Fred Foldvary wrote: >This overlooks the producer surplus, which is mostly >land rent, and indeed (as Ricardo wrote) does not >enter into the cost of production, hence is a social >surplus. The ethics of equity has to confront who >should receive this surplus. And this has nothing to >do with equilibrium, as the surplus exists also in >disequlibrium and in economic dynamics. I agree with this, but Clark would not, and it was Clark's thesis that I was explicating, not my own. And for Clark, equity is the result of equilibrium. On my own view, equilibrium is more likely to be the result of equity. >But of course if a supply curve slopes up, there is a >"producer surplus" which (as Marshall recognized) is >really mostly land rent, and since land is not a >produced good, the suruplus is really a "non-producer" >surplus. Again, I mostly agree (although I don't think that all economic rents are ground rents), but this is not Clark's view, and certainly not the NCE view in general. Clark thought he could get rid of Marshall's problem by turning capital into a mysterious fund, a platonic entity that floated above its actual material content, a content that happened to include land. He performed the same courtesy for labor and hence de-natured both land and labor. In doing so, he turned land and labor into fictitious commodities (Polanyi's term) and hence no longer had to deal with their actual existence; in other words, he defined George's and Marshall's problem out of existence. The most current practical explication of this thesis, by the way, is in Hernando de Soto's "The Mystery of Capital." >No, but we should recognize that besides cultural >values there is a rational universal ethic (or natural >moral law) that can be derived using reason. As John >Locke wrote in the Second Treatise: > >"The state of Nature has a law of Nature to govern it, >which obliges every one, and reason, which is that >law, teaches all mankind who will but consult it, that >being all equal and independent, no one ought to harm >another in his life, health, liberty or possessions." I agree that there should be and likely is a "universal ethic." Indeed, Clark was certain that he had discovered it, and published in purely religious journals the claim that he had worked out the natural laws of the moral and economic orders. The problem is, however, that the "universal" for humans is only reached through the cultural expressions of it; man has no other way of being than being cultural, being enmeshed in particular language and social systems. Ethical claims can never, and likely shouldn't, escape a certain amount of cultural particularity. Therefore, the claim to have reached the "universal" always has to be greeted with a certain skepticism. No ethical system can be logically validated because ethics do not belong to the realm of speculative reason, but to the practical reason. Thus Locke's system (like Aristotle's, Aquinas's, Mandeville's, Clark's or Mises's) is merely a rival claimaint to universality. And there is an inherent problem with a universality that has so many rival versions. The question then is how you compare these rival claims to arrive at a reasonable judgement. Ethical propositions can never be demonstrated in the same way that mathematical ones are but are compared through an entirely different methodology. And I believe that since ethics belong to the practical reason, economics plays a key role in the comparison of ethical systems, but not the role that it has generally played, which is mainly one of being in itself one more rival claimant. John C. Medaille