3.10.11

Classical Economic Theory Part 4

Land Rent
Adam Smith's opinion regarding the lease of land is one factor that sets the price. Furthermore, also argued that land rent is due and not the cause, rather than the high price of agricultural produce.

Adam Smith did not make the difference between the interest of capital and profit entrepreneurs. Meanwhile, Jean Baptiste Say (1767-1832) split "profit de l'industrie de l'entrepreneur" (profit employers):
Wages they give wealth for industrial purposes (so the capitalists), replacement of "service capitaux."
Wages for landowners to "foncier service."
Replacement for "service industrial" are obtained by the leader of the production process.

David Ricardo (1772-1823) states that the division of community income is the most important matter than a matter of economics. If the Physiocrat explained on any ground rent due to the productive capacity than the soil, while according to Ricardo (1772-1823) land rent arises because of the limitations (lack of) land. Ricardo's theory of land rent (1772-1823) known as the "Theory of Land Rent Differential". This theory states that in the early stages people will use the fertile soil, and because of its limitations it will use the land less fertile. Each has a ground lease is different. Ground rent is compensation to be paid to landowners for the use of "Original and Indestructible powers of the soil."

Meanwhile, Johan Heinrich von Thunen (1780-1850) declared the high and low land rent differences due to differences in the location of the sales market. The closer the lay of the land to market the resulting product will suppress / reduce the cost of transport products to market. Consequently ground rent is relatively higher than land farther away from the market.

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