How the Concept of Unearned Income Was Eliminated from Economics

Executive Summary

  • Unearned income used to be an area of study of economics, but it was eliminated as economics was taken over by elite interest.


The Chicago School of Economics proposes that there is “no free lunch” and that there is not a dollar overpaid, nor a dollar underpaid in economies because of the “efficient market hypothesis.” Michael Hudson describes how the history of economic thought and unearned income has been removed from the study of economics in the following quotation.

“To put the concept of economic rent in perspective, I should point out when I went to get my Ph.D. over a half a century ago, every university offering a graduate economics degree taught the history of economic thought. That has now been erased from the curriculum. People get mathematics instead, so they’re unexposed to the concept of economic rent as unearned income. It’s a concept that has been turned on its head by “free market” ideologues who use “rent-seeking” mainly to characterize government bureaucrats taxing the private sector to enhance their authority – not free lunchers seeking to untax their unearned income. The economy ends up being turned into a collection of tollbooths instead of factories. So, you can think of rent as the “right” or special legal privilege to erect a tollbooth and say, “You can’t get television over your cable channel unless you pay us, and what we charge you is anything we can get from you.” – Michael Hudson / Evonomics

Source: Evonomics

Observe that in the present day, even infrastructure is privatized under Public Private Partnerships which are promoted by major international private banking interests ranging from the EIB to the IMF. There are many discussions around privatizing the US Post Office.