Talk:Economic rent

From Wikipedia, the free encyclopedia

 Economic rent needs to be Wikified!
So here's what needs to be done:
Check if the article is a copyright violation or meets deletion criteria. ✔ check
    Suggestion: Do a quick Google or Yahoo! search with a sentence from the article.
Check if another article already exists on this subject. ✔ check
    Suggestion: Use the Wikipedia search to see what comes up.
Add Wikipedia markup. ✔ check
    Suggestion: Read up on m:Help:Editing.
Format the article. (considering)
    Suggestion: Read up on Guide to Layout and Manual of Style.
Remove the {{wikify}} tag (if there is one). (pending)
Join the Wikification effort! • How to use this template
This article is within the scope of the Economics WikiProject, an effort to create, expand, organize, and improve economics-related articles..
Start rated as start-Class on the assessment scale
Mid rated as mid-importance on the importance scale
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.

This POV (the "ownership is a sham and obviously belongs in quotation marks" POV) pervades this article. Especially "Detailed Historical Terminology" section. I tried to clean it up... but I didn't have any success. I don't know enough about the subject to rewrite the section, and the POV is so pervasive that I can't readily edit it out. 70.187.186.43 (talk) 02:43, 16 March 2008 (UTC)
       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"

[edit] So what is it??

I came on here trying to find a basic idea of what economic rent is, but the quality of this article is so terrible I don't even know what section of this crap I should read first. Define economic rent categorically, then show different ways the one true definition can be interpreted, then go into an explanation please. This is a mess. 193.1.172.104 22:37, 23 April 2007 (UTC)

I agree. This is one of the worst written articles I have read in a while. The opening sentence of the second paragraph is just one example. "Economic rent is distinct from economic profit, which is the difference between a firm's revenues and the opportunity cost of its inputs." What does that mean? Is the difference between a firm's revenue and opportunity cost its economic profit or economic rent? I'm in economics right now and I'll try a rewrite once I have a firm grasp of economic rent. As I understand it, economic rent is the difference between the price an input factor would ordinarily command and the price the input factor does command, based on the opportunity cost of allocating that input factor to another production process. For example, when Michael Jordan played basketball he was paid economic rents because his opportunity cost of playing basketball was fairly low. He briefly switched over to playing baseball, but was paid much less, thus less economic rent, and subsequently switched back to basketball. This is how I have interpreted economic rent but I don't really know if that is accurate. If I am correct or incorrect, someone please let me know. I can begin rewriting the article that much sooner. Thank you. --Andrew Elgert 00:42, 2 May 2007 (UTC)

[edit] You make some very good points

I'm workin on it! I will update the talk page when I'm done. Tthere will be several intervening updates to the page. I'd guess I'm spose to use the "sandbox" whatever that is but I. like everyone else, am strapped for time.


[edit] I am done with this until further complaints.

I await the wiki police and their POV banners all over the place. I'll see what I can do about support of official "wanks". It's there but I have to find it. I think the article is at least a little more to the point than it was and the history DOES provide quite a bit of "wank" support. --The Trucker 04:36, 27 May 2007 (UTC)

I stand corrected regarding "interest" being the return to "capital" in classical economics. In searching "Wealth of Nations" (Smith) and "On the Principles of Political Economy and Taxation" (Ricardo) the term "profit" is employed extensively to lable the distribution/return to the ownership of tools and machinery. The word "interest" does indeed lable the "rent" (common usage) paid for the use of money. --The Trucker 04:39, 1 June 2007 (UTC)

[edit] Benefit from celebrities

The celebrity .. performance of the work has added to the public welfare.
I laughed when I saw this... Zargulon 11:52, 15 June 2007 (UTC)

[edit] Brief Historical Summary

...section is not a brief historical summary. It's a brief summary of historical contrarity. So shall I re-label it "Brief Summary of Historical Counter-Spin"? I think that's what I'll do. I'd do more, but I don't know enoughb to re-write it into an actual brief historical summary, and if I remove it altogether (seems plain useless to me) it will probably get reverted by someone who thinks I'm a vandal or by someone who won't make the point of looking at it and seeing how worthless it is in its current state. In fact - it's so worthless, its worth is negative. At least with a new title, it may draw the attention of someone who can improve it, while simultaneously saving readers from laughing themselves into the hernia ward at the incongruity. It's too late for me, but at least my fingers still work. 76.200.158.235 18:19, 7 October 2007 (UTC)

[edit] "Ownership" POV

I've tagged the Detailed Historical Terminology section as POV. The POV I'm referring to (as I mentioned above on this talk page -- the POV pervades here as well -- is the "ownership is a total sham invented by the powerful and deserves to be put in quotes and talked about as if we all know it's BS" POV.

The whole article suffers a bit from POV, but this section is horrendous. I tried my hand at fixing it myself, but ended up deleting all my changes. I'm not expert enough on the subject to rewrite the section completely, and the whole section is written so thoroughly from the POV that I couldn't edit it out without just deleting the whole section.

I understand that Karl Marx believes that ownership (property rights) is just a means for the powerful to oppress the working man, but to assume that this is the only legitimate viewpoint (or even the most-legitimate viewpoint) is downright absurd. You might believe it too -- but you must realize that this is at best a controversial viewpoint.

70.187.186.43 (talk) 02:59, 16 March 2008 (UTC)