TAP affordable housing campaign BLOG 7. “THE PEOPLE’S LAND” OR “MOTHER OF ALL MONOPOLIES”.  Winston Churchill 1909.

19 November 2016

 

"THE PEOPLE’S LAND” OR THE “MOTHER OF ALL MONOPOLIES” The moral question raised by Winston Churchill in 1909.  Today's question is "who has power?"

Stephen Hill http://stephenhillfutureplanning.blogspot.co.uk/2016/11/stephen-hill-director-c-2-o.html

In his final blog in this series of nine, Stephen Hill asks why common sense, reason, and a sense of justice have been unable to bring about the changes needed to make housing and land markets for the common good. He makes some suggestions for how the ground could be prepared for the changes that are needed, but warns that nothing will happen and that injustice will persist unless we citizens want to make these changes and take action ourselves.

Winston Churchill wrote a book in 1909 called “The People’s Land”.

"LAND MONOPOLY is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly. Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public.

Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property."

 

Why hasn’t ‘it’ happened?

Before I say what ‘it’ is, I should warn you that this blog is about power and powerlessness. If that sounds as if it might touch on Brexit and Trump’s election victory…it might.

I’m a land economist. Land economy a curious hangover from classical economic thinking in the 19th and early 20th centuries when land was reckoned, along with capital and labour to be a key element of production. Neoclassical economists, often funded by big business and landowners, decided instead that land was just a commodity like any other. The market would determine the right price. Modern economists across the political spectrum now disagree: take the Financial Times’ Martin Wolf and Wall Street’s friendly Marxist Professor Michael Hudson.

Common sense suggests that there could not possibly be a functioning market for a commodity in fixed supply that is needed by every living creature on the planet for every aspect of their survival. Fred Harrison’s blogs in this series, and his many books, explain this better than me. We both come to the only logical conclusion that land value taxation, or whatever it’s called, is the most efficient and equitable way to build a stable national and international economy that serves the needs of everyone.

…so why hasn’t it happened?

In the first decade of the 20th century, the Liberal Party won no less than three general elections in the space of 4 years with land reform in its manifesto:

“We wish to make the land less of a pleasure-ground for the rich and more of treasure-house for the nation." Liberal Party Leader Campbell Bannerman at the Albert Hall in December 1905.

Winston Churchill, then a member of the Liberal Party published a book called The People’s Land in 1909 - he wrote;.

LAND MONOPOLY is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly. Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public.

Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property.

“I have made speeches by the yard on the subject of land value taxation…” Churchill, at the Board of Trade, in ‘The People’s Land’ 1909.

“Search out every problem, look into these questions thoroughly, and the more thoroughly you look into them you will find that the land is at the root of most of them. Housing, wages, food, health…” Chancellor of the Exchequer Lloyd George speaking in Aberdeen in November 1912

Their thinking came both from Henry George, ‘inventor’ of land value taxation, and from Cobden, here speaking in the Parliamentary debate on the Corn Laws in 1845:

“Thus, the land which (from the 11th to the 18th centuries) paid the whole of taxation, paid now only a fraction...The people had fared better under the despotic monarchs than when the power of the state had fallen into the hands of a landed oligarchy who had first exempted themselves from taxation, and next claimed compensation for themselves by a corn law for their heavy and peculiar burdens.”

It didn’t happen and a century later, little seems to have changed. Private Eye, George Monbiot, Greenpeace, Fred and others have regularly documented how already exceedingly wealthy landowners receive euro-millions in EU subsidies, often handouts for doing very little, and rather more generous than the £73.10 per week offered by a generous state to its unemployed citizens living on the barely tolerable edge of survival; required to pay rent and council tax since April 2013.

The power of landowners in the House of Lords scuppered land value taxation in 1910, and on several later occasions. But now?

Do we just lack the traditional political ‘big beasts’ of the past to drive through such a radical (if logical) reform? We certainly lack big beasts. They might help, but I doubt they have the power that is needed. The barrier is more deep seated, perhaps, and only a very few serious and thoughtful politicians talk openly about the fragility of our democracy, and its lack of resilience and effective power.

Who has the power?

From a right’ish progressive centre, junior minister Rory Stewart MP observes that everyone thinks that everyone else is more powerful than them, but that they are all mistaken:

"What is our democracy? Britain is such a different place now, and changing so quickly, that I'm coming slowly, painfully, to accept that we need to start again… The secret of modern Britain is there is no power anywhere."

