Land (economics)

This article is about Land economics. For the journal, see Land Economics.
See also: Natural resource economics

In economics, land comprises all naturally occurring resources as well as geographic land. Examples include particular geographical locations, mineral deposits, forests, fish stocks, atmospheric quality, geostationary orbits, and portions of the electromagnetic spectrum. Supply of these resources is fixed.[1]

Factor of production

Land is considered one of the three factors of production (also sometimes called the three producer goods) along with capital, and labor. Natural resources are fundamental to the production of all goods, including capital goods.[2] While the particular role of land in the economy was extensively debated in classical economics it played a minor role in the neoclassical economics dominant in the 20th century.[3] Income derived from ownership or control of natural resources is referred to as rent.[2]

Ownership

Main article: Land tenure

Because no man created the land, it does not have a definite original proprietor, owner or user.[4]

No man made the land. It is the original inheritance of the whole species.

— John Stuart Mill

Consequently, conflicting claims on geographic locations and mineral deposits have historically led to disputes over their economic rent and contributed to many civil wars and revolutions.

In the context of geographic locations the resulting conflict is regularly understood as the land question (see e.g. United Kingdom,[5] South Africa,[6] Canada[7]).

Addressing the land question

Land reform

Land reform programs are designed to redistribute possession and/or use of geographic land.

Georgism

Georgists hold that this implies a perfectly inelastic supply curve (i.e., zero elasticity), suggesting that a land value tax that recovers the rent of land for public purposes would not affect the opportunity cost of using land, but would instead only decrease the value of owning it. This view is supported by evidence that although land can come on and off the market, market inventories of land show, if anything, an inverse relationship to price (i.e., negative elasticity).

Significance

Land plays a vital role in advanced economies. In the UK, the "non-produced asset of land" accounts for 51% of the country's total net worth,[8] implying that it plays a more critical role in the economy than capital.

Academic

Some United Kingdom and commonwealth universities offer courses in land economy, where economics is studied alongside law, business regulation, surveying, and the built and natural environments.[9][10][11] This mode of study at Cambridge dates back to 1917 when William Cecil Dampier suggested the creation of a school of rural economy at the university.[12]

Accounting

As a tangible asset, land is represented in accounting as a fixed asset or a capital asset.

Sustainability

The sustainable use of land is the focus of some economic theories.[13]

See also

References

  1. ^ "Land - economics". britannica.com.
  2. ^ a b Samuelson, Paul; Nordhaus, William (2010). Economics. New York: McGraw-Hill/Irwin. ISBN 978-0-07-351129-0.
  3. ^ Ryan-Collins, Josh; Lloyd, Toby; Macfarlane, Laurie (2017). Rethinking the Economics of Land and Housing. Zed Books. ISBN 978-1786991188.
  4. ^ Mill, John Stuart (1848). The Principles of Political Economy. Book 2, Chapter 2, §6. Archived from the original on September 14, 2009.
  5. ^ Christophers, Brett (2019-04-18). "England's new enclosures: why questions of land ownership are entering the political mainstream". Retrieved 2019-05-01.
  6. ^ Ramaphosa, Cyril (2018-08-23). "Land reform in South Africa is crucial for inclusive growth". Financial Times. Archived from the original on 2022-12-10. Retrieved 2019-05-01.
  7. ^ Hunter, Troy (2017-01-30). "Opinion: The land question should be a matter of concern". Vancouver Sun. Retrieved 2015-09-02.
  8. ^ "The UK national balance sheet estimates: 2017". Office for National Statistics. 2018-08-01. Retrieved 2019-05-01.
  9. ^ "Land Economy Undergraduate Prospectus". Archived from the original on 2009-09-12. Retrieved 2009-05-04.
  10. ^ "Land Economy - Rural Surveying - Postgraduate Taught Degrees - Study Here - The University of Aberdeen". www.abdn.ac.uk. Retrieved 2019-11-16.
  11. ^ (http://www.hydrant.co.uk), Site designed and built by Hydrant (30 July 2013). "Commonwealth Association of Surveying and Land Economy (CASLE) - The Commonwealth". thecommonwealth.org.
  12. ^ "A brief history of Land Economy — Department of Land Economy". www.landecon.cam.ac.uk.
  13. ^ "Rethinking the Land Economy: Keeping 1.5°C in Sight by Bernice Lee". Hoffmann Centre for Sustainable Resource Economy.

Further reading

  • Anthony C. Fisher (1987). "Natural resources," The New Palgrave: A Dictionary of Economics, v. 3, pp. 612–14.
  • João Pedro Galhano Alves (2009). "The artificial simulacrum world. The geopolitical elimination of communitary [sic] land use and its effects on our present global condition", Eloquent Books, New York, USA, 71 pp.
  • Pierre Coulomb (1994). "De la terre à l’état: Eléments pour un cours de politique agricole", ENGREF, INRA-ESR Laboratoire d’Economie des Transitions, Montpellier, France, 47 pp.