by Don Boudreaux on April 26, 2011

in Agriculture, Creative destruction

I’m on a listserv called “FLOWidealism,” which I believe is the brainchild of my friend Michael Strong.  On the Flow listserv there happen to be a number of Georgists (although I do not count myself in those ranks; I confess that I’ve read very little of Henry George‘s work).

One of the Georgists on the Flow listserv took issue with my claim that people can produce more land.  He asked me, I believe sarcastically, if there is a “land factory” located somewhere.

Well, no, there is no physical land factory, but land can most certainly be produced.  Some of the following phenomena increase the volume of land physically, and all of the following phenomena increase the volume of land economically:

– Draining or filling-in swamps and other areas currently submerged beneath water for some or all of the year;

– Multi-storied buildings and advances in architectural design that reduce the amount of land necessary for any given number of people to work and reside; on this front, air-conditioning (by reducing the minimum necessary height of ceilings) and elevators are innovations that effectively increase the economic stock of land;

– Agricultural advances that reduce the amount of land required to produce any given amount of food;

– Economies of scale in production that reduce the amount of land required to produce any given amount of manufactured outputs;

– even teleworking and advances in shared-office-space practices, by reducing the amount of land required for office space, effectively increase the supply of land economically (if not physically).

– [other possibilities?  Please suggest some in the Comments section]


I don’t wish to get into a tussle over semantics.  Only the first for sure in the above list, and possibly the second, increase the actual quantity of land (or real estate).  But economically the concern that I gather Georgists have about land being some ‘thing’ that is largely fixed in amount is mistaken.  The owner of, say, the world’s greatest pineapple-growing land might today be reaping huge Ricardian rents (some would say ‘monopoly profits’) from owning that land and using it to grow pineapples.  But let a cost-efficient hothouse be developed in which wonderful pineapples can be grown at a cost equal to, or lower than, the cost of growing pineapples on that piece of land, and the landowner no longer has the stream of rents (or ‘monopoly profits’) that he once did.  The effective supply of land for growing pineapples has been increased.


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