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rents

A brief history of rents

Rents exist in human history for thousands of years. The origin of rents is the possession of land, and until the industrial revolution the possession of scarce land was the main source of rents. In our time possession of oil and gas are the most important source of natural resource rents. However, land rents are still relevant, and urban land rents are nowadays a major determinant of house prices.

After the industrial revolution the rise of monopolies was an important cause of rents, for example the steel and railroad monopolies in the USA in late 19th century. In our modern time such old-fashioned monopolies have declined in importance, instead it is the big platforms on the Internet, the big tech firms, and the big pharmaceutical firms that have replaced the old monopolies.

In the 21st century we see a decline of tangible investments such as machines and buildings, and on the other hand, the importance of intangible (non-physical) investments and assets has increased very much, for example the increase in the number and importance of patents.

The blog A theory of Rents discusses the history of rents in terms of the theories by famous economists.

By Arend Stemerding

My research is focused on rents (also known as economic rent). I am a part-time PhD student at the University of Groningen. I live with my wife Girke in Monnickendam (near Amsterdam), the Netherlands.

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