Meeting at the House of Commons on Land Value Tax

Molly Scott Cato

To the classical economist land was a factor of production: alongside labour and capital it was joined in the alchemy of capitalist production to generate profit. To a member of the landed gentry land was, and still is, the source of power and wealth. To a peasant or aboriginal the earth is the mother. According to legend, the Plymouth colonists who arrived in the US in the 1620s were greeted with this view:

‘The land is our mother, nourishing all her children, beasts, birds, fish, and all men. The woods, the streams, everything on it belongs to everybody and is for the use of all. How can one man say it belongs only to him?’

I cite this view because the sense of it is close to the origin of the Green Party’s view of land, and our support for Land Value Tax. We prefer our own cultural vernacular and would rely on the view of the Leveller Gerard Winstanley who thought of land as ‘a common treasury’.

So how might a common treasurer go about sharing fairly the value of that land? We think that a Land Value Tax might be a very good way of achieving this end, and for three main reasons:

1. It is a good principle to classical economists which green economists share that unearned income is a poor incentive. Much of the value that would be captured by a land value tax is achieved merely through buying land at a good price and holding it. The value that is acquired through change of use on a piece of land should accrue to the whole community not to the person who happened to be holding the parcel when the music stopped. This is a principle about intergenerational equity as well as present value. The classic example is that of properties close to the route of the jubilee line, whose owners saw a large increase in value when the route was announced. As with other windfalls, this windfall should be shared with the community at large through a Land Value Tax.

2. A particular green interest in a Land Value Tax is the way that it an be used in conjunction with the planning system to move us towards a green economy. Despite persistent rumours, green are not opposed to markets in principle but we do believe that there is a role for economic management. A Land Value Tax could be a useful  tool of economic management when combined with the planning system. For example, land designated for uses that we wish to encourage—say organic farming—could have a low or zero rate of interest while this industry is built up. By contrast land uses we wish to discourage could be controlled absolutely through the planning system or could be made much less attractive through a judicious combination of this system and a high rate of Land Value Tax.

3. It is an efficient way of assessing and sharing the most valuable resource in a bioregional economy. At present we access our resources from across the globe, relying on the power of our currency and our political leverage to win us favourable terms. The power of this strategy is clearly on the wane, and it never took account of the environmental consequences of the transport of goods to and fro across the globe when many of them could have been produced in local fields, factories and workshops. The bioregional economy of the future will be based on ‘borrowing our resources from the local environment’ and in such a structure land use and the value gained from land use will become much more significant.

1066 is remembered as an important date because of the battles that were fought in that year. The fundamental shift in economic structure and power is rarely taught in schools. Yet it was at this time that the focus of the economy changed to be about the financial rather than subsistence value of land. As we move towards an economy that is more self-sufficient in food we need to have similarly detailed knowledge of the land that is available to us and what purposes it could serve in terms of grazing land, arable land, forestry and so on. The land that we discover should be once again a common treasury for the people of Britain to feed themselves from. It is about time we reversed nearly a thousand years of feudal servitude.

Molly Scott Cato