Re: Labor theory of cost

Les Cargill wrote:
Mark M. wrote:

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.



The difference in output in Ricardo's model comes exclusively from the better location, not more labor.



Greater yield means more
labor,

Why? A better location will produce more for the same labor, no?


and if the landlord sets the delta in land
lease price as equal to all the additional production, the "sharecropper" is in effect losing the value of that
additional labor.

In Von Thunen's model, which uses Ricardo's law of rent, all the advantage that location gives is converted to rent. Land at the fringe is free and all better locations bear rent so that in the end wages are the same everywhere.


In Ricardo's example, it's not the location beyond the
effect of location on production.

The effect of location on production is a multiplier of labor.

Mark M.
.

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