Ricardo and the farmers

Bengt-Arne Wickström ()
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Bengt-Arne Wickström: Andrássy-Universität

Constitutional Political Economy, 2024, vol. 35, issue 1, No 7, 149 pages

Abstract: Abstract It is investigated under what conditions rents can be won through interference in the market through price subsidies. It is shown that owners of factors of production have an interest in price subsidies in the product market (which they can motivate with reference to “consumer interests”) only if the factor supply is not perfectly price elastic, the incentive for rent-seeking increasing as the price elasticity of supply decreases. It is further demonstrated that this can occur in the case of differential rents. Since differential rents are found primarily in the use of land, land owners, i.e. farmers, should have especially high incentives to engage in rent-seeking activities.

Keywords: Rent creation; Rent seeking; Differential rents; Lobbying; Factor ownership; Competitive markets (search for similar items in EconPapers)
JEL-codes: D40 D72 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10602-023-09404-1

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