Spencer Heath Archive

Item 1989

Penned in a notebook

May 28, 1934

Original is in item 1978.

     Exchanges take place at any level of value (which expresses the relative exchangeableness of goods or services) when the supply and the demand at that level are equal. The value of land is the value of the public services supplied to it. This value is made up of a supply of something and a demand for that thing. In the case of land value, the thing supplied is public services. The demand for these services is proportionate to the private services (production of wealth) performed. It is the amount of public services in relation to the amount of private services at a given time and place, that determines what quantity of the one service will exchange for any quantity of the other service. The private services (production of wealth) are a factor in land value only on the side of demand. And public services are the factor only on the side of supply. It is true that these two kinds of services interact so as to increase each other, but the values involved are expressed only by the relation existing between them — supply and demand. It is important to any clear understanding of the nature of land value that private services be recognized as creating land value only from the side of demand.