Economic rent (absolute) - it is a payment for a resource whose supply is strictly limited. Land rent is a special case of economic rent. The word "rent" in translation from French (French rente from Latin reddita) means "given". The etymology of this word thus reproduces the fact of the transfer of part of the production (or income) produced by the farmer to the owner of the land. Land rent - it's a fee per use of land and other natural resources, the offer of which is strictly limited. The supply of land and other natural resources acts as a reserve, rent as a flow. Consider first the rent that all landowners receive, regardless of its quality. K. Marx (18.18-1883) called such rent absolute, and N. G. Chernyshevsky (1828-1889) called "idle" 1. For. analysis, we proceed from a number of premises. We suppose:
1. Complete subordination of agricultural production to the market, i.e. lack of production for their own purposes (which is often the case in food production).
2. Separation of land as an object of economy from land as an object of ownership. This means that all land is rented in a completely competitive market.
3. All land is used for the production of a staple food (for example, wheat in the USA, rye in Russia, or rice
4. All lands are of the same quality, equally productive.
Land supply is absolutely inelastic.
Differential rent: The proposed model of net economic absolute rent assumed the same quality and the same location of the land. DIFFERENTIAL RENT - general economic category commodity production due to the limited land plots, the monopoly of management on them and the peculiarity of pricing in the rent-forming industries. One of the forms of land rent (the second is monopoly). As for the absolute land rent, it is an artificial construction of the Marxist school in economics for the pseudoscientific substantiation of the elimination of private land ownership and the nationalization of land.
Differential rent is formed as a result of the difference between the social value of a commodity, determined by the cost of production on relatively worse lands, and its value on average and better lands. The additional (or excess) surplus value that arises in the process of selling products turns into additional (above the industry average) profit and takes the form of differential rent. Distinguish between differential rent I and II. Differential rent I is formed due to differences in the natural fertility of the land, and differential rent II - due to the higher efficiency of additional investments in the same land plots. Although differential rent II is created by the additional application of labor and capital, the condition for its occurrence is the same natural properties of the soil, but more productive due to an increase in their economic fertility. This determines the differences in the distribution of differential rent. In principle, all differential rent I belongs to the land owner (person or state), part of it is appropriated by an economic entity, for example, a tenant, since this form of rent is created due to more productive labor and additional investment in land. Part of the differential rent, regardless of its form, has the right to appropriate the state through the land tax. Such a right follows from the fact that whoever owns or uses the land, it is a national property. The state uses the part of the differential rent received through the land tax for general needs, including for national economic measures to improve the land through land reclamation, irrigation, the cultivation of areas subject to spontaneous destruction associated with the destruction of crops, etc.
72. Capital market and%.
Capital is one of the basic elements of TQB of common wealth. Capitalin the broadest sense of the word- This any resource created with the goal of producing more economic benefits. Receiving a certain flow of goods and services in the future presupposes the presence in the production process of a certain stock of durable resources, i.e. capital. Capital differs from land in that it has the ability to reproduce, while the land fund is a fixed amount and cannot be rapidly increased. There are two main forms of capital: physical (tangible) capital(machines, buildings, structures, raw materials, etc.) and human capital (general and special knowledge, work skills, production experience, etc.). Strictly speaking, human capital is a special kind of labor resources... Therefore, under capital in the proper sense of the word usually
imply only physical, material factors. Physical capital is divided, in turn, into main capital, where do real assets durables, such as buildings, structures, machinery, equipment, and working capital, spent on the purchase of funds for each production cycle: raw materials, basic and auxiliary materials of labor. Fixed capital serves for several years and is subject to replacement (reimbursement) only as it is physically or morally worn out (the latter means the depreciation of fixed capital as its productivity decreases or with the beginning of the production of machines and equipment of a fundamentally new quality, which makes the use of the old fixed capital technically and
economically unprofitable). The value of capital today depends on what capital can produce in the future. To generate income, the owner of capital must give up current consumption in the hope of receiving a higher reward in the future. The stream of future income should stimulate the creation of today's stock. To create this stock, in turn, you need stream of savings. Time factor(comparison of the past with the present, the present with the future) acquires paramount importance in the analysis of capital. Capital income will be generated only if the owner of the capital transfers it for productive use to the entrepreneur (or becomes an entrepreneur himself). In this case, the capital lent for a time must return incrementally. This increase returned to the owner of capital is called interest. Loan interest- it is the price paid to the owner of the capital for the use of his funds over a certain period of time. In the analysis, capital is usually considered exclusively in monetary form, implying that physical capital is bought with money.
