Understanding Rents in the Real Economy

  • Edward Nell
Part of the Palgrave Studies on Henry George for the 21st Century book series (PSHGC)


George understood “progress”—economic growth—to be disruptive and innovative, taking place through developments that changed the proportions and relative prosperity of different sectors. He began his analysis with the movement of settlers to the “unbounded savannah,” where they cultivated fertile land, cooperated and established the division of labor, increasing productivity, and, as a result, they became a complex society with differential advantages and disadvantages to certain locations and parcels of land. Rents thus emerged (modeled using Sraffa’s equations). This picture is a good basis on which to build an approach to inequality and instability, but it is not consistent with the factor markets of conventional marginal productivity theory. George’s approach is superior.


Progress Poverty Division of labor Rent Differentials 


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© The Author(s) 2019

Authors and Affiliations

  • Edward Nell
    • 1
  1. 1.New SchoolNew YorkUSA

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