Monday, 28 February 2011

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.
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.


James Higham said...

Why shouldn't the government derive its income from doing what it does best, i.e. by creating and guaranteeing land titles?

You wouldn't be suggesting LVT by any chance?

Mark Wadsworth said...

JH, you've got it in one. It's got to make more sense than taxing incomes and so on.

Perry de Havilland said...

Yes, we are all de facto feudal tenants of the state. Lets have LVT and make it official, I mean what could possibly go wrong with that? :-)

Mark Wadsworth said...

PdH, that's a typical bit of Faux Libertarianism there - you claim that 'land owners' are somehow distinct from 'the state' (the two are synonymous, of course) and you'd like The State to guarantee land owners' privileges but you don't want then to have to pay for it. One citizen's privilege is another citizen's burden, don't forget.

In any event, half of us are de facto feudal tenants of our landlords or the mortgage company, and those who've paid off the mortgage are still currently shelling out more in income tax etc than they would be paying in LVT.

siorsyn said...

A very interesting angle on the subject. Another clear expression of the moral, as well as economic, case for LVT. Thanks.