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The idea of speculative holding of land is incompatible with perfectly inelastic supply. If someone is speculatively holding land, there is a price (demand) at
by Godel_unicode 9y ago
The idea of speculative holding of land is incompatible with perfectly inelastic supply. If someone is speculatively holding land, there is a price (demand) at which they will sell (supply) that land to be used. The supply of land is not the amount of land which exists, it's the amount of land in the market (just like the supply of oil is not the oil in the ground it's the gasoline in pumps). That amount reacts to price, which is the definition of elasticity of supply.
- nwah1 9y agoLand is not the same as oil commodities because oil must be discovered and drilled, whereas we already know where all the terrestrial land is, and for the most part it is all already owned by someone. Oil rights are a kind of land, of course, because that is what land really is... the rights. Those rights are precisely quantifiable in the form of land titles. The scope of those titles, and the quantity of land subsumed under them, is precisely quantifiable and does not change from year to year. The speculative holders of the rights are often neglecting to rent out the land, but in economic terms they are just consuming their own imputed rents. The rents are a flow that continuously accrues to the title.