73. The main types of capital. Physical and moral deterioration. Depreciation!
Main capital- this is that part of the productive capital that is fully involved in the production process, functions for a long time and transfers its value to the capital being created gradually, but as it wears out. Machine 500,000 rubles-10 years 1000 ed.-50 rubles.
Physical deterioration means of labor is expressed in their loss of technical properties and characteristics as a result of operation, weathering, storage conditions.
Obsolescence fixed assets - a decrease in the cost of existing fixed assets as a result of the emergence of new types of them, cheaper and more productive. There are two forms of obsolescence. The first manifests itself in the loss of value for equipment as a result of an increase in labor productivity in the industries that manufacture them. New cars are becoming cheaper, while the existing ones are morally depreciated, economically obsolete. Obsolescence of the second form is expressed in the loss of value by the means of labor as a result of the emergence of new, more productive machines, better in technical and economic parameters. Obsolescence is an economic category. Based on the study of the regularities of physical and moral wear and tear, the period of economic wear of this type of means of labor is determined, which underlies the approved standard service life of fixed assets.
Depreciation For the timely replacement of obsolete means of labor, without prejudice to the entrepreneur, it is necessary that the value of the retired funds be completely transferred to finished products... The necessary funds must be accumulated in the depreciation fund. Only under this condition can the process of reproduction of fixed capital be carried out in a planned and efficient manner.
Depreciation- the process of gradual transfer of the value of fixed assets as they wear out to manufactured products, converting them into monetary form and accumulating financial resources for the subsequent reproduction of fixed assets. By economic essence depreciation is a monetary expression of part of the value of fixed assets transferred to a newly created product.
Depreciation fund - a special cash reserve intended for the reproduction of fixed assets. He is a financial resource for capital investments... The depreciation fund is intended for simple reproduction of fixed assets, for replacing worn-out assets with new copies of equal value. However, in conditions of high rates of scientific and technological progress, depreciation is a source of expanded reproduction of fixed assets. In the process of reproduction of fixed assets, the moments of their simple renewal and expansion are harmoniously combined, and their delimitation is conditional.
74. Information and knowledge as economic resources: essence, features.
Factors of production - economic resources involved in the production of goods and services. Economic resources are understood as human resources (labor and entrepreneurial ability) and material resources (land and capital). Market economic resources- the market in which the purchase and sale of factors of production takes place. In other words, the market for factors of production is the sphere of commodity circulation of labor, natural resources and capital. Resource consumers are enterprises and organizations that produce various benefits and acquire them from resource owners. The owners of economic resources, sellers, in most cases are households. For every type and quality production resources separate markets are formed: the labor market, the capital market, the market for natural resources. In these markets, as a result of the interaction of supply and demand, prices of economic resources are formed.
The need to study the markets of economic resources is due to a number of reasons. First, it is in these markets that the monetary income of the household is formed. Households that own economic resources act as their sellers in the factor markets. Prices in factor markets determine household income. The standard of living of the population depends on its value. Second, resource prices determine the distribution of income in a society. Unreasonably high prices for some resources and low prices for other resources contribute to increasing income inequality in society. Problems of distribution of income from factors of production are always in the center of public attention. Third, the prices that emerge in the markets for economic resources determine the value of the firm's production costs. If for households the prices of factors of production are income, then for firms - expenses, costs. A firm that maximizes its profits will seek to reduce costs. The most efficient combination of the least expensive resources will be used for the production of products. The prices of economic resources determine which factors of production and in what quantities will be used in the production process. Fourth, the mechanism for the formation of prices for economic resources determines the rationality of their distribution by areas of activity. Resource prices facilitate their efficient distribution among various industries and firms. Resources are allocated to firms and industries based on their ability to pay. The willingness to pay for economic resources is determined by their profitability (or loss-making). Only that firm or industry, whose products are in demand, works profitably. Consequently, economic resources are allocated efficiently if they are directed towards the production of goods required by society today.
