Librarians are important people. They provide order to what would otherwise be chaos in the world’s store of knowledge. The most common way this is done is by the Dewey Decimal Classification system which ensures that you can find information on any topic in a standardised manner in libraries across the world. Land Reform is classified under

3. Social Sciences
33. Economics
333 Economics of land and energy
333.3 Private ownership of land
333.31 Land Reform

Definitions matter. Otherwise, we live in Wonderland with Alice, the Mad Hatter and Humpty Dumpty.

When I use a word,” Humpty Dumpty said, in a rather scornful tone, “it means just what I choose it to mean – neither more nor less.”
The question is,” said Alice, “whether you can make words mean so many different things.”
The question is,” said Humpty Dumpty, “which is to be master – that’s all.”

I was forcefully reminded of this at the Community Land Scotland conference on Skye this weekend. It convened in the wake of the publication of an Interim Report by the Land Reform Review Group (LRRG) that has had a less than enthusiastic welcome from land reformers (see for example, here, here and here).

Alex Salmond gave the first speech ever by a First Minister on the topic of land reform and set a target of one million acres of land in “community ownership” by 2016. He promised legislation this parliamentary session to sort out the mind-numbing complexities of the 2003 Land Reform Act and announced a further £3 million for the Scottish Land Fund. Listen to the speech in full here, text here and a brief media interview here. I will blog separately on this ambition (he provided no target for how he would like to see the pattern of private ownership by 2020). (1)

The important thing about his speech was that it belatedly re-vitalised the land reform debate. In May 2007, after forming a Scottish Government for the first time, Scottish Ministers instructed civil servants that “enough has been done on land reform“. On 1 June 2007, the Land Reform Branch within the government was wound up and replaced with the Community Assets Branch.

In their 2011 Manifesto, the SNP made the following promise

We believe it is time for a review of Scotland’s land reform legislation. For example, we believe the current period for three months for communities to take advantage of their right of first purchase is too short, and we would wish to see it extended to six months. We will establish a Land Reform Review Group to advise on this and other improvements which we will legislate on over the course of the next five years.”

In July 2012, Alex Salmond announced the formation of the LRRG which was given its remit in August. What became clear when the Group published its Interim Report was that a wide-ranging remit that sought radical proposals had evolved into a Group considering solely matters to do with community ownership (and a selective definition of that term). See my original critique here for further background.

And this is where definitions and meanings come into play. Alex Salmond’s speech was, of course a highlight of the conference but much of the interest was also focussed on the speech by Dr Alison Elliot, the Chair (and sole surviving original member) of the LRRG. The most significant revelation was that her definition of land reform is, in best Humpty Dumpty tradition, just what she chooses it to mean.

The classic dictionary definition of land reform is the redistribution of agricultural land to (usually) landless people. Most development agencies and non-governmental organisations, however, deploy a wider definition. The United Nations, for example, describes it as “an integrated programme of measures designed to eliminate obstacles to economic and social development arising out of defects in the agrarian structure.”

Peter Dale, former President of the International Federation of Surveyors, described land reform recently in the following terms.

Land is a diverse concept that depends on whether you are looking at it from a legal, financial, land use or social perspective i.e. its ownership, value or use. Reform may concern the changing of land rights (land tenure reform), the redistribution of ownership or use rights (including land consolidation and land reallocation, i.e. reforms to the pattern of ownership), alterations to land use (e.g. physical changes in agricultural practice or through inner city development), changes to land tax (that bring about changes in land ownership, value or use), or changes in how land is managed, etc.

“In summary, the term ‘land reform’ embraces all those processes that alter the pattern of land ownership, land rights, land values or land use within a specified area.” (My emphasis.)

Mainstream framing of land reform is characterised by two features – it is broadly defined and it is programmatic (that is it involves a series of interventions forming part of a coherent programme).

This is precisely what the Land Reform Policy Group did between 1997 and 1999 when they published a programme of proposals which ranged from public access legislation through tenement law reform to the establishment of National Parks. The roots of the current confused stance of the LRRG can be traced back to then. One of the products of the 1999 programme was the Land Reform (Scotland) Act 2003 which included the right of public access, a community right to buy and a crofting community right to buy. At the time I argued against using the term “land reform” as the title of the 2003 Act. I argued for two acts – a Public Access Act and a Community Right to Buy Act (in two parts). In her speech, Dr Elliot stressed how this one element of the earlier programme was the starting point for her Group’s deliberations.

If that was always the intent, then the remit given to the group compounded the confusion by appearing to provide a wide ranging remit to examine radical proposals. I and many others welcomed what appeared to be this broad programmatic approach. But it is clear now that we misunderstood matters. There are conflicting reports as to whether this fits with the original remit as envisaged by Ministers. On the one hand I hear reports that some in the Scottish Government are mystified at this turn of events. On the other hand, Alex Salmond has now endorsed the Interim report and given the group a vote of confidence. We are where we are.

The most significant practical impact of of this narrow focus on community ownership (and a restricted interpretation even of that term) is that other potential beneficiaries of land reform will gain nothing from it. In many parts of Scotland there are vast tracts of land with few or no people living in them. There is no community to even begin to consider community landownership.

The real economic potential of land reform lies in providing opportunities for individuals (who after all are what make up communities), co-ops, businesses and other collective groups to obtain rights over land and resources and to invest capital, skills and energy in developing enterprises. The other key potential relates to developing an appropriate fiscal environment in which land speculation is eliminated, levels of private debt minimised and productive investment can be made by young people in particular in urban land, housing and business assets.

In Orkney, for example, Udal law meant that land was inherited by all children. (Children under the rest of Scotland’s land tenure system do not have any legal rights to inherit land.) The fragmentation of holdings and the subsequent development of a plural pattern of owner-occupation in the early 20th century provided the basis for the islands’ future prosperity. It is this potential which appeared to be encapsulated by the first of the LRRG objectives, namely to “enable more people in rural and urban Scotland to have a stake in the ownership, governance, management and use of land …“. It remains a source of some bewilderment how “people” in this context can be taken to mean only groups of people acting through a corporate community body.

So where now?

This restricted definition is of course only that of the Chair of the LRRG. I argued back in July 2012 that the value of the LRRG depended on its definition of land reform and its remit. There remains the possibility (indeed the hope) that it is widened following discussion with other members of the expanded Group. If not, then it will be up to others (perhaps a real land reform review group) to explore and deliver the full potential of land reform for Scotland.


(1) Alex Salmond noted that “Land ownership is currently overly concentrated” but appears to believe that more community ownership will resolve this. There is no evidence that the two are linked in any way.

UPDATE 14 June 2013

In a written answer (S4W-15291) to Rhoda Grant MSP, Paul Wheelhouse said that the remit of the LRRG has not changed.

Rhoda Grant (Highlands and Islands) (Scottish Labour): To ask the Scottish Government for what reason the interim report of Land Reform Review Group focuses on community ownership and whether this reflects a change in the group’s remit(S4W-15291)

Paul Wheelhouse: The remit of the independent Land Reform Review Group (LRRG) has not changed. The consultation, which yielded 484 submissions, has brought forward a wide range of issues on a broad range of subjects, including farm tenancy issues and issues regarding access. In the view of the LRRG, as set out in its interim report, issues raised regarding farm tenancies represent an area already being considered by the Tenant Farming Forum and as such, the review group, as its interim report states, will now concentrate on taking forward a number of issues in respect of the implementation and geographic impact of community right to buy legislation in order to support communities throughout Scotland in achieving their social, economic and environmental potential. The work of the LRRG will also help to formulate potential approaches to extending right to buy to urban Scotland and will inform consideration of the Scottish Government’s community empowerment and renewal proposals.

As was stated during the Land Reform debate on 5 June 2013, issues regarding farm tenants will be considered as part of the review preceding the Agricultural Holdings Bill proposed for later in this parliamentary session.


  1. Robbie Pennington

    This is probably a daft question, but if government won’t act, wouldn’t it be possible to set up a non-governmental Land Reform Group to set out a programme for reform and campaign for it?

    • Not a daft question at all! This is one of the perverse benefits of the LRRG having set out so clearly how it intends to proceed. It opens the door to all sorts of alternative endeavours. Many activities are currently being actively discussed.

      • Robbie Pennington

        Excellent, I’m glad to hear it. There may be a constitution to write before too long…

  2. Dewey is a synthetic classification system, which means that although there is no subdivision of Land Reform, you can use the tables to specify areas, periods of time etc. So you’d add 411 to the 333.31 of Land Reform, to result in 333.31411 for Land Reform, Scotland you can also get more specific;
    -412 Northeastern Scotland
    -413 Southeastern Scotland
    -414 Southwestern Scotland

    If you really wanted youu could use the tables to classify a volume in the French language about 19th century land reform in SW Scotland.

    In practice a lot of libraries do quite approximate classification now, partly because of administrative cutbacks and non-librarian managers deciding that cataloguing in publication data will do (usually without any evidence or research on what the customers want or need) and also because holdings are so reduced there’s not always a need to classify to that level if there are only 100 books in your library.

  3. OK, so maybe that stuff about Dewey was missing the point, but on the other hand, it shows that DDC is more adaptable than the LRRG 🙂

  4. “So where now?”

    I suspect that if you’re relying solely on conventional political processes the answer will be ‘not very far’. But if you’re looking for other avenues to explore, I’ll offer the view that radical reform will only happen when there’s pressure from the courts to make the law coherent.

    I don’t know how different the legal system is in Scotland from what we have in England, but the courts here have the power to issue ‘declarations of incompatibility’ when they can’t reconcile other laws with the Human Rights Act (and, by extension, I would argue, with fundamental legal principles). Although there’s no explicit Right to Land recognised in that Act, there is an implicit one (since we clearly can’t live without land) because the Right to Life is recognised. It’s hard to see how current law is compatible with that – why should anyone have to pay for land?

    Other weaknesses in the present system which I think might be open to legal challenges are: laws of succession which, as they operate currently, are at odds with the principle that law does not operate for private benefit; and (less obviously) the fact that land – a finite resource – is traded with a medium of exchange which is infinitely expandable.

    But the courts will only look at those incompatibilities in the context of a dispute. I can think of situations where those arguments might be raised …. but only if people in those situations are willing to try them in court.

    I’m a bit dubious about most attempts to redistribute land; the whole system is intrinsically so complex and so interlinked with the whole financial system through it’s use as collateral, that I think any attempt at redistribution is bound to get bogged down in the detail (or do more harm than good through ignoring a lot of the detail). But if we can get the circulation right the distribution will sort itself out within a generation or two. The iniquity of the present situation stems from flaws in the laws governing how it changes hands – they’re what need reforming.

    • land has no capital value whatsoever. The ‘trade’ in land currently boils down to capturing the Land Rental Value by private individuals/corporations. All of this LRV is societally created. It’s return to that society would curtail the purchase of land for purely speculative purposes.

  5. The thing that jumped out of this post at me was:-

    “The classic dictionary definition of land reform is the redistribution of agricultural land to (usually) landless people. Most development agencies and non-governmental organisations, however, deploy a wider definition. The United Nations, for example, describes it as “an integrated programme of measures designed to eliminate obstacles to economic and social development arising out of defects in the agrarian structure.””

    The key words there are “agricultural” and “agrarian”. Scotland is not an agrarian society (even in its remotest and least industrialised parts), therefore “land reform” is of limited use to us.

    Take Applecross. Read the Applecross Community Council minutes, you see one of the biggest issues is the local GP. I was fascinated to read the recent ACC minute (May 2013) explaining why it’s difficult to get a new GP. In my naivety/ignorance, I imagined doctors would be queuing up to be something that sounds like the stuff of a Sunday evening TV drama. But the reality is different. But “Land reform” (however defined) will not give Applecross a new GP.

    Other stuff that preoccupies ACC is a snow blower to keep the Bealach open, the software of the community run petrol station routinely crashing, the fishermen of Applecross finding their fishing grounds (prawns, crabs) threatened by trawlers. These are all serious problems to a remote community but how are they related to “land reform”? As if it’s a panacea that will solve all the community’s problems at a stroke?

    Of course a massive issue in places like Applecross is affordable housing and you do need land for houses. But don’t housing associations have powers of compulsory purchase as a last resort? If they don’t, then a late submission to the LRRG is that they ought to. (I’ve got lots to say about affordable housing but will save it for another comment if anyone’s interested.)

    I hope people see the point I’m trying to make so others can come in with contrary views to debate. I would just add that I live in a remote community in Portugal. We don’t have estates in Portugal (abolished in 1975, I believe) but that didn’t prevent the local primary school closing in 2006, about half the houses in the village being empty due to emigration (no holiday/second home market here), the local dairy threatened with closure, medical services being cut back etc. etc. etc. Plus we have issues about not wanting to stick your head above the parapet to complain against the local camara municipal (my municipality is 1,500 so it all seems a bit too close for comfort). I’m not trying to make myself out to be some poor hard done by soul – far from it – but land is not the issue in Western Europe in the 21st century.

