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Land (economics)

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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

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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

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Because no man created the land, it has no definite original proprietor, owner, or user.[4]

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

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

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Land reform

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Ownership of agricultural land and its distribution among the population is a key driver of a wide range of social, political and economic inequalities.[8][9] Land reform (also known as agrarian reform) refers to the process of changing who owns agricultural land and who has the right to use these lands.[10][11] Redistributive land reform refers to the narrower concept of transferring agricultural land ownership from large private landowners to small farmers and people without any landholdings. It involves the redistribution of wealth and political power that comes from owning large swathes of land.[12][13] There are different types of land reform, including state-led and market-led agrarian reforms.[14]

Georgism

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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

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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,[15] implying that it plays a more critical role in the economy than capital.

Academic

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Some United Kingdom and Commonwealth universities offer courses in land economy, in which economics is studied alongside law, business regulation, surveying, and the built and natural environments.[16][17][18] 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.[19]

Accounting

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

Sustainability

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The sustainable use of land is the focus of some economic theories.[20]

See also

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References

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  1. ↑ "Land - economics". britannica.com.
  2. 1 2 Samuelson, Paul; Nordhaus, William (2010). Economics. New York: McGraw-Hill/Irwin. ISBN 978-0-07-351129-0.[permanent dead link]
  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. ↑ Albertus, Michael; Klaus, Kathleen (10 December 2024). "Land and Politics". Annual Review of Political Science. 28: 19–36. doi:10.1146/annurev-polisci-040623-112955.
  9. ↑ Lund, Christian (2008). Local Politics and the Dynamics of Property in Africa. doi:10.1017/CBO9780511510564. ISBN 978-0-521-88654-3.[page needed]
  10. ↑ White, Ben; Borras, Saturnino M.; Hall, Ruth (2014-02-27), Currie-Alder, Bruce; Kanbur, Ravi; Malone, David M.; Medhora, Rohinton (eds.), "Land Reform", International Development, Oxford University Press, pp. 479–494, doi:10.1093/acprof:oso/9780199671656.003.0029, ISBN 978-0-19-967165-6, retrieved 2026-09-29{{citation}}: CS1 maint: work parameter with ISBN (link)
  11. ↑ Batty, Fodei Joseph. "Pressures from Above, Below and Both Directions: The Politics of Land Reform in South Africa, Brazil and Zimbabwe". Western Michigan University. Presented at the Annual Meeting of the Midwest Political Science Association. Chicago, Illinois. April 7–10, 2005. p. 3.
  12. ↑ White, Ben; Borras, Saturnino M.; Hall, Ruth (2014-02-27), Currie-Alder, Bruce; Kanbur, Ravi; Malone, David M.; Medhora, Rohinton (eds.), "Land Reform", International Development, Oxford University Press, pp. 479–494, doi:10.1093/acprof:oso/9780199671656.003.0029, ISBN 978-0-19-967165-6, retrieved 2026-09-29{{citation}}: CS1 maint: work parameter with ISBN (link)
  13. ↑ Borras Jr., Saturnino M.; Franco, Jennifer C. (2025-05-16). Essential Concepts of Land Politics: An A–Z Guide (1 ed.). London: Routledge. p. 86. doi:10.4324/9781032658438. ISBN 978-1-032-65843-8.
  14. ↑ M. Borras, Saturnino; McKinley, Terry (November 2006). "The Unresolved Land Reform Debate: Beyond State-Led or Market-Led Models" (PDF). International Policy Centre for Inclusive Development. International Poverty Centre. Retrieved 10 September 2026.
  15. ↑ "The UK national balance sheet estimates: 2017". Office for National Statistics. 2018-08-01. Retrieved 2019-05-01.
  16. ↑ "Land Economy Undergraduate Prospectus". Archived from the original on 2009-09-12. Retrieved 2009-05-04.
  17. ↑ "Land Economy - Rural Surveying - Postgraduate Taught Degrees - Study Here - The University of Aberdeen". www.abdn.ac.uk. Retrieved 2019-11-16.
  18. ↑ "Commonwealth Association of Surveying and Land Economy (CASLE) - The Commonwealth". thecommonwealth.org. 30 July 2013.
  19. ↑ "A brief history of Land Economy — Department of Land Economy". www.landecon.cam.ac.uk. Archived from the original on 3 March 2015.
  20. ↑ "Rethinking the Land Economy: Keeping 1.5°C in Sight by Bernice Lee". Hoffmann Centre for Sustainable Resource Economy.

Further reading

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  • 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: Éléments pour un cours de politique agricole", ENGREF, INRA-ESR Laboratoire d'Économie des Transitions, Montpellier, France, 47 pp.
  • Van Sickle, John V.; Simpson, Herbert D.; Spengler, Edwin H.; Fisher, Ernest M.; Weinstein, A. H.; Wehrwein, George S.; Ely, Richard T. (1929). "Land Economics". The American Economic Review. 19 (1): 45–55.
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