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

The Landlord's Role in Society

An old story as relevant to day as it was then:

Many years ago a company of tradesmen united themselves into a guild and each one had to relate what he could contribute to its support.

First the blacksmith came forward and said:—
"Gentlemen, I wish to become a member of your organisation."
"Well, what can you do?"
"Oh, I can make springs and axles for your carriages, shoe your horses, and make all kinds of implements."
"Very well, come in, Mr. Blacksmith."

The mason applied for admission into the society.
"What can you do, sir?"
"I can build your barns, bridges, houses, and stables."
"Very well, come in; we cannot do without you."

Along comes the shoemaker and says:—
"I wish to become a member of your society."
"Well, what can you do?"
"I can make boots and shoes for you."
"Come in, Mr. Shoemaker; we must have you."

In turn all the trades and professions applied, till at last an individual came who wanted to become a member.
"And what are you?"

"I am a landlord."

"A landlord? And what can you do?"

"I can hunt and fish and win prizes at pigeon matches."

"But what do you do for a livelihood?"

"Oh, I take toll of all of you. The labourer pays me for the right to dig, the miner to burrow in the earth, and the bricklayer to build a house."

"But what can you *do*?"

"I can make your laws, and when I have made them I can administer them. If a man snares a hare I give him six months; if he shoots a snipe I give him three. I can drive men to desperation, and to the uttermost parts of the earth. I can prevent the erection of cottages, or the building of a Methodist chapel. I can look on and take the larger share of the prosperity of the farmer, the shopkeeper, and the manufacturer; I can keep up an army of paupers."

"And what else can you do?"

"I can bring the grey hairs of the aged to the grave with sorrow; I can break the heart of the wife, and blast the prospects of men of talent and enterprise, and fill the land with more than the plagues of Egypt."

"Is that all you can do?"

"Good heavens! is not that enough?"

source: English Land Restoration League, Issue No. 3, 1889

Wildlife Champion Ramps House Prices & helps a system that ensures Wildlife Destruction

A certain popular wildlife Conservationist was on the BBC’s top house price ramping programme, ‘Escape to the Country’ this week. The Wildwood Trust attracts hundreds of thousands of people each year, keen to experience the many animals it protects, such as these very cute baby beaver and rescued dormice which were featured on the programme.

Clip from the BBC 'Escape to the Country'

This programme shows very well how property prices are affected by the community that surrounds the houses. The infamous phrase; LOCATION LOCATION LOCATION tells us the largest part of a ‘property’s price’ is the location value, i.e. that which is created by the whole community.

Now that means that, with all probability,  the popular tourist destination and conservation charity Wildwood Trust is adding many thousands, if not millions, of pounds to the land prices of the houses & businesses in the area, these landowners (free-loaders) have enjoyed this increase in their wealth without lifting a finger, and without taxation (let’s call this cheating).

Wildwood Trust, as a charity, pays no corporation tax, but then who does these days as most large corporations avoid it? But Wildwood does pay more than 20% of its income in VAT and employment taxes (you also have to factor in all the taxes already paid on the goods and services used by Wildwood). The hundreds of volunteers and staff who have laboured hard over the years to make Wildwood Trust a success have all had to pay taxes on the materials bought to enhance the park & on the (very low) wages of the staff, who work tirelessly in all weathers.

We have a massive agricultural subsidy system and a myriad of special tax breaks and dodges that keep land prices high; on top of the work the whole community does, which is distilled into those high land prices. High land prices prevent people who want to reintroduce beavers, dormice or all the other creatures of Britain from protecting land for them to live on.  Marginal land is subsidised and uneconomically brought into production;  even rare woodlands and wetlands are hoarded by property speculators in the hope of one day becoming instant millionaires if they are allowed to build a house upon the land. Each year a range of charities spend hundreds of millions of pounds on purchasing land, a massive waste of charitable donations.

High land prices act as not only a ‘private tax’ on all wildlife land but on all the people and their business activity. This system of private taxation robs us all of the fruits of our labour, whether it be a wildlife charity, city banker or supermarket checkout single mum. Even our system of welfare payments and housing benefit end up being handed over to the landowners in one way or another

Our system of taxing real work, and not taxing land and natural resources, means the more successful Wildwood Trust is in attracting people to is conservation park & the better its boss is at getting his mug on the telly means they are playing a role in preventing wildlife protection in general, as the land around the park increases in price, some of that land the Wildwood Trust wishes to purchase to further its charitable cause.

We can stop this mad system by shifting taxation off earned income and onto the exclusive ownership of natural monopolies, the biggest one being land. Such a change will make marginal land economically worthless and return it to extensive farming or wildlife land, giving a home to the beavers, dormice and fast disappearing wildlife. Such a change would also mean all business activity, not involved in cheating, will be free from taxation making our economy stronger and creating hundreds of thousands of jobs. Other benefits including reducing pollution, global warming, community disenfranchisement, crime, etc etc.

For further information watch 'The Killing Fields' - a documentary exploring wildlife conservation and taxation:

Tortured Sheep, Marginal Farming and the Real Tragedy of the Commons

Only a few miles from where I am typing this the needlessly cruel practice of live animal exports has started again in Ramsgate Kent.

Understanding that a small loss of income, say from not being allowed to live export sheep, will make the sheep farmed on ‘marginal’ land not worth farming. Thus a number of livelihoods will be ruined, and so a body of people are highly motivated to campaign on an issue to protect their livelihood/privilege (the privilege being the landowners of tenanted farms in marginal areas).  Thus the government is constantly pushed by people with the motivation and means to lobby for such a vile practice of causing such huge animal suffering.

