This is the usual misunderstanding of ‘land’ as a macroeconomic factor. ‘Land’ is not merely ‘floor space’ such that you can easily manufacture more of it by simply hiring some construction workers (even assuming no issues like regulation).
For example, adding another floor on a building next to the stock exchange does not create new Land from the perspective of a high-frequency trader, because that floor space must be an additional X meters (and Y nanoseconds) away from the stock exchange central computer compared to the HFT traders on the floor below that. There is a certain sphere of space around that computer which is, due to the finite and unchangeable speed of light, going to be <Y nanoseconds away from it, and no matter what you do, that will always be true (barring some major breakthroughs in string theory or something); and that Land is of fixed finite supply, neither created nor destroyed, only rented out by its current owner for whatever the market will bear.
But my argument is about literal land and floor space for living. Literal land is fixed but it doesn’t matter because floor space for living isn’t (or is fixed at a level way higher than we’re likely to reach any time soon).
It’s the same thing. People do not need ‘literal land and floor space for living’. If you want that, there’s plenty of empty abandoned buildings in, say, rural Japan you can go buy which will provide ‘literal land and floor space’ - because everyone moved to Tokyo. What people need is Land: scarce, finite housing slots with relevant meta-properties like plumbing and garbage collection and low crime rates within X travel-minutes of their job and relevant amenities. Building another floor means additional load on elevators, electricity, garbage, roads and public transit, etc. And to the extent the local residents think all that is already barely adequate and legally bar new entry, then that is the real limit on Land and why it is necessarily scarce and generates high rents.
This is the usual misunderstanding of ‘land’ as a macroeconomic factor. ‘Land’ is not merely ‘floor space’ such that you can easily manufacture more of it by simply hiring some construction workers (even assuming no issues like regulation).
For example, adding another floor on a building next to the stock exchange does not create new Land from the perspective of a high-frequency trader, because that floor space must be an additional X meters (and Y nanoseconds) away from the stock exchange central computer compared to the HFT traders on the floor below that. There is a certain sphere of space around that computer which is, due to the finite and unchangeable speed of light, going to be <Y nanoseconds away from it, and no matter what you do, that will always be true (barring some major breakthroughs in string theory or something); and that Land is of fixed finite supply, neither created nor destroyed, only rented out by its current owner for whatever the market will bear.
But my argument is about literal land and floor space for living. Literal land is fixed but it doesn’t matter because floor space for living isn’t (or is fixed at a level way higher than we’re likely to reach any time soon).
It’s the same thing. People do not need ‘literal land and floor space for living’. If you want that, there’s plenty of empty abandoned buildings in, say, rural Japan you can go buy which will provide ‘literal land and floor space’ - because everyone moved to Tokyo. What people need is Land: scarce, finite housing slots with relevant meta-properties like plumbing and garbage collection and low crime rates within X travel-minutes of their job and relevant amenities. Building another floor means additional load on elevators, electricity, garbage, roads and public transit, etc. And to the extent the local residents think all that is already barely adequate and legally bar new entry, then that is the real limit on Land and why it is necessarily scarce and generates high rents.