Re: Labor theory of cost

On Mon, 28 May 2007 12:39:31 -0400, Les Cargill wrote:

The Trucker wrote:

On Sun, 27 May 2007 23:33:57 +0000, jmh wrote:

<snip>

Land has no cost. The APPARENT cost of particular locations is _labor_
saved by virtue of that location. In a good location I need only work
half as much to produce the same personal benefits for myself as I would
have in some other location. I can afford to give up some amount of my
produce as payment for the use of the location and still PROFIT from the
benefit of the location. I labor LESS for the net personal benefits I
receive after paying the rent or I would not locate myself in that
location. The net cost to me in labor for the use of the location is zero
or less. And the fact remains that labor is what is being expended for the
land rights and the benefits I receive, i.e. all goods are produced by
labor.


But does this map well to the original Ricardian idea? In the original,
someone leasing bottomland which produced more per acre would be forced
to pay the difference in yeild to the landlord. They'd actually
have to put in *more* labor to support that level of production.

So I'd question whether it's a trade between labor and land.

If the scenario you present is accurate then you have a rack-rent as
opposed to Ricardian rent. It says that even land that cannot sustain
life demands a rent. That is the only way that the location rent can
exceed the Ricardian rent.

Think about it: If the dude in question could labor less on "free" land
while realizing the same produce then he would tell the landord to stick
it where the sun don't shine. So what happens in real life (given the
existence of free land SOMEWHERE) is that the landlord makes a bargain
that at least SEEMS profitable to the tenant; a bargain where the tenant
can get more for himself than he would get on marginal land. Not a lot
more, mind you, but some.

Now then: If the land rent is redistributed on an egalitarian basis then
it is difficult to imagine how there could possibly be a rack-rent.

There are more than a few Georgists that claim that if the rent was burned
in a furnace it would not matter. They are quite wrong.

--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org

.

Relevant Pages

  • Re: Distribution & Redistribution
    ... >> walks (4.5 hours of labor). ... > berries home today, and still go out on the next days walk anyway. ... If these are not labor and not land then they must be capital. ...
    (sci.econ)
  • Re: Labor theory of cost
    ... It is axiomatic that natural resources have NO COST. ... "land") are a product of land and labor (labor of course ... This observation holds true for ALL goods, ...
    (sci.econ)
  • Re: Labor theory of cost
    ... whether or not you assume land is free. ... Cost is equal to the value attached to the satisfaction that must be ... In this case we speak not of the "value" of labor ... This observation holds true for ALL goods, ...
    (sci.econ)
  • Re: Is there an (objective) definition of wealth?
    ... How could they be labor? ... >> be justified by a contribution of labor, because land is not produced ... >The landowner will not buy if the benifits from landownership are all sucked ... >sell or rent for a higher amount to another. ...
    (sci.econ)
  • Re: "Investment adviser asks if wealthy are necessary"
    ... Without state ownership people have to exert labor to extract rent that is why it is property. ... Your argument says because I picked the berry I deprived the berry from someone who says they would have had picked the berry but did not so I should compensate. ... He can go and farm the barren land if he wants but is willing to pay to use the better land so he does. ...
    (sci.econ)