    • there is no where else in Western Europe that has anything like the concentration of land in so few private hands as Scotland—–otherwise it would be an issue.

    • so those handful of landowners in eastern Scotland getting the bulk of the CAP subsidies are getting all that money for non agricultural activities then?

      • Don’t be silly, Ron. I said Scotland is not an agrarian society. I didn’t say it has no farmers.

    • “Scotland is not an agrarian society […] therefore ‘land reform’ is of limited use”

      Surely part of the reason that it’s not an agrarian society now is that people were driven off the land in the past. But what it is currently is less important than what it might become after land reform – there are certainly many people who would love to get away from towns and cities, but can’t do so because they can’t afford to buy the land. I believe if a right to land was recognised in law there would be a migration away from cities (over two or three generations) which would mirror the movements that resulted from the clearances and enclosures.

      But the ‘agrarian’ issue is irrelevant anyway. Urban people also have to pay for land; and they don’t just pay for it directly, in the residential land they occupy, they pay for it in everything they buy because their suppliers’ land costs are passed on to them. The result is that there is a constant flow of wealth from the landless to the landed. Fair enough if there’s a good reason for it, but if it’s purely the result of perverse laws then those laws should be changed.

      • Indeed Malcol, well said and as I indicate in several posts the introduction of LRV( which is 100% societally created) would help initiate the changes you mention. In the broadest sense the LRV we all create is ‘our right to land’.

        • Thanks Ron, but I’m afraid I don’t share your enthusiasm for LVT/LRV. I regard it as a superficially attractive measure which does nothing to address the fundamental flaws of the system. At best, to my mind, it’s a distraction from healthier reforms, at worst it might even further entrench the inequalities I’d like to see dissolved.

          For me, our right to land stems from the fact that we cannot sustain life without it – a society which requires us to pay for it denies that right.

          • The collection of LRV is on the contrary of the most profound implication to all the major iniquities of the inequities of present land tenure in Scotland, because it would end the primal inequity of the private monopolisation of the only source of value land has–that which is created by the rest of society through its desire and need for it. Upon this inequity all the others are based.

          • please give an example of your healthier reforms. How would it or they give people access to land for nothing?

          • Robbie Pennington

            Malcolm, I do kind of agree with the sentiment in your last paragraph, but if you’ve a better, workable, idea than LVT/LRV I’d very much like to hear it, because to me the latter sounds like the heart of a just and redistributive system.

            Without wanting to get into a debate about terms, presumably you’ve read ‘Land Value Tax for Scotland’ – it seems to me that it answers the issue of the “right to sustain life”, “a place to lay your head” etc. If you don’t agree – why not?

          • Ron, thanks for asking for an example of the healthier reforms I think are possible – I’ll give an outline of the one I favour in my response to Robbie below.

            Regarding your earlier replies, I think you’re overestimating the importance of ‘societally created’ value. Land manifestly has intrinsic value; that’s why animals (and humans) fight over it even when it’s ‘unimproved’ (and the fact that economists distinguish it from ‘capital’ is irrelevant here). The primal inequity is the landowners’ power to exclude people from the resources they need to sustain life (whether by agriculture or foraging), thereby making everybody else subservient to them.

            It’s that power that needs to be removed, and I don’t see that LVT can do it when it leaves them with ownership. What I think it would do, however, is block more fundamental reform for a very long time. I’ll perhaps say more on that in my response to Robbie.

            (As an aside, I don’t think it’s quite true that all the other iniquities are based on that one. I’d say there is another driver of inequality which is almost as powerful – the use of a medium of exchange which (in its basic form) can be taken out of circulation by anyone who has a surplus. That gives the rich the power to charge everybody else for the privilege of using the medium of exchange; that’s where the phenomenon of ‘interest’ comes from . I’ve written about how that might be tackled at )

      • Malcolm,
        I think, as someone else has said on another thread that Mr King is basically just an internet troll, who simply likes to faecal-matter stir for the sake of it. I can just imagine him sitting with the same smug grin on the photo he uses, downing a family sized dram or large Portuguese vino as he punts out another itching powder comment in support of land monopoly.

      • With LRV the wealth of landed would be returned to the landless who created the wealth in the first place.

        • Malcolm: it is not possible to over estimate the societally created wealth of land rental value. The privately created wealth of labour acting upon the land is quite another thing and indeed such action is the sole creator of capital.

    • Alison Macleod

      Neil, I wrote the May minutes of Applecross Community Council you refer to. Please don’t assume that you understand what all the issues are in Applecross by reading the Community Council minutes. At those meetings we attempt to concentrate on the issues which we, in our role as community councillors might have a little influence on. These primarily relate to our relationships with the Highland Council, NHS Highland and similar organisations and trying to get the best possible services for our community that we can, because that is what Community Councils are mainly meant to be for. In any case that takes up too much time to get involved in many other issues. We have never discussed unsustainable fishing as far as I remember.
      The fact that land issues are rarely discussed at CC meetings does not mean to say that lack of access to land is not a big issue for us as a community and for individuals within the community. We do not need an estate, on the whole we do not want to own an estate. We do not even begrudge Richard Wills his few weeks a year here spent shooting deer. We do need access to some land though, even just a few acres. Ownership would be ideal as that allows better access to funding and ensures there will be benefits for generations to come. A long lease at a peppercorn rent would possibly be acceptable too. With access to land we can begin to come up with some of the answers to the many challenges that face remote, rural communities, without it we will struggle to do much at all.
      Not only do we lack access to land ownership, we lack any influence over the way owners use it. They are felling 13,000 tons of timber this year. It costs a fortune (approaching £1 million) to fell and ship it from Applecross, much more than the timber, which is in poor condition, is worth. They have substantial public grants to help them with this cost. The community would like access to a few thousand tons of this timber. We are over reliant on fossil fuels here, which are even more expensive than they are elsewhere because of transport costs. We have a large proportion of hard to heat and treat housing and relatively low incomes, so cold, damp houses and fuel poverty are common. Access to a local source of timber makes complete sense to us and you would have thought it would make sense to the trust, who also own cold damp houses. But it seems it does not. We have been asking about it for three years but last week I was told they were reluctant/unwilling to allow us to buy it from them because there was no proven demand in Applecross!!! The chances of influencing the replanting with continued provision of woodfuel in mind seem very small.
      Lack of access to land is certainly not the cause of all of our problems, but access to land is at least part of the answer to many of them. I believe we could make much better use of a few acres than they do of 70,000.

      • Robbie Pennington

        Well Neil, I’d say that’s pit yer gas at a peep!

        • Alison Macleod

          That’s unlikely, Neil’s gas is never pit at a peep from what I’ve seen.

          • Well Alison he has not responded so far. I was deeply affected by your post, because it describes the quiet anguish of a community divorced and marginalised from its land resources. It brought back to mind other examples discussed during the first Drumossie Land and Community conference almost 30 years ago, it marked the painful minimal progress we have made since then and rekindled the raw emotions I felt during the study trip to Vestlandet with Angus, his wife and child and especially on return to the anachronistic Victorian-Edwardian nightmare world of the Highlands. I live in an area dominated by large Central Highland estates some of which now lie in a national park not owned by the nation. The communities of which are also like yours, divorced from primary access to land resources that their Fennoscandian equivalents take for granted.

      • Alison. Thank you for taking the time to write such a full (and courteous) reply.

        I appreciate unsustainable fishing has never been on the Community Council agenda. In fact, I only added this in a (failed!) attempt to demonstrate I had other sources of information about Applecross than just the CC minutes. However, your point about the CC having a restricted statutory remit and therefore not being a forum to discuss all of Apx’s problems is well made and taken. I probably have been guilty of overlooking that and I shall keep it more fully in mind when reading the minutes in future.

        Beyond that, when you say you would like to own (or have a less than ideal long lease at peppercorn rent) a few acres, what would that be for? Housing? Or just a bit of “our space”?

        That’s very interesting about the felling as well. Rather like the thing about the GP not being able to see enough patients in Apx to keep her “ticket” (I hope that’s not a misrepresentation), it had never occurred to me that a plantation might cost more to fell and extract than the timber is worth. So there’s another little bit of education I’ve had. What happens to a plantation of exotic conifers if you just abandon it? I bet the spin the estate would put on it is “The Forestry Commission are paying us to pull this lot out and start again in accordance with modern practice.” I wonder if the FC have a tender conscience that they would have been party to planting the trees in the first place by paying dedication grants on them. I’m just thinking out loud here – not accusing anyone or presuming to know any answers.

        It is also very strange the estate are reluctant to sell you any of the timber. You’ve got to wonder what dynamic is influencing that. And stranger still that local provision of woodfuel doesn’t influence the FC in the grant structure of the replanting. This is maybe something (FC grant structure priorities) that needs to be addressed. So that’s another thing I’ve learnt. Thank you.

        Meanwhile, I’ll say that everyone’s slagging off the LRRG interim report. But the LRRG said they’d be looking at the concept of a Land Agency with powers of mediation and ultimately to recommend a compulsory purchase. You could imagine a scenario under this scheme where the Apx community despairs of negotiations with the estate to acquire your couple of acres or a plantation for a woodfuel supply so registers an interest with the Land Agency for a mediated settlement failing which as the ultimate sanction a compulsory sale. Would that not be a step forward towards resolution of Apx’s problems in so far as these are landownership related? Or does it not go far enough? I’m anxious not to fall into the trap of presuming that I know enough to prescribe solutions.

        • Alison Macleod

          You know it’s not for ‘just a bit of “our space”’ You know we have far better things to do with our time than bother hassling anybody for that.

          A brief summary of what we might use land for and why:
          Affordable housing sites, which will be an on-going problem as almost every house that is sold goes as a holiday home or retirees moving to live here and is one less for a family, young couple or single person who lives and works here.
          Sites for affordable housing that is suitable for the elderly and disabled so they can stay in their own communities for longer rather than be shipped off to homes elsewhere (usually two hours away in Inverness). We plan to provide a support worker (who will also need somewhere to live).
          Land that is suitable for housing sites that are less affordable to develop that we could to offer to sell to key workers like GPs.
          Work units of various kinds so people can expand or set up their own businesses; some of the houses could be built so that workspace is included.
          Office space for the community company and others.
          A site/building for our historical society to build or renovate and run as a museum with extra space to use to earn an income to ensure it is sustainable.
          Land for growing food for local use, most likely including polytunnels. Many have no access to croft land so it would be space for them, but we would also hope that the polytunnels could be used by crofters to start off seedlings etc. We could use some of the extra energy that we can’t export due to the poor grid to heat polytunnels in the winter so they are always productive.
          Land for an in-vessel compostor; there are to be very hard-line new rules next year about what you have to do with food waste which the catering businesses are going to struggle with. From next year it can’t go in the bins.
          Land for our recycling skips which currently take up valuable parking space behind the community hall. We moved them from the council owned car park because there wasn’t enough room for all the visitors cars and so many vehicles were parking on the edges of the road. It freed up a little space but there are still a lot of cars parked where they shouldn’t be and it affects road safety. The estate built a new path network, which they got grants for, but failed to provide a new car park for people using the paths; you can’t easily get grants for car parks.
          We asked the trustees last year for somewhere an in-vessel compostor and the recycling skips could be sited, but we haven’t had an answer yet.
          A community orchard.
          Land for storing our timber on, if ever we get it. Land for a shed for storing it in once processed and to support the development of a wood processing business. And land for another shed to store our processing equipment. Land for replanting trees, though some common grazings can also be used.
          The land our micro hydro site is on so we can keep the money we’re going to have to pay the estate in rent.
          Land for outdoor sports facilities- a multi activity pitch, mountain bike tracks etc.
          Land to manage for biodiversity.
          Land for individuals to buy to develop businesses on, so that the money, time and effort they invest in the land benefits them and their successors.
          And that’s just my ideas, I’m sure others will have lots more.

          The funding for the felling is mainly from HLF (rather than FCS) which it seems is mainly interested in the appearance of the landscape rather than the use the land or its produce is put to. It appears that the landowners don’t want us to have the timber because it’s a nuisance selling it to us; they suspect we won’t pay for it up-front and that we then won’t be able to sell it (because they believe there is no demand) and so won’t be able to pay them for it from our income from sales. They are worried we’ll leave our wood lying about on their land because we have nowhere else to put it.

          I am hoping that CLS’s land agency idea will come to something. But I’m not that hopeful given that any powers of compulsory purchase seem to have been ruled out. There would have to be some powers behind that mediating body so it has some teeth.

          • Robbie Pennington

            Another irresistible argument for radical, very radical, land reform.

          • Alison, thank you for another reply. I put in the bit about “our space” as a shorthand for “Apart from affordable housing, it’s about bit(s) of ground to use for various things which are important to the community and which the estate cannot dictate its terms over.” I’m sorry if you misunderstood that – it was probably a shorthand too far.

            Some of the things you enumerated struck a chord to where I live (the island of Flores in the Azores) on both positive (polytunnels) and negative (sports facilities) levels but I’ll say no more here because it is less easy than is sometimes assumed to communicate effectively by the written word.

