Charles Amos is a PhD student in political philosophy alongside working in the haulage industry. He writes The Musing Individualist Substack in his spare time.
Recently, Andy Burnham has said he wishes to introduce a land value tax.
It is estimated this will bring in £35bn a year. Unlike most tax increases, liberals cannot complain about its economic damage because, theoretically at least, it won’t produce any. Land cannot be withdrawn from production as labour and capital can be when taxed. Should liberals still wish to oppose a land value tax then, as most do, it must be opposed at the bar of justice and not on considerations of economic expediency. Essentially, a land value tax must be opposed for the people at large are not its common owners who can rightly draw a rent. Landowners today own the land and their property rights must be respected.
Burnham has supported a land value tax (LVT) since at least 2010 and says it is ‘an idea so old-Labour it can be traced back to Thomas Paine’. Since he explicitly appeals to Paine, who makes his argument for a land value tax on the grounds of social justice, and, economic expediency supports a LVT anyway, it falls upon libertarians to defend landowners at the bar of justice too. While Paine did defend a LVT, Henry George did the most to develop it and was appealed to throughout the latter part of the 19th century by socialists in their fight against landlords. So, George will be my target and Burnham placeholder. It should be noted before proceeding that a LVT is solely on the undeveloped value of land itself, excluding fencing, draining and fertilisation of fields.
In his 1879 magnum opus, Progress and Poverty, George states ‘Nature acknowledges no ownership or control in man save as a result of exertion’. If you plough a virgin field, you alone are entitled to all of the wheat that grows. On this point, George subscribes to John Locke’s libertarian idea that individuals are fully entitled to the fruits of their labour. Where George departs from Locke is in his secondary principle of distributive justice, namely: ‘The equal right of all men to the use of the land’.
This secondary principle is come to on account of land itself not being the product of labour, and, each person having equal status. ‘The equal right of all men to the use of the land is as clear as their equal right to breathe the air – it is a right proclaimed by the fact of their existence’.
This land socialism is not new and has a rich heritage, having being espoused by Paine in the 18th century, Herbert Spencer in the 19th century and Hillel Steiner in the 20th century. In practice, the equal right to the use of the land is cashed out as a land value tax which simply captures the value of undeveloped land. On this, George is categorical: ‘It is not necessary to confiscate land; it is only necessary to confiscate rent’.
The £35bn is an estimate of the natural resource value of Britain’s land taxed at 0.5 per cent annually. Georgists would demand an equal sharing of the tax revenue from a land value tax; otherwise, the injustice of being denied a kind of use of the land remains. I very much doubt Burnham will follow through on this part of Georgism.
Is George’s case for a land value tax just? No.
To begin with it seems to undermine out intuitive notion of property rights. If you own a garden, find a gold nugget in the Andes, or catch a fish out of the sea, it doesn’t seem that people have a right to demand money from you for any of those three holdings. Certainly, if the garden becomes more valuable it seems an injustice that the tax bill could be so large as to force you out. Yet Georgists will simply deny this.
A proper analysis of George’s thought, however, grants plausibility to opposing a land value tax. The first point to note is that although George often speaks about an ‘equal right to the use of the land’ he ultimately finishes with saying ‘it is only necessary to confiscate rent’. The second point is George doesn’t rule out unequal holdings of land, ‘so may a settler take and use as much land as he chooses’, provided the land value tax is paid.
Ultimately, then, George is getting at ensuring people are not denied opportunities in virtue of the fact there is no virgin land left for them to appropriate. It is not truly about equal rights to land; because, if it were, then people could veto disproportionate land holdings and demand actual land for landowners, but George is explicit in saying ‘no restriction need be placed upon the amount of land anyone could hold’. Or, irrespective of the correct interpretation of George, the opportunity view is what is plausibly supporting the land value tax, as land rent is essentially the value of the land’s opportunities. A simple thought experiment shows capitalism without a land value tax already meets this opportunity view.
Imagine a virgin soil which is totally homestead by farmers who grow potatoes in the normal way and over time come to use machines to increase their productivity in doing so. However, alongside these farmers are a special group of magicians, some of whom are also farmers, who have the power to create land out of thin air. Whenever a newcomer turns up, they magic up a new field for them of larger size to an equal share of the existing farmers’ fields. Every opportunity the farmers had with the virgin soil, e.g., growing wheat or grazing cattle, is provided with this new land to a greater extent. Yet the newcomers instead of taking up the new land created for them decide to annually raid the pantries of the farmers, and, thus, do no work at all, or, very little at most. This is unjustifiable theft from the farmers.
In its essential features, we are in the land of the magicians and farmers today. How so? Capitalists, in providing their capital to landless labourers, dramatically increase their net opportunities because any opportunities lost via non-access to land is more than made up for by access to capital.
