and influence of rentier states because the territorial sphere for the application of capital has narrowed. First, the rentier states lost part of their foreign capital as a result of the nationalization of foreign property in socialist countries. Second, the opportunity for new capital investments disappeared in the countries that broke away from the world capitalist system. Third, because of the growth and success of the world socialist system, the rentier states lost their monopoly in advancing loans to economically underdeveloped countries. Under these new conditions rentier states are being forced to reject methods of direct robbery of economically underdeveloped countries and to make certain concessions, such as the lowering of interest rates when advancing loans and agreements to impose partial limitations on the export of profit. In their efforts to keep these countries within the sphere of imperialist exploitation and to consolidate their unequal position in terms of the international capitalist division of labor, rentier states are employing a more subtle form of colonialism. Bourgeois economists attempt to characterize the relations between rentier states and debtor states as relations of equal cooperation. In reality, however, the rentier states obtain much greater return from these countries than they invest in them. For example, the USA’s foreign investments between 1950 and 1967 amounted to $11 billion, while the transfer of interest and dividends totaled $18 billion.

After World War II there was a significant increase in the capital investments of rentier states in developed capitalist countries. The primary incentive for this type of capital investment is also the pursuit of profit. Along with economic reasons, political motives also play an important role in the export of capital, especially when it is exported by the state. Thus, after World War II the USA advanced huge loans to its allies in various military-political blocs in order to strengthen these blocs and increase American influence in them.


Lenin. V. I. “Imperializm Kak Vysshaia stadiia Kapitalizma.” Poln. sobr. soch., 5th ed., vol. 27. Pages 396–406.


References in periodicals archive ?
Citing the centrality of oil rentier states to oil politics--oil-producing countries whose economic and political survival heavily relies on oil resources--Qasem describes the ways in which oil independence has affected the internal and external security strategies of Saudi Arabia, the quintessential oil rentier state.
Startups will lead the transition in economic development for most countries, to go from rentier states to more diversified, self-sustainable economies.
Schwarz, Rolf, "The Political Economy of State Formation in the Arab Middle East: Rentier States, Economic Reform and Democratization", Review of International Political Economy, Cilt 15, No.
This book calls our attention to the strategic interaction inherent in all overseas military basing decisions and shows how the internal politics of Gulf states--which, as rentier states, often confront quite delicate tradeoffs in their dealings with civil society--play vital roles in determining the circumstances under which American military forces will be hosted.
Bombing a poor country's infrastructure, murdering its defenseless civilians, blockading its ports, and hobbling its struggling economy are hardly ways of ensuring security for the Arab rentier states.
It may well be fair to assert that few, if any, Arab governments facilitated democratisation or encouraged the creation of wealth though rentier states in the Gulf region bucked the trend.
While doing so, however, she left behind a catalogue of academic jargon about the US policy, tribal states, rentier states, and legal reform that to some extent baffle the reader.
As rentier states, the Persian Gulf monarchies rely on great powers to fulfill security imperatives, making them unlikely to abandon their partnerships with the United States.
Group formation refers to the fact that in many rentier states (where oil and natural gas constitute over 40 percent of government revenues), there is no bourgeoisie, political society, or media independent of the government.
In response to the idea that exports to China are creating rentier states and deflating local manufacturing and refining, China says that it will help support local businesses and manufacturing (in part from the new loans it is offering).
These so-called rentier states do not levy personal income taxes on their populations, thus removing a key measure of political accountability.
Hossein Mahdavy, "The Patterns and Problems of Economic Development in Rentier States," in M.