Land: Difference between revisions
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In economic theory, '''land''' is one of the three [[factors of production]]. The other factors are [[labour]] and [[capital]]. | In economic theory, '''land''' is one of the three [[factors of production]]. The other factors are [[labour]] and [[capital]]. | ||
Alongside [[labour]] land is also recognised by most (? Samuelson uses the phrase ''often called'', pp. 50) economists as a primary factor.<ref>Samuelson and Nordhaus ''Economics'', (1989).</ref> | Alongside [[labour]] land is also recognised by most (? Samuelson uses the phrase ''often called'', pp. 50) economists as a [[Factors of production | primary factor]].<ref>Samuelson and Nordhaus ''Economics'', (1989).</ref> | ||
However, the Chicago School of economic thought seems to have been founded (and funded by J. D. Rockefeller) to eliminate the notion of ''land'' altogether from economics not just make it rank equal with capital and labour.<ref>Mason Gaffney in ''The Corruption Of Economics (1994) pp. 117-112.</ref> | However, the Chicago School of economic thought seems to have been founded (and funded by J. D. Rockefeller) to eliminate the notion of ''land'' altogether from economics not just make it rank equal with capital and labour.<ref>Mason Gaffney in ''The Corruption Of Economics (1994) pp. 117-112.</ref> | ||
Revision as of 07:38, 18 June 2007
In economic theory, land is one of the three factors of production. The other factors are labour and capital.
Alongside labour land is also recognised by most (? Samuelson uses the phrase often called, pp. 50) economists as a primary factor.[1]
However, the Chicago School of economic thought seems to have been founded (and funded by J. D. Rockefeller) to eliminate the notion of land altogether from economics not just make it rank equal with capital and labour.[2]
Closely coupled with land is the notion of rent -- economic rent, to be exact. With this goes the thorny question of "who is entitled to collect the value that accrues to land in its undeveloped state?"
Most classical economists from Adam Smith to J.S. Mill were explicit on this issue. In the words of Adam Smith, “Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own… (and) are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them.” [3]
This principle of "least bad tax" is still acknowledged by most economists today. Paul Samuelson assures us that "A tax on rent will lead to no distortions or economic inefficiencies". [4]