From today's FT:
Sir, Bravo Samuel Brittan for the masterly study, A catechism for a system that endures, (May 1), highlighting Jane Austen’s certitude in property title with the caveat of concomitant obligations. Even Lady Thatcher recognised that in relation to the earth and its resources we are but trustees...
The obligation aspect of property rights was well observed by Austen, for its absence feeds injustice. All wealth is produced by work applied to land*, in its various forms, yet if some person or institution successfully, but incorrectly, stakes the claim that such land is a possession-absolute by the rule of first past the post, it gives an unfair accretion to their share of the subsequent output, in perpetuity.
This surely is the nub of the issue for the future of capitalism – how can we ensure the equitable redistribution of wealth?
Arnold J Harper, London SW19, UK.
* In a modern context, it is vital to distinguish from the additional value that e.g. a farmer adds to his own land through drainage, cultivation, walls etc which belongs to the farmer, of course, and the value of any other land which is pure 'location value' or 'bubble value', which is entirely down to the efforts of third parties in building railway stations, roads, shops, or keeping the streets safe and clean, which is why Adam Smith thought location values in towns and cities ("ground rents") were fair game for taxation but not farmland ("the ordinary rent of land").
He was not a rascal by predilection
32 minutes ago
6 comments:
There were grains of truth but then the letter ends with a turd:
"how can we ensure the equitable redistribution of wealth?"
By not doing any by force, is my answer.
But land ownership is largely done by force as well, isn't it?
And land ownership hardly leads to an 'equitable' distribution* of wealth, in the sense that those that benefit from the wealth are quite different from those that create it.
* The word 'distribution' seems less provocative than 'redistribution'.
And you also have to look at the word 'equitable'. Is it equitable to redistribute 'wealth' via taxes on turnover, income and profits?
I would argue that it isn't, unless those profits arise from a state-protected monopoly, which can easily be dealt with by auctioning off monopoly rights (such as 3G licences, landing slots at airports, pub licences etc).
> All wealth is produced by work applied to land
No, all wealth is produced by the reciprocal exchange of time. This can be magnified by certain uses of land.
Some of the problems are diminished if you talk about a Land Value Repayment because this makes it clear from the outset that land value increases (from infrastructure improvements; from increasing the money supply) do not rightfully belong to the landowner and should be returned to the community.
AC!, the letter is a tad old fashioned, but even your 'exchange of time' has to happen somewhere, and we know that the price paid for 'exchange of time' is higher in town centres than out in the countryside.
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