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Differential and absolute ground rent
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Differential and absolute ground rent : ウィキペディア英語版
Differential and absolute ground rent

Differential ground rent and absolute ground rent are concepts used by Karl Marx in the third volume of Das Kapital〔Karl Marx, Das Kapital Vol. 3, Part 6. ()〕 to explain how the capitalist mode of production would operate in agricultural production, under the condition where most agricultural land was owned by a social class of land-owners〔Kevin Cahill, ''Who Owns The World? The hidden facts behind landownership''. Edinburgh: Mainstream publishing, 2006.〕 who obtained rent income from those who farmed the land.〔Robin Murray, "Value Theory and Rent: Part One and Two", in: ''Capital and Class'' (London) no. 3 & 4 (Autumn 1977 and Spring 1978). David Harvey ''The Limits to Capital''. London: Verso, 1999, chapter 11.〕 The farm work could be done by the landowner himself, the tenant of the landowner, or by hired farm workers. Rent as an economic category is regarded by Marx as one form of surplus value just like net interest income, net production taxes and industrial profits.〔
*Makoto Itoh, ''The Basic Theory of Capitalism'' (Barnes & Noble, 1988), pp. 235–249.〕
==Aim of the theory==

In good part, Marx's theory is a critique of David Ricardo's Law of rent,〔Christian Gehrke, "Marx's critique of Ricardo's theory of rent: a re-assessment." In: Neri Salvadori et al. (eds.), ''Classical Political economy: Essays in Honour of Heinz Kurz''. New York: Routledge, 2012, pp. 51-85.〕 and it examines with detailed numerical examples how the relative profitability of capital investments in agriculture is affected by the productivity, fertility, and location of farmland, as well as by capital expenditure on land improvements.〔Isaac Illich Rubin (1975) ''Essays on Marx's Theory of Value''. Montreal: Black Rose Books, chapter 29.〕 Ricardo conceptualized rent income essentially as an "unearnt" income in excess of true production costs, and he analyzed how some farm owners could obtain such an extra profit because of farming conditions which were more favourable than elsewhere.
Marx aims to show that capitalism turns agriculture into a business like any other,〔Michael Perelman, ''Farming for Profit in a Hungry World''.〕 operated for purely commercial motives; and that the ground rents appropriated by landowners are a burden for the industrial bourgeoisie both because they imply an additional production-cost and because they raise the prices of agricultural output.〔Ernest Mandel, Marxist Economic Theory (Merlin, 1968), Volume 1, chapter 9.〕 More specifically, Marx intended to show how the law of value governed capitalist farming, just like it governed capitalist industry.〔Ben Fine (1979)"On Marx's theory of agricultural rent" in ''Economy and Society'', 8:3 241–278.〕
The peculiarity of capitalism in agriculture is that commerce has to adapt to physical factors such as climate, altitude and soil quality, the relative inelasticity of agricultural supply, and the impact of bad harvests on international prices for farm products.〔Leo Cawley, "Scarcity, distribution and growth: notes on classical rent theory", in: ''Review of Radical Political Economics'', Vol. 15 No. 3, Fall 1983, pp. 143–158.〕 Eventually, however, the production of farm products is completely reorganized according to the exchange-value of farm output – foodstuffs are then produced mainly according to their expected trading value in the market (this is not always completely true, e.g. because it may be feasible to cultivate only a limited variety of crops, or run a limited variety of cattle on particular lands, or because there is no perfect knowledge about what the market will do in the future, if there is great price volatility, climate uncertainty etc.).

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