The fertility of land

Book 4, Chapter 2

§1 “Land” is defined as an input to production which is, contra capital, not made by man. Thus, dirt, but also trees, fish, reefs, the air. Humans do not make these elements of “land” but they are important as an input, and — in the case of dirt — also as the source of spacial rights that have their own value, in position and security.

§2. Agricultural soil comes with a range of characteristics (sandy, clay, organic, etc), which man can affect by tillage or adding (artificial) manure.

§3. Soil has been affected by human action for ages, but we should not forget the value of the heat, water and air that comes with some locations but not others. Those characteristics explain the “rents” that vary by plot.

§4. The relative contributions of land and labor, in terms of dividing the rents, varies with crops. Wood-bearing trees require much less labor than fruit-baring trees, or vegetables. Once the land contribution is made, labor and capital will be used until diminishing marginal returns advise a cut off, in terms of maximal output or value.

 

Author: David Zetland

I'm a political-economist from California who now lives in Amsterdam.

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