Criticism of The Ricardian Theory of Rent

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Criticism of The Ricardian Theory of Rent

Published by: sadikshya

Published date: 02 Jul 2021

Criticism of The Ricardian Theory of Rent in Grade 12 Economics

Criticism of The Ricardian Theory of Rent

There is various Criticism of the Ricardian Theory of Rent as follows.

  • No original and indestructible power.
  • The best land is not cultivated first
  • Neglects of a scarcity of rent.
  • No marginal land.
  • A narrow concept of rent.
  • Wrong assumptions of perfect competition.

No original and indestructible power

Ricardo says that there is an original and indestructible power of the soil. It is not correct. In these days of nuclear physics, no power of soil remains indestructible.

The best of land is not cultivated first

Land cultivated firstly is not necessarily superior land but rather easily accessible.

Neglects of a scarcity of rent

Ricardo rent arises on account of the fact that some land is superior and another inferior. The modern economist points out that there is no cause of land, rent will arise even all land is superior or great. Rent arises because the production of land is scarce in relation to its demand.

No marginal land

Marginal land is not necessary for the land at the margin of cultivation. It is so because it is not always the least fertile land that is the first to go out of cultivation if the supply of a commodity is to be reduced.

A narrow concept of rent

Ricardo assumed that rent earned by soil only. But land means not only soil it means all natural resources more ever modern economists have proved that rent can be earned by any factor of production which supplies in inelastic.

The wrong assumption of perfect competition

Ricardo assumes that rent is earned in a perfect competition condition. But perfect competition is not applicable in real economics. It is a theoretical concept only.