            I agree it looks bad of Salmond to appear to have poo-pooed the compulsory acquisition aspects of the CLS/LRRG suggestions. I am no Scot Nat (let’s not get into that!) but have always respected AS for a shrewd politician. This seems a mis-step by him – did he get an embarrassingly (for him) lukewarm applause at the conference?

          • indeed Robbie. When I explained some of this kind of thing that Alison exemplifies to Norwegians, they look at me in stunned disbelief( not that they are problem -free themselves of course. I dare say the 250,000+ forest owners in Maine( about the same size as Scotland with less than 2 million people) they would be astonished at the timber problems outlined. Sadly once again the SNP and Labour are just not interested in the analogies or the implications.

  6. I read this because I had hoped to go to the conference but it clashed with something else. We are thinking about the question of supporting the development of a community group here and are considering giving the group our old walled garden and steading. Our biggest problem seems to be the question – is there a community? There are perhaps 20 people living within 2 miles, but are they are community? They show no particular sign of it just now. There are people who are friends, and others who have fallen out and don’t speak to each other. Others just don’t really know each other. Would the existence of a project turn them into a community, or would it be more likely to lead to acrimony and dissent? (One so often hears of committees working on projects ending in tears). I am not approaching this cynically, but because I am genuinely puzzled and unsure how to proceed. What advice do you have?

    • Talk, talk, talk is my advice. Be clear about what your ambitions are and what you are prepared to do in very precise terms. Let others ponder and be open to discuss. These things take time. Oh, and then there’s the Hill of Alyth commonty …… 🙂

    • decide what problem you are wishing to move away from and/or what goal you wish to head towards. ‘a community is a self -defining human demographic entity that does not need a laird, a Quango, or an NGO to tell it what to do’

  7. Robbie Pennington

    A classic “straw man” argument! Land Reform is part of a package, which needs to include local tax raising powers via LVT and the recreation of genuinely local government, that would indeed give communities like Applecross the opportunity to address their problems.

    • The collection of societally created Land Rental Value( LRV as opposed to the destructive misnomer LVT) to REPLACE the de facto robbery by the state, known as tax, would in itself encourage a redistribution of land and stimulate economic activity. This would of course not preclude reformation of local government.

      • Robbie Pennington

        Can you link to some elaboration on the difference between LVT and LRV? I don’t understand why LVT should be a “destructive” misnomer!

        • Tax is a three letter word for bad. People might not like paying rent, but they detest tax. Land has no capital value whatsoever, so there’s nothing to tax anyway. The only value land has is a societally determinded desirability factor, its potential rental value. There is a different concept and definition between tax and rent. The collection of land rental value has more in common with hiring a hotel room or paying for a parking space than the state arbitarily deciding what % of labour it will ‘steal’ from an individual. The concept of LRV offers freedom from taxation, not what might be misconstrued as an extra imposition.

    • With respect Robbie, it’s not a “straw man argument” (which I admit I had to google to find what that actually meant!) because I wasn’t distorting or misrepresenting anyone else’s point. (Unlike Ron’s silly response above about a handful of landowners in eastern Scotland getting the CAP subsidies – that is classic straw man!)

      Anyway, ignoring these petty points, instead of just talking in vague terms about LRV and genuinely local government enabling Applecross to address its problems, I’d find it a lot more helpful if you – or someone – could give a clear worked example of a how Applecross (or Coigeach or Raasay or a hypothetical place like them) could actually benefit from what you’re proposing.

      I mean, what tax would you apply to what properties to actually result in that GP, more affordable houses. Not just vague statements, but an actual action plan. How does it work?

      • Robbie Pennington

        Here’s a typical Swedish Kommun (chosen because it’s where my family comes from). I know it’s not quite a direct answer to your challenge, but this Kommun, like all others in Sweden is quipped to deal with the the kind of problems to which you’re referring. Tax is gathered locally in a variety of ways including income and property tax.

        Tanums Kommun

        Population: 12 350
        Population Density: 13 per km2
        Area: 945 km²
        Budget: 560 000 000 SEK = 54 899 811 GBP
        Elected Represenatives: 41

        According to law, the municipalities are responsible for:

        Childcare and pre-school
        Primary and secondary schools
        Social service
        Elderly care
        Support to people with disabilities
        Health and environmental issues
        Emergency services (not policing, which is the responsibility of the central government)
        Roads & Streets
        Cleansing & Snow Clearance
        Environmental Protection
        Broadband & IT
        Air Quality & Noise

        Many municipalities in addition have services like leisure activities for youths and housing services to make them attractive in getting residents.

        • Robbie Pennington

          By comparison, ‘Wester Ross, Strathpeffer and Lochalsh’ is only one of 22 wards within the Highland area and is served by only 4 councillors. It has no budget of its own and no autonomy.

          • Robbie Pennington

            Of course the other thing to add, is that nowhere in Tanums Kommun resembles the lock-stock-and-barrel ownership of the famously exclusive Applecross Trust. Nothing happens in Applecross but by the Trust’s whim.

        • Robbie,
          I would not answer that unless Mr King offers you a hefty consultancy fee. You have already given enough info in your kommun description( very similar in Norway) for normal people to deduce the potential for Jura and Raasay etc.

      • Well, I can’t see the landowners concerned handing back the CAP money just because they don’t live in an agrarian society! Scotland has twice the % of agricultural land that Norway has, but , Norway which is not an agrarian society either, has a much more extensive private land tenure system than Scotland . ‘The landowners per square mile as opposed to our square mile per landowner metaphor( almost literal at times though). So your faecal matter stirring trolly nonsense has come to nothing again. Malcolm Ramsay’s answer, which you have ignored, covers most of the other bases you exclude.

      • No tax would be applied to any part of the duality of ‘property’. LRV would not apply to the bricks and mortar component( nor any rates), only to the non man- made fixed supply, no -associated- capital -value component of land.

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  9. Victor Clements

    I think there is an interesting difference between the terms LRV and LVT. It is just a name, in one regard, but in another…. “tax” is just a dirtier word all round, and rental seems fairer somehow. Ron Greer wrote a series of letters to the Scotsman about two years ago….. one being headed “Living in a Tax Free Scotland”…… I must say, it got my attention. I think the terminology is important. If you want to give people a vision….. give them a vision of a country in which we pay no tax at all, but where we simply pay a rent for use of the space that we occupy. That will get their attention.

    • Well said, Victor. In addition, Land Rental Value is accurate. We are talking about the classical concept of “economic rent” after all.

      • Has nobody else noticed the irony that this thread is about definitions? According to my dictionary (Collins, 1991), the definition of “tax” is:-

        “a compulsory financial contribution imposed by a state to raise revenue, levied on the income or property of persons or organisations, on the production costs or sales prices of goods or services, etc.”

        Tell me why “land rental value”/”economic rent” doesn’t fall within that definition?

        It may attract attention to talk of a tax free Scotland but how long will that attention be held once the electorate realise you’re taking them for mugs? To my mind that’s poltical folly. If you have so little confidence in your policies that you have to disguise them as something else, then you’ve already lost the argument before you’ve started!

        • Rent is a fee charged for exclusive use of a facility or space and though it comes out of your pocket it is not a tax. LRV is no more a tax than hiring a hotel room or a parking space. W are already being taken for mugs through the state robbery of taxation of labour( income tax) and the hijacking of societally created Land Rental Value by sectional vested interests. Land has no capital value whatsoever, its only value being the 100% societally created desirability factor of LRV. Using the correct term is not sophistry and is used with the confidence of accuracy. There is a need for public revenue, but no need to use tax to obtain it, if the rental value we all create is collected instead. There are no free lunches on offer and no deceit being promulgated.

          • “Land has no capital value whatsoever, its only value being the 100% societally created desirability factor of LRV.”

            I’m baffled by this, Ron. Land has value for me as somewhere to lay my head, and as a source of sustenance – how is that value ‘societally created’?

            I agree with Neil that Land Value Taxation is a more honest name for it – it makes it clear that the concept concerns the flow of money to the state. Land Rental Value on the other hand offers no clue to that at all, but instead uses a very common word in a specialised sense that most people are not familiar with.

            As far as I’m concerned LVT conflates two distinct issues; one (taxation) is the political/economic question of how government is paid for and what contribution individuals should be obliged to make; the other (ownership) is the political/legal question of how competing claims to resources should be resolved. These are both complex enough on their own, but they turn into a Gordian knot when you mix them together.

            Another reservation I have is that it would disconnect people from the costs of government. They’ll be paying anyway – because the landowners who are paying it will be paying from the revenues they get from the wider public – but they’ll have the illusion that it’s being paid for by someone else. I don’t see that as conducive either to responsible government or a healthy society.

          • Malcolm,
            Nice try, but not convincing. Have you got proof of an invoice from God or the Big Bang outlining the production costs for land? Land was made free of charge by non human agency so it cannot possibly have any capital costs/ value. What’s been put on the land by human beings does have a capital value and all capital is created by human labour acting upon land. Right now that is being taxed( robbed) by the state for public revenue. It is interesting that you would seem to prefer to put up with this economically enervating robbery rather than return the site desirability created by society as public revenue. I suspect that you maybe a landowner, property developer or a member of Scottish Land and Estates.

          • Is the difference from the hotel room or parking space analogies not that, in these cases, you’re paying a rent for the use of *someone else’s* property? Whereas Land Rental Value is a rent on *your own* property. I think most people would think of a “charge” (to use a consciously neutral term) on their own property as a tax.

  10. Robbie Pennington

    OK, thanks, I see what you’re saying. It’s a pity tax is seen as ‘bad’ though – it’s simply the price we pay for a civilised society. It’s unfortunate that politicians have totally accepted the “tax = bad” delusion. Still, we are where we are and I’ll look forward to enjoying our local dukes paying rent!

    • We need public revenue to support all those things we now regard as making us a civilised society and there are no free lunches. With LRV we get that through’ paying for what we hold and take, rather from what we do and make’

      • Robbie Pennington

        Ron, do you still have the piece mentioned above, “Living in a Tax Free Scotland”?

        • I may have it on file. BTW it was not me who gave it that title, but the sub-editor. I have written a number of letters in the Scotsman and Herald in the last 10 tens days or so in simliar tone.

  11. I may have it on file, but I had a lot of stuff wiped out after a computer virus. I have had letters in related areas published in the Scotsman and Herald in the last 10 ten days or so. Thanks for your interest.

  12. Robbie Pennington

    Thanks, I’ll have a look.

  13. Robbie Pennington

    Well the best places to look for the connections between local taxation, local government, local autonomy, local problem-solving and so on are countries like Sweden, Norway, Germany. Nowhere’s perfect, but almost nowhere that I can think of are local communities as powerless as in Scotland.

    • indeed Robbie and over the last 30-40 years, I have often drawn on the analogues in land tenure and land tenure in Rogaland, Vest Agder and Hordaland in Norway for envisaging a better way forward here in Scotland. It is these areas of Norway, that have the greatest bio-climatic, geo-botanical and topographical similarities. There are also analogues in terms of depopulation, deforestation, emigration and language suppression. However we still await the positive analogues that have occurred for example in Lyngdal in respect of all four.

      There’s a chicken and egg scenario in operation here as it is the extensive small scale private tenure that provides the political clout for rural communities in Fennoscandia. I thing for us the resuscitation has to start with the introduction of Land Rental Value.

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  15. Ron – with reference to your response to Malcolm above, June 14, 2013 at 10:50 am, you need to get out of the mindset that anyone who asks a question about your vision of LRV or – heaven forbid – dares to disagree with an aspect of it, is an enemy. It does nothing to win over people to the cause, indeed it’s probably counterproductive in that it risks alienating potential new supporters.

    Now, instead of insulting people who are not instantaneously 100% behind your views, why don’t you, for example, type a few sentences about the policies adopted by Norway to reverse depopulation, deforestation, emigration and language suppression in Lyngdal (and/or elsewhere). Giving an example of something, I think, is a much more effective educational tool than polemical rhetoric. I didn’t know Norway had had these issues, so I am already that little bit educated already and more receptive to hearing more.

    • bit of pot kettle and black there. Andy, Victor, Graham and Robbie, don’t seem to have been ‘insulted’ by rent not being the same as tax. If you or Malcolm can come up with a Divine invoice outlining the Sublime production costs of land and sent to Adam & Eve, then I will concede that land has capital value.

      I have spent a lot of time and effort over the last 30-40 years presenting illustrated seminars, with juxtaposed photos of the Highlands and the relevant parts of Norway, plus bio-climatic/geo-climatic data including day degree sum totals above thermal thresholds, lapse rate per altitude, exposure, precipitation, indices of continentality-oceanicity, snow lie, accumulated frost sums, max-min temps etc to a variety of organisations, NGOs, ( including ones I lfound myself), journalists, politicians and public figures and have taken part in a number of radio and TV programmes related to all this. To this day, I am still pulling knives out of my back, but I have learned to go for the jugular first and ask whose it was later.
      If you google Bronnoysund, Norway, you can get an inkling of what others have attained in a bio-climatic, geo-botanical environment very similar to the grouse moors near Dalwhinnie -Drumochter—–no lairds required.

