History of Economic Thought. K. Marx's views on ground rent (the most important)

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History of Economic Thought. K. Marx's views on ground rent (the most important)

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40. K. MARX'S VIEWS ON LAND RENT

Views K. Marx on rent theory coincide with the views D. Ricardo. Merit K. Marx consists in recognizing "absolute" rent. “Absolute” rent refers to rent from lands of worse quality (fertility) or more distant from markets. Developing the Ricardian theory of rent, K. Marx proves the existence, along with differential rent associated with differences in fertility and location of plots, also absolute rent, due to the very fact of land ownership, representing by and large a monopoly.

The theory of rent by K. Marx is as follows:

1) there is a “differential rent” that follows, like D. Ricardo, from differences in fertility and location of land plots of various categories. If the price of production of an individual capitalist is lower than the average price of production of a product, then he will receive a surplus product, which in magnitude will be higher than the average norm, if we assume demand high enough for this capitalist to be able to enter the market with his goods;

2) there may be "absolute rent" - something that is absent from D. Ricardo, - due to the fact that agriculture deals with capital, the organic structure of which is below the social average. As a result, the “value” of agricultural products exceeds their “production price.” In a normal case, the flow of capital would cause the rate of profit in agriculture to fall to the average level. But since there is private ownership of land, the landowner has the opportunity to burden the tenant with an additional rent payment equivalent to the excess profits received in agriculture.

K. Marx carefully avoids claiming that the organic composition of capital in agriculture is indeed below average. This, in his opinion, "is a question that only statistics can solve." If this is not the case, then absolute rent falls away and all rent remains differential.

Marxist theory of absolute rent has no force outside the framework of his theory of surplus value and the resulting need for the transformation of value into price. Therefore, it is necessary to note only one conclusion arising from this theory: absolute rent is negative if the agricultural sector is characterized by a higher capital intensity compared to other sectors of the economy, as was actually the case in the USA and Great Britain after 1930.

Discussion differential rent у K. Marx more detailed than D. Ricardo, but less comprehensive.

Marx didn't understand the theory D. Ricardo, according to which there must be cultivated land for which rent is not charged. In other words, he did not understand that there is a limit to both intensive and extensive farming. This is a serious misunderstanding if we remember that the introduced D. Ricardo the concept of marginal intensity became the beginning of all subsequent marginalist thought.

Author: Tatarnikov E.A.

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