Is alimony and pension a form of rent? An answer to a certain docent

In his response to my class analysis of Slovakia, a certain docent has voiced a few issues he perceived. Those include class designation terminology and the use of opinion polling, but most importantly he disagrees with my classification of the intelligentsia and pensioners as rentiers. Here, I will try to deal with this feedback and explain the matter further not just to the docent, but hopefully also to the wider readership.

First of all, I hope the readership will forgive my use of the collective designation of the capitalist sub-classes in the original analysis with the word capital,, which, as the associate professor rightly noted, technically refers to the appropriated Value intended for reinvestment. Money in itself, in fact, truly is not a class, so hopefully everyone understands that I am referring to non-financial and financial capitalists, not non-financial and financial capital as such.

But let's get to the heart of the matter. The respected docent objects to the suggestion of students and the intelligentsia in general, the army, and pensioners being rentiers. His argument is that rentiers are characterized by income based on the rental of property. Well, of course it's true. Rent is really the Value obtained from letting or leasing. Let's assume then, for a moment, that the intelligentsia, the military and pensioners - but let's focus on working youth (15-19 years old, in extreme cases up to 26 years old, when the maintenance obligation of parents ends) and pensioners - do not receive a rent, but a special form of income in the form of alimony or pension. It doesn't matter if it's dark because the sun went down or the light went out - it's dark either way. And so it is with alimony or pension. From the practical point of view, the difference between rent or dividends and alimony is insignificant: (let's say) every month the landlord of the apartment, the shareholder, the pensioner, and the student will have a roof over their head, food and water, as well as spiritual needs taken care of on some level, and in the best case they will have some change left to their name. None of these people created value through own labour, and yet they have appropriated a part of the value created by the labour of others. In this context and from the point of view of class psychology, there is no functional difference between these groups in practical matters of organization. This way of making a living separates these people from the workers, from the collective production process and the politics of working conditions, while reinforcing the individualistic element. Naturally, there is a difference between these groups, which is why I ultimately distinguish between them in this answer and in my original analysis. A pensioner has a different position in the economy than a student, who in turn differs from a landlord. So let's try to take a closer look at their position in the economy.

Let's assume the opposite, that alimony and pension is a form of rent. If rent is defined by letting, we need to find out what retirees and students rent. Rotta and Teixeira (Camb. J. Econ. 2015. 40(4), pp.1185–1201) succinctly state: "Rent is the payment for the use only, not for of ownership, of any monopolised resource not reproducible by labour. ... Unlike interest, rents appear when valueless resources [such as urban and rural land, patented information, licenced knowledge] are traded, leased or licensed.". Students and pensioners have one thing in common - they are not expected to actively participate in the work process. On the contrary, the state guarantees the survival of students through the legislated maintenance obligation on the part of the parents until the completion of their studies; the state guarantees rest for seniors by paying pensions. Of course, the extent to which maintenance obligations or pensions can ensure a (dignified) survival for individuals is up for debate, but in principle these two groups are not expected to work.

So what could be this property that retirees and students rent? Their place in the labour market! Or to be more precise - since workers cannot own a place on the labour market in any sense - they rent out their interest, their potential supply of their own labour force.

The state regulates the labour market in such a way to prioritise people of productive age. In return, it taxes workers in order to pay pensions to seniors, and at the same time the state requires working parents to support their children while those prepare for their future jobs. To work full-time, one is therefore required to pay out living expenses for both the youth and seniors. What is the evidence that, with the assistance of the state, students and pensioners (unsuspectingly, of course) rent out their (potential) place on the labour market?

One of the simple solutions to the crisis, in which capitalism finds itself essentially constantly at this point, is the precarisation of work in general. I am referring to the reduction or stagnation of wages (which is related to flirting with the abolition of the minimum wage), the legalisation of overtime work in various forms, or the weakening of the protection of workers in general. Freelance and part-time work combine these forms of precarisation - if a capitalist wants to save money, they hire a part-time worker or a freelancer. Well, here I finally got to the heart of the matter: Whenever it is necessary to cover poorly paid positions, pensioners and students rush to earn extra money due to low pensions or the poor state of the family budget (and due to the parents' expectations). We could see a hypothetical parallel in a small rentier who has lost a tenant of the land, and so our rentier has to work their own field by themself due to the loss of the rent. The claim that alimony and pension are forms of rent is not unfounded.

However, alimony and pension are not only forms of rent, but also have the function of state-mandated investment by the workers. I.e. it is cheaper to keep the older part of the population at least partially healthy than to deal with them potentially overwhelming of the healthcare system, the maintenance of which is otherwise much more expensive on a short-term scale - and thus the only relevant scale under capitalism. On the contrary, alimony is an investment in the reproduction of the labour force and in maintaining its average qualifications necessary to reproduce the status quo of the national economy. From a global perspective, these are secondary functions of this special kind of rent.

What is relevant, however, is who pays this rent. In both cases, the value comes from workers, but pensions are paid by the state, and alimony is paid indirectly, so to speak in kind, by parents. And therein lies the difference between pensioners' rent (who rely on the welfare state, like the unemployed and others by the way) and students' rent (which therefore experience the class struggle indirectly at best). This difference has significant effects on the class psychology of these groups, which I write more about in the original analysis.

In concluding remarks, our docent blames me for relying on opinion polls etc. and not on the objective class relations within the capitalist system when characterising the class psychology in my original analysis. The docent claims that surveys do not reflect the objective, but subjective and fleeting or superficial views is correct. A closer reading of my analysis should make it clear that it is precisely for this reason that I use surveys primarily to illustrate the implications of class dynamics, not as the basis of the analysis.

I would like to thank the docent for his stimulating response and I hope that I have clarified this part of the class analysis of Slovakia not just for him.

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