I’m sure everyone knows that I have what some would call an obsession with rent, of the economic kind rather than the Piccadilly kind frequented by politicians and the like 🙂 It wasn’t always this way. I was once as ignorant as anyone else about the effects of rent on our economy and society. It crept slowly up on me, and even now I continue to learn and find connections between rent and social and economic problems.
But it worries me. Not once, for instance, unless it was mentioned by me, did “rent” as a concept come up in an entire undergraduate economics degree. Were Henry George, J S Mill, Adam Smith and others also completely bonkers about land and rent? Very early into my journey with Henry George and his followers I was asked “have you seen the cat yet”, after Dr Seuss’s cat in a hat. I have no idea whether Dr Seuss was a Georgist, but lots of fiendishly clever people have been, such as Albert Einstein, Mark Twain, Bertrand Russell and many others. And, well, I’ve seen the cat, and, once you’ve seen it, you do indeed see it everywhere.
Sometime at the turn of the twentieth century the Liberal Party, en masse, and the emerging Labour movement, had both seen the cat: I understand that all of Campbell-Bannerman’s parliamentary party of nearly 400 MPs had seen it and signed a motion supporting a move toward land tax, that ended, of course, in the ill-fated People’s Budget of 1909. Nearly 110 years later, a single line in the economy motion at Lib Dem spring conference could indicate a renewed enthusiasm for cats…
Disappointingly, however, it comes across as more of a sop to those of us obsessively banging on about Site Value Rating, rather than demonstrating a real understanding of whence many of our economic problems stem, from rebalancing the economy away from London and the service sector, to preventing asset bubbles, to higher rents and low wages and promoting “efficient” lending, and decreasing personal debt. Even describing it as “taxing wealth” betrays a perverse way of viewing it that is likely only to put people off the idea – another tax? No thanks!
Now, I know, not many people talk about land, rent and expropriation. Even some of the most acclaimed economists don’t appear to understand it (Piketty, for instance, explicitly discounts the influence of land because we are no longer an “agrarian” land based economy – how wrong could he be!). What those of us who have seen that Georgist cat think is a silver bullet to a huge range of ills is barely mentioned by others. And yet Henry George’s Progress and Poverty was, reputedly, the most popular economics book in America when it was published. Fifty thousand pro-land reform leaflets were supposedly handed out in one day in Glasgow. Churchill made “speeches by the yard” about land reform.
So I’ve been wracking my brains to find a thought experiment that might help to explain how what often happened centuries ago (though is still happening elsewhere in the world) still causes great economic and social trauma in virtually every community on the planet. So I wondered if thinking about it in terms of the air might make it easier.
Air shares a lot of characteristics of what we usually think of as “land” – the ground under our feet, or the location of the ground under our feet. In fact, without wanting to confuse the issue so early, “the air” would be included in what economists think of as “land” – “all naturally occurring resources whose supply is inherently fixed” (Wikipedia: https://en.wikipedia.org/wiki/Land_(economics) ):
- It is essential to the life of every being on the planet: try living without air, or without some connection to the ground – even Tim Peake has to have that.
- It is (fairly) finite – certainly our atmosphere is finite – I’m told that if you stretched a rubber balloon tight over a globe, that would be about the depth of our atmosphere.
- It can be created “artificially”, but it’s relatively very expensive and difficult.
- We each need about the same amount of each to maintain a basic life.
- There is, just about, sufficient for us all to have enough to maintain a basic life (there’s an acre, just of arable land, let alone other productive land uses around the world, for every human now alive). Just as with “the air” we are now discovering that as we mess with its composition through pollution and green house gases we are getting to the point where there may not be enough, in the correct mix, to sustain all the life we need to sustain.
There are some differences of course:
- Most obviously “the air” is not fixed in space. It is fluid. Uncontained and unconstrained by borders and such human impositions. Though when we think of what makes “land” valuable, it tends to be its “location” combined with its physical characteristics, so we do find that concentrations of people make “the air” more precious.
- We generally (probably because of the above physical fluidity) don’t commonly think of “the air” as something that can be “private property”. I’m sure there probably are some who might propose it could be privatised. But it’s a step further even than the idea of privately owned oceans.
- We are beginning to come to a consensus that we ought to be paying for the use of air somehow. At least for its abuse. We recognise that it is pretty finite and that we have the ability to consume it faster than it can be replenished and still sustain life. So we are developing ways of making the biggest consumers of air quality (otherwise known as polluters) pay “rent” for its use.
