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It seems that he's mostly considering the value of the idea of economic rents in terms of how well they explain corporate profits as a means of testing the idea
by panglott 12y ago
It seems that he's mostly considering the value of the idea of economic rents in terms of how well they explain corporate profits as a means of testing the idea of economic rents themselves. However, the core idea of economic rents comes from analyses of land rents and monopoly rents in the 19th century: application to contemporary corporate profits is a derivative application of the idea.
Land rents, for example, were the rents generated by idle 18th and 19th century gentility simply for inheriting the land at the basis of economic production in an agricultural economy, rather than for contributing useful labor towards agricultural production. This idea has gained renewed attention with the rise of extreme inequality and inherited capital.
He also seems to be conflating these different kinds of rents together: land rents, monopoly rents, IP rents. The economic value of IP rents can be easily seen in patent trolling, defensive patents, &c. But trying to explain the corporate profits in terms of unspcified "rents" sound more like a project to discredit the idea of economic rents by conflating a lot of variables. That might be because I'm skeptical that economic rents are a predominant explanation of rising corporate profits, of course.
- esoltas 12y agoIt's true that I'm talking about all different types of rents in the article. I've written about land rents and land taxes here, if you're interested: http://esoltas.blogspot.com/2012/06/on-land-taxes.html http://esoltas.blogspot.com/2012/06/on-land-taxes.html. Also, as old as the Henry George analysis of land rents is, it is still quite relevant. If you look at some of the rebuttals to Piketty's capital (eg., this one: https://ideas.repec.org/p/spo/wpecon/infohdl2441-30nstiku669glbr66l6n7mc2oq.html https://ideas.repec.org/p/spo/wpecon/infohdl2441-30nstiku669...), what you see is that most the growth in capital/income ratios comes from increases in the value of land capital. That would suggest George is still relevant to our world, and that conversations about IP might be secondary.
- panglott 12y agoThanks, I've long wished there was a well-informed contemporary reappraisal of Henry George. There were a few municipalities in the U.S. that went to land value taxation in the late 19th century, but their economic history is not especially remarkable. Most, IIRC, have shifted to conventional property taxes, mostly because the original impetus for Georgist taxes are now obscure and out of fashion, and there is a perceived value to having tax structures common to other municipalities (easier to attract businesses and professionals if taxes aren't unusual).