A line of economic thought that runs from the classical economists through Henry George into the present has held that income from the mere ownership of land — and, by extension, of other naturally scarce assets — is in important respects different from income earned by producing goods or supplying labour. The classical distinction was sharp: producers and workers are paid for what they do; landlords are paid for what they happen to own. The distinction never entirely disappeared from economic writing, but it ceased, during much of the twentieth century, to organise the central textbook treatments.
A revival of interest in the distinction has, in the last two decades, returned it to economic discussion. Several developments have helped. The rising share of national income flowing to landowners in dense urban regions has been noticed; the role of land prices in driving both inequality and the cost of housing has accumulated empirical literature; the broader concept of 'economic rent' — income that flows to a factor in excess of what is needed to keep it in its current use — has been applied to network monopolies, financial intermediation, and patented pharmaceuticals in ways that extend the original distinction.
The revival is uneven in quality. Some of the most useful work has been quantitative, careful about distinguishing rent from return on capital and about measuring the share of income flowing to each. Some has been less careful — sweeping in its accusations of 'rentier' behaviour against firms whose returns are, on closer examination, returns to genuine production. The category of rent is precise in principle but slippery in application; to invoke it sharpens an argument only when one can also defend the boundary on which the invocation depends.
What the discussion has restored, at its best, is the older intuition that the source of an income matters morally and economically and not just its size. A society that taxes labour heavily and land rent lightly is making a choice whose consequences aggregate measures of inequality do not capture; a textbook that flattens production and rent into a single category called 'factor income' is hiding a distinction that the classical economists, with reason, had thought worth keeping in view. The work of restoring the distinction is unfinished and contested in many of its parts, but the case for doing it is stronger than the indifferent treatment it received for most of the twentieth century suggested.
The author's attitude toward the recent revival of interest in rent is best described as: