Notes on Land is a Big Deal

Failing to read Lars A. Doucet, Land is a Big Deal

I tried making a pass at the Land is a Big Deal book, but I'm not sure I'd agree with the book on the fundamental primacy of land such that land always becomes more valuable. If we consider taxation as the rent of using a country's "land", we can see that clearly - taxation is kept low out of fear of capital and labour flight. (Of course, I might just be misinterpreting the book, I got bored and skimmed...)

My own conclusion was that ultimately we have three groups of agents: the landlords (natural resources), the capitalists (stored wealth/factors of production), and labour (which operates on natural resources using stored wealth), and that there is no "justified" distribution. Whenever we have an oversupply of one and an undersupply of the other, the one with the undersupply has more bargaining power, which determines the distribution. The model is agent based, so if lots of agents combine into one agent i.e. a union, that also increases bargaining power

Thinking about it some more, I'm not sure where I got my sense that rents in Singapore are "high". They've certainly increased sharply, but that by itself doesn't mean current rents are high, since the alternative hypothesis is that past rents were too low.

I could reasonably suggest that sharp changes in the prices of things generally indicate some kind of dysfunction in a market, and while that's probably true, it's also kind of handwavey. I could point out that rent is over 50% of the median person's income (fake example, not actual number), which would imply that the real measure I care about is rent as percentage of income

If rent as a percentage of income is the measure that we ultimately care about, then I think that could be the metric used for evaluating whether to do market intervention. If intervening through indirect mechanisms increases rent as percentage of income (e.g. bad market intervention causes companies to collapse, triggering recession and lowering income) more than it does by decreasing rent, then we don't intervene, else we do

The tricky part then is determining (and agreeing on!) the metric used for evaluation