7.2 Land

When economists say land, they mean something much bigger than a field or a plot. In economics, “land” is a shorthand for the whole of nature that production draws upon. This is the factor that links this chapter back to the very first chapter of the book, on natural resources.

“Land” means all of nature

Land = All Natural Resources In economics, land means all the free gifts of Nature used in production, not just the ground. It includes the soil, forests, water, air, sunlight, minerals, oil and natural gas, everything Nature provides that we use to make goods and services. (You met all of these as natural resources in Chapter 1.)

So when a farmer grows wheat, a factory uses iron ore, a power plant burns coal, or a solar farm catches sunlight, all of these are using land as a factor of production.

Special features of land

What Makes Land Special

  • It is a gift of Nature. No human made the original soil, minerals or sunlight, we only find and use them.
  • Its total supply is largely fixed. We cannot manufacture more land or more mineral deposits; what Nature gave is, broadly, what we have.
  • It is unevenly distributed. As you saw in Chapter 1, different regions have very different natural resources, which shapes what they can produce.
  • It can be damaged or exhausted. Overused or polluted land, water and minerals lose their value, linking straight back to the idea of sustainable use.

Why land matters to production

Land is the starting point of almost all production. Agriculture depends directly on soil, water and climate. Industry depends on minerals, metals and fuels drawn from the earth. Even a digital service needs electricity, which comes from natural resources. No economy can produce without drawing on land.

Think About It The economist’s “land” includes sunlight and rivers, things no one made and (mostly) cannot increase. If the supply of a natural resource is fixed but our demand keeps rising, what is likely to happen to its value, and to the need to use it carefully? Connect this to sustainability from Chapter 1.

A Link Back to Chapter 1 This is a beautiful link across the book: the natural resources you studied at the very start (renewable and non-renewable, distributed unevenly, needing sustainable use) are exactly what economists call the factor land. Geography and economics meet here.

Let’s Explore List five different natural resources (forms of “land”) and, for each, name one thing that is produced using it, for example, river water → electricity, iron ore → steel. Which of your five are renewable, and which are not?

Land gives the raw materials, but raw materials cannot turn themselves into goods. That needs human effort, the factor we turn to next: labour.