Rentier State

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The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

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.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
The status of the Baloch, Pakhtuns and Mohajirs has depended on the political and economic contracts that they have brokered or broken with the rentier state.
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