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Land doesn’t matter in this age of technology

Land doesn’t matter any more, people often say. This is the sort of comment we often receive…
Are you stuck in the 17th century or something? Land doesn’t mean an awful lot when food can be shipped in cheap from Africa and your entire business is an office.

Unless you have taken up permanent residence in a spaceship, you are somewhere on the surface of the planet. Food from Africa has to be brought to your local shop, which will probably be a supermarket, and on its way it will pass through ports. Places which are suitable as ports have high land value, which generates land rent which passes to the owners of the port at no effort on their part. Much of the vast profits of supermarkets such as Tescos is land rent. Offices can mostly only be located where there is good access. Land values in such places are very high. Land which can be used for offices is thousands of times more valuable than land for growing food on. The significance of land in the economy is vastly more in this age of technology than it ever was in the seventeenth century,

Most of the value of “assets” such as shares is land value. There are those who own land and those who do not. That is the great economic divide. The latter are forced to pay rent and work for wages. The former can live off rental income without doing anything at all as the stream of rental income just drops into their hands.

Land rent is created by the presence and action of the community. It is the natural source of public revenue. But because governments do nothing about this state of affairs and do not collect land value as they should, labour is loaded with a heavy burden of taxes, risibly described as an “ability to pay” tax system.

The idea that land does not matter any more is one of the great economic delusions of our time and makes it impossible to address our problems, which consequently are persistent and intractable.