He contends that it is very hard to see where power lies, unless it can be amongst ourselves and in our own sense of autonomy.  Stewart is a strong advocate of community land trusts. I described these in my last blog as new locally autonomous democratic institutions acting for the common good of their communities.  

From a left’ish progressive centre, Lisa Nandy MP, a former Shadow Minister, echoes the need for;

“putting people back in control…(this) means there is not just one ‘right way’ of doing things, and no universal delivery mechanism, except to start with the energy, passion, creativity and strength in communities and build from there.”

The progressive historian and political philosopher R. H Tawney, believed that Britain had accepted democracy;

“as a convenience, like an improved system of telephones: she did not dedicate herself to it as the expression of a moral ideal… She changed her political garments, but not her heart… She went to the ballot box touching her hat”.

That criticism is directed at us, just as much as politicians. We have not done all that we could have done to sustain our role in maintaining a strong democratic public life for ourselves. We need to relearn how to live democratically and peaceably together…fast…and that should mean both ‘taking back control’ and living ‘better together’.

There are actions which we citizens could take directly, or which we could campaign and organise for. These changes could happen tomorrow if this country was really serious about tackling the inequities built into the way housing and land markets work: a big ‘if’, as the current situation suits more people than not.

To catch the mood of the moment, here are some self-interests we need to tackle (as illustrated in my first blog) and which need to become properly accountable to the public interest.

EXPERTS

…in the conduct of viability appraisals in planning to ensure that public policy delivers the amount of affordable housing that has been democratically decided. To ensure this is achieved, I propose the following:

- Registered Appraisers…to carry out a viability appraisal for a planning application, you must be a chartered surveyor or town planner and then be a registered appraiser. Valuers have to be registered specifically to carry out valuation work. Appraisals serve a very similar function.

- Public Interest Declarations…Registered Appraisers would have to declare that the information provided to local planning authorities is an honest and true reflection of costs and values, and the same information as provided to investors in the project. Islington Council already requires this. The Registered Appraiser should also declare that they have used their best endeavours to meet the objectives of all public policy relating to the development.

- Public Interest Sounding Board…the professional bodies should open themselves to challenge by civil society in a forum that provides space for dialogue about what the public interest means. This might then lead to the conclusion that viability appraisals are not actually fit for purpose as either a methodology or a policy instrument for shaping the behaviour of developers or markets.

- Professional Thought Leadership…the professions should then take that challenge back to government. As things stand, the state is saying that they are prepared to guarantee developers a 20% profit at the expense of the many people who need affordable housing…the ‘just about managing’…JAM for the developers but none for those who need it, apparently. Are these capitalist businesses or dependents of the state?

POLITICAL ELITES

…politicians and elements in the Treasury show an alarming lack of understanding of the basic facts and economic theory of housing and land market behaviour. I have often heard civil servants acknowledge that many policies either fuel house price inflation, or just follow it up. House price rises in 2007, the last year before the latest bubble burst, were, according to the National Institute of Economic and Social Research equivalent to a deficit of 4.4% of GDP; money sucked out of the productive economy. That’s a huge amount of growth lost. When was the last time our economy grew by that much? Thirty years ago. We need:

UK Housing Evidence Centre…the Economic and Social Research Council, RICS and others are setting one up, but it needs to be put on a statutory footing, independent of government, and to fulfill a similar function as the Office of Budgetary Responsibility to provide:

- Fact Checking…for example, no more nonsense claims by politicians that council housing is paid for with taxpayers’ money. It’s an investment in UK infrastructure essential to help stabilise the whole housing market, paid for by tenants’ rents.

- Evidence base of all UK housing & labour markets…so that central and local government can devise policies that are appropriate to the 1001 markets that exist around the country. No more nonsense that London and the Rest differentiations will do.

- Policy Impact Assessment…honest, independent and publicly available assessments of the likely financial and human effects of proposed policies. 

A time for hope?

IF we could make these changes, which are essentially changes of mind, then we would have made a good start on preparing the way for the major structural changes, which now look impossibly difficult, and which have been waiting to be done since 1910.

We must also be hoping just now that we will not need a second Clarence Darrow, an attorney in the United States, who made his reputation in the early 20th century, when defending a schoolteacher who dared to teach the scientific basis for evolution .

He also said of land value taxation that it was “so simple, so fundamental and so easy to carry into effect that I have no doubt that it will be about the last land reform the world will ever get. People in this world are not often logical.”
 

 


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