Killer Arguments Against LVT, Not (176)

Another favourite trotted out by the Home-Owner-Ists goes along the lines of this:

"I bought my home under a private contract, I've paid for it and it's in my name. It's my 'property' and nothing to do with you or anybody else."

1. Even if that were factually correct, it is irrelevant. Employment contracts are private, but we still have PAYE; buying stuff in the shops is private contracts and you still have to hand over 20p in VAT for every £1's worth of goods or services you buy etc. So that argument, if based on actual facts, is in fact an argument against income tax, VAT and so on (and these are very bad taxes indeed for this and a hundred other reasons). And your skills and labour, or the goods and services provided in the shops are private property as well. At no stage does 'everybody else' have a hand in creating any of this value and neither are they burdened by such exchanges.

2. The whole argument is based on a crass misrepresentation of the nature of land ownership anyway:

a. Land ownership is always an ongoing contract between the land owner on one hand and 'everybody else' on the other (with 'the state' as referee), and that 'everybody else' includes the government, the local council and all those people who contribute to the rental value of your land, whether that's by providing local amenities (jobs, shopping and leisure opportunities) or merely by respecting the land owner's right to exclusive occupation.

b. Land ownership in the modern sense can only originate by some sort of agreement between 'the state' and the land owner. That agreement may have been reached by simple force, i.e. when the Normans invaded and simply declared themselves owners of most of England ('the state' and land owners were more or less synonymous) or when colonialists conquered foreign countries and claimed the land for their respective empires and then sold or gave bits of it to themselves.

c. In a modern context, land itself is worth little, the real value is dictated by the location and the generosity of planning permission, so if a farmer has an acre of farm land worth £10,000 and the council gives him planning permission, the land is now worth £1 million, so he has effectively been given £990,000 (he has to up to half of that back in taxes and fees and bribes, of course). But in economic terms, giving a farmer planning permission for one acre is much the same as giving him another ninety-nine acres for half price, or giving him forty-nine acres for free. And 'the state' can't give somebody land without first taking it away from anybody else. Of course, the council also preserves the value of land which already has planning permission by being very restrictive about handing out any more planning permission, so this underpins the scarcity value of any existing plot with planning permission or a building already on it.

d. So we have to distinguish between the parties to the contract for the sale of land (Mr A sells to Mr B) and the actual subject matter of the contract (the rights of the land owner as against 'everybody else'). Land ownership is NOT and never has been created by private contract. Mr A does not 'sell his land' to Mr B, what actually happens is that Mr B replaces Mr A as a party to the agreement with 'everybody else', so up until the date of sale, the agreement is between Mr A and 'everybody else' and after the date of sale, the agreement is between Mr B and 'everybody else'. Some of the land seized by the Normans (or the Colonialists) has never been sold, it was passed down to their current living descendants, who have much the same rights as any land owner who paid for his rights since. The subject matter is exactly the same.

e. With the benefit of hindsight, we establish that whichever branch of 'the state' was entering into such agreements (i.e. creating private land ownership rights in the first place) struck an incredibly bad bargain on behalf of the people whom they are supposed to represent and who were being burdened in perpetuity (i.e. 'everybody else') which is why land owners can sell the bundle of their very favourable rights (less modest obligations) under the agreement with 'the state' to others.

3. To use a simple analogy...

a) If Mr C accepts an offer of employment from Mr D, then the parties to the contract are also providing the actual subject matter of the contract. Mr D provides the work place, the customers, the training and Mr C provides his own skills, labour, time. Mr D hopes that this will increase his total income, and he pays part of this to Mr C as wages and keeps the rest as his own profit. Subject to certain employment laws, either party is free to terminate the contract at any time, and no burden is placed on 'everybody else' or on future generations (or Mr D or Mr C's children). And I see no good reason why 'the state' should collect half of the income which Mr C and Mr D generate in tax, or why they should collect any at all (except maybe an 0.005% deduction to cover the cost of running Industrial Tribunals if the parties opt in to this rather than any other form of arbitration).

