Subprime Crisis and Marx's Theory on Ground Rent

Abstract

Most studies of the subprime crisis have taken into account the significance of the banks in general but not the specifically important role of mortgage loans including the crucial factor of private landed property. Marx's theory on ground rent serves as a key in a deeper understanding of the subprime crisis and in differentiating the class interests. Referring to Marx's theory on ground rent especially the topics of landed property, differential and absolute rent, price of land, mortgage, and fictitious capital, an analysis is given of the consequences of ground rent under monopolist capitalism, in particular on the recent subprime crisis, which has its winners and losers. The article concludes with the bourgeois and the proletarian solution of private landed property.