On Faux Libertarians

Dan Sullivan has written an excellent summary of how the Royal Libertarians (which is his term for 'Faux Libertarians', it's the same thing) have twisted the arguments and misquoted the statements of the earlier real Libertarians beyond recognition; arguments which actually supported land value tax are used as arguments against it.

It turns out, for example, that Thomas Jefferson had already come to this blinding insight:

A right of property in movable things is admitted before the establishment of government. A separate property in lands not till after that establishment.... He who plants a field keeps possession of it till he has gathered the produce, after which one has as good a right as another to occupy it. Government must be established and laws provided, before lands can be separately appropriated and their owner protected in his possession. Till then the property is in the body of the nation.

Which is another way of saying what I have been saying for ages: land 'ownership' and 'the state' are synonymous, you cannot have one without the other. For land owners to pretend that they can own land entirely independently of the existence of 'the state' is arrant nonsense, at which stage I refer you to the lengthier quote from Albert J Nock in the linked article.

Dan also rebuts a particularly stupid argument against Land Value Tax, which is that it would lead to all land being nationalised and that 'the state' would own it all, and therefore 'the state' would also own everything which stands on it*. It is of course not the physical land which is important, it is the rental value of land which is something quite different (the things standing on land are different yet again).** He points out that land rents are neither private property nor state property, they are common property.

The difference is quite simple, if you write a tune, then you have a (state-protected) copyright on it for a number of decades and for the duration, it is private property. Once your copyright has lapsed, that tune becomes common property and anybody can sing it, record it, play it, sell it without paying you a penny. That does not mean that the tune belongs to the government or the state.

It just so happens that it would be an administrative nightmare for every landowner to pay a few pence rent to everybody else in the country and collect a few pence rent from every other landowner, it is far easier for one central body (call it Crown Estates, call it HM Land Registry, call it 'the government') to collect it centrally, spend a bit on core functions of the state and then dish out the rest again as a Citizen's Dividend.

By crude analogy, your labour belongs to you and you work five days a week for a private employer. There is a big difference between the government levying a forty per cent income tax (the equivalent of two days' wages or two-days' worth of your labour) and the government making you do two days' unpaid work for the government every week. I don't really approve of the former, but it's certainly nowhere near as bad as the latter.

And I, for one, don't really believe that the government owns anything at all, at best, it holds it on trust for the electorate or for taxpayers generally, and neither do I believe that the government should be doing much more than the core functions and said collecting and dishing out. To accuse me of wanting everything to belong to the state is more or less the opposite of what I actually want.

* A tenant pays rent for his home or business premises, but he still owns all the physical objects he brings with him, and he still owns all the value of his own labour or income (ignoring taxes), some of which he happens to spend on occupying that favourable site. The position is little different for somebody who owns land/buildings with a big mortgage, and would be no different for an outright owner if the land is subject to an annual tax charge (except he would own the fabric of the buildings as well as the stuff in it).

** Imagine that all your neighbours and the local council decide to build a very high and impenetrable wall on their side of the boundary to your land so that your plot is completely inaccessible. Your physical land is exactly the same and it still belongs to you, but its rental value is now practically zero.

Or on a more day-to-day level, imagine you have acquired one of a limited number of taxi-driver permits, so you have a car, a piece of paper and a source of income. But because competition is restricted, your earnings are a couple of thousand pounds a year more than they otherwise would be (which is 'economic rent') and that permit is worth maybe £10,000. If the local council decides to abolish the permit system and allow competition, then while you still own the same real capital (the car), your income falls (or you have to work longer hours) and that piece piece of paper (the entitlement to 'economic rent') is now worthless. That income which you can no longer earn is now being earned by a competing taxi driver or maybe it ends up with lower prices; so that 'economic rent' has now become 'common property' again.