Land Lease, Capitalism, And Holy War
Do you know how much does it cost to lease a land for 60 years? About the same with the price of the land.
Think it this way. How much will it cost to rent a land for 1 year? Probably not much different than the interest rate for the value of the land, assuming the price of the land is constant. If not, it’ll be about the same with the difference between interest rate and the price increase of the land.
If it’s higher, people will borrow infinite money from banks, buy land, and rent it away. I know people do and make money doing it. However, let’s ignore this arbitrage for a while. Their profit really comes from taking calculated risk and work required to settle the deal. That’s why they can’t do that infinitely.
How much will it cost to rent a land for 2 years? Obviously more than it would cost to rent a land for 1 year. However, the present value of the second years rent is less than the first year rent. That’s because the money will grow in the bank first for 1 year and then used to pay the rent.
How much will it cost to rent a land for 1 billion years? You guess it. Buying a land is equivalent with renting it forever. However, most of the value is in the next 60 years.
Assuming the price different between interest rate and land price increase is 5%, rent cost of 60 years of land should worth 94.64% of the land price. If the rate difference is 10%, the 60 years rent cost should worth 99.67%.
You see why the British eventually return Hong Kong to Chinese? So they can get something as good as owning the land while letting the Chinese government, weak at that time, to safe face.
People kill each other because they think they can get the land permanently. However, they will not kill each other for a 60 years lease of the land. It’s kind of strange isn’t it? Could this be a solution for peace?
Imagine if UN or somebody told the Jews and Palestinians. Look, one of you will own the land for 60 years; the other will own it after ward. Both will jump wanting the second option, which worth only .33% of the economic value.
Things get better when we see that capitalists often earn way higher than interest rate.
Of course, that’s naïve. People can’t just make money and buy land. Once a country controls a land, they’ll make laws saying that foreigners cannot buy land.
The American take lands from the Indians through genocide and the rest of us should say that it’s American land. I wouldn’t argue that it’s wrong because at that time, that’s really how things work.
I wouldn’t say its right either because it really sets a bad precedent. It’ll tell the Chinese, the Indians, the Arabs, and every one else that if you want more land, the way to do it is to attack another country and kill of the native inhabitants. That’s the kind of precedent that can go against any of us, including American. We don’t want that kind of precedent do we?
When the Japanese buy the land from American or when some immigrants peacefully work for American, some Americans call that invasion. Now, that’s wrong. We can raise our middle fingers for all assholes that call peaceful trade an invasion. That’s really the source of our entire problem.
We live in such abundance world under free market. However, often wealth earned through merit and productivity, like Bill Gates’ wealth is called dirty. The earners are called greedy. And the wealth is often taxed. After that, those who earn it fairly are often massacred like capitalists in communist countries.
However, people often earn wealth, like land, by killing each other. The process is called holy war. The land is called holy land. All those are agreed by most people according to some holy bull shits.
No wonder we kill each other all the time.
If we show more respect to wealth earned productively, the Jews and Arabs can cooperate to earn more money. Those who really want the land can outbid the other. The “loser” can invest heavily in poor African countries that need more investors. In no time, they’ll own the whole Africa while helping many poor people.
What we need is a better game. A game where the greatest among us are those providing the best service to the most customers. What we need is a way to govern nations the way we govern our self. That game is called capitalism which we all should embrace.
But that’s not the game. Not yet. It’s getting there.
Hence, here they are, like all of us, busy killing each other for a tiny piece of land where we could have cooperate to conquer other planets, the whole universe, or, at least, eradicate poverty.