In the markets for factors of production, the laws of supply and demand also apply. However, the specificity of the objects of purchase and sale themselves determines some of the features of both the supply and demand of economic resources, and the formation of their equilibrium price. First, in contrast to commodity markets, in which a buyer acquires a product and takes full possession of it, in factor markets the buyer acquires only the services that this factor can provide. In other words, the acquisition of such a factor of production as labor does not at all mean that its buyer becomes the owner of an employee with this knowledge and skills. With regard to such factors of production as capital and land, it is possible to acquire them both in full ownership and only the services of these factors. Secondly, a specific feature of the demand for economic resources is that it has a derivative, secondary nature, that is, it is determined by the demand for finished goods produced with the help of a given resource. Generally, the higher the demand for a product, the higher the demand and the resources required to produce it. Third, the demand for factors of production is presented only by entrepreneurs, that is, people who are capable of organizing the production of the goods necessary for society. Fourth, the peculiarity of the demand for economic resources is that the demand for resources is interdependent. In the manufacturing process, various resources interact with each other. They interchange or complement each other, sometimes compete. The productivity of one factor of production depends on the efficiency of another. The interdependence of resources also means that in most cases it is impossible to say how much of a product was produced by any of the inputs separately from the others. Fifth, the specificity of supply in these markets is due to the scarcity of economic resources and factors of production derived from them. If there was no problem of limited resources, then there would be no problem of choice and all the needs of society would be satisfied. However, resources are scarce, and the degree of scarcity largely determines the supply and cost of factors of production in the market.
75. The main approaches to distribution at the micro level: functional and depending on the size. Lawrence curve and Gini coefficient.
The distribution problem is almost always associated with economics with the problem of efficiency. And if at the macrolevel distribution is viewed through the prism public policy, then at the micro level the distribution of income is traditionally reduced to the analysis of the profitability of factors of production. Therefore, in economic theory there are two approaches to the distribution of income:
1. Functional, in accordance with which a functional or factorial (horizontal) distribution is allocated depending on the function performed by each factor of production in the production process: wages - for work, rent and interest - for resources owned by someone, profit - entrepreneurial income.
2. Personal, i.e. personal (personal), vertical distribution of income, distribution of income among households.
Functional distribution is a problem in microeconomics, personal distribution is a problem in macroeconomics.
The formation of personal income is not limited only to the distribution phase; exchange and the method of connection with the means of production play an important role. Among the various methods of distribution, the most effective is the one based on labor that is beneficial to the producer. Distribution must be humanistic and fair in terms of equality for all economic actors with differing interests of the rules of the game - economic activity.
In general, the following distribution methods can be distinguished:
1. In accordance with the Marxist labor theory of value for workers, distribution is carried out according to the value of labor power, and for capitalists - according to the capital invested; under socialism, distribution was carried out according to labor and through public funds consumption.
2. Neoclassical theory highlights the factor distribution of income.
3. In modern economic theory, an integration approach to income distribution prevails.
Differentiation of wages predetermines inequality in the distribution of personal income. It is ultimately based on differences in abilities, education, and professional experience. An important factor inequality is also the uneven distribution of ownership of securities(stocks, bonds) and real estate... Finally, luck, luck, access to valuable information, risk, personal connections, etc. often play a role. These factors act in different directions, sometimes smoothing, then increasing inequality. To determine its depth, use the Lorentz curve.
In economic theory, it is customary to distinguish between the following types of land rent: differential, absolute and monopoly.
It is customary to study the essence of rental relations by analyzing the content of differential land rent. In order to reveal the content of differential rent, let us carry out a sequential analysis of the conditions, causes and source of its formation.