    • Robbie Pennington

      Neil, don’t you think that there’s some responsibility for people like you, who support Scotland’s unique concentration of land ownership, to do a wee bit of the homework themselves? It couldn’t be that you’d rather we exhausted ourselves doing it for you, could it?

      As it is, I did do some for you yesterday and Alison McLeod committed time to vividly rebut your easy assumptions about Applecross, but you responded to neither.

      “Nae lairds required” is the norm across almost all of Europe – does it never occur to ask why?

      • I think he must have substantial landholdings in Scotland and is just looking for ideas to plagiarise that might make him and his confederates more money.

      • or he is watching out for ideas that might threaten his establishment position.

      • I am asking why Robbie, but I seem to get slagged off for doing so!

        Including by you in the first paragraph of your post there saying I should do the homework myself. I do a little bit of homework by – for example – reading the Applecross Community Council minutes and then I get told my “gas has been set at a peep” because of my presumption!

        Don’t presume that I “support Scotland’s unique concentration of land ownership”. The worst I’m guilty of is that I don’t fully understand (yet) what evils it perpetuates. But when I ask questions, I get accused of being a troll (or of having “substantial landholdings in Scotland” – chance would be a fine thing!!)

        Anyway, to get back on topic and to try and get away from the confrontationality:-

        Robbie – yes I do understand that Scotland has overly concentrated local government. The Tanums Kommun looks good. I think you have to separate local government policy from land policy, though. Are they any more related than LG policy and – say – education policy?

        Ron – I looked at Bronnoysund briefly on Google Streetview. It reminded me a bit of Lerwick. I agree it’s bio-climatic/geo-climaticly similar to Dalwhinnie. However, the question I asked was what did Norway do (in terms of laws, policies etc.) that hasn’t been done in Scotland (in similar terms) to reverse a history of depopulation, deforestation, emigration and language suppression?

        • Robbie Pennington

          Neil, I’m sorry if you feel you’re being misunderstood, it happens to all of us (I’ve just been blocked by a Twitter follower for saying that the BBC tells lies!), but what we all have to do if we’re consistently eliciting a similar set of responses, is look first at our own behaviour – and you do have a certain style.

          For my part, I suppose I’ve been guilty of assuming that that if it walks like a troll and talks like a troll it maybe is a troll.

          I completely disagree that Land and Local Government are separate issues, on the contrary, the local autonomy to address, for example, the Applecross issues, requires both. It is precisely the relationship between land and governance in Scandinavia (and elsewhere) that empowers local communities to address their own local challenges and to thrive.

          Imagine, just for a minute, an Applecross with access to land and to the benefits and income that arises from it, and with a system of governance that enabled the community to govern and manage those assets…

          • Fair enough, Robbie, I accept “you have to separate local government policy from land policy” was not the best choice of words. Maybe it would be better to have said they’re distinct facets of an interlinked whole.

            To show what I mean, you could slice Highland Council up into areas similar to Tanums Kommun and it endow them with similar powers and budgets BUT that would be no use if you didn’t at the same time break up the big estates within these units. Equally, you could break up the estates but that would be little use without the reform of the local government. Distinct but related.

            Thus – with the greatest of respect – just to say “have a look at Tanums Kommun which has this population, that budget, powers etc.” is not a complete answer. It’s only part of the answer.

            As it happens, I personally am more interested in the land side of the equation (some may call that a selfish indulgence) than the local government side. (I also happen to have slight reservations about very small units of LG from my own experiences of the pop. 1,500 one I live in.)

            There are probably people in other forums devoted to health and education who thinking “You lot are in cloud cuckoo land if you think LG/land reform is important – what’s the point if you’ve died of a curable disease or have missed out on an education.”

    • first policy was independence in 1905 after 600 years of being a de facto colony. Quis bono?

  16. Robbie Pennington

    Teehee!!! A well placed anxiety!

  17. Robbie Pennington

    The discovery of fallibility and (dissembled?) modesty is joyous to behold.

    • Yes, Robbie it’s almost funny, but he’s coming along nicely and maybe his blinkers are beginning to slip a bit; but, will he bolt at the light?

    • Further Robbie, since he now knows, that given the fundamentally similar, bio-climatic and geo-botanical profiles of Vestlandet and the Scottish Highlands, the two different outcomes in the forms of cultural landscape, which currently pertain, are the result of what people have done within that basic environmental profile. Neither landscape is a primeval wilderness and both have been settled by humans for much the same amount of time in the post glacial period. The post glacial paleoclimatic chronological sequences have also been very similar, as was the species composition of the original soil-vegetation complex.
      To probably all but himself, it will be patently obvious that the big differences in the the two cultural landscape outcomes is the manner in which land is owned and managed. In Norway there is an extensive participatory private tenure system, operating under a local government structure that is well financed and well empowered. The result is the economically diverse , well settled and well wooded landscape with many hundreds, indeed thousands of local landowners, implied by computer generated photo trips in Norway and more importantly see and experience through direct visits and discussions with local people. ‘What evils does the the unique concentration of private landownership in Scotland engender?’—The missing cultural landscape attained in Norway? What alternatives to grouse moors then?

  18. Robbie Pennington

    It’s not “rocket science”!

  19. No, the question I’m asking is what did Norway do after it gained its independence (in terms of laws, policies adopted etc.) that hasn’t been done in Scotland (in similar terms) to reverse a history of depopulation, deforestation, emigration and language suppression in the areas you described?

    That’s not a challenge or a denial or a presumption or anything, Ron, it’s just a question!

    • I have never encountered an embarrassed lawyer in my life and you are obviously not going to be the first one. Have you had an imagination bypass operation and does your mother still help you to get dressed in the morning?

      If it’s not too much to ask you twiddle your fingers on a computer keyboard, I suggest you google ‘Norwegian Ministry of Local Government and Regional Development’ which was created by the independent Norwegian Parliament. If that is not too much bother for you then you can also try clicking on to and read the words of the Norwegian Anders Andersson given to the Highlands and Islands forum in 1998. If nothing else it might prevent you asking damned fool questions about the interaction between local government, land tenure and land use. JEEZUZ FRIGGIN KRIST!

    • and Nota Bene——-NAE LAIRDS REQUIRED.

      • Robbie Pennington

        Now Neil, how about your take on how take down the hegemonists and return Scotland to its people?

  20. (In response to Robbie Pennington’s post of June 14, 2013 at 8:55 pm)

    Yes Robbie, I think I do have a better, workable idea – though, as always, there might be some devil in the detail which makes it infeasible.

    Below is a bare-bones outline of it, and of my reservations about LVT. I don’t have time to write much at the moment because we’re hosting a small Forest Church gathering tomorrow (since Ron has guessed that I’m a landowner I’ll confess that my wife and I have a two-acre semi-wild garden in rural Lincolnshire – I hope that doesn’t disqualify me from writing about land reform).

    Before saying anything about how we’d get from here to there, I’ll outline how the system I’m advocating would operate normally. An essential feature will be separating the land market from the broader market; for a right to land to operate in a market economy, land would need to be traded using a fixed-quantity ‘currency’. As long as it can be bought and sold with ordinary money, then it is just one form of property among others whose total quantity is endlessly expandable. A fixed-quantity currency would allow everyone, as they reach maturity, to be given an allocation of (partially-tradeable) ‘land credits’ from a pool which would constantly be replenished by the credits of those who have died.

    Those land credits could be sold or rented out either privately or through a regulated exchange. This would allow the diversity of land values to be reflected – i.e. more desirable land would need more credits – but would give everyone an equal starting allocation of ‘land value’. When sold or rented out privately land credits would expire when the seller dies, but some aggregation would be allowed within the exchange so that buyers could either buy for their own lifetime (younger buyers would obviously have to pay more) or for a fixed term (corporations, having no life span, would only be allowed the fixed term option or an option related to some particular individual).

    Land would be heritable to the extent that a designated heir would be able to buy a particular piece of land for the same price the testator paid for it (though that might need to be qualified subsequently – perhaps being restricted to rural land, and perhaps only up to a certain size of holding). That would allow continuity, in farming for example, but would prevent land being used as a means of accumulating wealth.

    That system would give people a meaningful right to land, but because it allows people to give up that right, it would also be capable of producing the distribution that we currently have. That’s important for what I’m advocating because it would allow a relatively smooth transition over a generation or two (although I’d expect it to be accelerated once the basic framework is in place). The present distorted distribution would simply be deemed to have arisen under the new system and would unwind naturally. There are some complexities there (with land held in trust for example) which I haven’t given much thought to yet, but I wouldn’t expect them to present insurmountable problems. Freeholds owned by corporations would have to be converted to fixed term, but that could be done at an uncontroversial rate initially (perhaps based on the typical differential between freehold and leasehold prices) which might be reduced as the financial system adapted to the changes.

    Another detail which would be significant for the transition would be what happens with unclaimed allocations of land credits. The system I’m advocating would have them held in trust by stewards (who might be called ‘landlords’ or ‘lairds’) and the big estates would be deemed to have arisen in that way (which I think is not too far from how they did come about originally). That would allow the basic framework to be put in place without having to work out all the details (of who could claim what from which estate, for example) in advance. It wouldn’t in itself transfer any land from anybody, but it would remove the features of the law which sustain the current landowners’ monopoly, and it would establish a legal framework which would allow peole to claim their rights.

    I won’t say anything here about how I think that kind of change might be forced onto the agenda, but if you’re interested I wrote about it a couple of years ago in the blog post that my name links to above, and four more essays that followed it (they need re-writing really because at the time I hadn’t found the right voice – and they were aimed at the particular audience on that site – but they’ll give you an idea of what I think can be done).

    As far as LVT goes, no, I haven’t read that piece of Andy’s that you link too, though in the past I’ve read stuff put out by people advocating it here in England, and have had e-mail or forum exchanges with a couple of them. The major reservation I have is that it doesn’t address the underlying cause of the dysfunction, it merely addresses a symptom – and it does it in a way which creates a new political battlefield. If I’ve understood it correctly it relies on regular assessments of the productive potential of land, which I think is bound to be a hugely value-laden process. I can picture the guidelines on it changing after every election; and none of them I suspect will take into account the interests of people who want a simple, relatively self-sufficient lifestyle.

    I also have doubts about how effective it will be. The big landowners will still have a great deal of discretion over how land is used, they’ll still have huge cash flows (with the influence that implies), and because they’ll have constant interaction with the assessors, they’ll have more opportunity than non-landowners to shape how the assessors interpret their responsibilities.

    Yes, it will possibly make land cheaper – but it will make it cheaper for the rich as well as for the poor. The laws of supply and demand will still operate, and because it will be cheaper the rich will be able to ‘consume’ (i.e. buy for the pleasure of having) more of it. It might be cheaper than it is now, but I would expect prices to stabilise at a much higher level than natural justice would require. As I’ve said before, why should anyone have to pay for land?

    But would it in fact be cheaper? One of the arguments its proponents use is along the lines that the amount paid to landowners tends to rise until it absorbs all of people’s ‘surplus’ income (that’s not quite how they put it, I think, but I don’t have the time to look up how they do phrase it). One of the outcomes that they promise, on the other hand, is that people will be better off because state revenues will come from LTV, so taxes will go down or become unnecessary. I’ve tried pointing out that this will mean that people’s surplus income will therefore rise, and that, by their own reasoning, this rise will be matched by a rise in land costs, but I’ve never received a coherent response. Perhaps I’ve been unlucky with the people I’ve had exchanges with (the one I’m mainly thinking of gave the impression that he’d swallowed an economics textbook and been unable to digest it), so perhaps someone here can answer it.

    Anyway, I’ve written more (and cleaned and gardened less) than I’d intended to, so I’ll leave it there for now. Hopefully this isn’t longer than the WordPress comment system allows.

    • Interesting discussion. I’m puzzled by Malcolm’s response and his preference for a kind of secondary currency in the form of land credits rather than LVT. To collect the rental value of land is surely the most natural way to achieve equal rights to the land resource with minimum state intervention, and much less convoluted. It would discourage anyone from holding more land than they need, so would achieve a more equitable distribution, but it also addresses the problem of how to unburden the economy from punitive taxation on labour and enterprise by providing a huge alternative revenue source. It would break the interminable cycle of: taxation producing poverty; poverty requiring welfare; welfare needing to be paid for out of more taxation, and so on. Malcolm seems to think this would be a bad thing as surplus income would result in greater competition for land and so result in higher land costs, but surely we can’t justify limiting people’s spending power on such grounds. Anyway, LVT would act as a leveller as any increase in land values would be balanced by increased liability, with a corresponding dampening effect. It would also restore the relationship between rental values and selling prices, which currently is often distorted by the prospect of planning consent for change of use and capitalisation of enhanced values. Capturing the land rental value annually for the public purse would neutralise the financial advantage of merely owning land per se, which is how things should be.

      • Thanks for the response, John.

