Sunday, 25 November 2018

Killer Arguments Against LVT, Not (448)

Sobers on KLN 447:

[agreeing with the KLN]"The logical progression of land value tax is to enact government control over the whole economy"

And you don't think that has happened already? The history of the 20th century (and continuing today) is that when you give the State power over something at some point they will abuse that power. Sometimes immediately, sometimes after a period of time, but abuse always follows, often of an extreme nature.

Private ownership of land that the State cannot remove is a huge bulwark against tyranny - remove it at your peril.


That's circular and contradictory non-logic, so it's difficult to know where to start. So let's start with the last statement and write down what we know:

1. Land ownership and the existence of a State are synonymous, you can't have one without the other. So the statement is as fatuous as saying "Universal suffrage is a huge bulwark against state tyranny". It was the state (i.e. society as a whole) which decided that we'd have universal suffrage in the first place.

2. Envisage the following scenarios:

- The Normans invade England. "Hey Anglo-Saxons! We are here to liberate you from the tyranny of common ownership of land, we are going to parcel it up and anoint ourselves as land owners. As the defeated country, you can call us Sir and pay us rent! That's your best bulwark against state tyranny!"

- The Europeans invade North America: "Hey Native Americans! we are here to liberate you from the tyranny of sharing nature's bounty, we are going to parcel up the land and decide who owns what. As sub-humans, you can bugger off to ever dwindling reservations! That's your best bulwark against state tyranny!"

- Local councils start large scale council house building in the 1920s and 1930s, offering decent housing to working and middle class families for a fraction of what they are paying private landlords. Working and middle class families: "We want none of your truck! Us paying half our wages in rent is our landlords' best bulwark against state tyranny!"

Doesn't seem very plausible does it?

3. Public spending creates and sustains location values, and some locations benefit a lot and some not at all. So funding public services by levying a charge on those sites which benefit most from public spending is fair as between different landowners and is of course based on the explicit assumption that land is privately owned. LVT and land ownership go hand in hand. To say that LVT negates the existence of private landownership is nonsense.

4. LVT is largely an economic thing. so let's look at economic tyranny. Land owners benefit from public services; public services cost money; so taxes have to be levied to fund them. It is clearly state tyranny if one group (workers, businesses and consumers) are paying all the taxes to fund public services and the benefits all accrue to a different group (land owners). The fact that half the population are in both categories (i.e. working owner-occupiers) detracts nothing from this point - people moan about all the tax they pay but celebrate rising house prices. Far better to cut out the middleman.

5. Implicit in Sobers' claim is the notion that land-owners are protected from 'state tyranny', but what about tenants? Are your children who start their first job and rent somewhere somehow less deserving of protection against state tyranny than you are? Do landlords selflessly pass on the protection from state tyranny to their tenants? Nope, they charge them full whack for the privilege of accessing public services, with the state (courts, bailiffs) acting as enforcers on their behalf.

6. The private/personal right to exclusive occupation of specific land and buildings is of course fundamental to a modern capitalist society. There is a huge net benefit to it. But is that net benefit fairly distributed? Clearly not. Tenants are paying twice; once in tax and again in rent. That is exactly the same tyranny as perpetrated by the Normans, it's the same iron first but in a velvet glove.

7. There is a Laffer Curve of Freedom. When slavery and serfdom (hitherto enforced by the State) were abolished, that reduced the freedom of land/serf owners and slave owners, but increased the freedom of former serfs and slaves. Overall, it was an increase in freedom/reduction in state tyranny.

When the right to vote was extend to non-landowners in the UK in 1918 (about one-third of men and two-thirds of women didn't have the vote until then) that increased the freedom of all the newly enfranchised to take part in democratic decision making. By definition, it reduced the powers/freedom of landowners (mainly men) to decide government policy. Overall, it was an increase in freedom/reduction in state tyranny.

Similarly, while funding public services out of levies on land values instead of taxes on output and earnings reduces the freedom of landowners (the freedom to exploit workers and businesses twice over), it increases the economic freedom of a far larger group. Our median voters - working owner-occupiers - are net winners as their tax bills will fall and disposable incomes will increase. So overall, a win for economic freedom and reduction in state economic tyranny (forced transfers of wealth from a large group of 'hard working families' to a small group of what are effectively welfare claimants).

