Foundations+of+a+neo-Ricardian+Class+Analysis

Class notes: CRS SIS 700 8 November by Eddy Aage B. SØRENSEN Key Ideas: -Sorensen examines class as a rent-based theory. -Rent-seeking establishes the dynamics of capitalism. -Takes a “class as life conditions” rather than a nominal classification. Capitalism, like Feudalism is all about exploitation. In Feudalism the exploitation is readily apparent, whereas in capitalism exploitation is hidden. Workers seemingly are willing to work as they are paid a wage. However, this wage is not equivalent to the real value of their labour. They are thus exploited by the capitalists, who are able to do so because they own the means of production. Essentially all wealth, including property rights, serve as the source of exploitation. Accepts that property rights are the source of exploitation, but that is not all that wealth-creation is. Instead restricts exploitation due to inequalities generated by possession of //rent-producing assets//. It would be to the advantage of those not in possession of rent-producing assets to have them redistributed or eliminated. Class is defined as the actors ability to control rent-producing assets, which is in keeping with Marx's thought that class is defined at the point of production. 2 Classes of rents – Temporary and Enduring 3 Types of Rents – 1)Monopoly, 2) Composites, 3) Natural Abilities __Monopoly Rents:__ Monopoly rents emerge when rent-seeking is a zero-sum competition. The losers in this competition get nothing for their efforts, thus have wasted their resources without increasing the production of society and thus wasted resources. This is known as deadweight loss. (Eddy's note: but this type of competition is actually a key component in a society's overall productivity... anyway...) A number of Monopoly rents emerge in a labour market, including employment rents. Employment rents are a zero-sum competition: One person gets the job and everyone else gets squat. __Composite Rents:__ Two owners of rent-producing assets working together. Sorensen's example a mill owner and a river owner (can you really own a river? maybe in Sweden)... work together to produce composite rents. __Natural Endowment Rents:__ Sorensen views natural endowments as a source of structural inequalities in society. Example explains a professional athlete as a rent-producing agent. Also example of tuition and credentials: Increased demand for credentials leads to higher tuition as the larger rents that education allows means universities want a share of the rents. Then in order to secure their offspirng's (or as non-Marxist call them “children”) future, rich actors who can afford the high tuition set up credential-based barriers. This protects their less-talented offspring from more talented offspring of poor actors who can't afford high tuition. Conclusion: Those who do not own rent-producing assets are at a disadvantage. “The Rent-based concept of class as exploitation provides an explanation for the recent increase in earnings inequality and for the practice of downsizing to destroy rents in the labour market.”
 * __Foundations of a Neo-Ricardian Class Analysis__**
 * Classical Marxist thought:**
 * Sorensen critiques Marx:**
 * Rents:**