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- Title
THE HISTORICAL APPROACH TO RENT AND PRICE THEORY RECONSIDERED.
- Authors
Fine, Ben
- Abstract
In this paper we shall examine certain economic theories of rent in order to discover the particular ways in which landed property has been understood. Associated with each rent theory is a particular specification of the way in which landed property intervenes in the operation of the economy. We will conclude that an adequate rent theory can only be established by taking into account the specific effects of landed property. Where effects have been taken into account it is often only implicitly or by 'proxy'. As a result, rent theory has been as underdeveloped as the associated and neglected examination of landed property itself. For neoclassical economics, rent theory either dissolves in general equilibrium theory or is restored by the restrictions involved in moving to partial equilibrium. In the case of Ricardo, rent theory is based upon distinguishing the process of value formation in agriculture and industry. For Smith, the generation of rent under capitalism is treated by reference to Physiocratic notions which have greater relevance for feudal society. In each case, a theory of rent only emerges on the basis of a more or less chaotic understanding of the role of landed property. Our paper also has a second purpose. It is to demonstrate that different schools of economic theory cannot be reduced to special cases of a more general theory which is itself usually taken to be neoclassical economics. There are differences in the conceptual content of different schools of thought. By viewing Smith's theory through the prism of neoclassical economics, for example, the concepts unique to Smith become stripped of their distinguishing features and merely serve to reproduce those of the prism. Although this is a general proposition about the history of economic thought, we shall illustrate it by reference to rent theory.
- Subjects
RENT (Economic theory); MICROECONOMICS
- Publication
Australian Economic Papers, 1983, Vol 22, Issue 40, p132
- ISSN
0004-900X
- Publication type
Article
- DOI
10.1111/j.1467-8454.1983.tb00414.x