ABSTRACT
Suggestions have not been lacking for reform through generalization. Johnson, for instance, is concerned that many "concepts of distribution theory no longer match the categories of income distribution; and consequently, the theory of distribution is, to put it mildly, in a rather unsatisfactory state."1 His remedial proposal, a drastic one, involves completely recasting the theories of wages and rent so as to put them on a par with each other:2
What may be called traditional rent theory, following both the physiocrats and the classical economists, is concerned only with the pricing of the services of those capital instruments whose total stocks are fixed, notably "the original and indestructible powers of the soil," or land, including natural resources. The quotation is from Ricardo, and Ricardian rent theory has the best claim to the title "orthodox." A generalization of the Ricardian rent concept, which is due primarily to Marshall, includes "quasi-rents" to fixed capital instruments like buildings and machinery, whose stocks are constant only in the short run. A similar generalization includes also "rent of ability" to types of labor and personal services that are similarly limited, either naturally or artificially (as by apprenticeship limitations). These are primarily the higher levels of differential skills, whether managerial, athletic, professional, artistic, or technical.