You’ll notice that most of the similarities are to do with the physical or life sustaining properties, whilst the differences tend to be about social attitudes to each – whether it has value, who should pay or receive that value and whether it can be private property or not. In essence what Georgists argue is that both should be treated the same socio-economically – that we should pay for its use but that we are all entitled to sufficient to survive, everything else being equal, that there are limits on the extent to which it can be fully private property, dictated ultimately by the fact that we each need some to survive.
If we imagine that “the air” had been treated socio-economically like land through human history, we can maybe better understand why our current treatment of land is so unjust and inequitable, and that it has not always been like this. It seems that, so long as we can trace back human societies, there have been many different conventions about who can use, and later own, land as property, and whilst changes happened at different rates in different places, and indeed are still going on in different respects in various places, in England, at least, most people trace a big change in the conventions relating to land use starting with the Norman Conquest, though as ever, it’s not quite as simple as that.
But imagine the Norman Bastard had come here, a land he had barely set foot in previously, if at all, and instead of saying the land was all his, and everyone his tenants, he said the air was all his. Initially, everyone can use just as much as they need to sustain life, but for that they owe him service. Imagine that if you wanted to do anything more than survive, to put more effort in and make something of yourself, you would need to exert more effort, breathe more air. But your ration is the same. If you need more, you have to pay this Bastard and his followers. He can, in effect, extract every penny extra you make by using “his” air. Why would you bother? Every extra effort to improve your lot goes to him, and not the family you think you are working for.
But it gets worse. This Bastard’s chums grow restless for their own growth. They persuade him and his successors that they should be able to use some of the air you have to survive on for their sheep, because it’s more profitable for them than their existing reciprocal obligations to ensure you have enough. So they put you in a situation where even the air you need just to survive you have to pay for. Your health is affected, your growth stunted, your children grow up suffocating. And even if the population were static the air you share gets squeezed by every every enclosure or you and your children have to pay for any extra you need to survive. Your ability to function as a community suffers as everyone is fighting for the smaller share of air available, because someone has stolen the rest.
And this goes on for generations. Eight hundred years so far of incessant enclosure, starvation of the means of survival. And all the while, the people who restricted your very right to breathe are using the money they get from their sheep, and from the bankers they get to finance your exclusion, to invent ever more ways of not needing you at all. They might even sell the air that was once yours to someone else, once they know they can get more for it than it costs them to continue doing what they stole it from you doing. And these new “owners” then get to charge you for what’s left, while they invest in ever more imaginative ways of making more from your air than you can give them.
If you are lucky, you might save enough up to go somewhere else and start stealing their air. If you’re very lucky and connected, the people who own your air back home might give you the right to control the air of new places they have never seen or set foot in, such as happened with William Penn and his “grant” of 29 million acres – nearly half of the country he left behind – by a king who had never seen the country he was “granting”.
If you are less lucky, and the air you are left where you once had freedom is no longer enough even to sustain life, and you are forced into the new industries that were created out of the air they stole from your forebears. You are now packed together as tightly as possible, having to labour in dirty, polluted conditions, in poor air, and even then, they can take everything you earn above what it takes simply to maintain a meagre sustenance for the bad air they let you have.
That is what has happened with the land. Those once stolen acres are used to generate money far beyond the needs of the people who stole it. They invest what’s left, sell some on, and squeeze us into ever smaller cramped spaces.
And even then, it gets worse. Those new owners of the air inherit no “reciprocal obligations” from the original thieves. They do not feel an obligation to fund compensation programs for those displaced by previous owners. They find ways to pass that off onto you too. So not only are we paying for the air we need to survive, to the people who stole it and their successors, but they want us to pay for all the facilities that make their air accessible and valuable and attractive for others to come and pay them a premium for it.
Then someone, perhaps with good intentions, perhaps just to conceal their crimes and those of their predecessors, has the bright idea of saying “let everyone participate”, give them a vote, so they’ll feel better about being taxed, since they’ll have agreed to it. But this comes only after their theft is virtually complete. Those who think they really have a democratic say in their country are deluding themselves.
If we want a democracy, we need to unwind those centuries of theft. Else the generations currently squeezed into he putrid, thin air left to them will continue to atrophy. The market based way to do that it to tax the rent. They can keep the air they stole, but pay the rest of us to recognise that property, to prevent us claiming it back. This is the sine qua non of reversing centuries of deliberate theft and deprivation, of generations stunted by the actions of people who had no right to take what wasn’t theirs to take, that others needed to survive and attain their potential, to flourish and grow.
And if you think this simply fanciful, they even made a film to illustrate it – the “Total Recall” version with Arnold Schwarzenegger – you can bet that if they had the technology to restrict the air to subjugate the poor on earth, they would have used it, just as they have used the land to subjugate us for generations.