8. Rent in economics does not signify what we pay for our apartments, but refers to an income derived from a price in excess of that which is necessary to bring a given amount of production into the market. It is, in short, an artificially achieved (higher) price, due to some interference in the market – some form of private monopoly power or, as in the point under discussion in the text, the ability of private parties to enlist the State to raise their prices by a tax on imports. All monopoly profits are rents in this usage. Neoclassical economics, in sharp contrast, sees all incomes – wages, interest, profits, and rent – as equal to the recipients’ contributions to production.

Although neither Smith nor Ricardo presumed to do so, neoclassical economics claims to be scientific. One could thus reasonably expect that their conceptual apparatus be subject to testing – that is, verification – one of the key elements of the scientific approach. However, not only have their propositions not been tested, they are framed in such a manner that they cannot be tested. (My mere positing here of neoclassical economics as ideology rather than science will be elaborated upon in class.)