Nonproduced Means of Production: Neo-Ricardians vs. Fundamentalists

Abstract

Neo-Ricardian and Fundamentalist theories of rent and landed property are compared within the analytical framework of the Sraffian model with respect to both the question of the static distribution of surplus value and the dynamics of capital accumulation. The general problem of nonproduced means of production is first posed in a way that admits a Fundamentalist as well as Neo- Ricardian solution. It is seen that Sraffians refer to land's scarcity in relation to the level of effective demand as the cornerstone of their theory of rent, while Fundamentalists rely on the political and economic power of the landlord class to close the system of price-and rent-determining equations. A key Fundamentalist proposition concerning the dynamics of the capitalist mode of production-that rent deters capitalist development in agriculture-is demonstrated in the context of the sylized Fundamentalist model. This result is contrasted with Okishio's theorem which holds that individually profitable technical change will cause the general rate of profit to rise.