b) Conversely, perhaps the King of African country E sold some of his subjects into slavery to slave trader Mr F for their market value, and Mr F transports them across the Atlantic and sells them to slave owner Mr G in the New World for their market value. The parties to these contracts are the King, Mr F and Mr G, but the subject matter of the contract is the slaves and their children. These slaves and their children in perpetuity did not negotiate the contract, enter into it voluntarily or receive market value for their labour, and they are - morally at least - entitled at any time in the future to rescind it and declare themselves free men, i.e. demand market wages for their labour (or seek work elsewhere, like Mr C).

c) When land ownership rights were granted by 'the state' in the past, these were granted by somebody purporting to act on behalf of 'everybody else' within their jurisdiction (i.e. whatever part of the world's surface area they can control by force) in perpetuity. And from the point of view of 'everybody else' (i.e. the slaves and their children) they struck a bad bargain, ergo, 'everybody else' is - morally at least - entitled to vary the terms of that agreement and demand something approaching full payment for the value of the benefits (minus modest obligations) which 'everybody else' is generating and which land owners are currently receiving for free (which is mathematically broadly equal to the burden which land owners are placing on 'everybody else').

Crash course in Land Law

By Woman on a Raft in the comments at Orphans.

The author of the actual post, exaggerating wildly, said: "the popular view is that although the landowner has paid for the land, it’s not really theirs and everyone should have access to it whenever they feel like it without having to ask anyone for permission."

WoaR responded with this:

It’s English property law. They don’t own it. Only the Queen does, and she has sold a number of rights over it to them. She (that is, the Crown) defines what right(s) it wants to sell and in this case it was a parcel of land in the green belt which can be cultivated or not, but what it can’t be is turned in to a housing estate without permission.

There is no double-think if the conditions exist at purchase. So, the legislation which imposed a right-to-roam on people who had not bought land with that condition is something one can meaningfully argue about.

If, however, you buy something with a national monument, protected tree or various wayleaves, covenants or restrictions or listed buildings on it, then that is part of the deal. For instance, up until the mid-90s if you bought a house in a mining area there was a provision that reserved mineral rights to the National Coal Board, so you couldn’t go sinking a mine in your back garden.

There’s not double-think here – only a mistake as to what ownership over land legally means. It isn’t the same as ownership of other items, which is why there is a separate branch called Land Law.

So:

Do you own the land you’ve paid for or not?
No. The Crown owns it.

If you don’t own it, what have you paid for?
You have paid for a number of rights over it which may or may not be honoured in perpetutity, depending on what it said on the deal and how long the Crown lasts for. The main right is usually the right to exclude others, but as we’ve seen, that can be modified.

As regards Dale Farm, the crucial part is that the disputed parcel of land is defined as green belt, meaning the land was bought at the price of agricultural land, not land with outline planning permission for 50 dwelling plots on it. The green belt status was known about and there was no question of them getting further planning permission following DF1.

Fun Online Polls: Land ownership and the Irish bail out

On a low-ish turnout (so special thanks to those who took part), the results to last week's Fun Online Poll were as follows:

Land ownership is based on...
Legal concepts - 49%
Private contracts - 25%
Social contracts - 18%
Other, please specify - 8%

Whoever thought that land 'ownership' is based on private contracts scores an F-. For sure, when Mr A sells to Mr B, Mr B assumes Mr A's rights to exclusive possession under a private contract, but those rights themselves are granted and/or guaranteed by 'The State' - the subject matter of the contract, the thing being sold is created by 'The State'.*

'The State' is of course all of us, not just the police who go after burglars or squatters; HM Land Registry which is the final arbiter on who owns what; or the court system which props up house prices by making it difficult to evict borrowers in arrears balances the interests of mortgage lenders and borrowers. Those 'institutions' are there for our convenience and we are not here for theirs.

