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.

References in classic literature ?
And when the health of relatives and friends had been inquired after, and the gossip of Island McGill narrated, along with the weather and the price of land and crops, there was little left to talk about save themselves, and Captain MacElrath took up the tale brought home for the good wife from all his world's-end wandering.
He inquired the price of land, of houses, of estates; he made Mademoiselle Cormon describe at length the confluence of the Sarthe and the Brillante; he expressed surprise that the town was placed so far from the river, and seemed to be much interested in the topography of the place.
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The committee discussed in detail demarcation, price of land and dues.
So I have suggested that the gram Panchayat (village council) must decide the price of land, there must be another stream of valuation which will decide the price of land," he added.
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The average selling price of land for real estate development, commercial use and residential use in the second quarter dropped 5 percent, over 17 percent and nearly 11 percent, respectively, compared to the first quarter.