ABSTRACT
Land has traditionally been viewed as the fixed factor in the economy that puts a constraint on the level of a country’s GDP. That view has become increasingly untenable. The growth of the capitalist economy has led to massive urbanization. In highly developed countries more than 70% of the population lives in cities. Countries that are currently able to make the transition from a traditional agricultural economy towards a modern industrial economy achieve this through a massive increase in urbanization. Due to this urbanization and the high population density in urban areas, the traditional view of land as the scarce factor has become irrelevant. To the contrary, many countries suffer from large regions where the population density has fallen to such low levels that many services can no longer be provided at an efficient scale.
