The Malthusians “land is a fixed resource” argument

The real estate broker says that land is a good investment because they don’t make any more of it. That suits the Malthusians just fine as those folks are always raising the alarm about how humanity is going to run out of something Real Soon Now with disastrous consequences for mankind. The economist tells a different tale. Don Boudreaux responded to the concept and describes why Supply Is Not Exclusively, or Even Mainly, A Physical Phenomenon.

While I agree that efforts to create land out of water-covered areas won’t yield much extra land, I disagree that land is fixed in supply. It is not fixed, at least not economically.

The economic supply of land, like that of any other resources you can name, is not a physical phenomenon. As long as people are free and inspired to innovate – and as long as input and output prices are free to adjust to changes in supply and demand – the economic supplies of even the most ‘fixed’ and ‘nonrenewable’ resources will expand.

The examples used to illustrate how the utilization of land is not fixed include skyscrapers, refrigeration, and computers. If your value of land is only as nature will have it, then there is indeed a problem. But if you value land for its ability to provide housing, food, and preserves, then the imagination an ingenuity of humans provides endless horizons.

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