Fundamentals of Marx: Theory of Ground Rent

This video will cover the basics of Marx's theory of ground rent. We will go over differential rent I and II, absolute rent, and composition of capital.

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Narration, script, and video graphics by "M."
Animated intro by Jack, co-host of the Auxiliary Statements podcast @AuxStatements on Twitter.
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Background Music:
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Sources:
Bhattacharya, R., & Seda-Irizarry, I. J. (2017). Problematizing the Global Economy: Financialization and the “Feudalization” of Capital. Economics, Knowledge, and Class: Marxism Without Guarantees, Routledge, 329-45.
Harvey, D. (2018). The limits to capital. Verso books.
Fine, B. (1979). On Marx's theory of agricultural rent. Economy and Society, 8(3), 241-278.
Marx, K. (1990). Capital: A Critique of Political Economy (Vol. 1). Penguin Books.
Marx, K. (1991). Capital: A Critique of Political Economy (Vol. 3). Penguin Books.
Rotta, T. N., & Teixeira, R. A. (2015). The autonomisation of abstract wealth: new insights on the labour theory of value. Cambridge Journal of Economics, 40(4), 1185-1201.

[TheMightyShell]

Holy shit 20k subs? I remember recommending this channel for others when it was still under 8k. Seems to me that a relevant topic is growing

[ErikaBell_Z]

Congrats on 20K subs. Awesome work! I make sure to save your videos very often as reference sources

[ianmcshea]

Could rent be considered theft then? Sincere question.

[vidividivicious]

So, rent is like a tax on productive activities that take place on a piece of land?

[LowestofheDead]

8:16 So if I understand this right: when you invest in Amazon, it helps Amazon to grow and takeover other tech companies (unless those companies adapt to stay alive). Either way, industrial companies will end up with similar levels of profitability.

But when you invest in a farm with a useful river on its land, the farm can't buy a neighboring farm and put a river there too.

[dempa]

I would very much appreciate a longer video on this topic, but explained in simpler terms.

[antiname]

The intro was based and so was the whole video

[nthperson]

A correction is warranted. Almost all land has the potential to yield some amount of ground rent based on the fact that very little land that has the potential to be productively used remains freely accessible. Highest, best land uses also change over time, as when villages are established that gradually attract increased population and commerce as they become cities characterized by extensive public infrastructure and other amenities. The development of solar panels and efficient wind turbines has generated dramatically increased rents to land that was formally marginal for other purposes.

In a truly capitalist society, owners of tangible capital goods and those who provide services would bid for a leasehold control over whatever location or locations they desired to conduct their activities. Residents would do the same in order to obtain a use right to land on which a residential dwelling is constructed. As rents are societally-created, they rightfully belong to the community to be captured to pay for democratically-agreed upon public goods and services.

[buff]

I've had to watch it a few times to fully understand but this is one of my favorites now. Excellent video. It's hard to explain/understand some of these theories.

I'm a bit traumatized by having studied accounting for 4 years in highschool. Getting into this stuff is interesting but can be mind numbing as well.

[mj]

In Kapital III Marx almost solves the problem of ground rent but not quite.

Here is how Jennifer Choi fills in the missing bits.

Basically by showing that monopoly (and private property) has a labour theory of value cost no different from any other product on the market.


Labor theory of value states that what must be returned to labor is the cost to labor of production.

the energy you use has to be replaced by equal amounts of energy available in traded goods for consumption.

all useful purchases result in energy in for the body

(either they go into the mouth or they reduce expenditure of energy -a house...)

If you don't do this an economy collapses, people are using energy that doesn't get returned to them - they get ill.

(a simple biological model of the survival of an organism just economies are many organisms working together)

It also states that the only cost in production is labor. (if you f u the environment you have to exercise labor to fix it.)

for a balanced economy (sustainability) energy out has to be replaced by energy in.

When we exchange goods the market cost has to replace the expenditure of energy.

What Kapital III missed was that monopoly has a labor cost

Land that seemingly calls forth a demand for recompense but yet has no labour expended on it (ground rent) is charging for replacement of its monopoly or private property labor costs

(Marx spots monopoly but doesn't go the next step to show its labour cost)

the labor spent to protect property rights comes in the form of armies governments police courts etc

there is probably no land on the planet that has not been fought over and when a soldier dies the whole of his lifetimes labor is used up in a few seconds

The cost of any land, with limits on rights of use, in labour is immense.

(thousands of years of wars and before that even animals defended their patches)

Probably only a community or race can pay that level of cost and whatever organisation of ownership is used if it is not common ownership then we must understand the reasons we decide to apportion land to individual custodial ownerships

Marx You are welcome
Taken from unpublished notes on economics by Jennifer Choi

[kubhlaikhan]

Wow, I love the way economists just wreck a simple idea. Why don't you talk about the real world implications instead?!

[TheStainlessFish]

Henry George already solved this problem. It's called LVT!

[hybridxg]

So does the absolute rent theory, in which from what I understand, businesses with higher excess surplus value will have a proportion of it taxed in order for profit to equalize? Does this also apply to say if a capitalist were to buy land rather than rent it? Also if so, why do all capitalists have to buy land then, shouldn’t that mean they all have a tax, not just the ones with a higher amount of surplus? Thanks.

[brian]

Marx's Foundational Tautology

Marx writes (Chapter 24, first paragraph, Capital, 1867), "Hitherto we have investigated how surplus-value emanates from capital; we have now to see how capital arises from surplus-value."

See the tautology? How did this tautology get past the initial reviews? How did this tautology survive the intervening 157 years without being discovered, except for this political scientist? This again illustrates the magnitude of the Marxist co-option of our institutions.

Let's analyze the sentence's tautology...

Surplus value is generated by capital, but capital is created by surplus value!

[habibvakilitahami]

First of all equalization of rate of profit os debatable see Paul Cockshott
Secondly the reason for low composition of capital in agriculture is not explained
It might be because in agriculture no row material is needed
Still an issue of debate
Marx did not mention the fact that S/v in agriculture is higher because off non united rural work force that might give a reason for absolute rent

[hongyizhou]

Awesome vid! Would you consider NFTs "valueless knowledge commodities"?

[elipepper]

Uh...land has no inate price!? Okay, so give me London..