Re: novel argument against taxing rents

No, I'm claiming that in neoclassical theory, all production and
exchange OCCURS at the margin.

That is self-contradictory. What does "the margin" mean if there is
nothing but margin? That prices are set at the margin does not mean
all transactions are marginal.


I'm not sure what "all transaction are marginal" means, but it's not
just prices that are set at the margin. Production decisions are made
at the margin, factor income distribution is determined at the margin,
etc.



I repeat: what does "the margin" mean if there isn't anything else?

I didn't say that there "wasn't anything else", I said that
neoclassical theory presumes that all decisions surrounding production,
consumption, exchange, and distribution occur at the margin.


That definition is mathematically equivalent to the marginal revenue
product minus marginal factor cost definition.

Only if you assume all production is marginal, a concept I find
bizarre, as explained above.


The canonical example of a profit-maximizing firm is one that produces
at a level where Marginal Revenue equals Marginal Cost.



And all the rest of its revenue exceeds the associated costs, which is
how it makes any profit at all.


Now who's mixing economics and accounting? ;-)

.

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