My favourite saying at the moment is:

“it all happens at the margins”

A similar augment can be made for cows and M.Bovis as the marginal dairy farmers are the ones so motivated to campaign so strongly to blame badgers and campaign  for the cull. Such desperate people are easily lead by those with a vested interest in keeping subsidies flowing to landowners and not allowing wildlife protection to take away any of the rental value of their land.

The real tragedy of private landownership is that those on the margin do all they can to farm areas; robbing them of their wildlife value when we should be letting marginal areas revert to nature.  So uplands and wetlands and vast swathes of valuable ‘ecological services’ are destroyed for no real economic advantage and the detriment of the majority of the country. This is why all marginal land in the UK should be held in common so its use is best decided for us all and not the selfish needs of an individual. This is the exact opposite of what economists are taught in the ‘Tragedy of the Commons’ which was merely propaganda for the enclosure acts. The truth is that the commons was a wonderful way making the best use of marginal land, giving balance to community that used it and protecting its sustainability.

Governments of any hue will not challenge privilege/landowners unless forced to. Direct action, organisation, education and excellent PR are the remedy to the animal cruelty of live exports. But a more systematic way of dealing with the problem would be creating a greater divide between the cost of meat and vegetables, whereby the externalities of meat production are contained in their cost.

These issues would be best achieved by following Caroline Lucas’s proposals for a ‘Land Value Tax’ as she is proposing in Parliament today in her private members bill. It would solve a lot of other problems as well by taking away the monopoly privilege of owning land. LVT would systematically stop so many distortions created by the Landowner lobby and not just marginal farmers seeking to cut corners on animal welfare. It would turn all of our land into ' the commons' yet retain ownership and control in the hands that can use the land most effectively for the benefit of all.

http://www.carolinelucas.com/media.html/2012/11/09/%E2%80%98fair-and-progressive%E2%80%99-land-value-tax-would-help-stabilise-property-market/


The people, Carlo Nero & Fred Harrison, who made this film, helped Caroline to forward the private members bill:

Beaver, Land Value Tax & Future Slavery...

The biggest threat to beaver reintroduction to the UK is powerful  landowners and thier campaigning bodies such as the NFU, CLA & CONFOR. The owners of riverbanks see beavers as a threat. In my view the solution to the beaver issue is Land Value Tax...

In the fight to reintroduce the beavers the battle lines have been drawn, and will always exist between private landowners wanting to derive as much profit from their land as possible, i.e. intensive farming on riverbanks and the public need for 'ecosystem services' such as water quality and flood plain buffering of peak flow. The natural tendency towards people trying to create monopolies means landowning groups want to co-opt the taxpayer into paying for services they receive such as river management and drainage, while at the same time receiving private profits and government hand-outs with little taxation. Much of the research into 'ecosystem services' is being sponsored so as to allow a valuation for 'landowners' to then charge the rest of society a rent for these services. My economic research in this process, which I am in touch with some 'green' economists, highlight the lobbying efforts of the 'monopoly forces' to 'own' ecological services and try to charge the rest of society a 'rent' to access them. 

Beavers are a wonderful animal that can help return riverbanks to the 'commons' whereby landowners have stewardship responsibilities and that landownership confers responsibilities as well as benefits. Modern law sees freehold tenure as an absolute right, but it should be as much about imposing duties to protect the land as well as the right to exploit it for private gain. This I see as the most important battle of the 21st Century as global corporations try to 'commoditise' and privatise natural assets such as water, land and pollution then convert it to a tradable asset that can allow private ownership, speculation and 'rent seeking'. If we as a society allow this, the future of humanity will be very bleak indeed with a new feudal system between the 'freeholders' of natural assets and the rest of humanity who must live in relative poverty as a large proportion of their income will be captured by these natural asset 'rentseekers'. 

I feel this is the key economic issue to the return of beaver and other wildlife to our country and is often not well understood by naturalists and wildlife conservationists. There is a simple solution to this conundrum and that is the direct taxation of land, water and pollution so the 'rent' is captured by the Government and used to offset other taxes, while at the same time making natural assets expensive to 'own' or abuse and thus helping to conserve them. Direct taxation of land would mean those landowners who are fortunate enough to have beavers on their land and create, in perpetuity, a wet riparian woodland would receive a tax break as the land would have no economic value to them, but would have huge economic value to society. The thorny question is should we compensate private landowners for this process? Once we received these services for free and so the moral question is did our state have the  right to privatise the gifts of nature and should present day landowners have the right to expect payment when we ask for those service back? I think not but many would disagree...

Land Value Tax and Badgers...

Land Value Tax and badgers... I have been having a long campaign against the state funding of badger culling in the UK - My thoughts are both animal welfare and Georgist in nature. I would welcome your thoughts on the Georgist aspects of agricultural subsidies. Fred Harrison recorded my thoughts on the subject above: My argument is the solution to M.Bovis (bovine tuberculosis) are well known and well documented. The problem is that landowners want the taxpayer to fund this to protect agricultural rents.  In my view farming must internalise the costs of production and solve their own problems. Ricardo's law of rent tells us that every £1 taken off the selling price of beef and milk by subsidy means and extra £1 of rent in the landowners pocket (or profit if the farmer owns the land). While the badger is in the public eye landowners can avoid addressing the problem. We must consider M.Bovis like industrial pollution, their is no excuse for it and it can be simply eradicated by imposing quarantine measures that the landowners must bear themselves. Private insurance premiums, instead of state handouts, would reward good farmers and punish bad farmers and this would be reflected in rents and at no cost to the taxpayer.