Land value is mostly human made. The value as shelter, is entirely human made. Look what a piece of wood somewhere costs and what a piece of land in a city costs. The land is valueable, because there are buildings around.
There are a couple of remarks that one can make to that. The first is that this is not the value of the work that has been put into cultivating the land in question - it is the value of the work that has been put into cultivating the surrounding land. Or more specifically, it is the value of the positive externalities of the work that has been put into the surrounding land.
The second is that there is a scarcity premium on top of the value of the externalities of the surrounding development, because land is limited.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Which was done by other members of the same society. My argument is, that every normal person has profited. When somebody argues, that propertisation of land is immoral, I ask, immoral against whom? For sure not the people that form the state.
That is a very small premium. A piece of forest somewhere is pretty cheap. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
My argument is, that every normal person has profited.
Um, no. Not the people who don't own land. Or rather, they have profited, but they have profited less, and they have profited less solely because they didn't own land - not because they were less productive, but because they didn't take on the speculative risk of purchasing land.
Now, making money by taking on speculative risk is a legitimate enough business... as long as the risk you take on is transferred from hedgers (witness insurance companies, for instance). But that's not the case here. Risk is transferred from other speculators, which makes it substantially a matter of gambling.
Further, there is a barrier to entry into land ownership, in that you have to be able to get credit, which is only available to (lower) middle incomes and up. The only time that this is waived is in the terminal stage of a bubble, ensuring that if the less well-to-do get their hands on land, it's almost always at or near the top of the market.
So essentially, land price increases (whether due to increasing value of the surrounding society or due to price inflation) makes the (lower) middle incomes and up gain.
If the price increase is purely inflation, this is a direct transfer from the poorest members of society to everyone else (because the actual value of the land does not go up because of inflation - so society does not get richer overall. And when society does not get richer overall, any benefit to some members must come out of someone else's pocket).
If the price increase is due to increased value, the distributionary effects depend on how that increased value was financed.
That is a very small premium. A piece of forest somewhere is pretty cheap.
But land in cities is very limited.
I suppose that it's hard in practise to distinguish between scarcity rent and the value of the positive externalities of the city, though. So it's mostly a question of semantics.
The only time that this is waived is in the terminal stage of a bubble, ensuring that if the less well-to-do get their hands on land, it's almost always at or near the top of the market
Important point. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
I think we talk about different things. I talk about what has initiated the industrial revolution in the second half of the 18th century and you talk about land speculation. Of the increase in productivity in the last 250 years for sure everybody who participates in the society has profited.
Further, there is a barrier to entry into land ownership, in that you have to be able to get credit, which is only available to (lower) middle incomes and up.
Or somebody donates [e.g. via a land reform] it to you or there is a rule, that somebody who urbanises a piece of land can own up to certain amount [USA, 18th century or so] or it is anyhow 'your' land in the sense, that your family has a subsistence farm on the land for centuries, and now you get legal codification. Or you have worked in the past and saved enough to acquire a piece.
Why the hell do you want land in cities, if not for the other people there? How is the increased value of a piece of land in a city NOT made by humans? Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
That's all well and fine, but unless you can show a causal relationship between individual ownership of land and industrialisation, you still haven't made the case that everybody benefits from individual land ownership.
Otherwise, the wealth created by the industrial production economy is really beside the point.
Or somebody donates [e.g. via a land reform] it to you
Which has not happened in any Western(TM) society since the 19th century, AFAIK. And back then, land was "reformed" from the poor to the rich, by the way.
or there is a rule, that somebody who urbanises a piece of land can own up to certain amount [USA, 18th century or so]
That involves chasing the existing occupant out of said land.
or it is anyhow 'your' land in the sense, that your family has a subsistence farm on the land for centuries, and now you get legal codification.
Again, this does not apply to mature industrial economies.
Or you have worked in the past and saved enough to acquire a piece.
And how many land purchases were cleared in cash in the Bundesrepublik last year?
Why the hell do you want land in cities, if not for the other people there? How is the increased value of a piece of land in a city NOT made by humans?
It is made by humans, but that is beside the point. It's not made by the owner of the land. It's made by society as a whole - in other words, the owner of the land cashes in on value that has virtually nothing to do with his own endeavours. I call that either a speculative gain or a rent.
The link is, that propertisation has allowed to make a lot more credit. Independent of any possible gold standard, the commercial banks collaterise(d) there loans with the land. That is not to say, that it is impossible to invent different models for collaterisation. But it is a very good one, because land value is so stable. Mohammed Yunus with his Grameen bank takes good will and shame as collateral. This is already quite sophisticated. Still he demands 20-30% interest rate on loans, and the loans have a very low volume.
Yes, that was a collection of measures that happened in the past. We can invent new measures, but this is a measure that happened really in the past.
It has once applied to economies that are today industrial. It has initiated capitalism. To undo it, would undo capitalism (unless you have a smart replacement).
Most purchases of blank land that happend. Not many overall, as we are in a rather stable situation. But even in the remaining cases it is a portion of every deal. The rest you borrow by collaterising what you just bought. But then over time the debt is repaid. Land ownership isn't something to which only 0.1% of the population have access to and it isn't entirely by heritage. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
To undo it, would undo capitalism (unless you have a smart replacement).
Exactly.
The land is held by a Custodian, so it is never sold again. Co-owner Occupiers may change and Co-owner Investors may change but the land is never sold again.
For as long as he has use of the land (ie an indefinite term) the Occupier pays a rental for the use of the location (to the community) and to Investors (for the use of the capital invested in the location).
Anything an Occupier pays more than the rental due buys him Units. And if he maintains the property himself he gets Sweat Equity.
No borrowing. Just Units created within a partnership framework redeemable in rental value.
There we go. Reinvented Capitalism. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
To every one whose access to land is denied. Why should people pay for a place? For water or air?
"For sure not the people that form the state."
There is phenomenon called "homelessness". Why are people homeless? Because they can't pay an apartement maintenance costs? They are only 50e/month. They can't pay the land, but do they form a state?
There is sufficient public space. You just can't do there everything. Most land in most countries is accessible.
Why should people pay for a place? For water or air?
Because it helps to allocate limited resources in an efficient way.
Actually homeless people are pretty much a border case. As the society requires obedience to the law, one can require it to give something in exchange especially, when the grab is on nearly all available land - and we give: Usually the cause for homelessness is a mental illness. If you are able to ask for help. It will be granted to you. If you pledge to work within your ability, our society will grant you a home. At least in Germany, but I guess in all of western Europe nobody becomes homeless, because his ability to earn money in the market doesn't earn him enough to pay for a home. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
Yes, but not with the expense of the real economy.
I'm 100% confident in my position. I'm annoyed that I have to explain over and over again things, that are either not related to my original point, or are already completely clear from what I have written before. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
