20 lines
1.1 KiB
Markdown
20 lines
1.1 KiB
Markdown
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# rent of land
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**Definition**
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Rent of land is the portion of a commodity’s price that compensates the landowner for the use of the land’s natural produce. It represents a payment for the exclusive right to exploit the land’s resources, such as timber, grass, or other natural fruits, which would otherwise be freely gathered.
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**Source Chapter**
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*The Wealth of Nations*, Book 1, Chapter 6.
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**Context**
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Smith introduces rent of land after describing the transition to private property, noting that landlords “demand a rent even for its natural produce.” He explains that this rent becomes a component of the price of commodities like corn.
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**Economic Domain**
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Distribution
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**Smith’s Original Wording**
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> “When the land of any country has all become private property, the landlords… demand a rent even for its natural produce.”
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**Modern Interpretation**
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Rent of land corresponds to economic rent in contemporary theory—the surplus payment to a factor of production (land) that exceeds its opportunity cost. It is a key element in the factor‑income distribution of national accounts.
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