Re: Economic Rent As Sum of Externalities

On Thu, 31 May 2007 00:02:00 +0000, jmh wrote:

On Wed, 30 May 2007 03:55:36 GMT, royls@xxxxxxxxx in sci.econ
confessed to the world saying:
On 29 May 2007 09:47:29 -0700, "James A. Bowery" <jabowery@xxxxxxxxx>
wrote:

On May 29, 9:18 am, r...@xxxxxxxxx wrote:
Could you explain why you want to prevent people from thinking about
economic rent?

I'm on your side.

Well, I don't see how linking rent with externalities helps "my" side.
Neoclassical economists have tried to prevent people from thinking
about economic rent by redefining it according to the _amount_ of
return obtained rather than the _source_ of that return. Attributing
rent to externalities rather than privileges has a similar effect:
directing attention away from n return for the fact that rent is the share of
production that is obtained inot blocking producers'
access to production opportunities that would otherwise have been
accessible.

Odd that Smith doesn't seem to define rent that way. I guess
he's not a classical economist.

Odd that you have never read the WON yet claim to know what Smith defines.
So here ya go:
B.I, Ch.6, Of the Component Parts of the Price of Commodities in paragraph I.6.8

As soon as the land of any country has all become private property, the
landlords, like all other men, love to reap where they never sowed, and
demand a rent even for its natural produce. The wood of the forest, the
grass of the field, and all the natural fruits of the earth, which, when
land was in common, cost the labourer only the trouble of gathering them,
come, even to him, to have an additional price fixed upon them. He must
then pay for the licence to gather them; and must give up to the landlord
a portion of what his labour either collects or produces. This portion,
or, what comes to the same thing, the price of this portion, constitutes
the rent of land, and in the price of the greater part of commodities
makes a third component part.------------------------------------------

Now it is absolutely true that this is not "Ricardian Rent" which seeks to
explain the difference in rent from one section of land to another.
Nonetheless, the expropriation of the produce is called _RENT_. And we
note that it is INDEED collected by a political contrivance that bars the
gatherer of wood from doing so if he does not PAY the landlord for doing
absolutely NOTHING but preventing the gatherer from gathering the wood.

SOOOOOOOO!

We see that Smith says what is said above: "that rent is the share of
production that is obtained in blocking producers'access to production
opportunities that would otherwise have been accessible."

And though Smith may not repeat this every time he uses the word "rent" in
the WON, the facts are clearly evident and it is clear that Smith knew the
facts.

The bottom line is that Ricardian land rent is not the only land rent and,
in fact the usability for a section of the every worst land for growing
corn will have taken advantage of the difference between the profits of
wood and the profits of corn. And that difference even on the worst
corn land will line the pockets of the rentier.

And the _cost_ of everything is STILL _LABOR_.

--
"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

.

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