AGR is the key to land reform

“The equal right of all men to the use of land is as clear as their equal right to breathe the air — it is a right proclaimed by the fact of their existence.”

Henry George, Progress & Poverty

If we accept the axiom that everyone has an equal right to life, and therefore to the necessities for sustaining life, we must accept that everyone has an equal right of access to the land resource that provides those necessities. Land reform legislation must be about giving practical expression to this, and must restore equal land rights.

We cannot accomplish this by seizing or buying the land from current titleholders and reapportioning it equally (or arbitrarily) among the population. We cannot rewind history or unpick the multitude of transactions that have taken place over centuries. Nor should we attempt to do so. We have no rightful claim on the buildings and other improvements that the owners or their predecessors have paid for. But through the fiscal system, we could achieve fairness by balancing the privilege of land ownership with a corresponding financial obligation on the owner to the rest of society. We do not need to divide up the land and redistribute it; we do not need land nationalisation; we simply need to socialise the rental value of all land.

Land was a free gift – it wasn’t manufactured. But its supply is fixed and as soon as there is competitive demand for it, land acquires a value which reflects the level of demand within the community. That value is distinct from the value of buildings or other improvements on the land. It owes nothing to the landowner; it exists regardless of the identity of the current titleholder or that of his predecessors. Increased demand cannot result in more land being produced; instead, the value rises. Public investment in services and infrastructure increases it further. Land values are created by us, the public, and ought to be recycled into the public purse as the prime source of public revenue, not allowed to haemorrhage into private pockets.

The rent-seeking landowner, per se, makes no useful contribution to the wealth-creation process. He is living off the product of other people’s efforts. He demands a price for doing nothing apart from allowing someone else to use what is already there.   The land doesn’t need someone to “own” it before it can be put to use. Why should the user of the land pay a penny to someone else for the right to use it?

The way to recognise all of this is through a system of Annual Ground Rent, and the Scottish Government should now be heading in that direction. Once the ownership of land for its own sake ceased to bring any financial benefit to the owner, land would lose its appeal as an asset and its speculative price would collapse. Land-hoarding would become a financial liability and voluntary disposals of land as an investment would surely follow. The culture of landlordism as a way of making easy money would become obsolete.

 

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