The definitions of economic rent i n current use fall easily into two categories: ( I ) a payment in excess of that necessary to maintain a resource in its current occupa
1tion. Thus, Frederick Benham tells us that rents are 'the sums paid to the factors which need not be paid in order to retain the factors in the industry' . While to Kenneth Boulding2 it is the payment to a factor 'in excess of the minimum amount necessary to keep that factor in its present occupation' . The second category (2) is the difference between the current earnings of a resource and its transfer earnings3 - the latter term signifying its earnings in the next best alternative use. 4 For instance, Paul Samuelson5 says, 'we should term the excess of his income above the alternative wage he could earn elsewhere as a pure rent' . Similarly, for George Stigler6 the rent of a factor is 'the excess of its return in the best use over its possible return in other uses' . 7
While the first type of definition is , as we shall see, unavoidably ambiguous, the second type is yet more inadequate. Among other things it would require that, in the choice of occupation, men were motivated solely by pecuniary considerations.