Corporate profits increasingly reflect economic rents (v3 draft — evidence rail)

Design-comparison draft, v3 (2026-07-16). Same claim and evidence set as the page of record and the v2 ledger draft. Here the ledger becomes a standing evidence rail: the full roster stays in view while you read, the narrative cites into it by number, and the site sidebar is retired on this page so nothing competes with the proof point.

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 Case, Guided

Start with the three independent measurements. The claim's backbone is that different methods on different data agree. De Loecker, Eeckhout & Unger №1 estimate markups from firm microdata: from ~21% above marginal cost in 1980 to ~61% by 2016, concentrated in the upper tail. Barkai №2 decomposes factor shares: labor and required-return capital shares both fell while the residual pure-profit share rose sharply. Power & Frerick №3 find the same in the government's own tax data: the normal-return share of the corporate tax base fell from ~40% to ~25%. A fourth angle — Furman & Orszag's №4 firm-level return dispersion (90th-percentile returns more than 5× the median, winners persistent) — points the same way.

Then the corroboration from institutions and models. Akcigit & Ates №5 show the trends cohere in a single growth model driven by slowing knowledge diffusion. The IMF's cross-country excess-profit estimates №6 corroborate from an entirely separate dataset, and the 2016 CEA brief №7 is the official-institution confirmation. The remaining supporters explain why 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: 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 it never argues those gains are rents (context, so not a rail card).

The Counter-Case

The main rival reading sits in the rail in red. Crouzet & Eberly №13 show concentration and high measured profits partly reflect intangible capital that standard accounts undercount — productivity-driven concentration in consumer sectors, markup-driven in healthcare, both in high-tech. The superstar-firms literature (Autor et al. 2020 — wired as a challenger on the capital-share page, 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, which is why Mazzucato et al. №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 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 №1№2№3№4 are independent and agree on direction, with official-institution corroboration №6№7. Contested on interpretation: how much is extraction versus mismeasured returns to intangible investment №13 remains an active dispute; the honest reading is "a substantial but not precisely known share is rent." The rail also makes the composition visible: roughly half the supporting cards are direct empirical measurements; the rest are mechanism, synthesis, and framework — corroboration, not independent confirmation.

Why It Matters

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 allowance for corporate equity and cash-flow tax — rather than a land value tax). See economic rent, rent-seeking, and the narrative The Rentier Economy.

Context — Not in the Rail

Adjacent evidence, deliberately excluded from the rail because it is not wired as direct support or challenge: Azar, Schmalz & Tecu on common ownership (a concrete, contested rent-extraction channel), rent-seeking drags growth (the growth cost of the rents documented here), Philippon's finance-efficiency puzzle (the parallel evidence in the financial sector), and Kerspien et al. (a non-market-power account of the same labour-share decline — a reminder it is over-determined).