        You say: “To collect the rental value of land is surely the most natural way to achieve equal rights to the land resource with minimum state intervention”

        I think you’re forgetting that the current unequal distribution is itself the result of state ‘intervention’. Law, and the state’s enforcement of law, is what gives landowners the power to exclude others from ‘their’ land. What I’m proposing is simply a re-framing of the law to better reflect people’s natural rights. And, while it’s certainly not straightforward, we would probably end up with a much simpler system than we have now; current law is itself convoluted (in part because it tries to mitigate – to some extent – the ill effects of the underlying flaws) and I’d expect some of it to become redundant.

        LVT on the other hand makes no attempt to address the underlying distortion, but instead adds another layer of complexity in the hope that landowners’ self-interest will lead them to give up the benefits they currently enjoy. Perhaps it would work in economic terms (though I remember at least one discussion I’ve had where an LVT advocate acknowledged that it would only do so if it were accompanied by other legislative changes), but as far as I’m concerned land rights are about much more than purely economic factors.

        As I said before, though, I’m doubtful that it would work even in economic terms. In Andy’s report that Robbie linked to there’s a quote from the LVT Campaign which ends: “Land is worth holding only for use, and for good use to boot. Speculation in land is killed stone dead”. If speculation were the primary driver of high land prices, then killing it might indeed be a step towards ‘equal rights to the land resource’. But speculation really only drives the boom and bust; the high long-term price results from its value as a store of (trans-generational) wealth. As that quote says, it will be ‘worth holding only for use’ – but it *will* still be worth holding!

        When landowners rent out land they do so because they’ve decided that would be more worthwhile than exploiting it themselves. LVT will alter the equation, but it will still leave them the option of using the land themselves. Some will no doubt put their properties on the market – but what will they do with the money raised? I don’t see how LVT will strip it of its function as the ultimate store of wealth. You say that it will ‘discourage anyone from holding more land than they need’. I disagree; it will discourage anyone from holding more land than they *can use*. It’s not at all the same thing.

        You say: “It would break the interminable cycle of: taxation producing poverty [….]”. Taxation producing poverty? I don’t see that. People might dislike paying taxes, but most of us recognise both that the state can’t function without the labour of paid servants, and that those of us who benefit from the state have an obligation to contribute to it.

        What causes poverty, to my mind, are laws and institutions which cause wealth to flow towards the wealthy. Specifically, the laws which give monopoly control of land to a small section of society (thereby obliging everybody else to pay them for it); and (less obviously, but equally perniciously) a monetary system which allows the medium of circulation to be taken out of circulation by anybody who has a surplus.

        Actually (digressing slightly) taxation is implicated in that second one because, at bottom, the obligation to pay taxes in the form of money (i.e. in a form that we have no natural capacity to supply) forces people to obtain it from …. the people who have it. In other words, when the state demands taxes be paid in money (rather than in labour) it makes us subservient to the people who control the money supply. But taxation itself does not cause poverty.

        On that subject, why do proponents of LVT believe that taxation should be based on land rather than labour? After all, the rent that the landowner receives will be paid with the fruits of labour, and where’s he going to get it if not from the wider public? To my mind taxing labour directly offers a better chance (slim as it is) of keeping government honest.

        I don’t understand what you say about ‘limiting people’s spending power’. The ‘land credits’ I’m proposing would be tradeable, and in principle it would be possible for a few individuals to buy up the whole country if everybody else was willing to sell. But the buyers would not be able to pass it on to their children, and the sellers would only be able to sell their own rights, not the rights of future generations. At the moment they can … and that, to my mind, is why such ludicrous disparities in wealth and opportunity persist.

        (I wonder, do WordPress comments allow html tags for such things as bold or italic?)

        • The LVT acronnym continues to create a bit of confusion. The collection of land rental value is no more a tax, than buying a theatre ticket, hiring a taxi or buying a parking ticket. It is merely a fee for exclusive use of a space for a certain amount of time. Taxation, which you appear to support, is little more than a compulsory form of robbery by the state on individual or corporate labour/enterprise, with no specific guaranteed benefit in return.
          I trust that you do not conflate the state with society any more than you conflate ‘property’ in to a single element when it is actually a duality comprising bricks& mortar( or other man-made infrastructure) and the land it/they stand upon The bricks&mortar and /or other anthropogenic ‘improvements’, have through their genesis, a capital value and production costs can be identified to prove it. Land had no production costs as it was not man-made and therefor cannot possibly have any capital costs. Consequently it has no capital value. What we have erroneously termed land capital value is actually a chronologically compressed estimate of societally( but not state) created desirabliity.
          Two identical houses, with identical internal facilities, should have the same rental value, but if one is built in a run down sink estate with a high crime rate and poor social infrastructure, and the other in a prosperous leafy suburb with good social facilities and low crime, then it does not take Sherlock Holmes to work out that the latter will accrue a higher rent on the open market. Since the houses are absolutely identical, then the difference in attained rent is entirely due to the site it stands on and that comprises—-land. Thus we have separated the Land Rental Value in concept. All of the LRV on both site comprises the only value land has. All of this value is created by society and it is this that should be to be returned to the society that created it as public revenue and not an arbitary amount of robbery of individual labour set by the state in the form of income tax. What would you set as a fair level of this robbery in any case? How about 100% tax and a system of ‘labour credits’ for food, clothing and shelter to run alongside your ration book land credit system?

          • “The collection of land rental value is no more a tax, than buying a theatre ticket, hiring a taxi or buying a parking ticket.”

            Except that we can choose not to go to the theatre or use taxis or cars – we can’t choose not to use land. LVT/LRV constitutes a flow of money to the state, and it’s compulsory; that’s close enough to a tax for me to continue to use that term.

            I can see why you might want to convince other supporters of the concept to call it LRV, but I’m an opponent and, since Land Value Taxation seems to be how it’s most widely known, that’s the term I use. Making a fuss about what it’s called but making no comment on the substantive criticisms I’ve made isn’t likely to convince me or anyone else that it’s a good idea.

            My view of taxation is a lot more complex than I could hope to explain here. I regard government as necessary, and recognise that it needs to be paid for and that, even in a well-constituted society, there will probably need to be an element of compulsion in it. I favour taxation denominated in labour primarily because that’s what we are naturally able to supply, but also because it makes us all directly and obviously responsible for the costs of government.

            You keep saying that land has no capital value, but I’m no clearer now as to what point you’re trying to make than I was when you responded to my first comment. Who has said that it does have capital value, and what difference does it make anyway?

            As you know, there’s a fixed quantity of land, and nobody can make more of it. Because of that it has always been a source of conflict, and reconciling those conflicts has always been a primary function of government. The supply of food, clothing and shelter, on the other hand, is hugely variable and they are things which people are capable of producing themselves; for the most part there’s no reason for government to have any involvement with it.

            If you think what I’m proposing wouldn’t be a workable solution to the current problems of land distribution, perhaps you could explain why not?

          • Malcolm Ramsay: I see that we might after all agree that land has no capital value, but the problem is that the current’ property’ markets conflates the duality of property into a single element and attempts to treat the land element as part of the capitalisation process to determine the selling price and the rent should a property be rented out. The collection of the LRV to REPLACE taxation would eliminate this problem. The LRV created would be returned to the society that created it, whilst the owner or landlord would retain the full sales price of the ‘bricks&mortar’ when these were sold and if rented out, retain the rent agreed for the use of it and its facilities free of tax. The rewards of hoarding land, rural or urban,and sitting on a fatcat bahookie doing nothing whilst accruing publicly created LRV privately simply disappear, leaving the only way to make money by upgrading physical infrastructure, or increasing economic activity on the land and that would require increased labour( which would not be taxed)
            Why do you think people bricked up windows when the Window Tax was introduced?

        • Malcolm – just a few points. Yes, we can agree that land law is behind the present inequitable distribution. It was engineered and perpetuated by corrupt governments (see Andy’s book “The Poor had no Lawyers”) to create and sustain an elite power and wealth base.

          You say LVT makes “no attempt to address the underlying distortion”. It most certainly does. Each landholder, however large or small, is a monopolist, albeit mostly on a tiny scale. LVT would oblige every landholder to recompense the rest of society for the privilege of monopoly he enjoys, in direct accordance with the value of the monopoly. That would restore society’s stake in the land resource but without the state determining the physical allocation of the land. You go on to question my arguments on whether people would continue to hold land they don’t need and you prefer the word “use” to “need”. I’m not fussed about the word, but as you say, some might continue to hold land they don’t use and rent it out. That’s fine by me, as they will be financially neutral with their rental income cancelled out by their liability for payment, and the tenant would be financially in the same position as if he were the owner, paying LVT to the Exchequer rather than the landlord. But he would be freed from some of the burden of current taxation, so ultimately he would be better off.

          You disagree that taxation (on labour and enterprise) produces poverty. Of course it does. Income tax reduces people’s incomes while VAT increases prices. People just above the poverty line are pushed beneath it. The state steps in with welfare payments, and whether these are direct handouts or exemptions it comes to the same thing – a shortfall to the Exchequer. This has to be made up with further taxation, pushing a further section of society below the line etc. You say “What causes poverty, to my mind, are laws and institutions which cause wealth to flow towards the wealthy.” Yes, so reverse that flow through LVT – money from landowners to society for a change!!

          I really don’t see how “taxing labour directly offers a better chance (slim as it is) of keeping government honest.” It certainly doesn’t keep the taxpayers honest! Income tax and VAT fiddling are rife, and as for corporation tax, well…..!!!! And I don’t see how a government collecting land rents is going to be less honest than one collecting taxes on labour. Income tax rates are arbitrary – at the mercy of the Chancellor’s whim. There’s no ethical basis for any particular rate and the payment you make doesn’t relate to benefit received – if I pay more income tax than you, I can’t jump ahead of you in an NHS queue or have my dustbin emptied more often than yours. But LVT relates directly to what you take of the common resource.

          You make no reference to my point about the economic burden of current taxation, but you seem to misunderstand my point about it “limiting people’s spending power”. This was in response to your original statement that “people’s surplus income will therefore rise, and that, by their [advocates of LVT] own reasoning, this rise will be matched by a rise in land costs…”. I was querying the rather dubious implication that keeping people’s surplus income low would stabilize the land market.

          • several well made points here John. Malcolm expressed concern about wealth accruing to the landed rich from the non-landed poor. Like you, I too share that concern, but how did the landed get rich?—well of course it’s because they hold land which, as we know has no capital value, but upon which all capital is created by the action of labour. There is a twin ‘grand fiscal larceny’ going on here’: the ‘theft of societally generated LRV by a virtual land monoply cabal and de facto state robbery of labour by the arbitary imposition of taxation. Tax as we also know is self defeating as it depresses labour and production, by labour being concealed through evasion/avoidance or not done at all. Taxes like VAT or sales taxes can also be avoided/evaded by the ‘black market’ and may cause exchange of goods and services to be reduced. We need none of this in our current recessionary position. The collection of LRV cannot possibly lead to less land being produced and land cannot be hidden or transferred.

          • Thanks John – it feels like a worthwhile discussion.

            What I mean by the ‘underlying distortion’ is the laws which give some people ownership of land for free (through inheritance), but obliges others to pay for it. Are you suggesting that this will change under LVT?

            “That’s fine by me, as they will be financially neutral [….]”.

            That might be fine with you, but it’s certainly not with me – because it’ll leave the landowners with control of the land. Land ownership isn’t simply a financial matter, and they won’t be obliged to rent it out to the highest bidder. Large landowners will continue to have significant power over how large areas of land are used – in practice they’ll either find ways to use it themselves so as to cover the levy or they’ll rent it out to people whose interests are aligned with their own. They might have to work a bit harder, or be a bit more efficient, to maintain their wealth, but there’ll still be a huge gap between them and the people who have no land.

            “[The tenant] would be freed from some of the burden of current taxation, so ultimately he would be better off.” (This connects to the misunderstanding you mention in your last paragraph. You took my statement as a ‘rather dubious implication that keeping people’s surplus income low would stabilize the land market’, but that wasn’t at all what I meant. I was pointing to an inconsistency in the argument for LVT centred on the suggestion that you make above, that tenants will be better off because their taxes will go down.)

            As I understand it, advocates of LVT argue that a tax on land can’t be passed on to the tenant because rents are already as high as the market will bear. This seems reasonable enough if it’s an additional tax, but what the market will bear is strongly related to people’s ability to pay. If other taxes are reduced, why wouldn’t rents rise to absorb that? (Well, I suppose I can see a partial answer to that myself: if more land is offered for rent as a result of LVT being introduced, then the supply/demand equation shifts somewhat. I’m not sure what effect that would have, however, when there is significant unfulfilled demand.)

            “Yes, so reverse that flow through LVT”

            You agree with me that it is existing laws which cause wealth to flow towards the wealthy, but instead of wanting to change those laws, you want to add another layer to mitigate them. Why? Why do you want to hang on to laws which are manifestly flawed? Do you think it doesn’t matter having a legal system which is riven with inconsistencies?

