When Ricardo saw profit, he called it rent: on the vice of parochial realism
AbstractAccording to Ricardo the principal problem in Political Economy is to determine the laws which regulate the distribution of profits, rents and wages. Ricardo determined the respective shares in real terms and to this end invented an engine of analysis that became paradigmatic. The present paper applies a consistent real and monetary analysis, which is based on a set of objective structural axioms, and contrasts the results with Ricardo’s approach. The general result is that real analysis misses economic reality. The specific result is that rent is a misnomer for the distributed profit of the land owning firm.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33625.
Date of creation: 22 Sep 2011
Date of revision:
New framework of concepts; Structure-centric; Axiom set; Real analysis; Monetary analysis; Pricing of land services; Profit ratio equalization;
Find related papers by JEL classification:
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
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- Kakarot-Handtke, Egmont, 2011.
"Reconstructing the Quantity Theory (I),"
32421, University Library of Munich, Germany.
- Kakarot-Handtke, Egmont, 2012. "Intertwined real and monetary stochastic business cycles," MPRA Paper 42793, University Library of Munich, Germany.
- Kakarot-Handtke, Egmont, 2012. "General formal foundations of the virtuous deficit–profit symmetry and the vicious debt deflation," MPRA Paper 42912, University Library of Munich, Germany.
- Kakarot-Handtke, Egmont, 2012. "The rhetoric of failure: a hyper-dialog about method in economics and how to get things going," MPRA Paper 43276, University Library of Munich, Germany.
- Kakarot-Handtke, Egmont, 2012. "Income distribution, profit, and real shares," MPRA Paper 43291, University Library of Munich, Germany.
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