So the next possible - and most popular - answer is 'legal concepts', but those concepts in turn are based on 'social contracts' (which are in turn sometimes imposed by military force, e.g. Normans in England; whitey in America or Australia etc). If there were no popular support** for the idea that everybody respects everybody else' right to exclusive possession (and that includes a tenant's rights vis-a-vis his landlord) which is more or less fundamental to the efficient working of the economy, even the Communist countries accept this, then we wouldn't have these legal concepts.**

No doubt you can guess what this is all leading up to: the fundamental point that if a car manufacturer makes money by manufacturing and selling cars, why shouldn't the government derive its income from doing what it does best, i.e. by creating and guaranteeing land titles?

* As a useful contrast, consider the sale of a second-hand car, this is a private, legally enforceable contract, but the subject matter is a car which a car manufacturer - a third party to the contract - has created. You can't trade in cars until somebody has built them first. Unlike with land, the manufacturer has no legal relationship with the subsequent purchaser; but when you buy land you assume privileges which The State will continue to provide for the foreseeable future, so The State is always a party to the contract.

** Again, we can contrast this with the trade in illegal drugs or prostitution, which is based entirely on private, legally unenforceable contracts and they are only illegal because 'society' in its infinite stupidity wisdom has decided they 'should' be.
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Just about every party running in this week's Irish general election mumbled something about renegotiating the terms of the EU-IMF bail out, for background see e.g. The Telegraph, so that's this week's Fun Online Poll - what sort of success do you think they'll have?

Vote here or use the widget in the sidebar. You can choose more than one possibility as they are not all mutually exclusive.

Fun Online Polls: St Valentine's Day spending & Land ownership

Thanks to everybody who took part in last week's Fun Online Poll, results as follows:

How much did you spend on St Valentine's Day-related stuff this year?

Nothing - 67%
Up to £10 - 16%
£10 to £50 - 12%
More than £50 - 3%
OMG I forgot! So that's why my other half is sulking! - 1%
Other, please specify - 1%

I'm glad to see that only two of us forgot outright, and I am surprised that two-thirds of people get away with spending nothing (I'm in the "£10 to £50" bracket). Or maybe a lot of female readers took part, they can of course reliably getting away with spending nothing, and I doubt that most blokes would notice or even mind.
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M'learned colleague at work suggested I do a poll on which Middle Eastern despot will be deposed next, but that's going to end up too complicated, and AFAICS, all they do is hand over to another slightly-less-bad despot.

So this week's Fun Online Poll is just to see how many people have put any thought into the subject of what 'land ownership' really is and/or have been paying attention to my ramblings.

Vote here or use the widget in the sidebar.

"But I believe in this and it's been tested by research...

... that he who fucks nuns will later join the church."

Lyric from Death or glory by The Clash, if you're wondering.

Channel 4 Dispatches: Riding Europe's Gravy Train

Last night's programme was a fair insight into the waste and self-serving corruption that goes on in the EU, none of this was particularly new to me, but it's good to see it broadcast every now and then.

Of mild interest was the section on farming subsidies. From their own summary:

The programme also looks at the system of agricultural payments, which are supposed to help those British farmers struggling to earn a livelihood and continue producing food. Dispatches shows how millions of pounds in grants have ended up going to some of the best known - and richest - landowners in the country.

Well yes, we knew that as well, and we also knew that subsidies paid to tenant farmers end up pushing up the rents they pay; if the tenant farmer spends the money on improvements which then legally belong to the landowner, being part of the land, then clearly the rental value of the farm increases, of which the programme gave a few real life examples.

(Even if tenant takes the money as a straight subsidy, this either pushes up the rents and/or enables supermarkets, who are effectively large urban landowners with a retail division, to bid down the price they pay for agricultural produce, to the extent that a lot of farmers sell milk at a loss, comes to the same thing.)

