[pharke]

My question was more to do with how the improved value would scale for rural land that had a lot of use but can't generate as much income. Many rural businesses require a lot of land area but only produce a modest income which is possible under the current setup because land prices and taxes are low. There would have to be a lot of consideration given to the population density and the types of improvements made.

[LVTfan]

Rural land values will remain low until there is significant economic activity and particular demand for land IN THAT PLACE. To the extent that land, say, 10 or 20 miles away is just as suited for the user's purposes, the next piece of land that comes on the market is quite adequate, and the rural business can locate wherever, not pay a premium.

I am reminded of a famous passage from Henry George's book "Progress and Poverty" (whose subtitle is "An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy") known as The Savannah. http://progressandpoverty.org/files/george.henry/pp042.html, starting at the 10th paragraph (the paragraphs are numbered in this particular file).

Incidentally, George dedicated P&P as follows:

"To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment."

[pharke]

I'll admit that it is well written and makes for a compelling description of the growth of an urban center but it doesn't answer the questions it poses. It seems to say that the value of land and resources increases as the population does, this is true to some extent in that as demand increases for limited resources the value of those resources is driven higher. New goods and services are needed to support larger populations and more of them. A coal deposit may be worthless to a rancher since his concern is with the prairie that lays over top of it and he has neither the need nor the means to make use of it but if an urban center grows up beside that prairie then he may be coaxed into selling his land rights for a greater reward than his herd can provide. This is all perfectly sensible but doesn't say anything about how we should assign a fundamental value to those resources. Nor does it describe what should be done in a world in which that savannah is for the most part already settled and exploited or how we would replace an extant system.

It is not always true that a resource based business can relocate. They are often tied to the land they are on due to some local condition whether that is suitability for farming, grazing, the presence of natural deposits or features such as waterways. Only urban businesses that simply require square footage are purely fungible when it comes to location (although that often isn't entirely true since urban landscapes have their own happenstances that make certain businesses viable).

A lot of this seems to have the flavour of a just-so story that ignores a great deal of important ground truths.