It is important to note that the differential land income turns into a rent not thanks to special labor efforts of the workers occupied in agriculture, and a of the special conditions of production connected with a rarity, an irreproducibility and differently goodness of the earth. But force of nature not a source of additional profit, but only natural basis. Its source is work of landowners.
For the explanation of the nature of a land rent K. Marx used, in our opinion, very indicative example. Let all factories in the country be set in motion by steam-engines, and one has falls which natural force only this factory can use in the territory. It is easy to notice that this factory will gain additional income in comparison with the others. Falls – the phenomenon limited, each factory cannot have it, respectively the owner of falls will always have this additional income, i.e. a rent.
Distinctions in degree of intensity of separate farms even in the conditions of agriculture will remain for a long time. Therefore capital investments will cause receiving additional profit. But a mass investment of the additional capital, doing more all capital, conducts to reduction of a differential rent.
It is necessary to notice that not always and not all additional profit in a rent. The difference between the total amount of net income and average net income includes the sum of other types of a pure in each group of farms: tactical, rationalization, insurance, etc. These types of income can be considered as percent (or profit) on the current investments (a, the rationalization income, etc.).
The output in agriculture is closely connected with biological, and it caused a number of features of an intensification of production, a of its transfer to an industrial basis. It is expressed not only in an equipment, but also in a wide circulation of technologies of industrial type. Changes in technology are effective in agrarian production only in case organic communication biological (plants,, soils and mechanical (working cars and the equipment of elements of a is provided. if they form uniform bioindustrial system.
However the same D. Ricardo paid attention and to other circumstance: the rent is paid for use of the earth only because the number of the earth is not boundless, and its quality is not identical. Really, during development of new lands when the fertile earth is a lot of rather food needs of the population or concerning the earth which can be processed that capital that the population has, the land rent does not exist. After all nobody will begin to pay for use of the earth when there is a mass yet of the earth which is not turned into property which therefore everyone who will want to process it can have.
The neoclassical direction in the economic theory investigates problems rennets according to conceptual approach of the theory of a limit product and limit return. The sizes of limit products defines a contribution and a share of each of production products.
The second essential feature of agrarian sector is use of the earth as means of production. The earth is used practically in any production if only it is not conducted in space. But in nonagricultural branches the earth is used only as basis for placement of production constructions, constructions, is a platform for placement of the enterprise. Useful properties of the earth thus do not matter. The exception is made, perhaps, by only a mining industry which operates bowels of the earth.
The businessman gets down to business when expects to get not only average profit, but also the additional income which will be paid to the owner of land as a land rent. Therefore, the land rent is a form of economic realization of the owner on the earth. In its structure distinguish a differential and absolute rent, and also an exclusive rent.
Analyzing economic history of the world, it is possible to see that at all times while there is a landed property, there is also a specific form of a payment for use of the earth – a rent. Once at the household level it was called a land rent. Under this name this economic phenomenon was also included into the scientific theory.