Land rent

Depending on the production efficiency, entrepreneurs receive more or less income. This, in turn, affects the relationship between the owners and users of resources, as well as the cost of the resources themselves in the market.

Land rent is an economic category that provides for the regulation of relations between the land owner and the landowner. Externally, this category is a payment for use. Together with this, it is part of the cost of the product received by the entrepreneur.

From the economic side, the land is always either a direct factor of production, or it is used to locate production facilities, residential, administrative premises, as well as transport and other communication systems. Together with this, it does not belong to the category of freely reproducible production factors.

Today, land resources are of great importance. In the modern world, an irreplaceable production factor is the entire natural environment, which turns into a condition conducive to the reproduction of the world economy in general. However, as experts note, the natural environment is only beginning to be applied in real economic relations, affecting the reproduction of both public and individual capital.

The main feature of market relations related to the use of land as a limited, non-reproducible natural factor is land rent.

Pricing in agriculture has distinctive features. They are mainly associated with inelasticity, limited supply of land. It is these special proposals that distinguish income from the use of natural resources from profit, interest and wages.

Land rent occupies a special position in economic science. This is largely due to the fact that agriculture has been the main economic sector for a long period.

Various authors of the theory of land rent is treated differently.

According to Marxist doctrine, this type of income is a transformed form of surplus value along with interest, profit and wages. Surface land rent is a payment for the territory, which can create the impression that this territory itself generates income. At the same time, the economic value doctrine denies this, pointing out that value is created only by living labor. Thus, land rent is formed from the unpaid surplus labor of agricultural workers. Part of the surplus value received by entrepreneurs-tenants of the territory, they are paid to the owners of this territory.

According to the theory of production factors and marginal productivity, the concept of rent is defined as the reward received by the owner of a land plot or other natural resource that corresponds to the marginal productivity of factors.

One of the interpretations determines this payment not as an independent income, but as a loan interest on a certain capital that is invested in the leased section.

According to the theory of physiocrats, rent is a pure natural product, the only real income of society.

According to another teaching, this payment is considered an unfair income. So, in America, critical statements against rent payments took the form of a whole movement for the introduction of a single tax. It should be noted that this movement was generated by the book "Progress and Poverty" by George George and received substantial support at the end of the 19th century.