Today we discussed the chapter on rent and I wanted to make some notes before I forget. This stuff is crucial for me and I’ll be very pleased if anyone joins in. Michael
I am convinced that the way forward in this is to concentrate on trying to analyse the kinds of power relations which create conditions for the realisation of rent, paying attention to the dynamics of all that over time. How do particular configurations of relationships distribute the social surplus among participants (landowners, developers, corporate occupiers, small businesses, workers’ households [renters, mortgagees, owners], banks etc etc).
Only as a secondary matter is it worth assimilating the findings into the categories Marx derived from his analysis of 19th century European agriculture. It may be useful to do this but the danger is that the ‘librarianship’ (taxonomic) controversies will swamp the analytical/political value of the exercise.
The great thing about the (? badly named, as someone today suggested) ‘absolute’ rent is that it is defined as arising from systematic barriers to the flow of capital between sectors. Such barriers can prevent the equalisation of profit rates between the sectors and thus have an effect on the whole structure of the economy. We know that land use planning sets up loads of barriers to capital flows into geographic areas (green belts, conservation areas, national parks) [Q: can these be considered like 'sectors'] and sometimes into entire ‘sectors’ in the literal sense: UK retailing was the example I gave today. The Ben Fine story I told about coal mining was another example*.
With the concentration of activity into favoured locations (prime cities, lovely landscapes, heritage zones) we get more and more competition for the land there. ‘Scarcity’ in common language. Many factors then combine to create opportunities for the extraction of rent on any site: simple proximity to desirable destinations, production possibilities generated by previous rounds of investment on the site in question, agglomeration externalities generated by activity on adjoining sites, accessibility improvements flowing from new infrastructure… and so on. Buried in there are elements of DR1, DR2, monopoly rent. There may be elements of absolute rent too, if the special conditions (previous paragraph) are met. Does the mixture matter? I’d like to discuss that.
Via housing and retailing (and other things), many of these ground rent relations enter into the reproduction of labour power. Joon is working on the housing part of this, Burak on the retail, and both are pioneering.
(Getting tired now or perhaps it’s the Guinness) My immediate concern is what to do about all this in relation to the London Plan http://wp.me/PL68t-2X. But the important and long-term issues are much bigger of course. Michael 25 Feb, 2010.
As Harvey pointed out, a critical difference between AR and MR lies whether or not the existence of the rent influences production of surplus value in a sector according to its value composition of capital as existence of barriers of landed property is a common feature in both cases. As capitalist takes profit not according to surplus value produced but just the volume of capital input in a production, the equalisation of the rate of profit followed by competition among capitalists is nothing to do with value composition of capital (i.e. how much surplus value a sector create). Then it is not relevant that dual condition of low value composition of capital and collective power of landed property create the systematic barrier to prevent the equalisation of the rate of profit. Therefore, as Michael wrote, this kind of division of AR and MR is not quite appropriate so makes it difficult to produce advanced implications in urban context.
Instead, what I wanted to point out is how to figure out the existence of different sectors and different common rents shared within a sector. If a unique type of space appropriates a certain rent, then it could be identified as MR. however, if other capitalists manage to create very similar spaces, the uniqueness will disappear. But some amount of common rent may exist among the spaces. Then this generalised common rent in a sector needs to be differentiated from MR. In addition, DR can be generated from the difference of spaces [mainly location or fertility] within the sector. Therefore, rents in a sector consist of 1. a common rent which is different from that of other sectors and 2. DR by difference of spaces within the sector.
And for the first issue raised today in page 364, I want to make some comment. It was about the question that what on earth acquisition of perpetual right to the permanent improvements capital itself creates is to do with serious imbalances within the capitalist accumulation process. As Martin pointed out, this question can only be understood in the context with the previous paragraphs about the tension between capitalists and landowners over permanent improvements in land by investment of capitalists. As landowners eventually take all the benefit of permanent improvements in land, capitalists have to calculate returns they can get from their investment on land. Then they weigh other alternatives causing opportunity costs. Other alternatives can be borrowing other land, replacing old machinery, or employing more labours. So the tension over permanent improvements may be regarded to have a positive role in general capitalist accumulation process. Once this tension disappeared like capital’s acquisition of perpetual right to the permanent improvements, capitalist investments would be so concentrated on mainly land that accumulation process in other sectors can be negatively affected.
Michael, Joon – thanks for this. Some delayed notes on linked to themes raised last Thursday (11/03/2010) :
1. Michael said “I am convinced that the way forward in this is to concentrate on trying to analyse the kinds of power relations which create conditions for the realisation of rent, paying attention to the dynamics of all that over time. How do particular configurations of relationships distribute the social surplus among participants (landowners, developers, corporate occupiers, small businesses, workers’ households [renters, mortgagees, owners], banks etc etc).”
