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Comment by alexb_ | Hacker News Reader

Capitalism has nothing to do with this, because land is not capital. Land, as a non-fungible asset, is monopolistic by nature. There is no free market involved because competition cannot exist. Furthermore, because you must occupy some piece of land, it commands a monopoly price that ends up taking absolutely everything that the poorest can possibly pay, ensuring the continued existence of poverty no matter how much we progress as a nation.

Land ownership should not be confused with capitalism because it is not a free market, and the advantages of location are not capital.

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Weirdly confident and passionate rant here about nonsense.

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.

> Capital is not defined by non fungibility.

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.

> 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.

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

Capitalism, as commonly understood today, by non-Economists, has everything to do with this. (Which, yes, is a major social problem.)

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.

Tell that to the Dutch.

It's not quite that extreme.

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!)

https://en.wikipedia.org/wiki/Homestead_Acts#End_of_homestea...

> 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.

If we were like the Soviet Union we might address the problem of coastal overpopulation by setting up a Gulag in Idaho or Wyoming.

Capitalism has _everything_ to do with this as while the _amount_ of land may not be growing, the economic system does _nothing_ to cap the price of this essential commodity. The only cap on the price of land is the amount someone is willing to pay for it.

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!

Also capitalism provides plenty of capital to bid up house prices.

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.

I think point of gp is that land is _not_ a commodity. It thus cannot be treated as capital, the way it is more traditionally understood. Supply/demand dynamics in a market does not make something capitalism.

That's exactly right. Land is not a commodity, in fact it is the absolute furthest thing from a commodity. Plots of land are different, and command different valuations based on location. It is not produced by anyone and has an unchanging supply. To call it a commodity is so completely backwards.

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.

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