Depending on production efficiency, entrepreneurs receive more or less income. This, in turn, affects the relationship between owners and users of resources, as well as the cost of the resources themselves in the market.
Land rent is an economic category that ensures the regulation of relations between an entrepreneur using land and a landowner. Outwardly, this category is a payment for use. At the same time, it is part of the cost of the product received by the entrepreneur.
On the economic side, land is always either a direct factor in production, or is used to locate production facilities, residential, administrative premises, as well as transport and other communication systems. At the same time, it does not belong to the category of freely reproducible production factors.
Today, land resources are of great importance. In the modern world, an irreproducible production factor is the whole natural environment, turning into a condition conducive to the reproduction of the world economy in general. However, as experts note, the natural environment is only beginning to be applied in real economic relations that affect the reproduction of both public and individual capital.
The main feature of market relations related to the use of land as a limited, irreproducible natural factor is land rent.
Pricing in agriculture has distinctive features. They are mainly associated with inelasticity, limited supply of land. It is these special offers that distinguish income from the use of natural resources from profit, interest and wages.
Land rent has a special position in economic science. This is largely due to the fact that for a long period, agriculture has been the main economic sector.
Different authors interpret the theory of land rent in different ways.
According to Marxist doctrine, this type of income is a converted form of surplus value along with interest, profit, and salary. Superficially land rent is a fee for the territory, which may give the impression that this territory itself generates income. Moreover, the labor doctrine of economic value denies this, indicating that value is created only by living labor. Land rent, thus, is formed from the unpaid surplus labor of agricultural workers. Part of the surplus value received by the tenant of the territory is paid by them to the owners of this territory.
According to the theory of production factors and marginal productivity, the concept of rent is defined as the remuneration received by the owner of a land plot or other natural resource that corresponds to the marginal productivity of factors.
One of the interpretations defines the specified payment not as an independent income, but as a loan interest on a certain capital invested in a leased land.
According to the theory of physiocrats, rent is a pure natural product, the only real income received by society.
According to another teaching, this payment is considered an unfair income. In America, for example, criticism of rental payments has taken the form of a movement to introduce a single tax. It should be noted that this movement was generated by the book "Progress and Poverty" by G. George and received substantial support at the end of the 19th century.