Complicating the commons

A happy new year to you from Small Farm Future. So many things to write about in 2018…especially after getting back from the ninth Oxford Real Farming Conference, the biggest and best yet. The main theme I want to examine this year is the political shape of the state, specifically the agrarian states that I hope in the future may hold some promise for getting us out of the mess we’re currently in. On that note, my article on what I call the ‘supersedure state’ has just been published in the latest issue of The Land Magazine1. I’ll be republishing it on this site soon. At the end of this post, I’ll lay out a brief menu of things I’m going to be writing about here at SFF in the first part of the year, but first I want to anticipate my theme of the agrarian state by offering some further reflections on the concept of ‘the commons’ – which I’ve written about before, but feel moved to address further in the light of some of the presentations I heard at the Oxford conference, and of the interesting interview with George Monbiot in The Land.

Politically and intellectually, it seems like the idea of the commons is gaining traction – probably because the state and the market, its major rivals, have acquired something of an image problem in recent times. Politically, ‘the state’ has become associated with the unresponsive, centrally planned economies of communist regimes, and ‘the market’ with the flagrant inequalities and value-scouring short-termism of contemporary capitalism and/or neoliberalism. Intellectually, the story that’s often told about the commons starts with Garret Hardin’s notorious ‘tragedy of the commons’ argument that resources are over-used to the point of exhaustion in a commons because nobody has an individual interest in preserving them, and proceeds by way of Elinor Ostrom’s counter-analyses demonstrating various successful resource-preserving commons arrangements – some arising spontaneously through community-level agreements – to argue that the commons, rather than the state or the market, is the way forward2.

There’s much to commend these views, but they also involve some over-simplifications. The one that I particularly want to highlight here is our tendency to assume that markets and capitalism are complementary, if not synonymous. But they’re not. Historically, there’ve been plenty of market societies that weren’t capitalist, and plenty of capitalist societies (including our present one) which are not conspicuously market-friendly.

A capitalist society is one that secures its collective reproduction as an unintended side-effect of competitive profit maximization3, and only in certain rather unusual circumstances does that manifest in the development of widespread ‘free’, private markets of the kind identified in economic theory. As various thinkers have shown, markets are about exchanging goods through the medium of money, whereas capitalism is about using money to create more money, and one of the main ways capitalists do so is by using political patronage to help them create monopolies that limit market freedom. This is pretty much the situation we’re in today with the food system, and indeed in most other parts of the economy – as the economist Herbert Simon put it, we live in an organizational economy in which most economic transactions occur within corporate or government organisations, not in a market economy where they occur primarily in markets4. If we truly lived in a market economy, there would probably be something like 2 million farms in Britain, rather than the present 200,000.

Now, an attentive reading of Elinor Ostrom’s book suggests not that commons are a widespread and successful way of organising economic production, but on the contrary they’re rare and fraught with difficulty. To cut a long story short, in agricultural settings they usually only work at relatively small scales among groups of people who are relatively poor and who have relatively equal social standing, exploiting relatively extensive resources that are relatively low in value such as woodlands or grazing. People didn’t generally organise pre-capitalist agrarian societies predominantly through commons in the Hardin/Ostrom sense because it would have been a nightmare to do so, and the same is true a fortiori in contemporary society as we search for an alternative, post-capitalist economics. There are those who extend the concept of commons nowadays beyond agriculture into other realms, such as the notion of the ‘digital commons’. I’m not sure how convincing the parallel is, but if indeed there are commons in the digital world they don’t seem a whole lot more influential within it than traditional commons are within agriculture.

This would be a dispiriting conclusion if it propelled us back towards the dualities of state/market or communism/capitalism. But since, as I argued above, there’s nothing intrinsically capitalist about private markets, it doesn’t have to. My argument is that we should develop much more extensive private markets in food. If that happened, we’d find that the landscape would fill with lots of small-scale proprietors, who’d develop commoning arrangements between themselves as appropriate. And if they were supported by the state, this would really help to keep capitalism at bay.

