Some Literature On The Compatibility Of Exhaustible Resources With Classical Political Economy

I have been writing about natural resources that emerge unchanged from the production processes. In contrast, Bidard & Erreygers (2001, 2020) developed the corn-guano model to examine the compatibility of classical political economy with exhaustible natural resources. They argue that a royalty for an exhaustible natural resource will vary over time, in accordance with the Hotelling rule. Parrinello (2004) and Kurz & Salvadori (2011, 2015) argue that when the resource will be exhausted is not well-enough known for the Hotelling rule to apply. The price system, under their assumptions, has enough equations to determine the royalty, without prices varying over time. For Ravagnani (2008), the royalty for an exhaustible resource provides another degree of freedom and is set as a percentage of production by conventions and social norms, much like the natural wage in Ricardo and Marx. Hahnel (2017) emphasizes throughput efficiency, which is related to the rates at which the natural environment’s stock of natural resources and environmental sinks are used by human economic activity. These applications of classical political economy to environmental concerns are outside the scope of of my treatment of absolute, extensive, and intensive rent.

References

• Bidard, Christian, and Guido Erreygers. 2001. The corn-guano model. Metroeconomica, 52(3): 243-253.
• Bidard, C. and G. Erreygers. 2020. Exhaustible resources and classical theory. Oeconomia: History, Methodology, Philosophy, 10 (3): 419-446.
• Hahnel, Robin. 2017. Radical Political Economy: Sraffa versus Marx. New York: Routledge.
• Kurz, Heinz D. and Neri Salvadori. 2011. Exhaustible resources: Rents, profits, royalties and prices. In Volker Caspari (ed.), The Evolution of Economic Theory: Essays in Honour of Bertram Schefold. London: Routledge, 39-52.
• Kurz, Heinz D., and Neri Salvadori. 2015. The ‘Classical’ approach to exhaustible resources: Parrinello and the others. In Heinz D. Kurz and Neri Salvadori, Revisiting Classical Economics. Studies in Long Period Analysis, 304-316. London: Routledge.
• Parrinello, Sergio. 2004. The notion of effectual supply and the theory of normal prices with exhaustible resources. Economic Systems Research, 16(3): 311-322.
• Ravagnani, Fabio. 2008. Classical theory and exhaustible natural resources: notes on the current debate. Review of Political Economy, 20(1).