And so on.
---------------------------
The first statement shows a complete lack of grasp of history.

- Over the centuries, western European governments have gradually relinquished control. Until the 18th or 19th centuries, minor crimes, primarily those against landowners such as trespass or poaching, were routinely punishable by death. The death penalty is now more or less a thing of the past in developed countries (the USA is an outlier).

- In the 1914-18 war, politicians and generals thought little of sending tens of thousands of men to die in a single machine gun battle. They were a lot less callous in the 1939-45 war, politicians and generals cared a lot about the casualty rate. Conscription and National Service have been phased out in most countries.

- Compared to the horrors of the past, I can live with crap like the ban on smoking in pubs and them spying on our emails. It's not like I say anything in private emails that I don't say publicly on this here blog and the smoking ban is to a large extent tyranny of the non-smoking majority, not tyranny of the State.

16 comments:

Graeme said...

It's an odd viewpoint. Just read the Domesday Book and it quickly becomes apparent that land ownership has changed since 1066 and that most of the changes then recorded were as a result of the rulers having changed

Graeme said...

Prince Philip's father ruled Greece. Elizabeth's ancestors ruled Hanover

Things change. The people now own the land.why not pay a tribute to the real owners ?

Graeme said...

Prince Philip's father ruled Greece. Elizabeth's ancestors ruled Hanover

Things change. The people now own the land.why not pay a tribute to the real owners ?

Sobers said...

"Land ownership and the existence of a State are synonymous, you can't have one without the other. So the statement is as fatuous as saying "Universal suffrage is a huge bulwark against state tyranny". It was the state (i.e. society as a whole) which decided that we'd have universal suffrage in the first place."

I should more accurately have said that private land ownership enforceable by an independent judiciary is a huge bulwark against State tyranny. The first act of any tyranny is to remove the ability of the individual to own and control land, because owning land gives an individual power against the predations of the State, and any would be dictator needs to remove that power as a first step to dominating the population.

And giving the State the power to determine who occupies a piece of land (which is what LVT does, it makes the State the effective landowner and the nominal owner the tenant) means that if it wants to the State may remove any or all owners from their land by the simple expediency of increasing the 'rent' until it can not longer be paid.

The proponents of LVT should be open and honest about what they want - all private landowners to become tenants of the State, liable to eviction if they don't pay the rent.

Ben Jamin' said...

@Sobers

Lots of the compensation we are owed is collected into a central pot and then paid out to individuals. Like insurance or pensions.

Would you be happy if landowners paid their dues to a regulated,non-governmental body, from which we all get an equal share ie a land dividend?

So nothing to do with the state, except it legislates that those excluded from valuable natural resources must be compensated for their loss of opportunity.

In the same way the state legislates that slavery is illegal and wages get paid. Because of this its not true that the state owns labour as a means of production is it? Same with land and LVT. That the state collects, spends, redistributes it is a separate issue IMHO. Not a deal breaker for me. Perhaps it is for you?

Mark Wadsworth said...

G, what?

S, you're still talking rubbish. You can argue against anything on the basis that a dictator could abuse it. What's to stop a dictator from using income tax to persecute people? How long do you think an independent judiciary would last under a dictator?

Your ramblings and rantings have no relevance to the design of a fair and efficient way of funding public services.

L fairfax said...

@Mark
"What's to stop a dictator from using income tax to persecute people?"
Much easier to use income tax to persecute people as you can do it by making them do an audit of all their income, you can't really do that with a house as it is pretty obvious that you own.

(People allege that under Obama organizations he didn't like get audited more, no idea if that is true.

paulc156 said...

I think MW lays out a persuasive case for the introduction of LVT in the above whilst undermining the counter argument (KLN) with a coherent and intelligible argument. Just goes to show you can do it when you try. Well done!

Sobers said...

"Would you be happy if landowners paid their dues to a regulated,non-governmental body, from which we all get an equal share ie a land dividend?"