Perhaps this is a way to think about putting Limits to the test: Does it help to scrutinize the dynamics of rent to disclose the social and spatial exercise/configuration of contemporary power? Next week can we spend some time developing this ? Does Limits’ spatio-temporal analysis of rent offer pragmatic insights for future development of counter-powers to rent-seeking?
To develop this a little: in Capital vol. 1 labour movements develop out of group struggle over the exploitation of the physical and temporal conditions of the working day (within the workplace or across a particular industrial sector). However, increasingly mainstream processes of exploitation (of relative surplus value in developed industrial economies) take place in generalized, external, immaterial, and fragmentary ways: eg. flexible processes of short-term contract working; devaluing pensions or extending the working age; or, exploiting the need to procure a housing asset (to risk manage one’s personal and family welfare) to squeeze public services and stimulate financial ‘innovation’. So are the grounds of solidarity and affinity – which formed the grounds for labour struggle – now systematically ‘foreclosed’ by the flexible, residential, personalized, asset based strategies working people have to operate within to make a living? Or do the new manifestations of rent-seeking outline contemporary forms of class exploitation which can animate social movements?
2. Michael said “Only as a secondary matter is it worth assimilating the findings into the categories Marx derived from his analysis of 19th century European agriculture. It may be useful to do this but the danger is that the ‘librarianship’ (taxonomic) controversies will swamp the analytical/political value of the exercise.”
I agree about the practical need not to get bogged down in antiquarianism, but what is relevant to our discussion is the way the theoretical elaborations of ‘rent’ arguably weaken the strategic influence of labour in determining value. This from Ben Fine and Ellen Leopold in their book The World of Consumption:
“Analytically the poverty of neoclassical theory of consumption arises out of two factors. First, as Jevons made clear, his break with the economics of Ricardo was to reject the labour theory of value as applied to industry and, in its place, to apply his own marginal theory of rent to the economy as a whole. All production becomes agriculture-like, although it is called industry. Second the distinction between production and consumption is itself extinguished as the latter takes on this mode of achieving a given level of output (called utility) at a maximum cost (called income). The chain of activity from initial factor inputs to final utility makes little conceptual distinction along the way. Since all those involved are optimising by setting relative marginal productivities/utilities equal to relative prices.” (Fine and Leopold 1993: 258-9)
Did economics graduate to the status of science by dismissing Ricardo, Smith and Marx’s analysis of value in favour of an expansion of Ricardo’s theories of rent and trade ? And if so did this intellectual reduction of value to supply/demand relations itself serve to pacify the antagonistic capacities of labour?
In one of Harvey’s lectures he says that the whole marginalist break with the labour theory of value was a strategic response to neutralize Marx’s challenge of uprooting bourgeois political economy. Limits discusses changes in space-time and social organization supporting capital accumulation, but doesn’t spend much time on changing mental conceptions. But I think the changing conceptualisation of the market is an interesting point to develop ( is there a ‘fourth cut’ of crisis theory concentrating on efforts to stablize political and social unrest arising from market fluctuation – is this at work in the intellectual justification for welfare and employment expenditures on education, skills, employment circuit? A ‘cognitive fix’ ?). Explaining the changing recomposition of the concept of ‘the market’(through different cycles of accumulation and recapitulation) and how it gains traction in everyday life – particularly when used to justify welfare squeezes – would be an interesting point in analysing the social construction of capital formation through rent seeking.
3. Michael said “With the concentration of activity into favoured locations (prime cities, lovely landscapes, heritage zones) we get more and more competition for the land there. ‘Scarcity’ in common language. Many factors then combine to create opportunities for the extraction of rent on any site: simple proximity to desirable destinations, production possibilities generated by previous rounds of investment on the site in question, agglomeration externalities generated by activity on adjoining sites, accessibility improvements flowing from new infrastructure… and so on. Buried in there are elements of DR1, DR2, monopoly rent. There may be elements of absolute rent too, if the special conditions (previous paragraph) are met. Does the mixture matter? I’d like to discuss that.”
Understanding the composition/mixtures matter. Particular in trying to excavate how the social and spatial relations of rent reveal configurations of power relations at any given moment. And in relation to the issue of retail, space and rent discussed in Burak and Joon’s work, I like Richard Barras’ idea of ‘interactive innovation’. It bridges the question of rent and the chapter of spatial configurations. Technical change (in equipment and organization) + cultural shifts necessitate transformations in the use and form of retail space (DR 2), the capacity to respond to these innovations through built form and layout mark the success of particular firms, thereby reinforcing and improving efficiency and – presumably ?- ratcheting up rents (DR 1) and forming barriers to entry to competitors and wider applications of space.
Louis
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