Simple really. The long project by land owners to untax land and natural resources transforms these assets into financial instruments. Competing for control of these rent-yielding assets (land speculation) increases their price many times over.
But the wealth we see today in the land market is not produced within the ‘real estate’ sector. It is instead transferred out of people’s wages and legitimate profits. Those who actually produce the wealth by working and innovating end up being sucked dry.
Feel familiar?
The two-tier society thus engineered, whether by accident or design (site owner interests set against those of renters), is an unequal one. An unequal society produced by mis-governance!
The historic and continuing achievement of landlords is that free capital gains flow relentlessly into the coffers of the site owners (for doing nothing) OUT of the pockets of wealth producers. One unintended side effect is repressed UK production to the tune of £500bn+ a year [Harrison].
In Scotland today we witness renters rendered the effective slaves of parasite landlords. History shows that in such circumstances internal stresses build relentlessly over time to a point where societies implode.
Such is the course upon which Scotland and the UK are travelling today. Trouble looms for Scotland when the land market peaks in 2026 and collapses. But returning to funding the state from the rent of land and natural resources (Annual Ground Rent aka Land Value Tax) and untaxing wages and trade would replace the conflict with co-operation and the impending bust with stability.
Where will our two governments have taken Scotland by 2028?
By Ian Kirkwood