Talk:Economic rent
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- I know this article may be merged soon, but I thought I'd wikify it before anyway. --Draicone (talk) 04:07, 10 July 2006 (UTC)
- Certainly doesn't meet deletion criteria, and there isn't any copyright violation I can see. --Draicone (talk)
- The only other article that matches this is being merged in. --Draicone (talk)
- There really is no need for any work here in terms of markup. The article has been constructed fairly well so far. Considering a re-write however, which would take time and might not be worth it if there is a merge. Please share your views. I am happy to spend time rewriting, however do not want my work to go to waste. --Draicone (talk) 07:49, 12 July 2006 (UTC)
How is modern portfolio theory's use of the risk free interest rate related to the calculation of economic rent? Jim Bowery 17:11, 12 September 2005 (UTC)
this sounds like Marx's theory of surplus value
As the current page seems to be an attempt to hide the true nature of rent as that term is used in political economy or in classical economics or in any other reasonably honest presentation of the subject, it will be necessary to view a proper definition and explanation of the term at "economic rent (economics)".
Any "store of value" must be secured from theft by some force. Fiat money serves this purpose quite well in that it can be accounted in a government recognized bank where it will be almost impossible for anyone other than the owner to gain access to it. Imagine an outlaw going into a modern bank and demanding all of the account balances. Ergo, the cost of this safe depository is quite low and so too the payment for such service. Now imagine that one fears inflation and so converts the account balance into gold coins and stores these in a safe in the bank. In either case the "store of value" is protected by the bank which is, in turn, protected by government. The only return to the owner of this "store of value" that is earned is the original deposit minus the cost of safekeeping. We will refer to this as the real "risk free interest rate" (and it is always negative). Government bonds are the same scam. The return should be negative and any return above this amount is "economic rent". Inflation can be controlled by the central bank and probably is so controlled so as to return a negative rate of real interest to bank deposits. But the fact remains that "savings" (and T-bills and government bonds are savings as opposed to investments) should see a small negative return. Why do you expect the citizenry to pay for the government and banking services necessary to protect your financial wealth????
Hint! "Time value" is currently a crock. People save so they can spend later when they are (or may be) in need. Being dead certain that I will have an income in retirement is worth a lot to me NOW. I will pay a premium.
--The Trucker 01:27, 19 December 2005 (UTC)
Contents |
[edit] In classic Economies
- It was observed that higher wages or higher interest rates might be expected to draw additional labor or capital to market, but higher rents did not induce God to make any more land; the owners of land rented or made useful all the land they had, regardless of the going rent.
Sorry, but that is bullshit. This model confuses "the market" (a) / "not in the market" (b) and "all there is" (c). When mentioning labor the model expects it to move from (b) to (a). When mentioning capital the model expects it to move from (b) to (a). BUT when mentioning land the model tells us that (c) cannot get any larger.
The point is land can indeed move from being "not in the market" into "the market". No fancy talk needed for that idea. And that God cannot be induced to make any more laborers or capital, is also easily said. WHO thought of that ?
- Might be some prank played by some conservative freak. Thanks for the warning. But I do suggest you make an edit yourself =p __earth 18:18, 19 October 2005 (UTC)
The point actually is thst land = location and it does not move. The port of Seattle is not going to move to Denver and the amount of land in range of the water (usable as a port) is fixed. So too is the total amount of land. Remember that land is not just the hard dry stuff under the feet. --The Trucker 01:35, 4 December 2005 (UTC)
Current definition of economic rent is :
"The difference between the opportunity cost and the income earned in its present use is a rent."
But that is insufficient. The rent of any plot of land is the difference in the cost/income from that plot of land and the least desirable plot of land in the sovereignty (I would suggest that we remain in a given sovereignty). In our modern (non agricultural) economy almost all of the value of a plot of land is due to the location of the plot and the surrounding infrastructure. The "rent" of a plot of land is _not_ the difference between what the sports stadium people will pay and the amount which the hospital people will pay. It is the difference between the amount paid for a plot in the city and the amount paid for a plot in Death Valley. Every last dime paid for the use of a location is _rent_ and why people will pay it is irrelevant. And it matters not who gets the rent, i.e. it matters not who supposedly "owns" the land.
Correction -- it matters as to privatization.
So:
Economic rent is the "income" extracted by virtue of monopoly privilege. Pretty simple until you try to make up excuses to allow the idle aristocrats to fleece the common people. The current definition of "economic rent" seems to be an exercise in "neoconomics".
--The Trucker 02:03, 6 November 2005 (UTC)
I have created a new definition as "economic rent (economics)" that properly defines economic rent. Please comment on this offering.
--The Trucker 01:35, 4 December 2005 (UTC)
[edit] you can be somewhat correct, but....
Whereas the creation costs of land are zero (most unlike the creation costs of real capital) then any amount paid for tenant rights to land must be used in the public interest thus avoiding an economic rent for all such privatised rent is economic rent. You can also take the position that economc rent is not conditioned upon who receives the rent (though I would disagree).
Your term for privatised rent seems to be income over and above what what was paid for this factor of production. That is simply incorrect unless you acknowledge that money paid to a previous, so called "owner" of land is total economic rent. The tenant pays for the right to exclude others from the land and such right cannot be granted in perpetuity. The right to collect (privatize) land rent is arrived at in a somewhat feee market for land rights. But there is no actual "cost" for land in that it is naturally occurring.
In the case of a sports star there is no rent that inures to the benefit of the star. He/she is not protected from competition by any form of political contrivance and any funds paid to the star are willingly paid, e.g. we must have a place to be, and we must have medical care, and we may need lots of stuff, but entertainment is simply not on the list. The rent component in organized sports is the difference between what the star would earn in free agency and what the star will earn under current rules in the sports "business". That rent inures to the OWNER of the franchise and NOT to the star.
Economic rent is, in every case, a political contrivance to privatise that which should belong to all or to those who actually earn it.
--208.54.14.65 16:39, 5 December 2005 (UTC)
[edit] Merge Classical/Political Economy Version With This Version
I have attempted to merge these two versions of economic rent into this one article. We will see how much screeching and screaming results from my insistence that neoclassical economics is not the only or even the correct school of economic thought. Comments and criticisms are welcomed and will be treated with respect. I can always be reached on usenet news or google groups in alt.politics.economics or sci.econ for less laborious discussions on the subject of neoclassical vs classical vs political economy. I post as The Trucker.
The Trucker 15:55, 10 July 2006 (UTC)
[edit] Latest edit
A LOT has been added to this article's intro, that is not at all sourced, and smells of original researh. I will give it some time before deleting the new material, to give a chance to source it. Dullfig 20:08, 27 August 2006 (UTC)
[edit] "Economic Rent" is a specialized term, it does NOT mean "Economic definition of rent"
This article seems to confuse defining rent in general with the definion of "economic rents" which are a specialized, distinct concept.
There needs to be one clear section discussing rent (returns to a factor), and one clear section defining economic rents (returns to a factor above the value to keep them in use). —The preceding unsigned comment was added by 66.92.52.166 (talk) 20:53, 20 February 2007 (UTC).
[edit] Preferred terminology
I think "Economic rents" is the standard term, not "Economic rent"