[OPE-L:7641] Re: Re: Gold in the Transformation Problem

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Tue Sep 10 2002 - 15:21:01 EDT

Fred, You write

>Gil, I think you are misunderstanding what I mean by scarce, and are also
>confusing differential rent and absolute rent.  By scarce, I do not mean
>diminishing marginal returns, which has to do with differential rent, not
>absolute rent.  Differential rent is historically contingent in the sense
>that only one kind of land or mine could be cultivated, or all the lands
>or mines could be of equal fertility.  In these cases, differential rent
>would disappear.

I apologize for not being clear about specifics, but I haven't confused the 
two notions of scarcity; in particular, I do not mean in any way to invoke 
"diminishing marginal returns" in the sense you use the term here.  In fact 
I endorse your characterization below, subject to caveat:

>However, this is not what I mean by scarce.  Instead, I mean that
>capitalists cannot increase production of a natural resource unless the
>owners of that natural resource - the landlords - allow it.  And in
>general, landlords will not allow an increase of produciton unless they
>receive a rent, even on the least productive land or mines.  This rent
>paid to landlords on the least productive land or mines is absolute
>rent.  It is not historically contingent.  Rather, it is inherent in the
>capitalist mode of production, or at least inherent in capitalist
>production with private ownership of natural resources.

Yes, this is exactly what I meant by invoking "scarcity" in my previous 
post, with two caveats.  The first is minor:  granting that "in general" 
(to use your phrase) landlords will require a rent in order to allow 
(increased) production of a natural resource is not the same thing as 
saying that landlords can *categorically* demand a strictly positive rent 
to allow this.  Thus in that sense the existence of a strictly positive 
rent for natural resources is contingent, if not historically then 
economically.  The "constraint equation" I refer to in my postscript post 
describes precisely the condition that must occur in order to translate 
this "general" tendency into a reality for the conditions under study.

Which brings me to the second, and more important caveat, which is with 
your wording in suggesting that "landlords will not allow an increase in 
production unless they receive a [positive] rent."  One way to read this 
statement is that landlords *collectively* will not allow this, which is to 
say that landlords collude, i.e. act as a cartel, to set prices above that 
which would otherwise obtain.  I presume this is *not* the sense you mean, 
if for no other reason than that the existence of absolute rent does not 
depend on such collusion.

If we agree on that point, then I can say without ambiguity or further 
caveat that we are both talking about precisely the same sense of 
"scarcity," and in invoking the case in which the level of absolute rent is 
zero I'm invoking precisely that set of economic conditions that translates 
your "general" (but not categorical) condition into actuality.  As I 
observe in the postscript, though, I don't need to invoke the zero-rent 
case to establish my point, since the existence of a strictly positive rent 
necessarily implies the addition of an additional equation--call it the 
absolute scarcity condition--to the prices of production system, to go with 
the additional variable (rent), thus leaving the inconsistency problem intact.

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