An Expansion of the Neoclassical Horizon in Economics: The Rent–Seeking Research Program Brings in the Nuances of Social and Political Control

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Abstract

Abstract. The terms of discourse in the Neoclassical school of economic theory have constrained its ability to develop the connections between the economic and the social and political spheres. Building on the logic of the rent–seeking research program a systematic connection is developed. A taxonomy of distribution is presented in which rent and profit ate identified as distributions to control over productive factors. The structure of control embodied in social and political institutions largely determines who controls these productive factors and therefore who receives the distributions to control: profit and rent. The distinction between profit and rent relates to opportunity cost. Profit is a distribution to control equal to opportunity cost and is therefore allocatively necessary. Rent is a return above and beyond opportunity cost and is not allocatively necessary. By clarifying the role of rent and profit in Neoclassical theory the interconnection between the social, political, and economic spheres is systematically integrated into the theory.

Original languageEnglish (US)
Pages (from-to)223-237
Number of pages15
JournalAmerican Journal of Economics and Sociology
Volume47
Issue number2
DOIs
StatePublished - 1988

ASJC Scopus subject areas

  • Sociology and Political Science
  • Economics and Econometrics

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