Bluffer’s Guide to Economics/ RENT

‘cuz my money is spent. On the god damn Rent, neither party is mine, not the jackass or the elephant. That lyrick by Chuck D says it all. Political power is an extension of economic power. As a result, rent collectors have political power, rent payers don’t. Why? Because Land is the only factor of production that has a fixed supply. There are two competing price theories. both are correct if applied correctly, the difference between them is a difference of ideological framing. An emphasis on stocks or flows . If the the current distribution of the means of production and circulation is taken as a given, you want to focus on the subjective price of stocks. If distribution of productive assets is challenged, the focus falls on the objective cost of sustaining flows. The price of any stock is always subjective. It’s price is whatever consumers will pay for it, which itself depends on how much these consumers want or need it compared to how much supply is available. However, stocks can diminish and increase. When stocks of any given good fetch a high price, new suppliers are attracted, stocks increase, prices fall. When prices fall bellow production costs, flows reduce, stocks diminish, prices rise. So while at any item moment the price of any good is subjective, competition from new suppliers drives price toward cost. This means that any productive factor that can increase in supply can not sustain a price above its own reproduction cost. This is true of both Labour and Capital. However Land, in the economic sense, can not have it’s supply increased. The natural world is a fixed stock. So is the artificial universe of intellectual property, and the all other politically granted priviledge. No matter how high the price, new suppliers can not enter the market, thus the cost of production is irrelevant. Only how much the consumer wants or needs the goods matters. In the case of residential or productive land, medicines, key patents, and other essentials, that price is basically every cent you have, beyond your own subsistance costs. Rent collectors take it all. Rent is passed in in all prices. And those who accumulate it rule us.

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