Apparently some landlords (they singled out The National Trust, although I am sure they all do it), who actually write into the tenancy agreement that the rent is £x per acre, plus 50% of any farm subsidy payments.

But what was surprising is that anybody saw this as surprising, if you see what I mean. If all taxes come out of rent, then all subsidies accrue to rent as well.

I am absolutely amazed to see this in The Daily Mail...

"More than a third of Britain’s land is still in the hands of a tiny group of aristocrats, according to the most extensive ownership survey in nearly 140 years... A group of 36,000 individuals – only 0.6 per cent of the population – own 50 per cent of rural land...

Their assets account for 20million out of Britain’s 60million acres of land, and the researchers estimate that the vast majority is actually owned by a wealthy core of just 1,200 aristocrats and their relatives. The top ten individual biggest owners control a staggering total of more than a million acres between them.

These figures have been uncovered by the ‘Who Owns Britain?’ report by Country Life Magazine*, thought to be the most extensive survey of its type undertaken since 1872."

Daily Mail article here.

* I can't track down the actual report itself, but it would appear to say much the same as Kevin Cahill's excellent book from 2001, called... er... Who owns Britain?

UPDATE: as some of the commenters point out, it is misleading to look at land ownership in acreage terms, because 1 acre farmland is worth £5,000 but one acre of suburban land is worth £500,000 to £1 million; and one acre of bare land in town centres can be worth up to £70 million.

Be that as it may, the Daily Mail article includes a handy table showing values rather than acreage, and these tables (which the chap from ALTER emailed to me) suggest that land 'ownership' in value terms is just as unevenly distributed as it is in acreage terms; in any event, far less evenly distributed than incomes.

Things you didn't know you didn't know

I did three units of property law* on my law degree (LLB Hons with First Class), and either they didn't tell us this or I wasn't paying attention. I stumbled across a lengthy and fairly technical article, the upshot of which appears to be:

In England, Scotland, Wales and Northern Ireland, the land is held from the sovereign in right of her Crown. As we have seen from the operation of bona vacantia, this particular aspect of land law does not apply to Cornwall. This is because the whole of Cornwall is legally the soil and territorial possession of the Duke of Cornwall in right of the Duchy of Cornwall and people hold their land not from the Queen as sovereign, but from the Duke as sovereign. Therefore, and in accordance with the terms of the 1st Duchy Charter, people in Cornwall hold their land not from the UK Government, but from a legally extant but now denied and hidden Duchy Government.

Known today as the Prince’s Council, it is an institution of governance that, whilst reaping the financial benefits and other rewards of this constitutional settlement, abdicates its reciprocal duties and responsibilities towards the territory and people from which it derives its powers, rights and status...**

I have explained in my books, on the ‘Status of Duchy’ entry on this weblog and also on the Duchy of Cornwall.eu website, that although laws passed by the Westminster Parliament today always extend to England and Wales, they do not extend to the Duchy of Cornwall unless the text expressly states that they do, and then only with the prior express approval of the Duke in his capacity as the de jure sovereign of Cornwall. As with other sovereigns, when considering new laws the Duke acts on advice from his officers of state sitting as the Princes Council.

The author may be exaggerating, but it stacks up as far as I can see.

* They refer to land law rather disingenuously as 'property law' - the other forms of property, such as employment [income], goods, copyrights are all dealt with separately as 'employment law', 'sale of goods', 'copyright law' etc.

** In other words, Cornwall has Land Value Tax (often referred to as 'ground rents'), it's just that it's collected privately by Prince Charles and his mates. IMHO, it would be far better to collect it publicly and use the proceeds to cut other taxes, repay the national debt or dish out as a Citizen's Income.

Three types of private property

From page 11 of my draft manifesto:

1. Your own particular skills and abilities, willingness to work hard, pure blind luck. These change over your lifetime and go or die with you.