Opportunities wise, it is as if capitalists are creating land out of thin air, just as the magicians above did. Many of these capitalists will be landowners themselves as well, of course. Analogously, then, as the newcomers raiding the pantries of the farmers is unjustifiable theft, the state raiding the wealth of landowners today via a land value tax is unjustifiable theft too. The empirical claim of capitalists being like magicians is clear to see. In the 14th century it took a labourer over half an hour to earn a loaf of bread; today it takes them less than four minutes. Our real incomes now are over 33 times what they were in 1270, with all the new opportunities that brings.
And if you still want the old opportunities of the natural world itself, an equal share of England can be bought for around £10,000, or rented annually for £78. Of course, what I haven’t addressed here is the monopoly of location which today partially embodies itself in development land being so expensive in cities and around them. Today development land is 22 times more expensive than agricultural land.
Burnham might rhetorically ask: “Why should those who get to land first or purchase it from said people get all the development uplift, after all they’ve not worked for it”. Burnham could draw on Churchill who also criticised landlords deriving an ‘unearned increment’ from development all around them in which they had no part.
Obviously, one need not have worked for something in order to be fully entitled to it; hence, people fully own gifts made to them, beach combing finds and apples they eat from naturally occurring trees. But the original title to land, anyway, must typically be worked for too. As Locke wrote, to establish private property in land one must have first ‘mixed his labour’ with it. And once this is admitted then people can’t object to landowners getting the uplift for doing no extra work. If they did, they’d have to implausibly say a waiter now should get no higher wage than a waiter in 1800, as today the waiter too does no extra work than in 1800. Again, individuals’ private property must be respected provided it doesn’t make other people worse off relative to the natural condition of the world.
What does remain an injustice though is planning permission which enriches some landowners in virtue of depriving other landowners of their development rights. In the absence of competition between landowners, the cost of a house today is largely made up of land, while before planning permission in the 1930s it was mostly made up of the structure’s cost. Yet, the injustice of planning permission does not warrant stripping landowners of the full uplift on their land, as they are not responsible for the injustice. And any idea you cannot benefit from an injustice is clearly wrongheaded. An undertaker is entitled to the profit from providing a funeral service to a murdered man. We have now established the injustice of a Georgist land value tax.
A land value tax simply amounts to theft and it must be opposed by everyone with the slightest regard for private property.
While advocates of a land value tax are right to contend individuals should never be excluded from the opportunities which the natural world affords them, such a contention doesn’t support an LVT because capitalism today does not exclude anyone from such opportunities in the round, as limited access to land for labourers is more than made up for by extensive access to capital.
Burnham’s argument for a land value tax may not ultimately be George’s, but George’s remains the most robust argument for it, and yet even that fails.
Charles Amos is a PhD student in political philosophy alongside working in the haulage industry. He writes The Musing Individualist Substack in his spare time.
Recently, Andy Burnham has said he wishes to introduce a land value tax.
It is estimated this will bring in £35bn a year. Unlike most tax increases, liberals cannot complain about its economic damage because, theoretically at least, it won’t produce any. Land cannot be withdrawn from production as labour and capital can be when taxed. Should liberals still wish to oppose a land value tax then, as most do, it must be opposed at the bar of justice and not on considerations of economic expediency. Essentially, a land value tax must be opposed for the people at large are not its common owners who can rightly draw a rent. Landowners today own the land and their property rights must be respected.
Burnham has supported a land value tax (LVT) since at least 2010 and says it is ‘an idea so old-Labour it can be traced back to Thomas Paine’. Since he explicitly appeals to Paine, who makes his argument for a land value tax on the grounds of social justice, and, economic expediency supports a LVT anyway, it falls upon libertarians to defend landowners at the bar of justice too. While Paine did defend a LVT, Henry George did the most to develop it and was appealed to throughout the latter part of the 19th century by socialists in their fight against landlords. So, George will be my target and Burnham placeholder. It should be noted before proceeding that a LVT is solely on the undeveloped value of land itself, excluding fencing, draining and fertilisation of fields.
In his 1879 magnum opus, Progress and Poverty, George states ‘Nature acknowledges no ownership or control in man save as a result of exertion’. If you plough a virgin field, you alone are entitled to all of the wheat that grows. On this point, George subscribes to John Locke’s libertarian idea that individuals are fully entitled to the fruits of their labour. Where George departs from Locke is in his secondary principle of distributive justice, namely: ‘The equal right of all men to the use of the land’.
This secondary principle is come to on account of land itself not being the product of labour, and, each person having equal status. ‘The equal right of all men to the use of the land is as clear as their equal right to breathe the air – it is a right proclaimed by the fact of their existence’.
This land socialism is not new and has a rich heritage, having being espoused by Paine in the 18th century, Herbert Spencer in the 19th century and Hillel Steiner in the 20th century. In practice, the equal right to the use of the land is cashed out as a land value tax which simply captures the value of undeveloped land. On this, George is categorical: ‘It is not necessary to confiscate land; it is only necessary to confiscate rent’.
The £35bn is an estimate of the natural resource value of Britain’s land taxed at 0.5 per cent annually. Georgists would demand an equal sharing of the tax revenue from a land value tax; otherwise, the injustice of being denied a kind of use of the land remains. I very much doubt Burnham will follow through on this part of Georgism.
