Authors: Marshall Feldman*, University Of Rhode Island
Topics: Economic Geography, Geographic Theory, Urban Geography
Keywords: land rent, macroeconomic geography, geographical political economy, crises
Session Type: Paper
Start / End Time: 3:20 PM / 5:00 PM
Room: Studio 8, Marriott, 2nd Floor
Presentation File: No File Uploaded
A growing consensus holds that the theory of land rent has deteriorated and needs restoration. This paper contributes to this project by fundamentally rethinking land rent. An empirical analysis of aggregate land values in the U.S. demonstrates that land rent was the source of the bubble that triggered the 2007 crisis. Yet almost all heterodox writing on the crisis, including that by economic geographers, ignores land rent. The second part seeks reasons for this in land rent's history. During the 1970s, geographers became critical of “spatial science” and turned to geographical political economy, drawing primarily from Marx. Since the dominant theory of urban form relied on the neoclassical theory of land rent, geographers looked to Marx for a substitute. But Marx died before he could write his planned volume of Capital devoted to land rent. I argue this theory of land rent would resemble Quesnay's Tableau économique, and economic geography's quest for a theory of urban form based on rent-extraction mechanisms sidetracked it. Additionally, during the 1990s economic geography's fragmentation accelerated land-rent theory's decline. Part three proposes a way forward. After examining land rent's ontology, it debunks the belief that land rent arises from a fixed supply of land. Land can be produced and enters into the production of other commodities and final consumption; land rent partly arises from the necessary time to alter land supply. The paper proposes macroeconomic land-rent theory combining Marxian political economy, Austro-Georgist real-estate cycles, and Minskyan asset-price speculation and financial instability.