2. Things you own because you have traded the product of your skills and abilities with those of others.

3. ‘Private’ land is clearly private in the sense of ‘not being open to the public’, but it only remains private because society largely respects the right to exclusive possession. So ‘private’ land is a social contract between the land ‘owner’ and society in general or ‘the state’ in particular. When you buy or rent land, you are paying for the benefits that arise under a contract with ‘the state’ and not for the output of the vendor’s skills and abilities (that would only apply to the buildings).

And from the longer version:

The owner of any site can do very, very little to increase or decrease the rental value of the site, apart from obtaining planning permission or entering into a restrictive covenant (both of which are ‘social contracts’).

Kashmir

Cross posted at Nourishing Obscurity.

A common response to the proposal to scrap taxes on incomes or production and to tax land values instead are the cries of "It's my land! An Englishman's home is his castle! What right does The State have to come along and make me pay tax or rent on my own land?"

I would like to counter this well rehearsed bit of propaganda with the following example/analogy:

1. When India was originally partitioned, areas of land had to be allocated to one country or the other, and there was mass migration of Muslims to areas allocated to Pakistan (incl. what is now Bangladesh) and of Hindus to India (and lots of random killing along the way). So the proxy war that has been fought ever since over control of Kashmir illustrates the general principle that wars are fought over land rather than over anything else - I have no reason to assume that either side has the intention of enslaving the population of any territory it might gain. Both countries seem to grudgingly accept that the Line Of Control is more or less permanent, but there's always a nagging doubt that the Line of Control might be moved by force.
2. That just about exhausts my general knowledge of the situation, as highlighted by the fact that I used a picture of the Wagah Crossing, which is a hundred miles south of Kashmir.

3. But it does illustrate the general principle that control of land is the most basic function of government and comes before all else; wars are primarily fought over control of land or territory; a government wants to control all the land within its border (see also Pakistan/North Western Frontier); and if a government of a country controls land, then that land is part of 'the country (see e.g. British Overseas Dominions, all those little islands that geographically or culturally have little to do with the United Kingdom).

4. It is fairly irrelevant where individual Muslims or Hindus in Kashmir would like the Line of Control to be; where it ends up is decided by the two governments, acting, we would hope, in the interests of their whole populations, including those parts of the population who are not currently affected by the dispute, but who do not want to see their sons sent off to kill or be killed. Defending your border, or starting an offensive war has costs of course, but does this not give us a clue as to how the money ought to be raised? Oughtn't these costs be borne by those who have most to lose or to gain, i.e. land 'owners' in your half of Kashmir whom you are defending, or those people to whom you allocate land in any part of Kashmir that you take from the other country by force?

5. What relevance does this have to land ownership in the UK, or any other country which is safe against invasion by other countries (let's gloss over mass immigration for these purposes), you might ask?

6. The relevance is that even in country which has put all these territorial or tribal battles behind it (such as the UK), land 'ownership' can only happen under the protective umbrella of The State. It is not the case that land 'ownership' is something entirely independent of the existence of The State; which preceded the existence of The State; and on which The State tries to impose itself. The relationship - whether on a historical, political or economic level - is completely the other way round, as I will try to explain.

7. Please note that for these purposes, 'The State' is All Of Us. Arms of the government such as the police, the courts, planning departments deal with exceptions rather than the rule, which is that land 'ownership' can only work if all or nearly all of us respect others' rights.

8. I think we can agree that without the state-protected right to exclusive possession of land, our society and economy would collapse (even in Socialist economies where nominally everything belongs to The State, most people or businesses have exclusive possession of their home or their premises), so there are huge benefits to this, which accrue to tenants as well as owner-occupiers, but land 'ownership' itself only rides on the back of this; and the economic benefits of land 'ownership' are merely derived from and are secondary to the idea of 'exclusive possession'.

9. The benefits of land 'ownership' only accrue to owner-occupiers or landlords, as tenants have to hand over the value of the benefits they derive from the right to state-protected exclusive possession in cold, hard cash every month. What makes it worse for the tenants is a large part of what they are paying for is things which they have already paid for through their income tax (house prices are much higher if in the catchment area of a 'good' State school).