A lot of the people who enthuse the most about commons are the kind of people who are themselves small proprietors, or aspire to be. I think they sometimes see their private ownership of land as a necessary evil in a capitalist society, whereas I’d suggest that it’s a desideratum for a non-capitalist society. Let’s have a look at these lyrics from Dick Gaughan’s song, The World Turned Upside Down, which expresses classic commoning sentiments:

This earth divided
We will make whole
So it will be a common treasury for all

The sin of property
We do disdain
No man has any right to buy and sell
The earth for private gain

For me, the key phrase here is “sell the earth for private gain”, and I take ‘gain’ to mean ‘unfair advantage’ – what economists call ‘rent’ in the technical sense of a situation in which monopoly control of a scarce, in-demand good enables the controller to name their price, however extortionate. But that isn’t necessarily the situation that obtains if I buy a plot of land and grow food crops on it which I sell at a local market. In that case, ‘property’ just means I’ve bought the right to an income stream from the land that will hopefully enable me to cover my ordinary living costs, just as a plumber does by charging out the costs of their time, tools and skills. Nor does the fact that I ‘own’ the land necessarily mean that I have an unchallenged right to do what I like on it or with it – the wider polity that has accorded me the right to derive income from it might, if it so chooses, forbid me from engaging in any number of damaging activities on it or from passing it on to my children if in so doing that would confer ‘private gain’ or rent. It can persuasively be argued that, in the UK, the state doesn’t intervene nearly enough in the ability of private property owners to extract economic rent, resulting in extravagantly high land prices. But that isn’t intrinsically an argument against private property as such.

Consider the alternative of a propertyless world in which the land indeed is a ‘common treasury’. Perhaps I’d like to use the land in my environs to produce clean water and energy and to grow some food for myself. Perhaps you’d like to build a road through it, making it easier for you to commute to a bigger town where you earn your salary as a commodity broker. Imagine if every single land or resource use decision had to be thrashed out individually within your ‘community’. Having spent more of my life than I care to recall in community meetings trying to agree on – well, just about anything – I do wonder if people who call for commons as a general way of organising everyday life have ever actually tried it. It brings to mind Oscar Wilde’s witticism about socialism: the trouble is, it takes up too many evenings.

In his recent writings, George Monbiot argues for a land value tax, with the revenue thus gained being divided, after paying for public services, between communities which then set up democratic structures to manage its dispersal5. I agree that this is a good idea, subject to the nature of the democratic structures and the difficulties of forging a meaningful consensus at the level of the ‘community’. George gives various examples of how private property can deliver community benefits, especially when the planning process is participatory. I think he’s right, but for me it’s a stretch to call this a ‘commons’ – really, we’re talking about local determination of fiscal residues from the revenues of a larger centralised state, which has already top-sliced money for public goods, and mostly about collective private benefit from private ownership. I’d prefer to think of it as a reinvigorated public sphere within a society of private property right-holders. It’s something I’d endorse, particularly if the ‘public’ we’re talking about is one that’s substantially oriented to self-sustenance on the basis of local land and natural resources, with strong oversight from a centralised state at higher and lower geopolitical levels to defend public interest over private property rights, and also private interest over public appropriation. But I don’t think it helps to call it a commons or to suppose that it’s something radically different from an economy grounded in the state or the market. Because if you do, you tend to obscure or even scorn what you most need to develop – widespread private property rights, strong local markets, and a centralised state oriented to public wellbeing by regulating both.

One other thought on this. If you develop such a social order, you’ll get a lot of small local businesses and not so many large corporations. Is that what you’d want? A century ago, there were more firms manufacturing cars in France alone than there are in the whole world today. Today, there are only two manufacturers of large airliners in the world, and two major computer operating systems (OK, three, maybe four). Some might talk about economies of scale, though I’m not convinced that this is the only reason these huge monopolies have emerged. But there are also diseconomies of scale in the way that humanity shapes the world to fit its mega-monopolistic ways . Much of the technology that we take for granted today (but maybe don’t need) might not survive in a true state-market political economy of the kind I’m describing, rather than in our present organisational political economy. Perhaps that’s no bad thing?

