Jesus, no wonder kids today hate capitalism and are flirting with political ideologies on the extremes of the spectrum.
Ie, does your statement apply to everyone in the country? Some places have much lower cost of living but similar earning power.
Similarly, did you compare to the past? Average people used to be much worse off 20, 40, 60, etcetera years ago.
Also, should running research projects that matter little to the average person get large financial rewards?
For specifically about the research project (which is the only question really relevant enough to answer): no, I don't think someone running fully funded research projects at a top university in her field should necessarily be living luxuriously but I do think they shouldn't have to worry about making rent in the city the university is in.
Edit: to put it in perspective my dad was able to pay for college working part time on the docks. Nowadays it would struggle to pay food/rent, let alone get close to paying tuition.
Real estate, property development, and property renting/leasing are typically some of the least-capitalist and least-free-market sectors around.
They all tend to involve extensive and very invasive government intervention that controls or even prevents when and how capital can be used. That's the opposite of capitalism. That's the opposite of a free market.
Government-imposed zoning regulations, onerous development planning and approval processes, rent controls, licensing requirements, and other forms of interference severely inhibit the ability of the market to function properly.
As government involvement in such sectors has increased over time, the situation has gotten worse and worse. Of course, inefficiency and problems are exactly what we should expect to arise due to government interference with the market.
Competition becomes limited, which causes supply to become artificially constrained. This distorts the pricing, which may include collusion becoming possible. Incentives that would help drive down costs, while simultaneously increasing quality and availability, no long exist.
Those calling for even more government intervention than there already is are only making the situation even worse for themselves and others.
https://en.wikipedia.org/wiki/Dutch_East_India_Company
which was granted a monopoly in the Asia trade by the state. In general "capitalists" like "free" markets when it means they can do what they hell they want, but they very much like regulation when it is in their favor.
https://en.wikipedia.org/wiki/Capitalism#Definition
"There is no universally agreed upon definition of capitalism... some doubt that the term "capitalism" possesses valid scientific dignity, and it is generally not discussed in mainstream economics... understanding of the concept of capitalism tends to be heavily influenced by opponents of capitalism and by the followers and critics of Karl Marx."
I'd argue that the shareholder based ownership makes possible the vast expansion of scale which makes "modern" systems so productive. e.g. in "capitalism" somebody can accumulate capital and invest it.
Land ownership should not be confused with capitalism because it is not a free market, and the advantages of location are not capital.
Capital is not defined by non fungibility. Land is not “monopolistic” by nature. Competition can exist for land. Monopolies don’t define free markets. Land is not capital but not being capital does not mean it’s unrelated to capitalism. You’ve described land as having inelastic demand but that’s not correct, it’s actually inelastic supply. Demand for land is definitely elastic even if you “must occupy some land”.
This is like a puzzle to spot as many factually incorrect claims as you can.
Correct. It's defined as wealth in the course of exchange, coming from labor. Whose labor created land? Nobody's.
> Land is not "monopolistic" by nature
Completely false. By definition, if you own a plot of land, you have a complete monopoly on that location. Nobody else can compete with the price you put on that slice of the Earth. LAND is defined by its non fungibility. A plot of land in the middle of San Francisco is not the same as a plot of land in the middle of Arizona.
> You’ve described land as having inelastic demand but that’s not correct, it’s actually inelastic supply.
You can clearly see how land has an inelastic supply, yet you continue to think of it as capital which can be produced. The demand to exist in a piece of land has everything to do with the rents of the land. If you can make $30,000 more a year in valuable land than worthless land, using the same labor/capital expenditures, the land rents become $30,000 a year. Land values have nothing to do with the cost of production, but with that value of location.
A plot of land in the middle of San Francisco is very similar to another plot of land in the middle of San Francisco. People don’t describe ownership as a “monopoly over a specific object”. That’s just silly. Monopoly is a descriptor of a market. Not specific assets.
> You can clearly see how land has an inelastic supply, yet you continue to think of it as capital which can be produced.
… no I was pretty explicit that land is not capital in those exact words
> The demand to exist in a piece of land has everything to do with the rents of the land.
No, rents (prices) are a function of demand.
> If you can make $30,000 more a year in valuable land than worthless land, using the same labor/capital expenditures, the land rents become $30,000 a year.
Idk how to parse this sentence.
You have a very weird grasp on economic concepts
Vs. (IIR) Classical (Adam Smith era) Economics viewed rent as Feudalism - not Capitalism - and took a very dim view of all such "as much gold as you can squeeze out of others, without doing any real work yourself" schemes.
There are plots of land in random, remote places that continuously go up for sale for extremely cheap prices. You won't find these on NMLS listing services :-)
Also, modern local regulation (not capitalism) is largely to blame for housing prices. NIMBYism and similar attitudes are usually behind it, although distrust of potentially corrupt officials can also factor in. Smart city planning can help here. There are good developers out there with money to invest.
Finally, there are vast swaths of undeveloped, unused land, and not all of it is owned by the BLM. This represents an open opportunity for developing housing and townships.
All of the above are not easy to take advantage of -- there are significant hurdles involved. But having multiple clear paths forward does imply we're not under some thumb of tyranny with regard to housing and real estate.
(Edit: removed comment about homesteading; thanks for the correction!)
> The Federal Land Policy and Management Act of 1976 ended homesteading; by that time, federal government policy had shifted to retaining control of western public lands. The only exception to this new policy was in Alaska, for which the law allowed homesteading until 1986.
> The last claim under this Act was made by Ken Deardorff for 80 acres (32 ha) of land on the Stony River in southwestern Alaska. He fulfilled all requirements of the homestead act in 1979 but did not receive his deed until May 1988. He is the last person to receive a title to land claimed under the Homestead Acts.
To say that the advantages of location are not capital (or equivalent to capital) is just ignorant. There are plenty of pieces of land that act just like capital - access to natural resources, access to a coastline, fertile for farming, or in a location where a toll road or similar could be employed.
It becomes very difficult for someone to build and own a sapphire mine if they don't have the capital to buy the land that has the sapphires in it!
There are supply and demand dynamics in the land market. However much excess value you get from occupying a certain location on Earth, is how much people will be willing to pay for that. The demand will always be high as long as the value from the location is higher than the cost to occupy. This cost will soak up any advancements in society, which is why despite everything we have done to progress the state of man there is still a class of renters giving everything extra they make due to societal advancements to landowners.
There wouldn't be many $1 million ranch houses if there wasn't a bank that would give you a mortgage on a $1 million ranch house.