A Study of Rent

Abstract

THE PURPOSE OF THIS BOOK1 as stated in the preface is trace the origin and development of the theory of land-rent, to reappraise the conclusions of contemporary economics, and to test the current assumptions and analysis with an up-to-date measure of These are topics that will interest students of the development of economic doctrine, as well as the advocates of land value taxation. The project, incidentally, received financial support from the Lincoln Foundation. The late Joseph Lincoln created that Foundation in 1947 with the objective of teaching, expounding, and propagating the ideas of Henry George. The study is organized in two parts. Part I covers the development of the theory of economic rent from the early seventeenth century to the present time. This is a topic which has been covered by many other authors but a fresh approach is welcome. The political implications of rent theory are stressed, and the political motives of those who developed this theory are noted. The authors give credit to James Anderson as the first to present the modern theory of differential land-rent. His presentation took the form of a footnote in a pamphlet published in 1777 defending the corn laws of Scotland. Critics of the corn laws had charged that high agricultural prices were the result of high rent. To refute this charge Anderson added a footnote to his text in which he expounded the theory that prices of agricultural products determine the rent of land and not the reverse. Thus, in small type, the modern theory of land-rent was born. A generation later, David Ricardo and Sir Edward West developed independently the same idea, but the theory of land-rent now became the basis for attacks on the corn laws. The opposing policy recommendations are explained by the assumption of historically decreasing returns in the West-Ricardo version but not in Anderson's work.