Chapter dzǴ: Land, Money, and Capital Formation ȁȁȂŏśŚŏŘšşŕśŚ
Private ownership of land has a social function. In freeing resources from
serving current consumption while waiting for land’s periodic rents and
future selling price, the owner is supplying a productive service. It is essen-
tially the same as the waiting for which lenders receive interest. On the
other hand, the volumes of this service and of the resulting real capital
formation would be still greater if private and social viewpoints of landed
wealth did not diverge and if the Pigou or wealth effect did not deter sav-
ing. Quite similar remarks apply to some other vehicles of waiting, notably
collectibles and money.
Ļe entire foregoing discussion serves an analytical purpose only and
is not meant, by itself, either to justify or to condemn the private collection
of land rents. It does not claim that the effects described are quantitatively
important and detectable amidst all the constantly occurring changes in
economic conditions. For this and other reasons, the discussion does not
recommend any particular policy. Policy proposals are mentioned to help
clarify the analysis that underpins them.
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