Talk:Progress and Poverty (George)/Chapter VIII

The law of rent - Numeric example and question

Suppose there are rich land plots which, when cultivated by an expert, yield 100 units of produce. When cultivated by a non-expert, they yield only 20 units. There are also plenty of poor land plots, available for free, which, when cultivated by an expert, yield 20 units.

• According to "the law of rent", owners of rich lands will get 80 units as rent. This is because there is competition between the workers, so, if the net wage of workers renting the rich lands (produce minus rent) is higher than 20, then workers on poor lands will agree to pay a higher rent for that rich land, until the net wage will converge to 20.

• However, this argument can be stated the other way around. Since the land-owners are not expert workers, when they cultivate their lands on their own, they get only 20 units. There is competition between land owners: if a land owner will demand more than 20 rent, then the other land owners will offer their lands for a lower rent, until the net rent (produce minus wage) equals 20!

The second argument looks exactly symmetric to the first. The only point that breaks the symmetry is, probably, that in reality, there are much more workers than land-owners. New workers are born all the time, while land-plots are constant in number.

See discussion in the Progress Report forum. --Erel Segal (talk) 06:15, 9 October 2012 (UTC)