Corporate profits increasingly reflect economic rents (v2 draft — evidence ledger)
Design-comparison draft: the corporate-rents claim page restructured around a single canonical Evidence Ledger — same claim, same evidence set as the original.
Design-comparison draft (2026-07-15). Same claim and same evidence set as the page of record, restructured so every wired source appears exactly once in one canonical ledger. Not the page of record.
At a glance — The rise in US corporate profits above competitive returns is real and abnormal across independent methods, but how much of it is genuine economic rent rather than mismeasured returns to intangible investment remains genuinely contested. Evidence ledger: 12 supporting (6 peer-reviewed journal · 2 official-institution · 2 university-press synthesis · 2 working/conference papers) · 2 challenging (1 working paper · 1 official-institution note) — all 14 enumerated in the ledger below. Strongest support: De Loecker, Eeckhout & Unger (2020) — average US markups rose from about 21% to 61% over marginal cost between 1980 and 2016. Strongest counter: Crouzet & Eberly (2019) — much measured profit reflects undercounted intangible capital, not rent.
The Claim
An increasing share of corporate profit in the United States (and, more weakly, other developed economies) is economic rent — returns above what is needed to compensate capital and effort in a competitive market — rather than the ordinary reward for investment. This matters for the Georgist framework because it extends the classical rent analysis from land to other non-reproducible positions: market power, network position, regulatory protection, and control of scarce intangibles.
The Evidence Ledger
Every source wired to this claim, strongest first. Challenging evidence sits in the same table — the count in the banner is this table, nothing more, nothing less.
| # | Study | Design & venue | Key finding | Direction |
|---|---|---|---|---|
| 1 | De Loecker, Eeckhout & Unger (2020) | Markup estimation, firm microdata · Quarterly Journal of Economics | Average US markups rose from ~21% above marginal cost in 1980 to ~61% by 2016, concentrated in the upper tail of firms | Supports (core) |
| 2 | Barkai (2020) | Factor-share decomposition · Journal of Finance | Labor and required-return capital shares both fell 1984–2014 while the residual pure-profit share rose sharply — isolating returns above the competitive cost of capital | Supports (core) |
| 3 | Power & Frerick (2016) | Tax-return microdata decomposition · National Tax Journal / Treasury OTA | The normal (risk-free) return share of the US corporate tax base fell from ~40% (1992–2002) to ~25% (2003–2013) — excess returns rising toward three-quarters of the base | Supports |
| 4 | Furman & Orszag (2015) | Firm-level returns dispersion · conference paper | Returns on invested capital at the 90th-percentile US firm grew to more than 5× the median, with winners persistent over time — rents accruing to specific firms | Supports |
| 5 | Akcigit & Ates (2021) | Endogenous-growth model + ten stylized facts · AEJ: Macroeconomics | Rising concentration, markups, and profits alongside falling labor share unified by slowing knowledge diffusion from frontier to laggard firms | Supports |
| 6 | Hebous, Prihardini & Vernon (2022) | Cross-country excess-profit estimates · IMF working paper | Multinationals' profits above a normal-return allowance are large and concentrated in investment hubs (median ~1.9% of GDP there vs ~0.01% in the median low-income country) | Supports |
| 7 | Council of Economic Advisers (2016) | Official issue brief · US CEA | Rising concentration, widening returns dispersion, and falling dynamism documented by the US government itself | Supports |
| 8 | Zingales (2017) | Political-economy analysis · Journal of Economic Perspectives | The "Medici vicious circle": market power buys political power that entrenches market power — the mechanism that makes rents persistent | Supports (mechanism) |
| 9 | Philippon (2019) | Book synthesis · Harvard University Press | US markets became measurably less competitive than European ones via concentration, lobbying, and regulatory barriers — locating the rents in political economy | Supports (synthesis) |
| 10 | Eeckhout (2021) | Book synthesis · Princeton University Press | Draws the markup evidence into a general account of market power raising profits while suppressing wages | Supports (synthesis) |