The conditions for the formation of differential rent are:
- 1) The difference in the level of fertility of different plots of land, in the location of plots in relation to sales markets, in the productivity of additional capital investments in land. For brevity, these differences can be summarized as differences between best and worst lands. Using scientific advances in agriculture the fertility of the worst lands increases, with the development of transport, the difference in the location of lands is smoothed out, but not completely. Moreover, the new conditions of agricultural production give rise to differences that did not exist before in the fertility and location of land plots.
- 2) Limited land in general, the best and the worst in particular. Agricultural production cannot be concentrated only on relatively better land, so middle and poorer land is also cultivated to meet the public demand for food products.
- 3) The presence of commodity-money relations. Rent can develop as money rent only on the basis of commodity production. And it becomes such to the same extent that agriculture becomes a commodity production.
The inevitability of cultivating the worst lands determines the recognition of production costs on these lands as socially necessary, but in this case, farms on the best and average lands, along with the usual (average) profit, will receive additional profit (Table 1).
Surplus profit, which becomes stable and is fixed in the price of land products, is called rent. Surplus profit in agriculture arises from higher labor productivity on better plots of land. It represents the surplus of surplus value over the average profit.
Surplus profit turns into differential rent if the following conditions are met:
- 1) the creation of surplus profit should be associated with relatively stable, non-reproducible conditions of production;
- 2) it is necessary that the best non-reproducible conditions of production turn into a monopoly of individual farms.
The reason for the formation of differential rent is the monopoly on land as an object of the economy. The monopoly of the economy on land as the cause of differential rent will exist as long as commodity production and the market remain.
From these methodological positions, we can give the following definition of differential rent.
Differential rent is a stable surplus profit, which represents the economic realization of the monopoly on land as an object of the economy and is quantitatively equal to the difference between the social value of agricultural products and their individual value from the best lands.
According to the method of reproduction of surplus profit, two types of differential rent are distinguished: I and II differential rent.
I differential rent is a stable surplus profit received as a result of different productivity of the same labor input on equal land plots of different fertility and location.
I differential rent grows with the development of extensive farming. It increases in connection with the involvement of new land plots in the economic turnover, with the exception of the case when the entire increase in the cultivated land falls on the worst lands that do not bring differential rent.
II differential rent is a stable surplus profit obtained as a result of different productivity of successive additional capital investments on the same piece of land.
Differential rent II can arise both with an increasing (24 cent. Per hectare) and with a decreasing (16 cent.) Productivity of additional investments in land. For this, it is only necessary that the productivity of additional investments in land B be higher than on land A.
II differential rent under certain conditions can arise on worse lands if additional capital investment in land B turns out to be less productive than in land A. This corresponds to the fourth investment in land B with a yield of 12 centners. per hectare, when the second differential rent is formed on land A in the amount of 60 thousand rubles.
II differential rent arises in the transition to intensive farming. Consecutive additional capital investments in the same land area mean the intensification of agriculture, which expresses the main trend in the development of agriculture. Differential rent II is organically linked to the process of agricultural intensification. The purpose of intensification is to increase the output of products per unit of land area for a given capital expenditure.
Farms that conduct production more intensively than other agricultural enterprises in the same zone receive differential rent II.
Since the formation of the second differential rent is associated with the process of agricultural intensification, the tenant entrepreneur is especially interested in lengthening the lease term. Having bought off the land owner by rent, he can appropriate all the additional profit that is generated from additional capital investments during the entire lease term. The landlord will make sure to include this additional profit in the rent, but only when concluding a lease for a new term.
Ownership of land leads to the fact that land use fees are charged from any plot, including from all the worst lands. Indeed, the landowner will never agree to lend his land for free to the tenant. The worst lands, like the best ones, are provided for use by tenants only when they pay rent to the landowner. But this will no longer be differential, but absolute land rent.
The results of land management depend on the fertility of the land and on the location of the plots. Therefore, there are types of differential rent:
Differential rent I on natural fertility is the difference between income from production in the worst conditions and income from production on the best and average plots of land.
The market price of agricultural products is determined by the cost of production on the worst lands. Businessperson running a household on the more fertile area, will receive more income all other things being equal.
