ABSTRACT
The Ricardian extensive theory of rent is well known and does not require an introduction. The chapter ‘On Rent’ in Ricardo’s Principles is certainly the locus classicus of the Ricardian theory of rent. More recently the issue has been investigated by Samuelson (1959), Sraffa (1960, pp. 74-8) and Quadrio Curzio (1967, 1980); see also Kurz and Salvadori (1995, pp. 277-320) and the literature referred to there. Following Ricardo and the other Classical authors, none of the modern contributors give a role to the distribution of land ownership among landlords. In this chapter, on the contrary, I will argue that if the demand for agricultural commodities and the distribution of marginal land ownership is such that demand can be satisfied only if the owner of the largest plot of that land rents out at least part of his or her land, then a positive rent onmarginal land is possible (if landlords behave in a strategic way). This chapter is not devoted to a complete analysis of the case under consideration. In this respect I will fully explore only two cases: that in which each owner has the same amount of marginal land and that in which there are just two owners. The other sections are as follows. Section 2 provides a summary account of a
simple model of Ricardian extensive rent in order to introduce the language used in the following sections. Section 3 shows with a simple example in which the marginal land is equally distributed among a finite number of landlords that there are cases in which the equilibrium predicted by the Ricardian extensive theory of rent is not a Nash equilibrium, that no Nash equilibrium in pure strategies exists whereas there is one in mixed strategies. Section 4 shows exactly the same thing when marginal land is not equally distributed and there are only two owners of marginal land. Sections 5 raises some doubts on the relevance of the results presented when interpreted as a criticism of Ricardo; it suggests that a deeper analysis of Ricardo’s ideas on the attitudes of landlords would be needed. Section 6 provides some concluding remarks.