| 11 | Mazzucato, Ryan-Collins & Gouzoulis (2023) | Conceptual mapping · Cambridge Journal of Economics | Treats intangible/platform returns as the modern frontier of rent analysis — returns to scarcity and position, not marginal production | Supports (framework) |
| 12 | Korinek & Ng (2019) | Theoretical model · working paper | Digital innovation — fixed cost, near-zero marginal cost — lets a few firms capture rents, raising markups and lowering the labour share | Supports (model) |
| 13 | Crouzet & Eberly (2019) | Sector-level decomposition · NBER WP / Jackson Hole | Concentration and high measured profits partly reflect intangible capital standard accounts undercount — in some sectors the "profit" is a return on real investment | Challenges (interpretation) |
| 14 | Bouras, Bustamante, Guo & Short (2023) | Staff analytical note · Bank of Canada | Canadian markup growth explained less than one-tenth of 2021 inflation and was near zero or negative by 2022 — a caution against the "greedflation" over-extension of this claim | Challenges (scope cap) |
How the Evidence Fits Together
Three independent methodologies converge on the same direction, and that convergence — not any single study — is the claim's backbone: markups estimated from firm microdata (ledger #1), the pure-profit share isolated by decomposing factor shares against the cost of capital (#2, #3), and firm-level return dispersion (#4). Akcigit & Ates (#5) show the trends cohere in a single growth model; the IMF's cross-country estimates (#6) corroborate from an entirely separate dataset; and the CEA brief (#7) is the official-institution confirmation. The remaining supporters explain why the rents persist and where they now live: political entrenchment (#8, #9), the wage side (#10), and the intangible/platform frontier (#11, #12).
A rare admission-against-interest rides alongside the academic evidence: OpenAI's own 2026 policy paper concedes "a risk that the economic gains concentrate within a small number of firms like OpenAI" — corroborating context for the concentration premise, though the document never argues those gains are rents (context, so not a ledger row).
The Counter-Case
The main rival reading (ledger #13) is that measured profits reward genuine efficiency and investment rather than rent: Crouzet & Eberly find productivity-driven concentration in consumer sectors, markup-driven concentration in healthcare, and both in high-tech — so in some sectors the "profit" is a return on real, if hard-to-measure, intangible investment. The superstar-firms literature (Autor et al. 2020 — wired as a challenger on the capital-share ledger, cited here as context) similarly attributes rising concentration partly to winner-take-most competition among unusually productive firms.
These are not fully exculpatory: rents on intangibles and network positions are still returns to scarcity and position rather than to marginal production, which is why parts of this literature (ledger #11) treat them as the modern frontier of rent analysis. But they mean the size of the pure-rent component is genuinely contested.
The second challenger (#14) is a scope cap, not a rebuttal: the Bank of Canada's timing test warns against stretching this page's long-run claim into a "greedflation" story about any particular price surge.
Strength of Evidence
Moderate–strong that the profit rise is real and abnormal — the markup, pure-profit, and dispersion methodologies (ledger #1–4) are independent and agree on direction, with official-institution corroboration (#6–7). Contested on interpretation: how much is extraction (market power, regulatory capture, network monopoly) versus mismeasured returns to intangible investment (#13) remains an active dispute, and the honest reading is "a substantial but not precisely known share is rent." The ledger also makes the composition visible: roughly half the supporting rows are direct empirical measurements; the rest are mechanism, synthesis, and framework — corroboration, not independent confirmation.
Relation to the Georgist Case
Henry George's analysis located unearned income in land; the modern rent literature finds structurally similar unearned income in corporate position. The policy translation is the same in spirit — tax the rent, not the production — though instruments differ (competition policy, spectrum/resource auctions, platform regulation, and rent-focused taxation — see the allowance for corporate equity and cash-flow tax designs — rather than a land value tax). See economic rent, rent-seeking, and the narrative The Rentier Economy.