10. And while the economy and free markets in general (and the right to exclusive possession of land) are a positive-sum game, the total amount of land is physically limited so at best, it is a zero-sum game in practical terms. Any change in the selling prices of land does not add to or detract from overall wealth.

11. If you look more closely, you'll know that land 'ownership' is a negative sum game from the point of view of the productive economy (the source of all wealth, along with natural resources). As the productive economy grows, an ever larger share accrues to the rental value of land (which is usually capitalised into the selling price), as illustrated by my earlier post.

12. Home-Owner-Ists may dispute that there is a steady transfer of wealth from the productive economy to land 'owners', but is it not widely accepted that Consumer Price Inflation (which is based on the value of freely traded goods and services) rises more slowly than Retail Price Inflation (which includes rent and mortgage payments)? Is that not evidence enough?

Just sayin', is all.

Fun Online Polls: The Next General Election & Land Ownership

Having caught snippets of the details of the 'negotiations' between the Lib Dems and the Tories on the telly over the weekend, it strikes me that all the big three parties must have known for weeks that a hung Parliament was a very real prospect, so I would have expected each party to have sent off a small delegation to haggle with the others over what the terms of a possible coalition would be, just in case. From where I am sitting, their overall policies are so similar, that it can't be too difficult to go through their manifestos line-by-line and find a compromise on each one.

So either:

a) They are reasonably competent, have thrashed this out in advance and are now just playing to the gallery (which makes them unfit to run a country, this is not a game), or

b) They are in fact totally incompetent and vain, and lived in a fantasy world where 'their' Party was going to win an outright majority (again making them unfit to run a country).

Whichever answer is closest to the truth, what the public (i.e. me) really wants to know is, how long will they stumble along, playing to the gallery and/or living in a fantasy world, until they throw in the towel and call another General Election.

Place your bet here or use the widget in the sidebar.
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As to last week's Fun Online Poll, "Is landownership possible in the absence of a 'state'?" I was heartily relieved to see that 62% chose "No, of course not. The two are synonymous.", but perturbed in equal measure by the 38% who chose "Yes, and I have left a comment explaining how it would work."

Out of the 36 who said they'd leave a comment explaining how it would work, only five bothered to actually try and explain how it would work. These answers fell into two categories:

a) The usual faux-libertarian "land ownership can be protected by force", which is self-defeating - whoever has the biggest army, or can call on the compliance of the most people IS the state, so that is just replacing one state with another, and

b) The other faux-libertarian favourite "land can be bought and sold by private contract", which completely misses the point. Of course it is quite possible for land to be bought and sold by private contract, but that does not address the subject matter of the contract.

I tried to illustrate the point here, by referring to broadcasting licences, it may be just as useful to look at the opposite extreme and consider things which are totally illegal in most countries, like drugs.

If I had asked "Is the ownership of drugs possible in the absence of a 'state'?" then the answer must quite clearly be yes. We know that people grow and manufacture drugs, smuggle them into the country, wholesale and retail them, and the user buys them from his local dealer and consumes them. The state goes to all manner of lengths to try and prevent this at every step of the way.

Ownership of drugs, in a legal sense, is more or less impossible - if they catch you at customs with half a kilo of coke, then they will take it off you, whether you can show proof or purchase or not. But when you go to your dealer for an ounce of dope, he expects hard cash there and then - there is little point you pointing out to him that in legal/criminal terms, he does not own what he is selling - in a very real and practical sense he does.

When you are buying drugs, you are paying for the drugs themselves - the physical stuff, which in turn the dealer and everybody else in the supply chain has created from scratch, and so on.

Compare and contrast this with 'land ownership'. What are you paying for when you buy land (apart from the buildings perched on it)? You are paying for exclusive occupation of a certain plot of land (or part thereof, in the case of a block of flats), which, within your budget constraint, you have chosen because it is near to your place of work or a train station, has a nice view, is near the shops, in a low crime area, in the catchment area of a good state school etc etc.

