Dynamics of profits, rents and their shares

Abstract

Profits and rents are two distributive variables that depend on quite different production factors and economic operators. Profits depend on capital, a producible factor, and entrepreneurship. Rents depend on a scarce factor, either nonproducible, non-reproducible or non-reproduced, and ownership. It could therefore appear advisable to deal with rents and profits separately. In particular, considering rent alone would seem the natural corollary of having in our analysis Npmp as scarce factor of production. However, there are also reasons for dealing jointly with these two categories of income because, given the unit wage, we notice that in the long run the real antagonism is between profits and rents. Moreover, because technology and accumulation, which are decided by the technology-maker operator, affect the distributive weights of profit and rent, it is useful to analyze these two variables together. A different choice would have been required if we assumed given the rate of profit instead of the unit wage. An exogenous rate of profit rises conflicting interests between rents and wages, and in this situation the two latter categories should be studied together.