Price of Land

Price of Land 

under capitalism, capitalized land rent. As an object of private ownership, land is bought and sold. Although it is not created by human labor and hence has no value, it does have a price. Unlike the price of conventional commodities, which is the monetary expression of their value, the price of land is a nonrational expression—that is, an expression that has no corresponding content.

In effect, land price is a converted form of land rent; it depends on the amount of rent that a plot of land brings and on the loan interest rate. The price therefore equals that sum of money which, if deposited in a bank, will yield an interest income equal to the rent that can be obtained from a given plot of land. The price of land thus places private ownership of land on a par with interest-producing capital or with capital expended on the purchase of stocks. The price that is paid to purchase land is a diversion of capital from productive use and impedes the development of productive forces. The price increases when a given plot of land yields a higher rent or when the bank interest rate is lowered.

The chief cause of rising land prices under capitalism is that the demand for land greatly exceeds its supply. This situation developed at a particularly rapid pace after World War II, resulting from the sharp growth of inflation, the increasing use of land for nonagricultural purposes, and the concentration of land in largescale capitalist farms. Thus in the USA in the first half of the 1970’s, while the price of all farmland rose to $187 billion (as against $54 billion in 1950), the total agricultural-use area was reduced. Rising land prices mean that landowners assign an everincreasing share of the surplus value to nonproductive uses, resulting in higher costs of agricultural products and detrimental conditions for the working people.

In socialist society, where there is no private land ownership, land is not a marketable item and has no price. Economic assessments of land, however, are made for land cadastre purposes.