Sraffian environmentalism

It is well known that the surplus approach authors dealt with exhaustible resources when discussing land and rent. The so-called Ricardian theory of rent, discovered by West and Malthus, has important implications for income distribution as it is well known. Landlords benefited from protection, which forced the use of scarce land, and led to higher rents (and for a given output and a fixed wage at subsistence) lower profits. Thus, the existence of an exhaustible resource led to a transfer from the dynamic capitalists to the backward landlords.

The rent paid for the extensive use of land of different quality is significantly different than the intensive case of marginalist (neoclassical) theory. Marx was critical of certain aspects of the Ricardian theory of rent. In particular, he argued that 'absolute rent' would arise even if there were no differences in the levels of land productivity, if owners had a monopoly power over the natural resource. In this sense, the nature of rent is highly dependent on the historical contingencies and institutional arrangements that make one social group or class able to obtain greater bargaining power.

One important conclusion from this approach is that ownership and taxation of natural resources is crucial to determine which groups win or loose with the continuous use of exhaustible resources. Nationalization of natural resources not only might provide a situation in which the benefits and costs of extraction are shared more equitably, but also furnish the funds for the investment needed to promote alternative technologies. Below some readings that might be useful.


Suggested readings:

Bidard and Erreygers (2001), The Corn-Guano model, Metroeconomica 52(3), 243-53.

Burkett (2006), Marxism and Ecological Economics, Leiden, Brill.

Parrinello (2001), The price of exhaustible resources, Metroeconomica 52(3), pp. 301-15 (subscription required).

Ravagnani (ND), Classical Theory and Exhaustible Natural Resources, processed.