LAND. In economics, land is commonly treated as a separate factor or agent in production, differing from capital in that no increase of the price paid for its use will evoke an increased sup ply. What land furnishes is, first, room for productive operations or other activities, and second, location, as, e.g., with respect to markets. The value of urban land is mostly a matter of room and location. In the third place, different tracts of land have different special qualities or characteristics which permanently affect their productivity. Among these characteristics are such things as climate, configuration, tillability, other general qualities of the soil or subsoil, situation (as in a valley or on the north or the south side of a hill), feasibility of drainage or irrigation, etc. Finally, dif ferent pieces of land have other special attributes, set apart from those which have already been mentioned by the circumstance that they are perishable, i.e., that they are used up in the processes of production. Mineral deposits and native forest are examples of this last class. So too are those elements of the soil which are exhausted by crop-growing and which have to be replenished if the fertility of the land is to be maintained.
The value of any piece of land depends upon the serviceability and the scarcity of all of the particular attributes which it pos sesses. Economists, however, sometimes find it useful to make use of an abstract conception of land, in which only its permanent qualities are taken into account. Ricardo's statement that land rent is paid because of the "original and indestructible" powers of the soil has been challenged by a long series of critics, who point to the perfectly obvious facts that some of the valuable qualities of land have been imparted to it, as, e.g., by fertilization or drain age, and that not all of its valuable qualities are indestructible. The critics miss the point, which is that it is important for some purposes to take separate account, not only of the element in the value of land which may be imputed to the capital which has been incorporated with the land in the form of improvements, but also of an element which reflects the gains which may be secured by appropriating and depleting some of the valuable attributes or constituents of the land. The rent of mines, for example, is in
the nature of a royalty rather than a true rent, and the possibility of "mining the soil" is often an important element in the value of lands which have been newly opened for settlement.
Land, in the economic sense, need not be terra firma. Land under water (e.g., oyster beds), and even tracts or bodies of water, as where valuable fishing rights are involved, may figure as land. It is often convenient, in fact, to regard land as synony mous with all that nature supplies, external to man, which is valuable, durable and appropriable, thus including, for example, waterfalls and other sources of water-power. Valuable rights to particular uses of land, such as the right of a privately-owned tramway to use a city street, may also be included, for the eco nomic nature of land does not depend upon how it is owned or con trolled. Only in respect of especially favoured spots or strips of land, which have unique uses or supply unique products, does land ownership or an exclusive right to a particular use of a piece of land constitute a monopoly. An important city street, the only practicable pass through a range of mountains, the only important deposit of a rare mineral, are examples. The circumstance that a particular piece of land is of high quality does not give its owner a monopoly if its uses and its products do not differ in kind from the uses and products of other pieces of land, even if these other pieces of land are of inferior quality. (See ECONOMICS, RENT.) (A. Yo.)