Investing in land or property?

Monday, 22 September 2008 20:21
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Investor or businessman? This site has important information for you.

Forecasting

The Campaign uses the best model of the economy currently available. It was used to correctly forecast the crash of 1992 in the middle of the 1980s, and had already predicted the present one in 2005. All other economic models regard land as part of capital This is wrong, misleading and damaging. Land and capital are different. Capital can be increased and deployed to best advantage. The supply of land is fixed. They don't make it anymore. Each plot of land is unique. If the best location for a particular activity is taken, then the next best must be used instead. This gives the holder of the best site and advantage, which can be charged for. That charge is called Rent of Land.

Academic Economists

When economics theory was being developed by people such as Adam Smith and David Ricardo, the significance of this was  understood. But after about 1890, economics became so abstract that the importance of land was largely forgotten by the academic economists. Most modern economics textbooks have little more than a page or two on the subject of land and rent. Yet nobody can do anything without having to buy or pay rent for suitable premises or a plot of land to run their business from and to live on. How strange that it is ignored!

Caught Unawares - again - again - again

It is because the significance of land is not usually taught to economics and business students that the periodic crises like the present one keep on taking everyone unawares. The highly qualified policy wonks who advise the political parties hardly know about it. Neither do professional bankers, or they would not have got their employers into such trouble. Little over a year ago, reputable commentators were talking about the possibility of a "soft landing" from the housing boom. They could not have been more wrong. The Campaign's team were talking about it at the time. Although, as its name makes clear, the purpose of the Campaign is to promote Land Value Taxation, the information we are putting out is important to investors and business people.

It's the land Stupid!

Our track record of prediction is good not because we are clever but because we are using an economic model that takes account of land and the way the land market works. You can check this out for yourself by going to our downloads area and looking through old issues of our publication, Practical Politics.
 

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