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Under the labor theory of value, land should on its own have no value if no useful labor has been put into it yet its exchange value on the market extremely high. How is this contradiction addressed? if it is because the value is offset somewhere else then how can we prove that that is happening? Marginal utility explains this well with from what I understand, fewer assumptions.

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Land value and rent

I think the proper answer to your question is that, clearly, yes land should have no value under the labour theory of value if no useful labour has been put into it. Its value derives from land ownership and the rent which such ownership enables. Rent on land, held as property, corresponds to interest on capital.

'...landed property presupposes that certain persons enjoy the monopoly of disposing of particular portions of the globe as exclusive spheres of their private will to the exclusion of all others' (K. Marx, Capital, III, London: Penguin, 1991: 752).

Given the natural quality of an area of land, and the potential of that land for profitable farming or capital development in housing, factory building and the like, the owner of landed property can charge rent which represents one part of the capitalist tenant's profits. The land is worth whatever rent can be gained from it or whatever it is worth to anyone who wants contractually to acquire it.

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