A Reformulated Version of Marx’s Theory of Ground Rent Shows That There Cannot Be Any Absolute Rent

Deepankar Basu

Review of Radical Political Economics, 2022, vol. 54, issue 4, 542-567

Abstract: This article develops a simple theoretical model to analyze Marx’s theory of ground rent. Using the model, I demonstrate two important results. First, if we take capital outlay as exogenously given, then total ground rent can be decomposed into the three components: differential rent of the first variety (DRI), differential rent of the second variety (DRII), and absolute rent (AR). Second, if we let the amount of capital outlay on each plot of land be determined by the profit-maximizing behavior of capitalist farmers, then absolute rent becomes zero. Neither the low organic composition of capital nor the monopoly power of the class of landlords can generate any absolute rent. I conclude that under reasonable behavioral assumptions about landlords and capitalist farmers, there will be no absolute rent in a capitalist economy. JEL Classification: B51

Keywords: ground rent; differential rent; absolute rent (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/04866134221115905 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:54:y:2022:i:4:p:542-567

DOI: 10.1177/04866134221115905

Access Statistics for this article

More articles in Review of Radical Political Economics from Union for Radical Political Economics
Bibliographic data for series maintained by SAGE Publications ().