Tag Archive for 'factors of production'

We shouldn’t own land

Should we abolish ownership rights over land?

It’s a crazy thought but it’s actually very logical.

Consider the factors of production. Classically defined, as land, labour, and capital. Along with entrepreneurship, which organises the factors, you have the building blocks of economic activity. Therefore, any controls on the factors leads to a limitation to the usage of the resources.

Remember how not so long ago, slavery — the ownership of humans over other humans — was a thing? Back then, it was an “economic” necessity but which fell apart when technology did the work of humans cheaper and led to the political revolution that now, thankfully, requires the treatment of all humans as equal in dignity. Less talked about is we’ve also seen a boom in economic output as well since slavery was abolished, as people are now free to use their time as *they* see fit (not another person). Slavery still exists, and economic slavery is more of an issue these days in developed economies, but my point remains: free the people.

It sounds not just absurd, but down right shameful, to suggest we own humans for economic reasons. And so I want to posit to you, that after years of trauma — like the micro issue of overpriced property where few can afford to buy a home especially the big cities or the macro issue¬†like the wars caused by nationalism — that the ownership of “land” is one of the most damaging things we are doing to our economy (and society, if you ask me). Not just damaging, just out right wrong even.

Well that’s just ridiculous. How can the world function without ownership of land
This concept already exists: it’s called leasing. With leasing, you have a temporary control on the economic value and usage of an asset. The British had a 99 year lease with China before they had to give Hong Kong back to the communists. More relevantly, the Chinese communists themselves forbid foreigners from owning land, as its owned by the state and the collectives. Just because you don’t “own” the land, doesn’t mean you can’t own a home you build on top of it. It simply means that no one human has control of this factor of production indefinitely.

“Property rights” still exist….you just can’t sell the land as an asset and it’s a finite right you have.

So the government owns all the land?
I hope not. I’d rather say “society” does. Every few years, we allow an individual or a group to bid for a lease capped at a certain amount of years. At each bid, a group of independent people can assess what is the best usage of the land. The lease owner then gets to control the land like a land owner does and on the face of it, society will not have changed. But under the surface of it, we’ve changed the way we think about the world. We let creativity, demand and supply determine outcomes…and because nothing is assured, it keeps lease owners on their toes. It kills the concept of inheritance of land, which damages the dynamism of the economy.

Now, the devil is in the details. Replacing private ownership of land with a committee that approves land usage can be a slippery slope of sliding into horse shit again, but as long as the principle of ‘freedom’¬† is upheld for the resource that is land and it’s dynamic usage towards the best ideas, I think we’re good.

You could never convince existing land owners outside of China
No kidding. But that’s ok. I like to think of what we do on earth as a petri dish, where the best ideas will lead the way. What matters more is that we recognise this is the best way, so that when in the next century we begin a new phase of exploration as humans colonising other planets, moons of planets — and one day exoplanets — we have this principle down pat.