From the FT:
Sir, Asset price bubbles in financial markets undoubtedly show that money capital as a factor of production does not behave like consumer goods in a free market ("Capitalism and the credit crunch", Samuel Brittan, September 12). Nor does land, as the present housing crisis so manifestly proves.
Since land is not produced, its price is almost entirely demand determined; hence demand changes act almost entirely on price without affecting supply. The disastrous effect of this in the housing market is only too evident, for it is the land price element in "house" prices that fluctuates so much, not the cost of the building.
How much more evidence is needed that a tax on land values to reduce land prices permanently and, at the same time, to relieve taxes on things that really are produced, such as consumer goods and real capital, is the right way to make competitive capitalism work?
Brian Hodgkinson, Oxford, UK
Sounds as if he's been reassured
5 hours ago
3 comments:
Yes Mark, I was a skeptic but you have won me over. you are right about pensions as well,its time to out the middle men at Canary Wharf.
I am a LVT convert. I have been on the fence for ages, wanting to like it but struggling to square both the 'payment to live' and implementation difficulties. Recent thinking though has made be a firm supporter.
PB, V, when I first heard about the LVT idea two or three years ago I also thought it was counter-intuitive to the point of madness, but the more I thought about it the more I liked it. So welcome aboard.
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