When there is an institution calling itself the Free Market Foundation, it has to live up to that.
The foundation of a free market is that the value of anything is the highest price at which a willing seller and buyer agree to contract. But Chris Hattingh (“David Rakgase’s farm victory good news”, May 31) ignores that when it comes to land, the seller is always less willing than the buyer, for land prices keep on rising above the consumer price index (CPI). An average suburban plot in Plumstead has risen 15 times since 1994 to R1m. CPI rose four times.
This escalation was not caused by any work or investment by the owner, but relies on nature’s endowment, governance and state spending on infrastructure and services. Land prices are therefore a state subsidy.
Peter Meakin, Registered professional valuer
JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length. Send your letter by e-mail to busday@bdfm.co.za. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.