The natural dividend: An introduction to resource rents

Abstract

This article introduces the concept of a Natural Dividend and describes the three types of rent that combine to produce it: a differential rent, a regulatory rent, and a locational rent. Each of these rents is associated with a classical economist (Ricardo, Marx and George, respectively), and each is shown to be a product of nature, society and/or the political authorities that manage nature on our behalf. Because the Natural Dividend is a windfall derived from our regulation of commonly held (and immobile) natural resources, it can be taxed at a higher level without distorting any underlying investment decisions.