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Theory of ground rent in classical political economy and some phenomena in contemporary capitalism

Grant number: 17/14907-9
Support type:Scholarships in Brazil - Scientific Initiation
Effective date (Start): October 01, 2017
Effective date (End): September 30, 2018
Field of knowledge:Applied Social Sciences - Economics
Principal Investigator:Leda Maria Paulani
Grantee:Guilherme Veiga Arthen
Home Institution: Faculdade de Economia, Administração e Contabilidade (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil

Abstract

Ground rent was intensively explored in Economics since the physiocrats and even before the classical authors. However, especially through the Classical Political Economy it gained importance. The latter observed this category simultaneously with a macrodinamic analysis, predicting laws and tendencies for economic behavior while looking through the lenses of distributive disputes in social classes, questioning value formation and its transformation into prices and further leading to the comprehension of these categories as an evolution of a social and historical process. Adam Smith, David Ricardo, Thomas Malthus and Karl Marx brought out these matters to scientific discussion. After the 1970's, there have been substantial changes in the capitalist regime of accumulation leading to a dominance of finance capital over other forms of capital. Finance capital has a peculiar valorization process since it could take place outside the sphere of production. Therefore, assets that are based on property rights are becoming more and more significant, such as intellectual property and value associated with brands. Their logic of income extraction has similarities with the ground rent such as the classical authors approached it. Property, as foundation for valorization against the production, alters investment decisions and income allocation for it modifies social interactions and social wealth distribution itself. Therefore, the understanding about ground rent category will shed light on the nature of these important assets and, consequently, on contemporary capitalism itself. (AU)