See Also
Context and adjacent evidence — deliberately not in the ledger because none of it is wired as direct support or challenge:
- Azar, Schmalz & Tecu: common ownership and airline prices — a concrete (and genuinely contested) rent-extraction channel
- Rent-seeking drags economic growth — the growth cost of the rents documented here
- Philippon (2015): the finance-efficiency puzzle — the parallel evidence in the financial sector
- Kerspien, Madsen & Strulik (2025) — a non-market-power account of the same labour-share decline (a reminder that the falling labour share is over-determined)
- Superstar Firms · Economic Rent · Rent-Seeking · The Rentier Economy · Most of the modern rise in the capital share is land, not capital
Sources
Every ledger row, in ledger order. Full bibliographic detail and quoted findings live on each linked research page.
- Jan De Loecker, Jan Eeckhout & Gabriel Unger (2020), "The Rise of Market Power and the Macroeconomic Implications," Quarterly Journal of Economics 135(2) — used for ledger #1 (the markup rise). wiki summary · DOI
- Simcha Barkai (2020), "Declining Labor and Capital Shares," The Journal of Finance 75(5) — used for ledger #2 (the pure-profit share). wiki summary · DOI
- Laura Power & Austin Frerick (2016), "Have Excess Returns to Corporations Been Increasing Over Time?", National Tax Journal / Treasury OTA WP 111 — used for ledger #3 (normal vs excess returns in tax data; magnitudes verified against the Treasury PDF abstract). wiki summary · Treasury PDF
- Jason Furman & Peter Orszag (2015), "A Firm-Level Perspective on the Role of Rents in the Rise in Inequality," Columbia "A Just Society" conference — used for ledger #4 (ROIC dispersion). wiki summary · PDF
- Ufuk Akcigit & Sina T. Ates (2021), "Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory," American Economic Journal: Macroeconomics 13(1) — used for ledger #5 (the unifying dynamism account). wiki summary
- Shafik Hebous, Dinar Prihardini & Nate Vernon (2022), "Excess Profit Taxes: Historical Perspective and Contemporary Relevance," IMF Working Paper WP/22/187 — used for ledger #6 (cross-country excess-profit estimates). wiki summary
- Council of Economic Advisers (2016), "Benefits of Competition and Indicators of Market Power," issue brief — used for ledger #7 (official corroboration). wiki summary
- Luigi Zingales (2017), "Towards a Political Theory of the Firm," Journal of Economic Perspectives 31(3) — used for ledger #8 (the Medici vicious circle). wiki summary
- Thomas Philippon (2019), The Great Reversal: How America Gave Up on Free Markets, Harvard University Press — used for ledger #9 (the US–Europe competition divergence). wiki summary
- Jan Eeckhout (2021), The Profit Paradox, Princeton University Press — used for ledger #10 (the market-power synthesis). wiki summary
- Mariana Mazzucato, Josh Ryan-Collins & Giorgos Gouzoulis (2023), "Mapping Modern Economic Rents," Cambridge Journal of Economics — used for ledger #11 (the modern rent-analysis frontier). wiki summary · UCL
- Anton Korinek & Ding Xuan Ng (2019), "Digitization and the Macro-Economics of Superstars," working paper — used for ledger #12 (the digital-superstars rent model). wiki summary
- Nicolas Crouzet & Janice Eberly (2019), "Understanding Weak Capital Investment: the Role of Market Concentration and Intangibles," NBER WP 25869 / Jackson Hole — used for ledger #13 (the intangibles counter-interpretation). wiki summary · NBER
- Panagiotis Bouras, Christian Bustamante, Xing Guo & Jacob Short (2023), "The Contribution of Firm Profits to the Recent Rise in Inflation," Bank of Canada Staff Analytical Note 2023-12 — used for ledger #14 (the inflation-timing scope cap). wiki summary