Surplus profit is converted into differential rent and is appropriated by the owners of the middle and best plots of land.
Differential rent I by location- the difference between incomes from the production of similar products on lands of the same fertility, but closer to the sales markets. As a result, manufacturers bear different costs for the delivery of products to the consumer.
The number of sites located close to the sales market is limited. The production of this land alone is insufficient to meet the entire demand for food. Therefore, remote areas are involved in the economic turnover, which will be processed only when the price of the product will cover all costs (including transport costs) and provide an average industry profit. The price of agricultural products is regulated by production costs in distant areas.
This rent is also appropriated by the landlord.
Question 5. Differential rent II
Fertilization, use the latest technology cultivation of agricultural crops, carrying out a complex of agrotechnical measures creates economic soil fertility - its ability to provide increased productivity. Natural soil fertility is created by nature, based on the use of the beneficial properties of the top layer of the earth - soil. Economic fertility depends on the conditions of farming, the level of development of science and technology, and is created by people.
Before the expiration of the lease agreement, D II is assigned by the lessee, after this period the owner of the land includes it in a new lease agreement. Therefore, land owners always strive to shorten the lease period, and entrepreneurs - to lengthen it.
D II is the result of investment in land resources that generate additional income.
Question 6. Price of land
The price of land depends on the influence of several factors.
1. Rent. The land acquires a price only because it brings in rent.
2. Lending interest rate. Both land rent and interest on loans are factor income. The land buyer always makes a choice: which is better: to buy land plot and receive an annuity or invest days in a bank and have a loan interest.
The price of the land is equal to that amount of money, which, when lent, yields annually an income equal to the rent from that land.
C = Received rent / rate of lending interest.
For example, a land owner receives rent in the amount of $ 10,000, and the loan interest rate is 5%, then the price of land (Tsz) will be equal to:
The landowner will sell his land plot precisely for a price not lower than $ 200, because the bank at a rate of 5% per annum will allow him to receive an income equal to $ 10,000.
Lending rates are relatively stable, and the demand for land and the price of land are increasing, so money owners prefer to invest in land plots.
The higher the rent, the higher the price of the land. The higher the loan interest, the lower the price of the land.
Rent is the amount of rent and other payments for the use of buildings, plantings, roads, etc. located on a given site.
If land rent is a part of the profit paid by the capitalist-farmer to the landowner for the right to use the land, then the total profit that the capitalist-farmer receives on the capital invested in the land must be higher than the average.
Indeed, the capitalist farmer will invest in land capital only if he receives on this capital the average profit plus the surplus that constitutes the material basis of the ground rent, which he must give to the landowner. Excess over average profit – this surplus profit, which should not be temporary, but permanent.
How is this constant, fixed surplus profit formed in agriculture without violating the general market economy laws?
Differential rent, or, as it is also called, differential rent arises regardless of the form of land ownership and the form of management. Only the question of who receives the rental income depends on the form of ownership.
If the land is owned by the state, then rental income in various forms (through the tax system, price mechanism, etc.) is at the disposal of the state, in the state budget... If the land is owned by a large private owner, the rental income (mainly in the form of rent) goes to the landowner. If the farmer, the peasant is the owner of the land, then the rental income mainly goes to him, and is a kind of expression of the surplus surplus product.
The main thing in the question of differential rent is to clarify the conditions and reasons for its formation, as well as legal and economic conditions implementation.
Distinguish between differential rent I and II. Differences in the fertility of plots of land and in their location in relation to sales markets act as the initial conditions for the emergence of differential rent I.
The mechanism for the formation of differentiated rent I can be clearly illustrated with the help of conditional example(see table 17.1). Suppose there are three plots of land, equal in area, but differing from each other in the natural fertility of the soil. On site A, 12 centners of wheat are produced at B and C, respectively - 10 and 8. The costs of growing wheat are the same at all sites.
As you can see from the table. 17.1 the individual costs of producing a unit of output vary from site to site. A product is sold, regardless of its individual costs, at the general market price of production. The market price of a product is determined by the cost of production on the worst-used land plot. This is the "secret" of the emergence of differential rent. By selling products in accordance with production costs in a relatively worse site, entrepreneurs in the best sites will have additional income. – differential rent I.
