How do we Value Rural Britian

This week there has been many reports on second homes. Our recent Budget speech was basically a charter to give public money to underwrite loans to buy homes. Most of these will be sold to speculaters,  landlords and people wanting a second home and not for the purpose the deceitful chancellor George Osborne stated; in helping people buy a house for their own occupation.

Leading on from this press activity former poet laureate, Sir Andrew Motion, now head of the campaign to Protect Rural England, has made the headlines in all the UK media, calling for tax increases on second homes in the countryside to preserve communities. He is of course correct but if we dig deeper into what do we as a society want to see in the countryside we must look at the issues and values that will save rural communities.

A number of papers have posed the question of how do we value rural Britain and protect its social and natural character.

Here is my response:

The Value of Nature is complex – (once you look into what is meant by value and the psychological and economic ramifications of value theory and its relationship to natural wealth)

The psychological value of nature, is best expressed in economic terms, in the uplift in land values of rural properties. This is a truly staggering amount of money. The privatisation of this ‘uplift’ is a form of cheating, robbing from everyone for the monopolistic benefit of the few. This uplift in value should belong to the community as a whole and those that take away this ‘value’ should compensate the rest of society in the form of a ‘rent’ for that loss.

This sounds complex but in essence the remedy that will solve this, is my stuck record one, that of taxing the value of land and other natural assets.

The issues that I think we want to address in the countryside for people and wildlife are:

1. Efficient use of land and natural capital like rivers etc.
2. Biodiversity protection
3. Free open access to natural wealth and enjoyment of the countryside
4. The right to own property in the countryside and have enjoyment of it
5. The right to make a living in the countryside

In all the issues, Land Value Tax is the mechanism that will achieve these objectives, with fairness, as it balances stewardship of scarce resources (such as having a lovely second home in the country), resource efficiency and is a constant force rebalancing inequality in Land access with freedom to have exclusive possession.

In general second homes demonstrate the division in our society and economy where those with  exclusive land ownership have a free ride when it comes to possession of scarce resources, while those that work and toil for their income are denied access due to high land prices and high taxes on that human effort.  Shifting taxation off of earned incomes and onto exclusive land possession will solve this problem fairly and efficiently. The uplift in value of rural properties is often far more than the taxation of the work that was needed to buy the property and pay the mortgage, this is Ricardo’s Law and this is the fundamental issue at the heart of economic unfairness that those that possess monopoly, of all kinds, have a huge amount of unearned income from the uplift in those values at the expense of those that do not possess and it is that very labour of people, intellectually & physically  that creates that increased value of the land.

A short lecture I gave on the Value of Nature:

The Real ‘underlying problem’

I listened to our Government's Chief Scientist,  John Bebbington, on Radio 4 this morning, he is retiring and has made a statement on three ‘underlying problem’ facing Humanity: Climate Change, population Growth, and Sustainable cities.

What annoys me about such media debate is they seem to avoid all discussion on actual remedies to the three ‘underlying problems’ he raised. Instead of examining the solutions, the debate concentrated on anguish, wringing their hands with worry; saying it is really difficult and if only we tried a little harder, and it’s going to cost a fortune to protect the planet, and nobody wants to bear the cost of doing so etc...

The real ‘underlying problem’ is our legal, political and economic system that enshrines the right of Government bodies & private individuals to own the ability to destroy and monopolise natural assets without compensation to the rest of society & ‘the planet’; yet it is the one issue that never seems to be challenged by mainstream media and they seem incapable of discussing it. This is further shown where normally ‘good’ people find it hard to discuss population control because it has so many negative connotations with totalitarianism and despotic control. If we just looked at factors that really do, ‘statistically’ control population and are socially acceptable we can pursue them, such factors are about personal & financial security, quality education and equality in ownership of opportunities and the resources needed to sustain life.

So the real huge elephant that is in the room is not the problems of population, climate change and the sustainability of cities that Professor Bebbington highlighted, but that there is a simple coherent remedy to all these problems. This remedy will cost society ‘nothing’, it will impoverish no one, it will help feed the poorest in society, tackling poverty, crime and ill health. This remedy will free our creativity and enterprise to focus, naturally, on the three great challenges facing humanity that Bebbington quite correctly identified.

The Remedy? Just transfer all existing taxation to Land Values and natural resource exploitation, and include in our taxation structure environmental and social externalities. In addition, if we want to get to grips with fundamental issues we need a system of ‘Money Supply’ that reflects the wealth of human labour and the natural assets available to us, issued as credit and not debt.

How to control population: 

Education, equality, and security for the future will bring down birth rates and we will end up reducing population. These have been well observed, first by the economist Henry George in 1870’s, while debunking the pseudo-science of Thomas Malthus, and in just about all societies these are the deterministic factors in birth rates. If you believe in Malthus the human populations will always rise to carrying capacity and thus enshrine natural resource depletion and poverty. In the real world, the Malthus theory breaks down as there are numerous examples where well-ordered and fair societies have low birth rates and dysfunctional societies have high birth rates. http://www.henrygeorge.org/pchp6.htm

How to make cities sustainable: 

capture the value of the monopoly of land as government revenue and stop the formation of land monopolies that makes cities perform so inefficiently and ensure social division and poverty. http://savingcommunities.org

Climate change: 

To tackle climate charge people who use natural resources and thus must pay the externalities that are involved in a form of tax (offsetting other taxes) and thus we will respect nature and make its use efficient and more sustainable without the need to create poverty. New technologies that do not abuse nature will flourish by directing ‘Human Action’ to concentrate on activities that do not harm the planet and that those activities will remain untaxed by society through income & trade taxes and by monopolists through ‘economic rent’.

Taxing land and natural resources and externalises will mean the cost of that use is included in every economic transaction driving down our harm to the planet and leaving nature alone to rewild. It means there will be no poverty and enough resources to provide excellent education and health care for all free, it will stabilise society and reduce crime and war and provide the security to allow people to have fewer children.  All without the force of government.

Just as a plastic bag tax reduced use by nearly 90% so taxes on all land and natural resources will immediately get us to use more efficient transport, better-insulated homes and reduce the environmental costs and concentrate human development on less and less land.  And no one has to be persuaded, except the politicians that keep our taxation system on the shoulders of the hard-working people who create the wealth of the world while allowing the abusive owners of land and natural resources off the hook Scott free.

http://www.monbiot.com/2013/01/21/a-telling-silence/

My lecture on the subject - skip over the first pat to 12 mins in