This note is a part of my Zettelkasten. What is below might not be complete or accurate. It is also likely to change often.
19th July, 2020

Private Property is a monopoly

Normally, Monopoly is considered only in terms of a person or company that holds control over a commodity and can affect prices in their favour by withholding supply.

However, because Land is not a commodity, each piece of land is often unique in its location and character, its owner has monopoly over that particular supply.

This is especially the case when demand of a unique piece of land is high. For Example:

  • An upcoming football field is planned on the land
  • Oil has been discovered on the land
  • A high-value construction is being used as a scrapyard

In such cases the owner can choose to hold off supply to raise the price of the land while the land lies unused. This leads to Allocation Efficiency.

This is true in case of any other asset as well (like art, automobiles, furniture, buusiness equipment, intellectual property, domain names, etc). All these assets can suffer from allocation inefficiency. They can be hoarded by speculators or just used at sub-par efficiency.