Sharing the Rents: The Economic relationship Between Humanity and Nature

alter-logo-300Action for Land Taxation and Economic Reform (ALTER) seeks to build on support for Land Value Taxation amongst Liberal Democrats and to promote and campaign for this policy as part of a more sustainable and just resource based economic system.

The ALTER fringe meeting at Brighton this year was chaired by our MEP, Catherine Bearder. Jock Coats, a former Oxford city councillor, presented a paper aimed at infusing the Liberal Democrat mission statement as set out in the “preamble to the constitution” with explicitly “geoist” principles.  The paper argues that only publicly collecting the “economic rent” from land and natural resources enables a genuine market and democracy to work together to optimally distribute economic welfare and save the planet.

The premise of the paper is that neither markets nor democracy can function properly whilst a monopolistic class, rentiers, captures so much of economic productivity. It leads to a two caste society, one of which reaps the benefits of public need and public programs through land values, while the other pays for it. “Tenants pay twice so landowners don’t have to”.

The policy areas that these issues affect, and that can be solved by “going geoist” are enormous – there is barely an area you can think of that is not affected by the inequity and injustice created by this two caste society. From the obvious ones like housing and environment, through transport and international development, to education and culture.

Sharing these rents presents an opportunity not just to make the tax system fairer, but of pre-distributing the social surplus in the form of a citizen’s dividend that incentivises economically beneficial productivity, and penalises environmental degradation.

It is not just a tax issue, which gets side-lined into fiscal discussions rather than the policy areas that could most benefit. Sharing the rents should be something that all policy areas have to consider – and hence worthy of inclusion in the principles of the preamble rather than of piecemeal consideration by the treasury team.

Jock’s paper was addressed by panel members, Professor Molly Scott Cato MEP, (Green Party, SW), author of “Green Economics” and Heather Wetzel of the Labour Land Campaign. A lively Q&A between the audience and cross-party panel followed.

The key take away point – Conservatives and Labour identify as the parties of capital and Labour respectively. No party is explicitly identified with the third critical factor of production – Land – that underpins the relationship between capital and Labour. As Liberal Democrats seek to answer the question – What do we stand for? – this is a gaping hole which can be filled by a distinctive Liberal policy platform that recognises the pervading influence of economic rents in our modern economic systems. By seeking to capture the benefit of land rental values for society as a whole, Liberal Democrats can realise the aims of the preamble to the constitution.

ALTER will have a stand at the upcoming London Liberal Democrat Conference at the Polish Centre in Hammersmith on November 5th.

* Joe Bourke is an accountant and university lecturer, Chair of ALTER, Chair of Hounslow Liberal Democrats and PPC for the Brentford and Isleworth constituency.

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10 Comments

  • Richard Underhill 26th Sep '16 - 3:36pm

    Mark Twain said “Buy land, they are not making it any more” which may have been a comment about the USA expanding from east coast to west. It should not be taken as axiomatic within the ALTER debate, because every additional floor on a tall building constitutes “land” for this argument.

  • It really doesn’t. It makes the same land more productive by increasing the capital improvements on it. And splits the rental value of the same land amongst more people. This is one reason why the switch to capturing land rents instead of taxing capital and labour would help economise on the use of land. But it’s still the same land.

  • Conor McGovern 26th Sep '16 - 4:22pm

    Great stuff. With a snap election potentially round the corner, I’m wondering where our policy is. Groups like ALTER help point the way – I hope we can have a discussion about economic reform in the Lib Dems soon, with real flagship policies emanating from it.

  • By the way if (like me) you seem to have trouble getting to the document from the ALTER link above here it is elsewhere.

  • J George SMID 27th Sep '16 - 11:42am

    Mark Twain said “Buy land, they are not making it any more” – and he promptly lost a fortune on land speculation. Additional benefit of LVT – it limits land speculation as holding the land speculatively is not ‘cost free’

  • Conor McGovern 27th Sep '16 - 1:29pm

    A Land Value Tax is essential.

  • Mark Robinson 27th Sep '16 - 10:44pm

    Jock,

    I run a property investment business, regenerating town centres, I’ve been interested in getting to grips with LVT so will give this a read and hopefully get back to you!

    Cheers

    Mark

  • jedibeeftrix 1st Oct '16 - 11:14am

    Does this ‘geoist’ principle make the New South Wales allowance of exempting the primary residence of citizens from LVT?

    I would support it if it did. I will not if it does not.

  • @ jedibeeftrix Sorry this is so late, you’ve probably completely forgotten. No, in principle it doesn’t. All rent should be collected. What it does do though is exempt you from all treadmill taxes instead.

    Various proposals, however, instead of say having a Citizen’s Dividend, create a “homestead allowance” that acts like a person allowance against which to offset your location rent.

    Why should, say, £50m worth of land value in Kensington Palace Gardens be exempt?

  • As a Chartered Surveyor and Registered Valuer looking forward to reading and considering this

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