Some of these things happen of their own accord, some of these things are paid for out of taxation (separate topic). You are not paying for the physical land - you are paying for a bundle of things which the vendor has not had any hand in creating.

Further, unlike illegal drugs, land ownership is only possible with the state's blessing - it has to be recorded at HM Land Registry (or in olden times, backed up by title deeds which would be recognised in court) - and is only worth something because the state is prepared to guarantee exclusive possession, by evicting squatters if need be. Again, you can contrast this with drugs - they still have value, even though the state will not protect your title or guarantee exclusive possession - if somebody nicks them off you, you can hardly go to the police, and if they are of inferior quality, you cannot go to the local Trading Standards Officer.

Sure, in theory, the state/the police protect ownership of all physical goods, but even with higher value items like cars, the chances are, if your car is stolen, the police will give you a crime number and go back to watching television in the canteen. The reason why so few cars are stolen is because of locks and immobilisers and so on, and if your car is stolen or vandalised, most people will just claim it back on the insurance rather then expecting the car to be returned to them. But car ownership still 'works', even though it is far more privatised than the system of landownership.

If the state had the same lackadaisical attitude to land as it did to cars, i.e. if you get squatters, just claim on the insurance, then things would look a lot different - insurance premiums would be colossal, and land values would be correspondingly low.

Just sayin', is all.

Fun Online Polls: Paedophilia and The State

It appears that the Roman Catholic church's double strategy of openly attacking homosexuals while covering up for dozens or hundreds of paedophile priests has backfired on them most horribly.

88% of respondents to last week's Fun Online Poll though that a Roman Catholic priest was more likely to sexually molest a child than a gay adoptive couple.

Thanks to everybody who took the time to vote.
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This week's Fun Online Poll asks a more fundamental question: "Is land ownership possible in the absence of a 'state'"?.

The faux-libertarians like to rail against 'the State', and I'd agree that half of what most governments do is either a waste of money or economically or socially damaging. Some of them appear to think that 'the State' oppresses landowners or homeowners and that 'the State' can somehow be overthrown and landowners and homeowners can live freely.

This can't possibly be true - if the State shut itself down, sacked all the police, deleted all the records at HM Land Registry and shut down the court system, you'd find very quickly that land and houses would become nigh worthless. 'So what.', the faux-libertarians continue 'I'll buy myself a shotgun.' although they forget to add '...and remain physically present 24/7, thus reducing my earnings potential to subsistence farming'. So those who are most willing to use force and violence would end up in occupation of various plots of land.

We know that anarchy never prevails for long - neighbours would get together to form their own vigilante groups or share duties, so ultimately a new 'State' would emerge, and the first thing that neighbouring 'landowners' would do is to rewrite the Land Registry and agree, for the collective benefit of themselves and to the collective detriment of everybody else, that protecting their 'title' to their own plots would be paramount, which would enable them to abandon subsistence farming and pursue more profitable activities.

So it strikes me that 'landownership' and the existence of 'a State' are more or less inseparable, one is more or less impossible without the other.

Vote here or use the widget in the sidebar.

Vaclav Klaus vs. The Sudeten Germans etc.

There's an interesting but depressing article here, which is all the more interesting for what it doesn't say as for what it does. This part, however, sets me off on a tangent:

Klaus signed the EU reform Lisbon treaty on Tuesday after the Constitutional Court (US) ruled that it is in line with the Czech constitutional order, and after the EU met his demand for an opt-out for Czechs from the Charter of Fundamental Rights, part of the Lisbon treaty. Klaus demanded it in fears that the charter might enable the transferred Germans to claim their former property on Czech soil, confiscated from them on the basis of the post-war Benes decrees...