            It’s a fair comment about the honesty of taxpayers. What I was thinking of was the transparency of government financing, and how freely they spend money. If voters are taxpayers they have a clear interest in keeping government spending in check. If they’re only paying indirectly, through landlords, I think they’d be much more likely to make unrealistic demands.

            I think your comment about the Chancellor’s whim cuts both ways. I’d say the rate at which LVT is levied is a significant factor in how likely it is to drive real change. If it’s levied at 100%, and fully replaces other forms of taxation, then I agree that it might lead to significant reform. If it’s less than 100% and other taxes remain, then the chancellor has one more tool in his armoury, and there’s one more political football to kick around. What sense is there in the state giving people an unearned benefit and then taking some of it back? How is that fairer or more efficient than not giving it to them in the first place?

            “People just above the poverty line are pushed beneath it.”

            If you hold the last straw responsible for breaking the camel’s back then yes indeed, you can say taxation causes poverty. But people don’t live ‘just above the poverty line’ from choice – they’re kept there by the factors I mentioned in my previous reply to you. It’s the addition of taxation to the rest of the burden which tips them into poverty. But since the rest of the burden (the ‘economic rent’ they pay) gives them no real benefit, while the payment of taxes provides an infrastructure which enriches us all, I think I’ll go on blaming those other factors.

            I favour labour as the basis of taxation, primarily because that’s what it ultimately comes from and that’s what we all have to give. But I can see the attraction of levying it through land, and that’s not a major part of my objection to LVT. If people were only advocating it as a better way of financing government I probably wouldn’t object very strongly. But as a method of land reform I regard it as hopelessly inadequate, and I think anyone who puts their faith in it will be seriously disappointed.

          • Malcolm Ramsay: I see you have very cleverly turned the term LVT to your benefit and you’ll perhaps note that I never use it and instead employ the more correct term Land Rental Value as what is being proposed is not a ‘tax’ let alone an additional one. Users of the term LVT have been hoist by this self made petard for about a century.
            In multiple press letters and posts I have consistently pointed that LRV is 100% societally created( billions upon billions of it), it is 100% unavoidable and a 100% collection to REPLACE taxation would be 100% fair. I have yet to hear from anyone proposing taxation of labour, enterprise and ‘bricks& mortar’ as the source of public revenue what they would establish as a fair level of state robbery. Further they do not explain how taxing labour will stimulate and reward that labour and encourage more of it( less umemployment), nor how any form of tax will prevent less of the activity or item being taxed being carried out or produced or prevent evasion/avoidance.

          • Malcolm Ramsay: I see your ‘ration book’ land credit system is apparently aimed primarily at rural land, thus leaving the biggest area of LRV rip off by the already rich and landed intact. The implementation of LRV would have an impact on the ownership of vast tracts of rural Scotland by a very few people, but it is in urban and suburban areas that the greatest source of public revenue is being hijacked. The current furore over the Housing Benefit costs in London is a pretty clear example. The high rents being charged are driven not by the bricks and mortar and the facilities therein, but by the location. The solution of moving people out of such locations to simliar quality housing further away where rents would be cheaper clarifies the source of the problem. Houses of identical quality and facilities should attract an identical rent, but they don’t and why?—because of differentials in societally created demand( ie its LRV level). Another classic example is the impact of the Jubilee Line construction where 3 billion worth of public investment resulted in ‘property’ values in the ‘curtilage area’ increasing by 15 billion—all going into the pockets of the landowners with no effort or entrepreneurial dynamism being shown by them My favourite Scottish example however is the 3 bedroomed flat overlooking the Old Course at St Andrew’s being sold fo over £3 million, while almost identical flats just a few hundreds of metres away, but not overlooking the golf course, might attract only a fraction of that. The hugely greater rental value of that particular flat, created not by its quality nor by the owners, but by society ,instead of being returned as public revenue, under your land credit ration book system, go straight back to presumably already rich landlord.

          • Roger Sandilands

            Malcolm: I’m new to this site and this discussion, so forgive me if I am not totally up to speed.

            Here I’d like to take issue with you only on your disputing Ron’s point that “the collection of land rental value is no more a tax, than buying a theatre ticket, hiring a taxi or buying a parking ticket.”

            You say: “Except that we can choose not to go to the theatre or use taxis or cars – we can’t choose not to use land. LVT/LRV constitutes a flow of money to the state, and it’s compulsory; that’s close enough to a tax for me to continue to use that term.

            It’s true that we cannot choose not to use land, but you seem unable to distinguish acreage from value. Given my income, my preferences and my circumstances, I can choose to live in an big or small apartment in a more or less valuable neighbourhood, or in a city house with a garden or in a remote cottage.

            That is choice. In principle, it is no different from choosing to pay to park in a city centre for 3 hours or go by bus; or to pay for an expensive theatre seat rather than one in the gods. I pay for benefits received. It is thus a fee I pay, not a tax.

            A tax is what one is forced to pay regardless of any direct benefit one gets from the payment. It is true that if I am taxed on my wages I may choose not to work, and one reason is that I do not see any direct benefit from the taxes I would be forced to pay, plus I may prefer leisure (or welfare) than to work for a lowered net wage. So I work less, the government gets less, GDP falls and other people’s wages and employment fall with it. That is why John is right regarding the link between taxation and poverty, and the absence of any ethical basis to the current tax system.

          • (In response to John Greer’s comment above )

            I see your ‘ration book’ land credit system is apparently aimed primarily at rural land

            Yes and no. It would cover all land, but I do regard rural land as primary, because I think urban land values are strongly influenced by the availability of rural land. I’ll say more about that in my response to Roger.

            The system I’m advocating doesn’t rule out some sort of LVT, but I suspect it would be unnecessary. I’m concerned about the institutional factors which tilt the economic ‘playing field’ in favour of the rich, but I’m not unduly bothered by windfall gains from changing values. If the fundamentals were fair I don’t think they would constitute a significant distortion.

          • (In resonse to Roger Sandilands comment )

            It’s not that I’m unable to distinguish acreage from value, Roger, rather that I’m unable to distinguish underlying value from artificial value.

            You might have all those choices of where to live, but you are surrounded by people who don’t. In particular, they don’t have the option of that remote cottage (with a patch of land which would enable them to lead a moderately comfortable rural life). Their ancestors were driven off the land in the clearances and enclosures, and took refuge in the cities where they could at least earn a pittance in the new industries that were springing up – and as the cities grew, competition for housing grew and the ‘value’ of land in the cities increased.

            I don’t know how many would leave the cities if they could, but I hear of many people actively trying to, who can’t because they can’t get land. Behind them are many more who dream of it, but don’t make the attempt because they are disheartened by the difficulties they see others having. Beyond them, I suspect, are a very much larger number who push away the thought, because they don’t want to have dreams that they know can never be fulfilled.

            I think the implementation of a right to land would start an exodus from the cities (and from the model of paid employment which dominates currently), and that would have a huge effect on urban land values. Not only because demand would drop considerably, but also because high values are partly sustained by the presence nearby of a captive workforce. (In fact there’s some evidence that part of the intention behind the enclosures in England during the industrial revolution was to make people desperate enough to work in the new factories – because, as long as they had an alternative, they refused to).

            “It is true that if I am taxed on my wages I may choose not to work [….] So I work less, the government gets less”

            For the record I don’t advocate taxing income; in the system I favour people’s contribution would be denominated in time. But, as I said to Ron, my views on taxation are quite complex (and tied up with the reforms I would like to see to the monetary system) and I regard it as a separate subject to land reform which is the topic here. As I suggested before, if LVT were only being promoted as an improved way of financing the state I probably wouldn’t actively object to it. But it’s being promoted as a method of land reform, and I’ve not seen any coherent arguments for it in that role.

    • Malcolm – I can’t see a reply button below your latest post so I am putting it here.

      By inheriting land you’d be inheriting the obligation to pay its rent in the form of LVT.

      You say “it’ll leave the landowners with control of the land”. But all of us who own our homes are landowners. Do you mean just the big ones, and how big? Landowners come in different sizes – you can’t mistrust them all! You are one yourself. If they “find ways to use it themselves so as to cover the levy” that rather suggests they are using it efficiently (as you acknowledge) within planning constraints, which is a good thing. As for the wealth gap, it would be much reduced once those who claim to own the country are paying its running costs. Inheriting an estate might not seem such a great thing after all! In practice, much land deemed surplus to requirements would be a financial burden and released.

      I stand by my statement that tenants would be better off. As you say, more land for rent (and for purchase for that matter) on the market would mean the supply/demand equation shifting, with competition for tenants keeping rents low. And if a landowner raised rents, he would be proclaiming the higher rental value of his land. So he’d have no grounds for complaint when his LVT payment rose accordingly to absorb that increase. A pointless exercise – he’d risk losing his tenants and his income, but he’d still be paying the LVT.

      You say “You agree with me that it is existing laws which cause wealth to flow towards the wealthy.” Yes, but I’m talking about the laws that allow land to be treated as “property” just like man-made goods. Land is different and society should be regarded as the general landlord with titleholders paying for their privilege of monopoly, but with no bureaucratically-determined redistribution of land parcels.

      I don’t understand your point about voters who are renting land making “unrealistic demands” on government.

      Yes, 100% would be the target, but it would have to be gradual to allow market adjustments. At 100% you say “I agree that it might lead to significant reform” but later you say “as a method of land reform I regard it as hopelessly inadequate”. Confusing.

      I do regard taxes on earned income as the most significant (and dispensable) “last straw” that pushes people into poverty. Of course, it depends on which order you count the straws as to which one becomes the last one! You “favour labour as the basis of taxation”, but a person’s labour is absolutely his own, except in the eyes of those who support slavery. No-one should be forced by the state to surrender a portion of it. Taxing labour acts as a penalty on diligence and efficiency. Land, on the other hand, morally belongs to all of us and if we wish to enjoy the exclusive rights that “ownership” confers, we should recompense the rest of society accordingly for the monopoly of those rights.

      • again more well made points John. He seems reticent to deal with the negative impacts of state expropriation of labour or speciify what % of expropriation ( wage slavery) he would construe as being fair, let alone just. LRV collection would be to land reform what the running and weightraining basics are for all main forms of athletics and contact sports and set a national fiscal physical condition for more specific legislation to be developed.

      • “By inheriting land you’d be inheriting the obligation to pay its rent in the form of LVT.”

        Indeed – but if you’re also inheriting shares in the enterprise making use of the land then that’s not really a problem. You think that as long as it’s being used efficiently, that’s a good thing, but if the main benefits of that use are accruing to a narrow section of society while large numbers of would-be smallholders remain trapped in a wage economy, then the underlying distortion will still be causing significant harm.

        I’m happy to agree that LVT would lead to a more efficient class of landholders, but I’m very doubtful that it would make much contribution to social justice, because they’ll still have a monopoly.

        “And if a landowner raised rents, […] he’d risk losing his tenants and his income, but he’d still be paying the LVT.”

        As I understand it LVT will be levied on the market rate, i.e. what tenants are prepared to pay. If the landlord’s asking more than that then he will indeed lose out. So he lowers the rent to what they are prepared to pay – that’s how markets work. The point I was making is that (according to the reasoning LVT advocates use) if other taxes fall, then (everything else being equal) the market rate can be expected to rise. What will happen in practice will depend on how landowners respond, and how much latent demand there is.

        At 100% you say “I agree that it might lead to significant reform” but later you say “as a method of land reform I regard it as hopelessly inadequate”. Confusing.

        If I remember correctly Kevin Cahill reckoned in his book, Who Owns Britain, that 90% of it was owned by 10% of the population. If LVT shifted it so that they only owned 80%, that would double the average holding of the other 90% of the population. I would regard that as a significant reform – but it would still be hugely inequitable. Can you put some figures on what you would expect?

        And would LVT in fact ever reach 100%? You say that would be the target … but the road to hell is paved with unmet targets. Why wouldn’t it become another political battleground?

        “No-one should be forced by the state to surrender a portion of [their labour].”

        But you’re okay with the state forcing them to pay for land? How do you think they’ll pay for it if not with their labour?

        What I’m arguing is that government revenues are going to come from the wider public whether they’re paid directly (through taxation of labour) or indirectly (through taxation of land). There’s a difference in transparency and a danger that people will not realise that they’re paying (which is what my comment about unrealistic demands referred to), but either way the state is forcing them to pay.

        But under the present system many people (those who aren’t lucky enough to inherit what they need) are ‘forced by the state to surrender a portion of their labour’ to some private individual (or company) for the use of a bit of land. And you presumably want that to continue?

        “Land, on the other hand, morally belongs to all of us and if we wish to enjoy the exclusive rights that “ownership” confers, we should recompense the rest of society accordingly”

        I don’t agree that land ‘morally’ belongs to all of us – at least, not at the level of individual use.

        Everyone of us has an absolute need for use of a certain amount of land in order to stay alive, and most of us feel a visceral need for a small area that we can treat as exclusively our own. And we will fight for it. At bottom, ownership rights are society’s mechanism for minimising that potential conflict.

