Working Paper Number
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
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Basu, Deepankar, "Marx's Theory of Ground-Rent: A Suggested Reformulation" (2020). Economics Department Working Paper Series. 296.