Economic rent

The basic pension is a theory of classical economics, which explains why and in what form is obtained a basic pension in the economic cycle. The basic pension (including ground rent, differential rent or quite often just pension) is the part of income that a tenant has to pay the owner of the of him as arable land, building sites, for forestry, mining or whatever used soil regularly.

In a specific sense basic or ground rent represents the difference in yield between two floors of the same size with the same amount of labor and capital. This difference is due to factors such as different soil fertility, favorable climatic factors, traffic, use the form ( agricultural or forestry, structural and legal suitability for housing or work, exploitation ability of soil to coal, oil or natural gas ), and characterize the prevailing land law with its special provisions ( see, eg, agricultural Law ( Germany ) ).

• 5.1 Marx's basics
• 5.2 Differential Rent 5.2.1 differential rent I

• 5.3.1 Working pension
• 5.3.2 Products pension
• 5.3.3 annuity

Basics

The theoretical analysis of the basic pension requires the labor theory of value. This fundamental theorem of classical economics that describes the exchange ratio of goods under market conditions, stating that each product has an objective value that can be measured by the quantity of labor needed (expressed in units of time ), which are on average spent on the production of this commodity. The market price is formed on the basis of this value, but may be subject to supply and demand fluctuations. Are supply and demand ( considered in the long term ) in equilibrium, the price equal to the value, expressed in terms of another product (for example, gold).

For agricultural products ( as opposed to industrial products ) in income, however, depends not only on the work ( - szeit ) due to external influences mentioned above. Thus can earn an income for a given demand and independent of labor income difference. The forms of income, wages and profits can add the basic pension therefore.

The discovery of the theory of rent

Ricardo saw Sir Edward West (1782-1828) and Malthus as the discoverer of the theory of rent. In contrast, Marx refers to James Anderson (1739-1808) and its largely unnoticed remaining font to inquiry into the nature of the corn laws, with a view to the new corn bill Proposed for Scotland (Edinburgh 1777), where this casual nature of pension explained as well as its essays. Relating to Agriculture and Rural Affairs (3 volumes, Edinburgh from 1775 to 1796 ), as well as in the 1799-1802 issued Recreations in Agriculture. Natural History, Arts, etc. ( London). Marx recognizes Anderson's priority in relation to the discovery of the theory of rent and at the same time accused Malthus of plagiarism.

Adam Smith

Adam Smith defined the basic pension in his major work " Wealth of Nations " ( " The Wealth of Nations " ) as " the price for the use of land ," which the tenant has to pay (or capitalist ) to the landowners. Smith continues:

Thus, the basic pension, according to Smith, the difference between the yield of the product and the cost ( labor and means of production ) plus profit of the farmer. If both sizes (expressed in money) the same size, can therefore not incur a pension for the landowners.

The latter, according to Smith, is an important characteristic of the basic pension: you do not go as wages and profits as a factor in the pricing with a:

Subdivision of the bottoms on the amount of rent

Adam Smith divided the various ground products of his time into two groups: 1st floor products that always yield a pension and 2nd floor products, which sometimes yield a pension, but sometimes not. The first group he counts the food (mainly cereals). Smith supports this assertion with the empirical evidence that even discard the most inhospitable places in Norway and Scotland a pension for their landlords, because foods are needed everywhere and anytime. A rising population Increase this trend in the form of increased demand. Likewise, few workers would even at high wages sufficient to throw a sufficient income for a pension. The pension is also still affected by two natural factors: the fertility of the soil (especially for agricultural products significantly ) and the location of the soil. If the ground is far from towns ( population concentration → main sales area ), reduce transport costs, the pension.

Skip to second groups Smith is one of mining products and those products which secondary satisfy human needs ( such as clothing and housing ). Here it comes, according to Smith, sometimes before that lead to a demand pushes the price, so no rent for the landowner drops. As an example, he calls the operator ( lessee ) of many silver mines, to abandon their mines, as the silver price keeps falling due to the influx from the New World and thus not step muted demand.

David Ricardo

David Ricardo says in the introduction, the basic pension is " that part of the product of the earth, which is paid to the landlord for the use of the original and indestructible powers of the soil ".

