)/rportionofrentwereassignedexclusivelytoanindividualtenant(ortenants),say,throughtheissuanceofstocksagainstthemarketvalueofthegivenland,jointownershipofthelandwouldbeestablished.Withtheentirereturntotheownershiprightassignedtoprivateparties,eachjointownerwouldtherebybegrantedauthoritytomakedecisionsconcerninghisshareoftheresource.Withtherighttoderivetherentfromlandwhollyexclusiveorunattenuated,therighttousetheresourceisalsowhollyexclusive.Variousformsoftransferswouldinsurethatthevalueofeachsharebedeterminedinthemarket.Theimpliedresourceusewouldthereforebeexactlythesameasbeforethesharerestriction.Theimplicationisthattheinefficientallocationofresourcesundertherentalpercentagerestrictionliesnotinthelandowner'ssharebeingreduced,butinthattherighttoderiveinefromlandisnotwhollyexclusivelyassigned.Inotherwords,underthesharerestrictioninTaiwan,therighttolandownershipwasnolongerwhollyexclusive.
Letmecarrythisargumentfurther.Underthesharerestriction,itwillberecalled,themarginalproductoftenantlaborfallsandthemarginalproductoflandrises.Butaslongastherentalpercentageisgreaterthanzero,themarginalproductoftenantlaborwillneverbenegative.(Thisisimpliedbythemaximizingbehaviorofthelandownerundertheaddedshareconstraint.)Supposeboththerentalpercentageandthenonpecuniarybene-
fitsofowninglandareeffectivelyreducedtozero;thatis,privatelandownershipisreducedtoameretitle,devoidofanyformofine.Returnmomentarilytofigure7;petitionamongtenantswillpushlaborinputtopointk,wherethewagerateequalstheaverageproductoflabor,orwheretheentireunassignedinefromlandisexhausted.Dependingontheproductionfunctionandthewagerate,themarginalproductoflaborinthiscasemaybenegative.[2]Thatistosay,iftheentireinefromlandisunassignedtoanyindividualorprivateparty,landbeesamonpropertyresource(inourcase,withaprivatetitle),andpetitionamongusersimpliesthatnonlandresourceswillbeallocatedtolanduntiltheinetoland(rent)iszero.[3]
Fromtheabovediscussionwemaygeneralize:Foranyproductionfunctionrequiringresourceinputshandt,iftherighttoaportionoftheinefromh,howeversmall,isnotappropriatedorexclusivelyassigned,theratiot/hwillriseunderpetition,implyingafallinthemarginalproductoftandariseinthemarginalproductofh;astheunassignedinefromhincreases,themarginalproductoftwillaccordinglybelower,andmaybeenegativewhentheentireinefromhisnotassignedtoanyindividualparty.Wemaycallthis"theproductiontheoremofpropertyrightassignment."
[1].Thisshouldbedistinguishedfromaninetax,wherethetaxreceiptisappropriatedbythegovernment.Asimpliedinthefollowingdiscussion,themisallocationgeneratedbyataxonresourceusestemsnotfromthetaxitself,butfromthefactthatnogovernmentofficialistherebygrantedauthoritytomakedecisionsonresourceuse.
[2].Inthisandmyearlierstatementthatthemarginalproductoftenantlaborwillneverbenegativeif
isgreaterthanzero,theargumentwouldperhapsbemoreconvincingifthemarginalproductoflaborintherelevantrangewerealwayspositive,sothatwhen
=0itisstillpositive(withthewagerateequalingtheaverageproductoflabor).Inthiscasetheincreasesintenantinputwillbegradualandcontinuousinresponsetogradualdecreasesof.
Theoreticallythepossibilityoftheexistenceofsubzeromarginalproductoflaborrequiresnotonly
=0,butalsothesuppositionthatthetitleholdercannotdenytenantfarmingonapetitivebasis.
[3].Withasomewhatdifferentapproach,thisconditionisreachedinH.ScottGordon,"TheEconomicTheoryofaCommon-PropertyResource:TheFishery,"JournalofPoliticalEconomy(August,1954).AnditisimplicitinProfessorPigou'simaginativeexampleoftworoads,whichisexpoundedbyProfessorKnight.SeeA.C.Pigou,TheEconomicsofWelfare(London:Macmillan,＆Co.,1920),p.194;andF.H.Knight,"SomeFallaciesintheInterpretationofSocialCost,"QuarterlyJournalofEconomics,vol.38(1924).
Thecorrectanalysisexplainingthedissipationofrent,tomymind,isanalogoustoCournot'sduopolysolutionwithfreeentry:withrentalinereplacingmonopolyrent,theaggregateaverageproductoflaborreplacingmarketdemandforproduct,andapositivewageinsteadofazerocostofproduction.
7.EvidenceofInputAdjustmentsundertheShareRestriction
Theeffectsonresourcereallocationunderthesharerestrictionasimpliedbythetheoryofsharetenancycanbesummarizedasfollows.Theimpositionofamaximumrentalpercentagerestrainsthemarket-determinedrentalpercentage.Intheabsenceofsufficientpensatingpaymentsandtenurerearrangementsthroughwhichtheinitialresourceusemayberestored,thetenantswouldrecieveearningsfromfarminginexcessoftheiralternativeopportunities;butpetitionamongtenantsofferingtoincreasenonlandfarminginputseliminatestheresidualearnings(unlessthemarginalproductofnonlandinputsgoestozero).Undereffectivesharerestriction,emphasiswillbeplacedmoreonthemaximizationofgrosscropvaluethanonthecropvaluenetofnonlandcosts.Theyieldperacreoflandwillrise,andwithalowerrentalpercentagethelandowner'srentalinewillbepartiallyrestoredbyahigheroutput.