Is George’s case for a land value tax just? No.
To begin with it seems to undermine out intuitive notion of property rights. If you own a garden, find a gold nugget in the Andes, or catch a fish out of the sea, it doesn’t seem that people have a right to demand money from you for any of those three holdings. Certainly, if the garden becomes more valuable it seems an injustice that the tax bill could be so large as to force you out. Yet Georgists will simply deny this.
A proper analysis of George’s thought, however, grants plausibility to opposing a land value tax. The first point to note is that although George often speaks about an ‘equal right to the use of the land’ he ultimately finishes with saying ‘it is only necessary to confiscate rent’. The second point is George doesn’t rule out unequal holdings of land, ‘so may a settler take and use as much land as he chooses’, provided the land value tax is paid.
Ultimately, then, George is getting at ensuring people are not denied opportunities in virtue of the fact there is no virgin land left for them to appropriate. It is not truly about equal rights to land; because, if it were, then people could veto disproportionate land holdings and demand actual land for landowners, but George is explicit in saying ‘no restriction need be placed upon the amount of land anyone could hold’. Or, irrespective of the correct interpretation of George, the opportunity view is what is plausibly supporting the land value tax, as land rent is essentially the value of the land’s opportunities. A simple thought experiment shows capitalism without a land value tax already meets this opportunity view.
Imagine a virgin soil which is totally homestead by farmers who grow potatoes in the normal way and over time come to use machines to increase their productivity in doing so. However, alongside these farmers are a special group of magicians, some of whom are also farmers, who have the power to create land out of thin air. Whenever a newcomer turns up, they magic up a new field for them of larger size to an equal share of the existing farmers’ fields. Every opportunity the farmers had with the virgin soil, e.g., growing wheat or grazing cattle, is provided with this new land to a greater extent. Yet the newcomers instead of taking up the new land created for them decide to annually raid the pantries of the farmers, and, thus, do no work at all, or, very little at most. This is unjustifiable theft from the farmers.
In its essential features, we are in the land of the magicians and farmers today. How so? Capitalists, in providing their capital to landless labourers, dramatically increase their net opportunities because any opportunities lost via non-access to land is more than made up for by access to capital.
Opportunities wise, it is as if capitalists are creating land out of thin air, just as the magicians above did. Many of these capitalists will be landowners themselves as well, of course. Analogously, then, as the newcomers raiding the pantries of the farmers is unjustifiable theft, the state raiding the wealth of landowners today via a land value tax is unjustifiable theft too. The empirical claim of capitalists being like magicians is clear to see. In the 14th century it took a labourer over half an hour to earn a loaf of bread; today it takes them less than four minutes. Our real incomes now are over 33 times what they were in 1270, with all the new opportunities that brings.
And if you still want the old opportunities of the natural world itself, an equal share of England can be bought for around £10,000, or rented annually for £78. Of course, what I haven’t addressed here is the monopoly of location which today partially embodies itself in development land being so expensive in cities and around them. Today development land is 22 times more expensive than agricultural land.
Burnham might rhetorically ask: “Why should those who get to land first or purchase it from said people get all the development uplift, after all they’ve not worked for it”. Burnham could draw on Churchill who also criticised landlords deriving an ‘unearned increment’ from development all around them in which they had no part.
Obviously, one need not have worked for something in order to be fully entitled to it; hence, people fully own gifts made to them, beach combing finds and apples they eat from naturally occurring trees. But the original title to land, anyway, must typically be worked for too. As Locke wrote, to establish private property in land one must have first ‘mixed his labour’ with it. And once this is admitted then people can’t object to landowners getting the uplift for doing no extra work. If they did, they’d have to implausibly say a waiter now should get no higher wage than a waiter in 1800, as today the waiter too does no extra work than in 1800. Again, individuals’ private property must be respected provided it doesn’t make other people worse off relative to the natural condition of the world.
What does remain an injustice though is planning permission which enriches some landowners in virtue of depriving other landowners of their development rights. In the absence of competition between landowners, the cost of a house today is largely made up of land, while before planning permission in the 1930s it was mostly made up of the structure’s cost. Yet, the injustice of planning permission does not warrant stripping landowners of the full uplift on their land, as they are not responsible for the injustice. And any idea you cannot benefit from an injustice is clearly wrongheaded. An undertaker is entitled to the profit from providing a funeral service to a murdered man. We have now established the injustice of a Georgist land value tax.
A land value tax simply amounts to theft and it must be opposed by everyone with the slightest regard for private property.
While advocates of a land value tax are right to contend individuals should never be excluded from the opportunities which the natural world affords them, such a contention doesn’t support an LVT because capitalism today does not exclude anyone from such opportunities in the round, as limited access to land for labourers is more than made up for by extensive access to capital.
Burnham’s argument for a land value tax may not ultimately be George’s, but George’s remains the most robust argument for it, and yet even that fails.