Improve and Sit: The Surrendering of Land at Rents Below Marginal Product in Nineteenth-Century Valencia, Spain

In formulating his theory of land rent, Ricardo did not take into account the fact that in the Europe of his time relationships between landlords and tenants were often regulated by customs that kept rents below marginal product, sometimes even in the long term. Since all those customs had a number of points in common, understanding the logic governing one of them can be a very useful way to gain an overall understanding of the phenomenon. This chapter analyses a case of such customs in the area of market-gardens surrounding the city of Valencia, eastern Spain. Here, tenants were by custom the owners of the improvements they carried out, agricultural efficiency increased, and land rents stagnated. The chapter addresses issues such as cooperation among large groups of people, definition of rights and the creation of property rights by means of social conventions that clashed with law.