On minimum rents: Part 1, Marx and absolute rent

Marx suggests that land would not be rented to a tenant at less than some minimum rent which he calls absolute rent. This concept and Marx's arguments are analysed in this paper. It has been argued by some that absolute rent in Marxian economics derives from the fact that investment in agriculture is lower so that the organic composition of capital is lower. It is argued here that the low organic composition of capital in the Marxian schema is rather a consequence of the existence of absolute rent, and this in turn results from the landlord-tenant relationship. Marx himself stressed that if land were owner-occupied absolute rent would not exist-that it is a consequence of the system of land tenure-but provides no explanation as to why it should have this consequence. In an associated paper, modern economic analysis is used to explain why minimum rents will occur.