Ricardo shares, in principle the remarks of Adam Smith, but they still partially substantiated. So he grabs Smith's insight on that ground rent can not be a component of the price of natural products, and deduces that there must be a cultivated land forever, the yields no rent. As the price of a commodity (eg corn ) is derived from its value, which in turn results from the time spent working, it may be theoretically possible that there is grain of varying value. If two tenants (same number of workers, the same number of working agents, etc. ) economies with the same effort on two soils with different fertility, is the income of the farmer, who farmed the fertile soil, higher than that on the less fertile; but both have the same (working) value.

Thus, if a (closed ) economy of a given soil fertility farmed, but now ( by population growth), the demand exceeds the supply ( price increase ), the corresponding nation has no choice but to manage soil fertility worse. Are supply and demand ( at the higher level ) again in equilibrium, the price ( of grain ) depends precisely on the value of that grain which is grown on the soil with the lowest fertility. The price is thus sufficient just to the capital invested ( plus profit ) for this tenant to replace (plus profit), which he can not pay rent.

Due to the rise in price as the landowners better soils are now in a position to demand from their tenants a pension, precisely so much that the remaining part represents their invested capital plus profit.

In the course of Ricardo's Notes to the basic pension, he emphasizes the inconsistent application of the labor theory of value of some of its predecessors (Adam Smith, Jean -Baptiste Say) on the complex of the topic. It turns out that only the quantity of labor affects the price of a commodity and neither profit nor rent.

According to Joseph Schumpeter made ​​Ricardo's theory of rent is no explanation of the phenomenon, but is only the means abolish the concept of soil from the theory of value and price theory. The assertion of a direct relationship between wages and subsistence Ricardo served merely to get along without any particular theory of wages. Without this thesis but its fall distribution theory collapses. The modern conception as Ricardo's assertion is not as empirically false back, but I'm even cope with empirical correlations, which are incompatible with Ricardo's thesis.

The term " Ricardian Vice " (Eng. roughly: " Ricardo's peculiar error " ) wants Schumpeter mark a fundamental flaw in Ricardo's method of explanation. Heinz D. Shortly includes Schumpeter's criticism as unjustified because it fails interpret Ricardo's method. Schumpeter, who says in his Ricardian criticism of the preferred by him because supposedly more general standpoint of the theory of marginal utility to be able to argue from, going to the different kind of explanation of classical economics not fair.

Karl Marx

Karl Marx takes for his work on the basic pension the remarks Ricardos as a basis. Marx praises them, but also those of Smith, explicitly, mainly related to the fact that he is also the statements of the two joins. His theory of differential rent is only therefore of particular importance, as Marx had to integrate the one in his analysis of the value-form ( and the resulting distribution of the value in wages, profit and rent ) and on the other hand significantly more precise statements concerning the pension and influence of various factors ( capital investment, size of the cultivated area, etc. ) made ​​to those.

Marx's basics

The basis of each commodity exchange ratio is the labor theory of value also in Marx. The exchange value of a commodity results from the whole of society to those goods used average necessary labor time. The aim of the capitalist mode of production is then now a so-called recovery process: the production of ( absolute / relative ) value added. This means precisely that the capitalist is forced to the production of surplus value (or profit ), afford to let the workers themselves extra work () by extension or intensification of work ( - szeit ), that is: to make work the workers longer than would be actually necessary so that this reproduces itself. Or put differently: The work done by the workers work, and the arising therefrom ( re) value is divided into two parts: One part falls to the laborer to (in the form of wages ), the other part of the capitalists (in the form of surplus value ). , It is therefore, according to Marx, an exploitation of the dispossessed working class instead: The profit (or added value ) is generated that the worker remains a part of his work unpaid. Salaries are based, according to Marx, by the sum of consumer goods ( the sum of the prices ) needed by the workers to survive, viz: " to reproduce ". What goes beyond this amount shall accrue to the capitalists. The capitalist mode of production thus presupposes that the direct producers (workers) are separated from the means of production ( expropriation ) that a certain technological level of development of civilization has been achieved and that the workers on a contractual relationship with the capitalists, ie the exchange of their labor is, for a fee, dependent.

Thus, the tenant is at all capable of the landowner to pay a pension, it is necessary that in agriculture there is the capitalist mode of production. This means that the farm workers ( the producers ) are separated from their means of production and free competition as well as the transferability of capital prevails.

