Yes and once again the profits are taken up by the economic rent. David Ricardo first defined the theory of economic rent two hundred years ago and it is still 100% valid today.
Would you like to explain how property relates to Ricardian economics in 2017?
Would you like to explain how property relates to Ricardian economics in 2017?
No as Ricardo has already done so in his Theory of Economic Rent.
This "Economic Rent" is unearned value which is the best kind of value to receive ie for free, and not be confused with weekly rental property payments which are earned value for the provision of shelter ie something is produced. Economic Rent by definition has to be money received for doing nothing, no effort whatsoever, other than simply owning an asset or licence. Economic Rent is called a Capital Gain in terms of property.
Rent
Main article: Law of rent
Ricardo is responsible for developing theories of rent, wages, and profits. He defined rent as "the difference between the produce obtained by the employment of two equal quantities of capital and labor." Ricardo believed that the process of economic development, which increased land utilization and eventually led to the cultivation of poorer land, principally benefited landowners. According to Ricardo, such premium over "real social value" that is reaped due to ownership constitutes value to an individual but is at best[15] a paper monetary return to "society".
The portion of such purely individual benefit that accrues to scarce resources Ricardo labels "rent".
No as Ricardo has already done so in his Theory of Economic Rent.
This "Economic Rent" is unearned value which is the best kind of value to receive ie for free, and not be confused with weekly rental property payments which are earned value for the provision of shelter ie something is produced. Economic Rent by definition has to be money received for doing nothing, no effort whatsoever, other than simply owning an asset or licence. Economic Rent is called a Capital Gain in terms of property.
Rent
Main article: Law of rent
Ricardo is responsible for developing theories of rent, wages, and profits. He defined rent as "the difference between the produce obtained by the employment of two equal quantities of capital and labor." Ricardo believed that the process of economic development, which increased land utilization and eventually led to the cultivation of poorer land, principally benefited landowners. According to Ricardo, such premium over "real social value" that is reaped due to ownership constitutes value to an individual but is at best[15] a paper monetary return to "society".
The portion of such purely individual benefit that accrues to scarce resources Ricardo labels "rent".
OK, so are you saying that speculating on property is a no brainer because the economic rent component is its intrinsic value?
I am saying that the majority of all profits created in the productive economy are taken up by the ever increasing land values. The economic rent always takes the gain.
I am saying that the majority of all profits created in the productive economy are taken up by the ever increasing land values. The economic rent always takes the gain.
Well yes and no. If the consumer and businesses are squeezed beyond what it takes to make a profit, the business goes under and land has to be used for other purposes. The value of the land falls if there is no demand.
Well yes and no. If the consumer and businesses are squeezed beyond what it takes to make a profit, the business goes under and land has to be used for other purposes. The value of the land falls if there is no demand.
True to an extent, but if you go to any major shopping centre in Australia you will find business's failing all the time and a stream of wannabe business owners lining up to take their place.
Take risks - if you win you will become wealthy, if you lose you will become wise
True to an extent, but if you go to any major shopping centre in Australia you will find business's failing all the time and a stream of wannabe business owners lining up to take their place.
I see. So you think that the retail industry is thriving, regardless of profitability. OK. If "productive business" is able to increase profitability by reducing land and labor costs, I say all power to them.
I see. So you think that the retail industry is thriving, regardless of profitability. OK. If "productive business" is able to increase profitability by reducing land and labor costs, I say all power to them.
I didn't say any of that Terry.
Take risks - if you win you will become wealthy, if you lose you will become wise
True to an extent, but if you go to any major shopping centre in Australia you will find business's failing all the time and a stream of wannabe business owners lining up to take their place.
An empty statement that doesn't explain why business is not constrained by land costs.
True to an extent, but if you go to any major shopping centre in Australia you will find business's failing all the time and a stream of wannabe business owners lining up to take their place.
An empty statement that doesn't explain why business is not constrained by land costs.
It's Saturday night and I have better things to do.
Take risks - if you win you will become wealthy, if you lose you will become wise
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