The working age population is the wealth. For example, you can have a country with 90 retired people and 10 working people. The 90 retired people can have $1M or $1B or $1T in their accounts, but it isn't going to matter if they have insufficient products/services to buy. The money just provides a relative ranking of what proportion of product/service is allocated to whom.
Armies, judicial systems, etc, plus labor to bring about the goods and services. Plenty of examples of prime land decreasing in price due to the labor around it not being of sufficient quality/quantity.
Land value is not a product of labour -- in Canada it's an investment and a way to move/launder money from other countries. Many many properties being build that are not designed to be realistically lived in.
Also, at 90/10, the working people will surely start to wonder why they are paying rent (or tax) and who is going to stop them if they don’t. Same for invaders looking at obtaining the natural resources in Canada.
I picked an extreme ratio to illustrate the why, but in reality, it’s a far more gradual process, where ideally there is no violence, just various renegotiations of expectations.
> Land value is not a product of labour -- in Canada it's an investment and a way to move/launder money from other countries. Many many properties being build that are not designed to be realistically lived in.
It is sort of “land value is a product of labor from decades prior that has accumulated to the orderly, productive society today”. But that can gradually change.
Canadian currency at the lowest in years. But most of the wealth of Canadians is not held in cash and not entirely even in Canadian investments.
> It is sort of “land value is a product of labor from decades prior that has accumulated to the orderly, productive society today”. But that can gradually change.
I don't see the connection. The land I live on is worth well over a million dollars and increases at an significant rate every year but has no basis in reality other than demand for land outstrips the supply.
It’s only worth whatever it is because that land has access to utilities, sources of food, security due to social cohesion and judicial systems, etc. Some of that stuff takes decades to build.
And if you stop being able to buy the food you want, get clean water, electricity, all that basic societal stuff because it is getting too expensive because there are too few labor sellers, then the land price (in real terms) will reflect that.
I am not disputing that supply and demand determine price, I am saying demand curves themselves can shift due to demographic changes.
> Canadian currency at the lowest in years. But most of the wealth of Canadians is not held in cash and not entirely even in Canadian investments.
I assume Canadian real estate is a huge portion of wealth for many Canadians. Maybe not nominal amounts skewed by the richest Canadians with international equities.
Land is valuable investment because the government decided many years ago that it can never decrease in value. It's a cycle: Canadian land value increases due to demand, this causes prices to increase, which increases the demand because it's a good investment. You'd be crazy to invest in business or anything else in Canada other than real estate. It's a sure thing and will give you the highest returns. If you a foreigner moving your money out of your country, even a little bit of loss is acceptable. There's no point in even renting out your property; the gains well exceed any reason to deal with that hassle. This is the reality.
The fact that people have to also live in the these investments is actually the problem! It's Bitcoin that people can sometimes live in. Its use as investment is completely divorced from the income of people living here and that is the problem.
> And if you stop being able to buy the food you want, get clean water, electricity, all that basic societal stuff because it is getting too expensive because there are too few labor sellers, then the land price (in real terms) will reflect that.
That's like saying Bitcoin should be worth nothing because it's useless as currency. I agree. But the reality is that Bitcoin is worth a lot -- just like property in Canada. It already doesn't reflect all that basic societal stuff because it's almost entirely unrelated to it. It should be but it's not.
I'm more inclined to believe that the recent importing people en masse has benefited a few large employers of low skilled workers, continue to increase the cost of real-estate which has become more than 50% of our GDP, and artificially pumped up the GDP purely through population increases. Canada might have better off if it wasn't mostly unaffected by the 2008 financial crisis; instead we have been kicking that can down the road for almost two decades.
Canada probably shouldn't have gotten itself into this mess but it's easy to see how it happened and also why it's so hard to change course.