from Note 4: It should not be forgotten that land for which the demand
is so weak that its site value cannot be easily distinguished from the value
of its improvements,
is certain to be land of but little value, and almost certain to have no
value at all. ...
Note 14. Land values are lower in all countries of
poor government than in any country of better government,
other things being equal. They are lower in cities of poor
government, other things
being equal, than in cities of better government. Land values
are lower, for example, in Juarez, on the Mexican side of the Rio Grande,
where government is bad, than in El Paso, the neighboring city on the
American side, where government is better. They are lower in the same
city under bad government than under improved government. When Seth
Low, after a reform campaign, was elected mayor of Brooklyn, N.Y.,
rents advanced before he took the oath of office, upon the bare expectation
that he would eradicate municipal abuses. Let the city authorities
anywhere pave a street, put water through it and sewer it, or do any
of these things, and lots in the neighborhood rise in value. Everywhere
that the "good roads" agitation of wheel
men has borne fruit in better highways, the value of
adjacent
land
has increased.
Instances
of this effect as results of public improvements might
be collected in abundance. Every man must be able to
recall some within
his own experience.
And it is perfectly reasonable that it should be so.
Land and not other property must rise in value with desired improvements
in government, because, while any tendency on the part of other kinds
of property to rise in value is checked by greater production, land can
not be reproduced.
Imagine an utterly lawless place, where life and property
are constantly threatened by desperadoes. He must be either a very
bold man or a very avaricious one who will build a store in such a community
and stock it with goods; but suppose such a man should appear. His
store
costs him more than the same building would cost in a civilized community;
mechanics are not plentiful in such a place, and materials are hard
to get. The building is finally erected, however, and stocked. And now what
about this merchant's prices for goods? Competition is weak, because
there are few men who will take the chances he has taken, and he charges
all that his customers will pay. A hundred per cent, five hundred per
cent, perhaps one or two thousand per cent profit rewards him for his
pains and risk. His goods are dear, enormously dear — dear enough
to satisfy the most contemptuous enemy of cheapness; and if any one
should wish to buy his store that would be dear too, for the difficulties
in
the way of building continue. But land is cheap! This is the
type of community in which may be found that land, so often mentioned
and so seldom seen, which "the owners actually can't give away,
you know!"
But suppose that government improves. An efficient administration
of justice rids the place of desperadoes, and life and property are
safe. What about prices then? It would no longer require a bold or desperately
avaricious man to engage in selling goods in that community, and competition
would set in. High profits would soon come down. Goods would be cheap — as
cheap as anywhere in the world, the cost of transportation considered.
Builders and building materials could be had without difficulty, and
stores would be cheap, too. But land would be dear! Improvement
in government increases the value of that, and of that alone. ...
Q43. Is there any land question in places where land is cheap? In Texas,
for example, you can get land as cheap as two dollars an acre. Is there a
land question there?
A. There is no place where land is cheap in the sense implied by the question.
Land commands a low price in many places, but it is poor land; it is not
cheap land. It is true that in Texas there is land that can be had for two
dollars an acre, but it would yield less profit to each unit of labor and
capital expended upon it than land in New York City which costs hundreds
of thousands of dollars an acre. The valuable New York land is the cheaper
of the two. The land question is the question in every place where land costs
more than it is worth for immediate use. ... read the book