They Will Buy Everything Up
With the concepts of the “sphere” and “rent,” the following idea, which circulates widely among the people, is closely connected. This is the idea that “they will buy everything up.” I think one reason this idea is so widespread is the obvious finiteness of the land supply. We feel that all the land has been counted, since ultimately it represents a fixed area on our planet, and because its supply is limited, it can all be bought up. Apparently, compared to other goods, land’s supply seems unlimited. This is what misleads us. In fact, the supply of any good at a given moment in time is finite. Goods with infinite supply (air, for instance) aren’t commodities at all; they aren’t sold because they lack scarcity, so their price can’t be determined. As we recall, demand is determined by the purposes for which we use land. Even if those purposes consist of “holding it for better times,” there is no demand for all land, just as there is no supply of all land.
But let us return to our oligarchs. Given the oligarch’s exceptional viciousness, organization, foresight, and so on—in other words, treating him as practically omnipotent and omnipresent—we still need to ask what purpose such buying would serve. This purpose can only be one—monopoly, or more precisely, monopoly price. For example, no one doubts that were he to be given the chance, the oligarch would immediately buy up all the fertile land and, exploiting the absence of supply (monopoly price, as we recall, arises exclusively from control over supply, typically achieved by destroying part of it), would establish a monopoly price on his products.
In fact, the first question we should ask is why the oligarch wouldn’t simply buy land somewhere more tranquil—somewhere less agitated about the prospect of “scoundrels buying everything up.” Obviously, a normal oligarch, if we consider him a super-rational and super-intelligent being, would do exactly that. And if you object that our land, unlike more tranquil places, “costs a penny,” even if I agreed—although, of course, it costs far from a penny—then, as we have found out, this means only that you can get from this land only a penny’s worth as well. What’s the point?
Again, obviously, the oligarch buying up land will inevitably face rising prices for each subsequent plot. Again, the question is—what’s the point?
And finally, the last point. Even bearing enormous costs and “buying up all the land,” the oligarch will not get what he wants, because he will also have to ensure that imports of products he will grow there from other countries are prohibited. And here we come to the fact that this itself is impossible without political decisions.
It is worth mentioning that this is perhaps the only place where Mises agreed with Marx. They both said that latifundia are not a product of the market, but a product of politics.
I will be told that, you see, our oligarchs are precisely “a product of politics,” and what would stop them from creating latifundia with “protection” in the government? Nothing would stop them. And nothing prevents them from doing this now. Supporters of the latifundia theory, like all supporters of conspiracy theories in general, inevitably fall into contradiction. On the one hand, they attribute supernatural abilities and supernatural foresight to the supposed scoundrels; on the other hand, they for some reason believe that the absence of some legislative squiggles is capable of stopping an omnipotent and unscrupulous oligarch.
One can firmly say only one thing—without a legal land market, you will definitely do nothing about latifundists.