Debate Magazine

"Land Rents Don't Exist"

Posted on the 18 October 2013 by Markwadsworth @Mark_Wadsworth
The strange thing is that it is not just the Homeys and Faux Libs who deny that land rents exist, the Commies do it as well. From the comments in a leftie blog:  Marx is not so much deploying the Smith/Ricardo LVT as criticizing it: abstract average socially necessary labor time is not so much embodied in commodities as extracted/abstracted from them through the system of market exchanges.  But at the same time, surplus-value is generated from the hiring of commodity-labor at "fair" wages, as determined by reproduction costs, and it is the need to reproduce surplus-value to maintain the valorization of capital stocks that is the key dynamic driver of the whole system.  At the same time, neither natural resources lying in the ground, nor capital goods can accrue any value unless activated by labor processes. (Land rents don't exist except within some system of production that deploys labor and capital).  Splendid state of denial there! It strikes me as pretty hard to envisage a "system of production" that doesn't "deploy labor and capital". That's what "production" is, it's the deployment of labor and capital, and with a bit of luck, the value of the outputs is more than the cost/value of the inputs.  (Even if it is value-detroying, it is still "production" i.e. British Leyland were "producing" cars right up to the bitter end.) And as soon as you have a system of production, you have land rents.  Whether that system of production is hunter-gathering or sitting in a swanky city center office making important sounding phone calls and shoving paper round, it all requires land, so that land has value and that value is rent.

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