Marx's Theory of Ground-Rent: A Suggested Reformulation

Authors

Deepankar Basu, Department of Economics, UMass AmherstFollow

Working Paper Number

2020-13

Publication Date

2020

Abstract

This paper develops a simple theoretical model to analyze Marx's

theory of ground rent. Using the model, I demonstrate two important

results. First, if we take capital as exogenous, then total ground-rent

can be decomposed into the three components: differential rent of the

first variety (DRI), differential rent of the second variety (DRII), and

absolute rent (AR). Second, if we endogenize capital outlays using

profit-maximizing behaviour of capitalist farmers, then absolute rent

becomes zero. Thus, under reasonable behavioural assumptions about

landlords and capitalist farmers, there will be no absolute rent in a

capitalist economy.

DOI

https://doi.org/10.7275/20375438

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 License.

License

UMass Amherst Open Access Policy

Recommended Citation

Basu, Deepankar, "Marx's Theory of Ground-Rent: A Suggested Reformulation" (2020). Economics Department Working Paper Series. 296.
https://doi.org/10.7275/20375438