Monopoly Rent

A particular form of capitalist ground-rent, refers to the ground-rent transformed from the surplus-profit obtained from soil with unique natural conditions.

Monopoly rent exists only on a small amount of land where natural conditions of soil are particularly favorable. For example, soil where rare precious agricultural products (such as precious ginseng plant, tea, citrus, etc.) can grow. Since land is very limited, the demand for these precious products exceeds the supply, and in this case, the price at which the product is sold may be determined neither by the price of production nor by the value of the commodity, but by the needs and solvency of the purchasers. It can sell at a monopoly price much higher than the price of production and also much higher than the value, and thus obtain a part of the surplus-profit. This surplus-profit is not appropriated by the renting capitalist, but it is passed by the capitalist to the landowner, forming a monopoly rent.

It can be seen that monopoly rent is different from both differential rent and absolute rent. While differential rent and absolute rent are the two forms of ground-rent that usually exist in capitalist relations of production, monopoly rent is a particular phenomenon in capitalist relations of production. The monopoly price, which is the basis of monopoly rent, is not the same as the monopoly price that generally exists. It is an individual phenomenon, the level of which is determined by the needs and the solvency of the purchasers of this precious commodity. Marx said: “The analysis of monopoly price falls within the scope of the theory of competition, where the actual movement of market-prices is considered and elucidated.”

In capitalist society, landowners can also earn monopoly rent by taking advantage of certain building lots in particularly favorable locations. In the mining industry, certain mines that extract precious minerals also form monopolistic rents.