        I don’t see the ‘exclusive rights that “ownership” confers’ as a privilege (as you referred to it somewhere), I see it merely as a recognition of an underlying reality. That potential for conflict creates a social need for land to be owned by someone. Therefore ownership of land fulfils a mutual need – the individual’s need for land to sustain life, and society’s need to pre-empt conflict.

        I separate rights to land into rights of occupancy and of use (both of which arise from the individuals need for land to sustain life) and rights of dominion (which arise from society’s need for order). As far as I’m concerned it is only those rights of dominion which morally belong to all of us. Unfortunately, over the centuries, they have become confused with rights of use, because grants of land which were originally part of the machinery of government have come to be treated as personal rights.

        We cannot live without land. Why should any of us have to pay for it?

        • Malcolm – I’m not sure what you are driving at with some of this, but I’ll do my best.

          If by “the main benefits of that use” you mean the wealth generated, you will agree that that wealth is the product of labour and capital applied to land. I am happy for people to take in full the product of their labour and investment, so long as they recompense the rest of society for the exclusive rights to the land they require for their purposes. If I own the rights to a piece of land, the rest of society loses their (equal) rights to it, and LVT is the most effective way of balancing my gain with their loss. But presumably you won’t accept that, as later on you say “I don’t agree that land ‘morally’ belongs to all of us”. Perhaps you don’t like the word “belongs”, or do you simply disagree that we all have equal rights to the land?

          You seem to ignore my point that an increase in rent by a landlord would be futile as it would be cancelled out by the increase in LVT that he could hardly argue against. You think I am happy for people to be ‘forced by the state to surrender a portion of their labour’ to some private individual (or company) for the use of a bit of land.” You have missed the point that the sum paid would end up the public purse, not private (or corporate) pockets.

          You ask me to predict the proportion of ownership! No-one can do that as we all have different levels of aspiration and therefore different demands on the land resource, whether it be in terms of acreage or value. All we can do is to create a level playing field and allow the market to operate free from the distortions of the perpetual monopoly that constitutes private “property” in land. As for political battlegrounds, any reform such as either you or I are talking about is going to be one of those – landowners are powerful and don’t give up their privileges without a fight!

          You continue to advocate state appropriation of personal earned income as tax, and you talk of the state “forcing them to pay for land”. If we accept the need for compulsory public revenue surely it makes more sense to base it on what people take of the common resource rather than on their privately generated income. Taxing labour means that the harder you work, the harder you are hit; the more you produce, the more you forfeit. You make no comment on my point that a person’s labour is absolutely his own – do you accept it? And can you answer Ron Greer’s point about what percentage rate of tax on labour is fair – and why?

          You say we “feel a visceral need for a small area that we can treat as exclusively our own”. Yes, and that would continue. You’d still have a title deed, secure tenure and the same bundle of rights over the land that you have today.

          • Another series of good points from yourself and Roger. The implication I take is that Malcolm does not in fact want to expropriate cash from individual labour, but wishes them to contribute time. Well in that case what % of their time would be fair and why.
            He is still struggling with the tax v rent concept. It is compulsory to pay for food from a retailer, as if you don’t this is theft, but though wages raised by labour pay for the food and food must be eaten to sustain life, this is still not a tax.
            He keeps hinting at linkage to financial reform, but does not elaborate. If he is thinking about the end of Fractional Reserve Banking and its replacement by Full Reserve Banking, then I’d be fairly sympathetic. The collection of LRV does not negate the possibility of specific land reform legislation, but certainly change the theatre in which this might operate. A country basing its main source of public revenue on unavoidable LRV has a financial collateral that will not vanish or be transferred.

          • What I’m hoping for, John, is either some reasoning that supports LVT as a worthwhile method of land reform or an acknowledgement that it doesn’t really do anything to address the fundamental problems.

            I did wonder when I was replying to your last post if you’d properly taken in what this discussion is about; it seemed to me that some of what you said would only make sense in a comparison of LVT with the status quo – but what we’re doing here is comparing it to an alternative reform. You ask if I ‘disagree that we all have equal rights to the land’. Well of course I do – that’s why I’ve proposed a system which explicitly gives people equal rights!

            You yourself also believe that we all have equal rights to the land and yet you tell me that under LVT “You’d still have […] the same bundle of rights over the land that you have today”

            Yes, I know. That’s why I regard it as an inadequate method of land reform. Everybody else who owns land would also continue to have much the same rights that they have today. As would the people who are currently landless – or rather they would continue to have much the same lack of rights that they have today. The offspring of those who own land will be given some free, while the offspring of those who have none will be obliged to pay if they want to acquire some. This isn’t my idea of equal rights.

            “If I own the rights to a piece of land, the rest of society loses their (equal) rights to it, and LVT is the most effective way of balancing my gain with their loss.
            But your gain is already balanced – by your own loss. In exchange for your rights over your own land, you surrender your rights over others’ land.

            I was trying to answer your argument ‘that an increase in rent by a landlord would be futile’ when I pointed out that he’d be very unlikely to raise it above the market rate. What more would you need to answer it?

            “You have missed the point that the sum paid would end up the public purse, not private (or corporate) pockets.

            As I understand it LVT will not change the fact that a landless person buying land will have to pay a private individual for it – will have to ‘surrender a portion of their labour’ in order to buy it. Your statement above would only be true for someone renting, and only if 100% of the rent goes to the state – but how likely is that?

            “You ask me to predict the proportion of ownership! No-one can do that”

            No, I’m asking you to tell me what your guess is, because you surely wouldn’t be pushing it as a serious method of land reform if you didn’t have a guess – would you?

            “All we can do is to create a level playing field and allow the market to operate free from the distortions of the perpetual monopoly that constitutes private “property” in land.”

            But LVT doesn’t create a level playing field. It doesn’t break the monopoly – it simply makes it a bit harder to maintain. The offspring of the rich will still be given preferential access to land and the capital attached to it.

            You say that you’re ‘happy for people to take in full the product of their labour and investment’. So am I – but only if it really is their labour and investment. But to a large extent the owners of capital are in fact taking the product of past generations’ labour and investment.

            “As for political battlegrounds, any reform such as either you or I are talking about is going to be one of those”

            But some battles are fought over and over again, while others are fought only once. The effectiveness of LVT would depend on the rate it’s levied at, and that’s something which could be constantly adjusted up or down. The reforms I’m proposing, on the other hand, rest on questions of principle; is there a right to land?; and what is the purpose of inheritance law? Once those questions have been settled it’s unlikely they will be brought up again. (And I think it would be very hard to come up with credible answers which support the status quo.)

            “You continue to advocate state appropriation of personal earned income as tax”

            What I’m primarily saying is that the question of how the state should be financed, and what each person’s contribution should be, is distinct from the question of how land should be allocated. I’ve engaged a little on the subject of tax because that seems to be the argument you keep coming back to, but what I’m interested in here is whether or not LVT is a worthwhile route to land reform.

            The land reforms I’m proposing are perfectly compatible with LVT as a way of financing government, and I’ll be happy to discuss whether that’s the best way once we’ve finished discussing the more fundamental topic of land reform. At the moment I’m still waiting for an answer to the main objection I’ve raised, that it leaves existing landowners with an effective monopoly.

          • Malcolm – when I say we all have equal rights to the land I mean as human beings we have an equal moral entitlement to the land. I thought that was clear from the context. I didn’t mean we’re actually enjoying that right already under the present system – I wouldn’t be complaining about it if we were! And by the “same bundle of rights” I mean that there will be no compromise to this as a result of paying LVT – you would still have the sense of “ownership” that you cherish.

            As for the inheritance issue, as I said before, you’ll inherit the financial burden with the land, and those who cannot (or do not) make optimum use of the land within planning constraints would find themselves obliged to dispose of it or suffer the financial consequences. That is why LVT is so bitterly opposed by the big (and in some cases, not so big) landowners. Land monopoly is their power and wealth base and would be destroyed once they have to pay annually on what they own. You seem to think that things would just carry on with large monopolies and landless hordes.

            You must surely realize that at 100% LVT there would be a seismic shift in land distribution and a collapse in the selling price of land. You challenge me again to put a figure on that redistribution, but I am not going to do that any more than I am going to give you a weather forecast for, say, year 2017. We all have different aspirations and we require different quantities (and types) of land to realize them. Until we are given that opportunity, statistical predictions are baseless and a guess is meaningless. You admit in a post to Roger Sandilands “I don’t know exactly how the system I’m advocating would work in practice” – but then you accuse me of being vague!!

            You agree with me that the rent wouldn’t end up in private (or corporate) pockets “only if 100% of the rent goes to the state – but how likely is that?” And you say the “effectiveness of LVT would depend on the rate it’s levied at”. I’m saying that at 100% is the system I’m proposing. How likely is any reform for that matter?! But I’m pleased you agree on the effectiveness of LVT at 100%.

            I fail to understand your confusion over the individual’s gain being society’s loss. If each landowner (large or small) pays to society for the privilege of his monopoly, then we all compensate one another in accordance with the different parcels of land we hold. Those who want more pay more – in terms of acreage and/or value. That is a level playing field.

            You agree that people should “take in full the product of their labour and investment” but in a reply to Ron Greer you said “I favour labour as the basis of taxation” even though later to Roger Sandilands you said “For the record I don’t advocate taxing income; in the system I favour people’s contribution would be denominated in time”. I’m lost!

            But you make a fundamental mistake in confusing land and capital when you say “owners of capital are in fact taking the product of past generations’ labour and investment”. It is the owners of land who are able to command a portion of that product. Neither labour nor capital can function in the production of wealth without land, which provides the raw materials. They are both at the mercy of the land monopolist who can demand a rent and cream off surplus wealth. The distinction between land and capital is a crucial one. Confusion arises when the landowner and capitalist are one and the same person (or corporation), but it is in the role of landowner that he wields the power. Try playing a game of Monopoly where you start by owning all the sites and your opponent owns the money and buildings – you’ll win! LVT would take into the public purse the portion that is currently creamed off as rent by the landowner.

        • Malcolm,

          What do you mean by ‘artificial value’ of land? Since land has no capital value, what value do you perceive it to have in financial terms? The monopoly value of land lies in the capture of the only value it has–a societally created desirability factor termed its LRV ( this is definitively not a tax). The 100% collection of LRV completely eradicates the value of this monopoly and as the 100% collection LRV is intended to replace taxation of labour, it ends the state expropriation of this labour. You remain silent on the confused statements you have made on levels of state expropriation of labour in terms of wages and time. What % of each or both do you consider ‘fair’ and why?

  21. Robbie Pennington

    I thought I’d better thank you for this response before I take time to ‘get my head round it’ – it’s going to take more than one reading! So, thank you for such a full response. Now to wake up the neurones…

  22. Robbie Pennington

    Neil, I think I said that “it’s not quite a direct answer” and I guess that could be taken to imply it’s not a “complete” answer either.

    I’m not trying to lay out a comprehensive thesis here, just to engage in a conversation.

    I know you appreciate the difference.

    As to your last point, while one can argue about it’s precise weight, land monopoly is a one of the foundations of an unjust, unequal and unhealthy society.

  23. Robbie – I am now in TOTAL agreement with you!


    Now, let that conversation – which could potentially involve areas of disagreement but, hey!, that’s allowed isn’t it? – commence about what you rather neatly encapsulated as the precise weights to be applied to different factors (foundations) contributing to unjust societies.

  24. Hegmonist,s, Oligarch’s, and Feudal rural land holding that would shame a Banana Republic…Oh Scotland….someone please rescue it from the 18th Century!!.
    The issues are simple: The land system is a land system designed for social and political oppression, and acts as a key segment of the process by which Scotland was Colonized after the Union. Likewise, the whole process has been an environmental and ecological disaster. All of this is known, and approved of, by Scotland’s real power holders. It’s the “System”.
    So can we please look at the situation clearly, objectively, and face up to the reality of what it has done, at huge personal and social cost, to the Scottish people. Also what has to be done. The Oligarch’s and Feudalists need to be stripped of their vast land holdings. They gained them from ancestors in most cases, who committed a crime against the ordinary people. Those who came later, were happy to continue the consequences of this. Sadly, the SNP has now been “Co-Opted” and is on the side of the Landowners. It also has shifted it’s support to other issues, like nuclear power, and NATO, that are clearly not wanted by the mass of Scots. So I will not be joining the SNP. In fact, sadly, I have to oppose it’s policies. What is going to happen, I think, in the event of Independence, is a serious crisis where people wake up and realize that on many issues, including land, “Everything has to change, so that everything can stay the same”

    • Graham,
      Once more I find large areas of agreement with you. I will be voting YES inspite of the SNP policy position on these issues and NOT because of them. I was an active member of the SNP from 1981, when I joined on my return from a study trip of Iceland’s forests. I actively promulgated land reform within SNP for the next 25 years and was a member of the Scottish Land Commission set up by Alex Salmond. The wilful ignoring of its recommendations, despite its acceptance by acclamation in the 1997 National Council meeting, was the start of a process of disenchantment leading to cessation of my membersip. I am now a member of the Scottish Democratic Alliance, a pro independence party. Independence is much, much bigger than the SNP and its achievement will be the engine to engaging with those issues that we have been covering in these posts. As I said above, Alison’s post really ‘got through’ to me and I hope the words of Anders Andersson will be of inspiration to her.