As I said in my previous post:

... the only pre-requisite for land ownership is a state to guarantee title*; and once you have a state you have land ownership (even if the land belongs to 'the state' or is earmarked as common land). Land-ownership and the state are two sides of the same coin.

So this is an excellent example of land-ownership and the (sovereign) state being two sides of the same coin. The Czechs are giving up part of/a lot of** their "sovereignty" and with it are giving up the right to guarantee the title to land that their state had granted to others under the Benes decree.

Those pesky Sudeten Germans might now find that a higher 'state' (i.e. the EU) is now guaranteeing their title to that land, which trumps the Czech government's guarantee. OK, in practice, I'd expect them to be compensated in cash rather than actual Czechs being physically evicted, but the principle stands.

* Unlike any other form of 'property' which can only arise from an individual's efforts and free exchanges with other individuals.

** Delete according to taste.

Harry Haddock v Winston Churchill

At last weekend's drink up organised by DK, I was lambasted for my support for Land Value Tax, which I see not only as a welcome simplification* but also as the 'least bad tax' (per Milton Friedman).

DK himself advanced the Poor Widow Bogey, whether he was playing Devil's Advocate or whether he is at heart a member of Tory land-owning aristocracy I do not know, and I still haven't summoned the energy to list his arguments or go through the counter-arguments.

Harry Haddock advanced the 'market gardener' anti-LVT argument, which runs briefly as follows:
1. I am a market gardener on the edge of town with a lot of Valuable Fruit Trees on my one acre.
2. The town expands, and all the surrounding bits of land are sold off for development.
3. My hitherto agricultural land becomes potential building land, and so its market value jumps from a few thousand pounds to a million pounds (assuming that getting planning permission is a shoo-in).
4. A fiscally neutral LVT rate would mean that I have to pay about £20,000 in LVT**.
5. As a market gardener, I can't make that much money so but I would be forced to sell my land and I would lose my Valuable Fruit Trees.

This is not actually a big issue (but difficult to explain in a pub setting) so I'll do it here:

1. Economics says, people put their assets to most efficient use. The market gardener has a choice: sell off your one acre, bank £1 million cash and - if you so wish - buy yourself 200 acres of farmland. Sure, you might not be able to take your Valuable Fruit Trees with you, but hey. Maybe just buy 50 acres of farmland and spend £750,000 on replanting the Valuable Fruit Trees, or something?

2. English land law says, you are allowed to enter into a Restrictive Covenant to devalue your own land. See Tulk v Moxhay (The Leicester Square case). So if the market gardener is so wedded to his trees, he can enter into a Restrictive Covenant with surrounding home owners and/or the local council and their heirs, successors and assigns to use the land for market gardening in perpetuity and never to build on it. The market value of the land thus reverts back to normal agricultural value of £5,000 or so, for which LVT of £100 or so is payable every year.

3. Of course, once Market Gardener pegs it, unless his kids want to follow in his footsteps, they will be pretty miffed to find out that what they thought was a site ripe for development is in fact worthless, but hey, that's life.

If you prefer words to logic, Winston Churchill no less covered this topic in a speech much cited by Land Value Taxers (most recently Jock Coats).

* Here's the list again: LVT could and should replace Council Tax, Business Rates, SDLT, Inheritance Tax, Capital Gains Tax, the TV Licence fee, Insurance Premium Tax and VAT on domestic fuel, s106 agreements and roof taxes; net of agricultural subsidies, Housing and Council Tax Benefit, VAT zero-rating for new residential construction. Total net revenues in the order of £60 billion = 4% of GDP = 10% of all current tax revenues.

** HH didn't actually say £20,000 (I don't know if he was imagining a higher or lower figure), but this is roughly the amount that would be due were a single LVT to replace all the taxes less subsidies in the above list on a fiscally neutral basis. And yes, of course there is massive waste in gummint spending and hence scope for cutting taxes, but let's cut the worst ones first (VAT and Employer's national insurance - total revenues £120 billion - twice as much as property/wealth taxes), eh?