ABSTRACT

Marx presented his theory of rent in what are considered to be two of his most mature economic works: Theories of Surplus Value (TSV) and Capital. In TSV and Capital, Marx presented a detailed analysis of this two-stage transformation of values into prices of production as part of the mechanism through which the total mass of surplus-value extracted from the working class is distributed among all capitalist producers. Before discussing Marx's theory of differential and absolute rent, it is important to review how Adam Smith's successors faced the theoretical challenge of explaining rent within the context of a theory of value based on labor time. Having noted the absurdity of a theory of rent based on monopoly prices, Marx then turned to David Ricardo's theory of rent. According to Ricardo, population growth leads to an increase in the demand for agricultural goods.