Table 17.1
Formation of differential rent I by fertility
The formation of differential rent II at the expense of additional capital investments can also be illustrated. Differential rent II - this is a net additional income arising from additional investment of funds and labor in a cultivated area of land. An additional investment means a more thorough soil cultivation, the introduction of organic or mineral fertilizers, a more thorough care of crops, etc.
The difference between annuities I and II is conditional. The second rent is, as it were, superimposed on the first rent. But there is no complete similarity between them. So, there are significant differences in the procedure for the sale of income. Income from rent I, since their size is not associated with additional capital investments, are given as a condition of the lease and, as a rule, are withdrawn entirely by the owner of the land, while differential rent II, in principle, should remain at the disposal of the lessee, since by its origin it is the result of his costs. Regardless of this, the landowner, when renegotiating the lease agreement for this land, improved not by his efforts, sets the amount of rent taking into account the increased soil fertility due to additional investments during the previous lease term.
As a result, there is a constant bargaining between land owners and tenants: the farmer seeks to conclude a contract for a longer period, and the landowner, on the contrary, – for a shorter one. Maintaining this order makes it difficult to use the reserves of agricultural development.
The principle of the formation of differentiated rent II is the methodological basis for understanding the essence of intensification of production in general and agricultural production in particular.
In the first form of differentiated rent, the task of increasing the volume of agricultural production is solved mainly on an extensive basis, that is, by involving additional plots of land into economic circulation. And under the second form of rent, the increased needs for agricultural products are satisfied by increasing the yield of already developed lands as a result of additional investment of funds and labor in previously developed areas, that is, on an intensive basis.
INTRODUCTION2
1. The concept of annuity in various economic doctrines 3
2. Rent types 4
2.1. Land rent 4
2.2. Absolute annuity 5
2.3. Differential annuity 6
2.4. Monopoly rent 7
2.5. Economic rent 7
2.6. Construction rent 9
2.7. Forest rent 10
3. Land tax 11
3.1. Subjects and objects land tax 11
3.2. Land tax rate 13
4. Land tax problems and possible solutions 15
4.1. Agricultural sector 15
4.2. Regulation of the agricultural sector 16
4.3. Lending to the agro-industrial complex (land banks) 17
4.4. Land payments 19
CONCLUSION 21
References 23
INTRODUCTION
Wherever the forces of nature can be monopolized and provide surplus profit to the industrialist who uses them, whether it be a waterfall, or a rich mine, or water rich in fish, or a well-located building site, a person is recognized by virtue of his title to a piece of land as the owner of these objects of nature, captures this surplus profit from the functioning capital in the form of rent. Economists define the essence of rent in different ways. Some consider rent as one of the types of property income, payment of owners for the use of a natural resource. Others see rent as regular income from capital or land received by their owners without doing business. Rent is also defined as a special type of relatively stable income that is not directly related to entrepreneurial activity.
The analysis of the formation of rent makes it possible to find out the sources of income of these two subjects of lease relations, to reveal the influence of the natural factor and the legal form of ownership on the mechanism of the emergence of rent.
The definition of rent is inextricably linked with the concept of land. Externally, rent is a payment for the use of land that the owner receives from the tenant. Obviously, it is part of the value of the product received by the entrepreneur. But its nature, sources and circumstances of its occurrence will be shown by a theoretical analysis. First of all, it involves the elucidation of two main circumstances that determine its emergence: firstly, the features of pricing for agricultural products, in which the natural resource has a decisive influence on labor productivity, and secondly, the specifics of obtaining superprofits in this industry and the reasons for sustainability their reproduction. These circumstances are generated by the following features inherent in the natural factor of production: 1) land and many other natural resources are not freely reproducible working conditions, like industrial tools and materials; 2) the scarcity of agricultural land in general, and land of better and average quality, all the more, determines the scanty elasticity of land supply.
