This whole issue circulates around "rent". While we normally use the term rent to indicate a charge for using something for a given period of time, "economic rent" is a term used to refer to the return from a natural resource.

This subtle use of the word is very confusing when coming to grips with Geonomics. A better word would be "bounty" or something similar.

Returning to the use of land, and the bounty you receive from land, the charge you can receive for land use is set by the least useful land available. Its a subtle thing; everything hinges around "the least useful land."

When land is least useful, it means it is only just worthwhile to farm it. The return you get for a given investment of grain, labour, electricity etc. exactly matches the value of crops which are generated.

There's a little sleight of hand here; it seems you need to assume that the money paid to labour is enough to make it worthwhile for labour to be employed, and this motivates people to work the land.

And this return on labour is very well defined. One cent less and labour will not work the land. This is clearly an ideal. It is the "subsistence" return on labour, to the extent this is a well defined quantity. Does this mean we can trust the consequences of the analysis ? This is not clear.

Anyway, let us now consider land which is slightly more fertile. The return on harvesting the land will be more than cost of farming it. This surplus is considered the bounty of that land, or the "economic rent". This means that a landowner can gain this amount from someone (labour) farming the land.

The assumption here is that labour will work for this return, and find the situation tolerable. This means they will be willing to part with the surplus to the landlord and still work the land.

Because the differences in fertility yield this bounty (rent), it was called differential rent.

However, it was also observed that more fertile land could be farmed more intensely, with more labour and capital applied to it, till the return from extra labour and capital dropped. This extra working of the land could also be captured as rent, and would exist so long as there was a shortage of land.

This second form of rent was called scarcity rent.

Then, we can see that if you have an input, it attracts something similar to rent if the return stands above the next most lucrative use of that factor. For example, a singer's employment outside the opera may yield a lot less than the opera. A large part of what the opera singer is paid must be called rent.

A particularly useful machine may earn quasi-rent while there is a shortage of capacity.

What is the conclusion here ? That whenever there is a "shortage" of something, the return someone makes on it is similar to the "rent" which land receives. Similarly, monopoly profits could be classifed as rent.

In other words land is not as unique as Geonomists make out. Certainly, it is always in fixed supply. But the effects of this "fixed supply" do show up in other parts of the economy, with things like particular machinery in shortage, which are not "free gifts of nature".

Further, there is a dynamic argument, stating that in order for an economy to be alive and progressing, there must always be some shortage of capital, and so there will be returns which seem like economic rent from non-land factors.

So, if we are to get worked up about the rent drawn by land, we must get equally worked up about the returns which someone makes everytime there is a "shortage".

And how do we know there is a "shortage" as compared to a market in proper equilibrium ? Its a difficult thing to figure out.

Now, Geonomists do dissaprove of monopolies and artificial shortages. But they do put "free gifts of nature" in a special position, and you can see that analysis above devalues this special position. It makes returns from any sort of "shortage" similar to the return from "free gifts of nature".

Now, this analysis both acknowedges the unique nature of land and goes beyond that. It does not seem confusing at all. It sets up some ideal situations which cannot match reality - but these sorts of ideals are no worse than what you get in Geonomics, or many other aspects of economics for that matter.

It may or may not be right. Certainly, though its structure is not as bad as the impression I get from reading Geonomic writing.

However, the author is about 10% a Georgist. There is a way of rescuing Geonomics from this hole, but Geonomics loses a lot of its vigour in the process.

We can say that return from any sort of shortage are inequitable, but there is a cost to identifying them and addressing the problem. In the case of land, the cost of identification is sufficently small that collecting the return from the "land shortage" is a worthwhile exercise.

However, this means that we chose to collect the return from land shortage not because it is a moral imperative that we do so, but rather for pragmatic reasons. Its worth doing, but more because it is feasible to do so than anything else.