The Principles of Economics, with Applications to Practical ProblemsFetter, Frank A. (Frank Albert)
General
The Principles of Economics, with Applications to Practical Problems
Fetter, Frank A. (Frank Albert)
Economics
5. _Man studies and compares the durable goods that give him command
over enjoyable goods, and attaches value to them._ Thus energy is found
dissipating itself throughout the world in ways useless to man, and in
places where it cannot serve his purposes. As man grows in power of
control over nature, he seeks to apply these forces in forms and at
places he has selected. If he can arm himself with the energies of mine
and torrent, he can react with giant strength on the material world. He
ceases to accept passively its conditions, and to live on its grudging
gifts; he becomes its fashioner, in a sense its creator. His
intelligence and his wants are most important factors determining what
the form of the physical world about him shall be.
But all the efforts of men in the most developed economy cannot make to
disappear the differences in the quality of goods and agents. Desirable
goods to consume are limited in quantity, and they vary in quality;
hence they have value and some higher than others. Likewise, durable
material agents and sources of power are limited in number and vary in
convenience of location and efficiency. As men seek to gratify their
desires, they attach importance to these agents of power. Each is valued
for its service or its series of services. When anything is seen to
contain a series of uses, it becomes a rent-bearer, and the economic
problem of rent arises, one step more complex than the problem of
valuing simple consumption goods.
CHAPTER 8
THE RENTING CONTRACT
§ I. NATURE AND DEFINITION OF RENT
[Sidenote: Temporary use and permanent possession of agents]
1. _The temporary use of materials and power and their sources is
necessary to bring most enjoyable goods into being._ Indirect goods have
value solely because they help to get direct goods. The apple-tree is
valued because it bears fruit, and the orchard because the trees give
promise of yielding a succession of crops for years to come. There are
thus two problems of value in connection with durable goods: that of the
value of a temporary use for a brief period, as for a year; and that of
the value of a thing itself, the use-bearer, for a long series of years
or in perpetuity. To explain what fixes the value of the temporary use
is the problem of rent; to explain what determines the value of
long-continued use or of permanent control and ownership of a use-bearer
is the problem of capitalization.
[Sidenote: Origin of the term rent]
Public-domain text, read in full here on John Shaqi.
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