But it should also be borne in mind that the term "rent" has two meanings: legal and economic. In jurisprudence, rent is an independent legal relationship concerning the direct relationship between the subjects of the rent agreement, in no way connected with the lease of property. The economic relationship between the recipient of rent and its payer is directly related to the use of credit funds or renting property.
1. The concept of rent in various economic doctrines
From the point of view of Marxist economic theory, rent is a converted form of surplus value along with profit, wages and interest. Karl Marx wrote: “Whatever the specific form of rent, we generalize to its types the fact that the appropriation of rent is an economic form in which land ownership, and that land rent, in turn, presupposes land ownership ... ". On the surface of the phenomenon, rent appears as payment for land, which creates the impression that the land itself generates this rent. However, the labor theory of value denies this, since value can only be created by living labor. The source of rent is the unpaid surplus labor of hired workers in agriculture. This part of the surplus value received by entrepreneurs - tenants of land plots is paid by them to land owners.
In the interpretation of the theory of factors of production and the theory of marginal productivity, rent is the reward that the owner of natural resources, in particular land, receives in accordance with the marginal productivity of these factors.
The essence of one of the interpretations is that rent is not an independent form of income, but represents a loan interest on the capital invested in land.
According to the theory of physiocrats, rent is a pure product of nature, the only income that society actually receives.
2. Types of rent
2.1. Land rent
A special form of rent is land rent associated with agrarian relations. Land rent acts as a part of the surplus product created by producers who manage the land. Land rent is a certain amount that a land owner receives from a tenant - an entrepreneur who has taken a land plot for temporary use for rent.
Land rent is formed not only in connection with the lease of land for agricultural production, rent also takes place in cases where land is leased by entrepreneurs for the construction of buildings and structures, the development of its subsoil. Land rent appears in two main forms - absolute and differential, which is due to the existence of two types of land monopolies: monopoly private property land and land monopoly as an economic object.
2.2 Absolute annuity
Absolute rent is the result of a monopoly of private ownership of land by a particular class of society. Indeed, the owner of the land is precisely in this capacity, knowing that the land is necessary for everyone - for agricultural and industrial production, - will force the person who wants to use the land to pay rent for it. Indeed, in English the word “rent” originally meant rent or rent, and this category manifests itself with all clarity and definiteness at the same time as the emergence of capitalist society. This rent contains two parts: one corresponds to the interest on capital already invested in the land and is inseparable from it (melioration, irrigation, buildings, etc.); the other always exists and corresponds to the transfer of the right to use the land, or, as Ricardo said, to use the original and indestructible properties of the land.
The formation of absolute rent is associated with the fact that, due to the backwardness of agriculture in comparison with industry, the organic composition of capital invested in agriculture is lower than the organic composition of capital invested in industry, and, consequently, in agriculture, the share of variable capital (spent on wages) is proportionally higher than in industry. It follows from this that the surplus value created in agriculture is higher than the average profit, and the value of products is higher than the capitalist price of production. The proportional distribution of the surplus value created in agriculture is impeded by land ownership, which, representing a monopoly, itself constantly claims a part of this surplus value and appropriates the difference between value and the price of production. Land ownership thus inflates the price of agricultural produce by the amount it collects as absolute rent, and which is therefore a kind of tax imposed on society.
It should be emphasized that the historical backwardness of agriculture in comparison with industry, which is one of the main manifestations of the law of uneven capitalist development, stems not from the nature of the land, but from social relations. Private landed property, which prevents the investment of capital in land and appropriates for itself an ever-increasing part of surplus value, is one of the main reasons for this backwardness. An explanation of the emergence of absolute rent follows from the fact of a lower organic composition of capital in agriculture compared to industry.
Analyzing such a concept as net economic rent, we deliberately
considered land and land, completely abstracting from the ways of their use in practical economic life. It is natural that various sites lands differ in fertility, climatic features, location, and not all of them are suitable for universal use. The land in the Krasnodar Territory has many advantages for the cultivation of grain crops, and in the Kaliningrad region - for the construction of ski resorts. For this reason (there has been astonishing consensus among all economists since David Ricardo), not all land plots generate equal rents in the markets of competing sellers.
