Re: Smith: ground rents and land rents

On Fri, 19 Aug 2005 03:45:46 GMT, Les Cargill <lNOcargill@xxxxxxxxxxx>
wrote:

>royls@xxxxxxxxx wrote:
>
>> On 18 Aug 2005 17:13:53 -0700, "ruetheday@xxxxxxxxxx"
>> <ruetheday@xxxxxxxxxx> wrote:
>>
>>>>When Adam Smith wrote, "Both ground-rents and the ordinary rent of land are
>>>>a species of revenue which the owner, in many cases, enjoys without any care
>>>>or attention of his own."
>>>>what precisely did he mean by "ground-rents" and "ordinary rent of land."?
>>>
>>>"Ground rent" means the land rent. The "ordinary rent of land" means
>>>rent in the vernacular sense which includes improvements.
>>
>> IMO the ordinary rent of land would be rent received from tenants in
>> return for use of the land net of improvements, while ground rent is
>> the economic rent of the land, which can also be captured by the owner
>> directly -- e.g., a plantation owner can collect the ground rent by
>> employing an overseer to run his plantation rather than letting the
>> land to tenants.
>
>I am skeptical of just how helpful this is in enabling those who do
>not understand rent, to understand rent.

I was just trying to clarify what (I suppose) Smith meant.

>If I may, rent is simply gain from sources other than those
>which can be commonly agreed on as "earned".

IMO that is highly misleading. Lottery winnings are not rent.
Inheritance is not rent. Robbery is not rent.

There is a big difference between the income of a bandit who robs
people passing through a forest and the income of a holder of a royal
license to collect tolls from the very same travelers: if you assert
your rights against the depredations of the former and overcome him by
force, the government will give you a pat on the back, whereas if you
do likewise against the latter, it will hunt you down and forcibly
deprive you of your liberty, assets and/or life. Likewise for the
contrasting cases of unauthorized foreign land appropriators (i.e.,
invaders) and officially approved domestic ones.

>But this is also problematic, as it requires a rigorous
>definition of "earned". We might define "earned" in terms
>of "rent".
>
>But that would be circular.

Why not define "earned" as "obtained in return for commensurate
contribution"?

-- Roy L
.

Relevant Pages

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  • Re: Land, Labour and Capital Taxation....
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