Land: the last economic taboo?

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My Land: get off it

My Land: get off it

OK, so it’s not the sexiest title for my first (proper) post for over two weeks (apologies – I have been visiting family in the provinces, and have not long since returned to the big smoke). But my absence in the countryside, alongside the economic discussion of the budget, has got me thinking.

Land is the ultimate scarce resource. There is a fixed amount of it; what’s more, it’s of a varied quality. And although nobody produces land, or puts and work into its production (alright – apart, occasionally, from in Holland, smartarse), a small number of people own the freehold on the vast majority of land in the UK – this ownership being a hangover from various historical developments from less democratic ages.

It’s not feasible to redistribute land equally, even if you could do it practically – what would I want with either several hundred acres of scrub land in Scotland, or 12 square feet of Mayfair? – and land nationalization, whilst popular with some early socialists, would be prohibitively expensive for the government and would serve no obvious purpose (as well as disrupting the economic activity that goes on within the present ownership system).

So where does this leave the land-minded redistributionist (a label I think I’m going to start appending to my emails)? The idea I cooked up on a train last week: National Land Shares.

First, the government establishes a National Land Bank, and every individual in the UK is given 100 National Land Shares. NLSs are given to everyone, by right, at the age of 18, and cannot be confiscated by the government; they are not inheritable, and revert to the state when you die (but this is OK, because your kids get theirs when they reach 18 anyway).

Most importantly, the shares are tradeable – the National Land Bank operates as an exchange for NLSs.

Landowners are then taxed on the basis of the value of their landholding. All of the taxes raised are distributed as dividends to the holders of NLSs.

So, if a landowner wishes to reduce their tax liability, they can do so – by buying shares from people willing to sell.

The plan is profoundly redistributive, since everyone is given the same number of NLSs; it also redistributes a good where the current distribution is capricious, and in few ways related to the hard work, enterprise, risk-taking, or intelligence of its owners – or any of those other fine qualities we’re assured capitalism encourages and rewards.

It also provides the great bulk of people with assets at the beginning of their working life, which they can hold, add to or sell as they wish – this can only help an economy which, we’re told, has met a sticky wicket due to easy access to cheap, unsecured credit.

So how about it? Let’s face it, at the present moment, it could hardly harm Labour’s poll ratings, and we might as well try a few interesting ideas if the polls are right.

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3 Responses to “Land: the last economic taboo?”

  1. manofkent86 Says:

    Not sure I totally understand how this works. Are all freeholds invalid and then all the land in the UK divided up into various shares? If so how does one determine who owns the land under my feet at present? If you cannot determine this why does someone have an incentive to maintain any one piece of land? Might need this policy explained further to me.

  2. voteredgogreen Says:

    No no no no no no no. Freeholds remain – the present pattern of ownership remains. Nobody has their property confiscated.

    What happens is:

    a) there is a new tax, based on the value of land each person holds.
    b) the entire proceeds are paid out to people in proportion to the number of “shares” they own – these shares being essentially a derivative of land, and holdable and tradeable like any other financial derivative.

    The shares aren’t a claim on an individual portion of land, just as a government bond isn’t a claim on a specific government asset should the government be unable to fulfil its obligation to make good on its debt to you.

    Make sense now? Sorry if I wasn’t clear.

  3. manofkent86 Says:

    I’m with you now. Was thinking of the shares in a proprietary literal sense and was getting a bit baffled. Will digest it in its current format and write a response in due course.

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