Differential rent

With the advent of the capitalist mode of production is, according to Marx, the generation of a basic pension, the primary objective of agricultural production, as is the recovery process and the consequent exploitation of the working class for the entire capitalist class.

The basic pension, or differential rent is a part of the surplus value of unpaid work, paid by the tenant to the landlord. Marx explains:

Thus, Marx points out that the basic pension is a result of this difference, and is therefore not to be understood as a component of the price. He points out (similar to Ricardo ) that also high (or low ) are to understand profit and wages not as building blocks ( ie cause) of high ( or low ) price. The pricing depends on the producer price ( cost price plus average profit ) and this in turn by the quantity of labor that was used on a commodity. This value then decays into the parts profit, wage and rent. Marx raises here before Smith and Ricardo even inconsistency in the application of the labor theory of value.

Causes for the emergence of that difference of the results are:

• The location (eg distance from the main sales areas)
• Fertility
• Differences in the burden of taxes
• Differences in technological development
• Inequalities of the distribution of capital among tenants

Differential rent I

To illustrate his theory Marx draws an abstract example approach: In the first part of his study of the influences that vary the amount of the basic pension, he focuses on the capital- independent, natural influences. It defines four classes with different soil fertility ( and position). A, B, C and D are these 4 types, soil type A, the (relatively) barren and ungelegenste and D accordingly is the most fertile and bestgelegenste kind. A is (like in a harvest season) discard 1 quarter of wheat and the following soil types in each order a quarterback more. As an example it is further assumed that the price of corn at 3 pounds sterling is (= 60 shillings ). Since A is the worst type of soil and the pension is a differential rent, that the reference price exactly the producer price ( cost price plus average profit ) of the grain of the soil A. The price of production is therefore set at 60 shillings, so you can now assume the capital invested ( cost price ) amounts to 50 shillings and the average profit 10 shillings.

You come to the table below:

While the cash advance ( that is, the constant and variable capital ) remains constant, the product of B, C and D are each twice as large as that of the previous soil. The tenants of these soils are to be paid in the location of a pension, Just so much that the remaining part of the capital advance and average profit ( the tenant of the price determinants, the worst soil type ) covers. (see table: remaining profit = Profit - pension)

" Genesis of capitalist ground rent "

Karl Marx draws the basic pension for a historical perspective and represents states that the ground rent is not an expression of the capitalist mode of production itself. It has merely changed its appearance in the course of development or, as Marx says: She has obscured its original form. In parallel, he makes a number of vulgar economists the accusation to be confused with retirement income and not this tell apart. He also criticized at Smith and Ricardo, that they had made ​​no effort to classify the pension historical perspective. Only the Physiocrats, he speaks to the power to have recognized the following differences.

Employment pension

What Marx referred to retrospectively as a work pension is the product of so-called drudgery. To serfs compulsory labor or unfree peasants were obliged when it was required by their feudal lords in the Middle Ages. According to Marx, this is the pure form of the basic pension. Between landowners and workers there is no "middle man" and the exploitation takes place, visible to the observer, right through the bars of additional work instead. The unfree or serfs farmed the ground handed over to it for yourself, another part to work further ( one week) for the landowner. The additional work is still evident here.

Pension products

With the progress of cultural development in Europe, the pension does not change their appearance, but their essence. As Marx says, the pension is now demanded " by law rather than by the whip ." With the newly acquired legal freedom of the producers ( farmers ), the pension is now taking an increasingly commodity-form. The pension that is not expressed thus in forced overtime, but in a more subtle part of the products produced from.

Annuity

The annuity is close to the rent in kind, with the significant difference that a pension in the form of money to a monetary circulation active trading, a market and, as a result, the existence of a market price implies. With the separation from the exaction direct overtime to pure contract- union money ratio in which represents the pension, the capitalist mode of production has arrived. With the transformation of the pension annuity now takes the capitalist class as a third party between landowners and workers. This development is significantly influenced by the inflation of silver from the New World. Rising prices and rigid pensions increase the profits of individual farmers and tenants, which leads to a centralization of agriculture and rapid enforcement of the capitalist mode of production.