Of course not, because there is no such thing as a 'regulated non governmental body' that a) isn't under the control of the State in some way, or b) doesn't over time develop a political ideology and aims of its own. Imagine the power that the people appointed (by who?) to run this 'independent' body would have. There would be similar arguments as to what happens in the US over the appointment of their Supreme Court judges - its politics masquerading as an independent judiciary. Any body that had such power would need democratic control and that brings us back to State power controlling things.

Basically the more power the individual has vs the State the freer the country will be and the better place it will be to live. Its no coincidence that countries where private ownership of land free of the State's ability to throw you off said land is not permitted are inevitably shit holes.

Sobers said...

"What's to stop a dictator from using income tax to persecute people?"

Indeed, as mentioned above Obama did exactly that. Imagine what fun he could have with an LVT!

Ben Jamin' said...

@ Sobers

Everything is subject to laws, rules, regulations,else theft and slavery would be a normal part of every day life. Back to the stone age.

Insurance and pension companies work within that regulated framework. They wouldn't exist without it.

If you like, this body that collects our share of our land fee compensation could bid for the business of doing so, for say 0.5% of the amount collected. Just like estate agents do for landlords now.

As I said before, the state really just needs to legislate such compensation should be paid.

I don't see how you could have an issue with that based on your stated objections so far.

Or why don't you think of a better way that those excluded from valuable natural resources are compensated for their loss of opportunity? Because when such losses aren't compensated we get excessive inequalities and resource misallocation which is bad for everyone.



Mark Wadsworth said...

LF, good point and yes I believe that the us govt uses the IRS to persecute people.

PC, why thank you sir.

S, seriously grow up.

BJ, remember that Sobers makes a living by selling state protected, tax free land titles. That's why he is dead against LVT. He would have to go a different get a proper job.

Ben Jamin' said...

"Indeed, as mentioned above Obama did exactly that. Imagine what fun he could have with an LVT!"

LVT and rent are economically the same, only difference is who collects. This actually incentivises the state to think more like a firm, thus aligning its incentives with those of its citizens.

Taxing output turns the state into a thief. That doesn't make for a very harmonious relationship with its citizens.

So I'm not sure what kind of harm Sobers thinks will happen?

Mark Wadsworth said...

BJ, Sobers thinks that he won't be able to sell off his farm land in dribs and drabs for £millions. That's the harm he sees. So he damns LVT as Marxist, while celebrating welfare for land owners (govt guaranteed easy money).

Bayard said...

"The proponents of LVT should be open and honest about what they want - all private landowners to become tenants of the State, liable to eviction if they don't pay the rent."

S, you keep on going on about this, but it is a complete non sequiteur.
The state already has the power to evict you from your land if you owe them money that you cannot pay, because you haven't paid some of the taxes that are already in force. They can make you sell your land to pay the debt. Also your use of the phrase "liable to eviction" implies that you are thrown off your land the freehold of which then becomes the property of the state. AFAIK, no-one is advocating that the only recourse that the state would accept for non-payment of LVT is surrender of the landholding the debt has been incurred on. A debt to the state due to non-payment of LVT would be treated like any other debt, payable by any means available, just like debts to the state currently are, but I suppose that doesn't fit with your state as landlord scenario.
Oh, and as you probably well know, all land in the UK belongs to the state already. All you and I own is a licence to occupy and make use of it without charge. We are simply tenants who pay no rent.

Mark Wadsworth said...

B,thanks and exactly.

The other obvious points are

1. That land speculators (or sellers or landlords) need 'the State' to grant planning, provide infrastructure and pay for all public services without which nobody would want to live there.

2. Landlords are happy for the state to step in when it comes to evicting tenants.

3. Sellers/banks are happy for the state to step in when it comes to repossessing people in mortgage arrears.

So while LVT reduces the 'freedom' of land speculators, sellers and landlords, it puts everybody (land owners, tenants, mortgage borrowers, taxpaying workers and businesses) on a level playing field. If one group can only gain freedom by restricting the freedom of others, then it's a net reduction in overall freedom (hence the slave owner/slave example).