  25. Alison, Your blog comment was spot on.

  26. Roger Sandilands

    Malcolm: Rural land values, per acre, are generally very low compared to urban land values. So I and many others would have little difficulty in buying a remote rural cottage with a large garden to grow roses and vegetables. Why don’t we? Paradoxically, precisely because the land value and its annual rental value is so low there! And why is the land value there so low? I’ll let you answer that. It shouldn’t take much thought.

    • You’re right, Roger, it doesn’t take much thought. Those land values are so low because that land is not attractive to the kinds of people who regard land as a financial investment.

      The fact that you and many others would have little difficulty buying it is irrelevant to the argument I’m making. What is relevant is the fact that its market value has a floor – the minimum price at which its current owner would be willing to part with it – which is very much higher than many other people would be able to pay.

      The question remains: why should they have to pay anything at all?

  27. Roger Sandilands

    Malcolm: It’s ridiculous to argue that people should not have to pay anything for the land they occupy. Who then will allocate it? You? Me? Mao? Stalin?

    The reason rural land is not purchased by more urbanites is not because its price is artificially high due to its being held off the market by speculators and the aristos, but because it is relatively remote from all the facilities that most of us prize: schools, shops, clinics, cinemas, public transport, and, crucially, jobs – especially well-paying ones. (And why is that? Not for the reasons you give.) Additionally, if it is wanted for farming and “Good Life” self-sufficiency, low priced – and available – rural land is probably also scrubland with limited natural fertility.

    You need to familiarise yourself with Ricardo’s law of rent in which the best and most accessible lands have high fertility relative to remote, infertile lands and so command a rent. At or below the “margin of cultivation” where the land will only yield enough to pay the going rate of wages and the going rate of return on machinery etc (“capital”) invested, there is no rent that the owners can command except perhaps a little for its small prestige value. But most of those looking for the Good Life do not want to live in those places anyway, and would usually prefer to pay rent and live in more desirable locations.

    The only question that should concern us then is: to whom do they pay the rent? To private landlords or to the state? If to the former, the state must turn instead to the destructive taxation of our wages and enterprise.

    The same principles apply to urban land rents. Should I pay no rent to anyone (nor indeed pay the going price to obtain title deeds) to live in central London or Manchester or the best parts of Glasgow? If that land were rent free you can be sure that someone is being given a huge backhander or that it will go to their relatives and pals.

    Allocative efficiency dictates that (subject to normal planning controls and zoning etc) land goes to those who are willing and able to pay the market price. The distributional issue is separate: Who should get the value of my labour and my enterprise, and who should get the (community) value of the land I exclusively occupy?

    • As you said in your first post, Roger, you’re not up to speed on the discussion.

      I already gave a bare-bones outline of the system I favour for allocating land in a previous post ( June 15, 2013 at 10:05 pm). It would be quite capable of producing the distribution that exists currently (and in its initial form would leave the existing distribution largely untouched), but it would remove the features which cause it to persist across generations.

      I’m sure a lot of the economic canon would continue to be relevant, but it has developed within a grossly unequal world where land has been traded as though it were just another commodity, and no right to land has been recognised in law. Its conclusions can’t simply be applied unchanged in circumstances where that no longer applies.

      I don’t know exactly how the sytem I’m advocating would work in practice, because it’s intended to address the principles and leaves much of the detail to be worked out through the development of case law. But I see control over land as only one of two major causes of inequality, and reform of land law without reform of the monetary system would still leave huge distortions to the ‘natural’ economy. The land reforms I’m suggesting, however, would largely prevent the inequality compounding across generations. LVT wouldn’t in my view.

  28. Roger Sandilands

    Malcolm: Let me address one point in your reply to John:

    You (kind of) accept John’s point that if tenants are already paying the market rent the landlord cannot raise it above that market rate.

    But you go on to say that the landord therefore “lowers the rent to what they are prepared to pay – that’s how markets work. The point I was making is that (according to the reasoning LVT advocates use) if other taxes fall, then (everything else being equal) the market rate can be expected to rise. What will happen in practice will depend on how landowners respond, and how much latent demand there is.”

    Malcolm, the landlord would only lower the tenant’s rent below the market rate if the “LVT” or LRV collected by the State is imposed directly on the tenant rather than the landlord. If it is imposed directly on the landord (the usual case), the tenant would still pay the same rent but the landlord’s net rent would fall (and the selling price of land would also fall accordingly).

    But meanwhile, other things would not remain the same. If destructive taxes on wages and genuine enterprise are correspondingly reduced, there would be incentives all round to increase output and income from work and enterprise. This would increase the demand for land, and this would indeed tend to increase rents – hence state revenues too, further reducing reliance on taxes… and so on, in a virtuous circle. There would indeed be latent demand. That’s because currently there is repressed demand from the current perverse system.

    One important caveat is that there would now be less incentive to hold land for purely speculative reasons. The state collection of rent on the land will force the development of land otherwise held idle, or force its sale to someone willing and able to use it productively. This would tend to reduce sale prices and the associated land rents. The net effect will depend on the relative strength of these two opposing pressures.

    • You’ve lost me there, Roger. Where did I suggest that the landlord might lower the rent to below the market rate? All I said was that, if he’s asking more than he can get, he’ll lower his asking price to what he can get.

      “But meanwhile, other things would not remain the same.
      The net effect will depend on the relative strength of these two opposing pressures.”

      Yes, there would all kinds of effects which would most likely make for a somewhat fairer society than we have today. They wouldn’t, however, remove the fundamental distortions which the inequalities in our society stem from. But what relevance do they have to a comparison between LVT and more fundamental reform?

  29. (Response to John Digney’s post of June 21, 2013 at 11:48 am

    As I said before, John, I’m not very interested in talking about how government is financed on a land reform site. But you and Ron seem to be set on it so I’ll answer some of your questions about what I think. It means I won’t have time today to answer the land reform side of your post, but I’ll try and do that tomorrow.

    There’s no conflict between my statement that I favour labour as the basis of taxation and my wanting people’s contribution to be denominated in time. In the system I envisage the basic tax demand would be for a set number of hours of (passive) labour, and government would buy goods and services by issuing tradeable (time-limited) tax receipts. Those tax receipts would function as a currency, and people would be able to fulfil their tax obligations by selling goods or services in exchange for them and handing them in.

    Perhaps there’s some contradiction between my agreeing that people should “take in full the product of their labour and investment” and believing that some kind of compulsory taxation might be necessary, but no more (in my eyes) than there is in your position. We both think government should be paid for with a compulsory levy of some kind; you prefer to characterise it as people paying for land (sorry, exclusive use of land). That’s fine with me, but I’m afraid I think it’s a bit spurious when you know perfectly well that the money will in fact be paying for the activities of government.

    But as it happens I’m not even sure that a compulsory levy would be needed in a healthy society. In a society which did not deny people a fair share of natural resources (and of past generations’ legacy) I don’t think people would begrudge paying for the state in the way they do today. I think it’s quite possible that, in a healthy society, the state could be financed quite adequately by what people choose to give to it.

    Having said that, I should add that I think much of what states do currently is a violation of a basic principle – what I think of as the hierarchy of law. Compulsory taxation rests on a threat of violence, but violence is one of the first things most societies legislate against, and the threat of it should only be used in extreme circumstances. As far as I’m concerned any proposal to spend money which has been raised by compulsion should face a test of “would it be right to send someone to prison for refusing to contribute to this?”. If the answer is no then it’s not a proper use of tax revenue.

    But then the whole issue is made more complex in our current system by the fact that so much government expenditure is aimed at mitigating the distortions caused by fundamental laws which developed at a time when slavery and serfdom were an accepted part of life.

    For those reasons the question of what percentage of people’s time or labour would be fair isn’t one I see any point in trying to answer. In practice it’s likely to fluctuate; if there’s a war to pay for, or the aftermath of a natural disaster, then it would go up; in times of stability it would go down.

    If you’re interested in why a time limit is necessary for currency, I’ve written about that in the past in a blog post, The Root of Much Evil, and previously in a piece published on OpenDemocracy, In Search of Honest Money (which also contained a paragraph or two on the advantages of basing a currency on labour).

  30. The primary value of land is its annual rental. This is a function of its productivity in relation to other land. If all land is enclosed, this annual rental value is higher than it would be if land was freely available at the margin, or if there was no taxation at the margin. Present tax systems attempt to levy tax at the margin, which has the result that (1) land which might be productive cannot be worked profitably and (2) after-tax earnings are lower than they would otherwise be.

    Land price is the capitalisation of land rental value but is subject to many factors including interest rates and future expectations of rental growth ie it includes a speculative element of “froth”.

  31. (Further response to John Digney’s post of June 21, 2013 at 11:48 am)

    ” …. as human beings we have an equal moral entitlement to the land”

    Yes, John, I’d understood what you meant, and I know you don’t think that’s what we have currently. I was pointing out that we would continue not to have it under LVT. I’ll qualify that if you like; we’ll continue not to have it at the foundational level. You think that we can impose something on top of the foundations which will counteract the distortions they create. I don’t see how.

    “[They’ll] inherit the financial burden with the land
    Land monopoly [….] would be destroyed once they have to pay annually on what they own.”

    If the monopoly was merely the power to prevent other people using the land then that might be true. In practice their advantage stems more from having first choice as to how the land is used. They won’t just inherit the financial burden they’ll also inherit the opportunity for wealth generation which is inherent in the land. The monopoly doesn’t lie in the power to prevent the land being used, it lies in the freedom to choose how it is used – and that will be retained.

    When I wrote of owners of capital taking the product of past generations’ labour and investment I was thinking primarily of commercial and residential buildings. You think I’ve made a fundamental mistake there in confusing land and capital, and you point out that without land, capital can’t function in the production of wealth. No, of course it can’t – but LVT distinguishes land from any buildings on it, and the benefit of the buildings will continue to go to the people who inherit them. Buildings are not merely improvements, they’re also encumbrances. Nobody who wants the use of a particular site can buy just the land – they have to buy any buildings on it as well. This is a transfer of wealth from the buyer to the person who has inherited that building.

    You say I “must surely realize that at 100% LVT there would be a seismic shift in land distribution and a collapse in the selling price of land”. No, John, I don’t believe that’s the case.

    At 100% LVT I would guess there’d be a reduction in the average selling price of land (though I’m not sure it would be very large). But a reduction in the average can manifest in different ways. It might happen through a reduction in all prices at every level; but it might also happen simply through a flattening at the top of the market; it might even happen that a flattening at the top of the market would be accompanied by an increase at the bottom (since people at the bottom will no longer be paying tax). Ultimately, it depends on whether the amount of land released onto the market (by sellers who want to avoid the financial burden) is more or less than the latent demand.

    We could argue over the latent demand (I think it’s huge), but one thing is certain: if land becomes cheaper the rich will be able to buy more of it. I think they’ll do so, as much for the enjoyment of having it as for any income potential, and that will limit how much prices drop.

    I’ll point out here that others who are pushing LVT certainly don’t expect prices to collapse. In their FAQ, the Labour Land Campaign makes a point of reassuring people that their children’s inheritance will not be compromised. This is from the leaflet they point people to for more information:

    In other words, the net effect of LVT, other things being equal, would be to make land prices and property prices lower than they otherwise would be, but not lower in absolute terms. Prices would merely stop rising, or not rise to the same extent, as they would have done.

    You cavilled at my questioning the likelihood of 100% of rent going to the state. My understanding is that the rent a tenant pays will have two elements to it – rent for the land (which will be taken by the state) and rent for the building and services (which will go to the owner). Somehow, these have to be separated. If that’s done carelessly and the state takes too much, then the genuine costs in providing and maintaining the buildings will not be covered. To avoid that possibility, the valuation is almost certain to err on the side of caution and favour the owner. LVT might drastically reduce the flow of wealth to the landlords, but it won’t eliminate it.

    You say “Land monopoly is their power and wealth base and would be destroyed once they have to pay annually on what they own”. Let’s see:

    The offspring of the landed will inherit land and buildings which they can choose to make use of themselves or sell. If they want to keep them, they have an asset which can be used as collateral for a loan to establish a wealth-generating enterprise. If they sell them then they have funds to invest in a wealth-generating enterprise.

    The offspring of the landless will be in much the same position as they are today. If they want to start a wealth-generating enterprise they have to finance it without any collateral. They will have to accumulate some capital while renting accomodation – at a price which gives the building owner a ‘fair’ return for the use of his building. If they think the landlords aren’t asking a fair price they have the choice of living nowhere until the landlords, collectively, can no longer bear the financial burden of paying LVT and lower their asking prices.

    Do you really think this constitutes the destruction of the landowners’ monopoly?

    I’ve already acknowledged that LVT could be a significant improvement over the existing system. What I don’t understand is why you prefer it, as a method of land reform, to a system which explicitly gives people equal rights to land.