oOo

Anyway, how to conjure such a state-market political economy out of our present mess is the main thing I want to focus on in my upcoming writing. Not that I necessarily have any brilliant ideas for snapping my fingers and making it happen. But there are a few lines of enquiry I want to pursue. Some of them take me back to the debates I was having here at Small Farm Future about this time last year in the thick of the Brexit-Trump imbroglio. I think it’s about time I – cautiously – picked up a few of those threads again. Cautiously, but maybe also quickly – I’ve already prepared a retrospective on Mr Trump a year on and I fear that it may be rendered obsolete either by the 25th amendment or the global consequences of his argument with Mr Kim Jong Un about the size of their, er, buttons. But let me at least try to cultivate an aura of calm. All in good time. So what I’m planning to offer readers in the first part of this year in addition to ruminations on the agrarian state is posts on the size of my garden, the number of cow legs I can reasonably manage, some juggling with an olive branch, a bracing dip into the deep waters of anthropological theory and Mesopotamian history, some brief trips to India, Cuba, Oxford and Alt-America, a wrecker’s guide to system theory, that perennial favourite of this site – energy futures and societal collapse – and a few tips on fencing, though possibly not of the kind you’d imagine in a blog ostensibly devoted to farming. At the same time, I’m trying to focus on a larger-scale writing project, so it’s possible my posts will be less frequent than they have been recently. But I hope you might stop by here and have a read or – still better – leave a comment…though please note that if you’d like me to reply it’s best to leave your comment at Small Farm Future and not at the various other waystations of cyberspace to which my posts sometimes migrate. À bientôt.

Notes

  1. C. Smaje. 2018. The human hive. The Land 22: 28-30.
  2. G. Hardin. 1977. ‘The tragedy of the commons’ in G. Hardin & J. Badel (eds) Managing the Commons, W.H. Freeman; E. Ostrom. 1990. Governing the Commons, Cambridge UP.
  3. See more detailed discussion here
  4. H. Simon. 1991. Organizations and markets. Journal of Economic Perspectives. 5, 2: 25-44.
  5. eg. 2018. ‘Reclaiming the commons’ The Land 22, 12-15.

34 thoughts on “Complicating the commons

  1. Happy New Year! That’s an impressive number of topics planned for blog posts this year, all of which look fascinating (especially fencing – new thoughts on community conflict resolution?). And a pretty substantive post to kick off the year.

    I wonder if you might come up against quibbles over definitions here (and I must be careful here – I do it myself far too often). It strikes me that ‘private property’ in which some public authority has the right to prevent you passing it on to your children might strike some as not very private. It would be possible to argue that land subject to LVT and to restrictions on inheritance had been ‘nationalised’ to some extent. One question that might tease this out is whether you envision a ‘free’ market in land, and how that would work. In your post you talk about a free market in food, and about buying land, but could you expand?

    I’d also quibble with your characterisation of pre-capitalist commons as rare, at least in England (the area I’m most familiar with). Of course the size of the commoning community depended on the size of the resource being collectively managed, but these could be quite large. Moreover, far from commoners being limited to the poorer members of a community, many were quite substantial landholders – the better off freeholders and copyholders. It’s also worth noting that whilst commoning tended towards an association with resources such as grazing, fisheries, pools, woodlands, these basically represent most of the non-arable infrastructure, and in the middle ages many peasants also collectively managed at least some of their cropland too, each contributing some oxen to a common plough.

    There’s a slippage, I think, between commons as collectively managed resource and commons as ‘common treasury’, which we see both historically and now. Commons were always about the collective organisation of what we might justifiably call private property rights – e.g. formal ownership of the right to graze a certain number of cattle on the waste, or to take and use as much timber from the woods as is necessary to maintain the farmhouse, etc. But they were sometimes also about the support of those who had no formal right on the commons, such as the ‘squatters’ of the 18th and 19th centuries who appeared along the edges of many of the larger areas of common land. This second kind of commoning has always been contested by those with formal rights, and we can perhaps see it today in the debates over the digital commons as some kind of free-for-all open source.

    The limitation of unfair advantage was always a major concern in commoning regimes, and to that extent I wonder if the public management of your landed property rights – preventing, in various ways, unfair private gain – would end up looking like some kind of commoning regime, at least in the formal collective management sense. It would certainly have to be something managed at a fairly local level, and democratically in some way – we don’t want too many meetings, but we’ll need some I would think.

  2. Erudite as ever.

    Andrew has already anticipated a couple of things I’d also like to know more about – so I’ll pass onto a couple others.

    Is there currently no land value tax in the UK? I guess I need to go and see what George is going on about. We have property taxes here on the north-western shore of the Atlantic… and they are quite the political topic. These taxes (their levies, enforcements, uses, etc. etc.) are probably the most varied across the wider landscape of our collective states. Agricultural land (within Ohio anyway) is not taxed at the same level as residential property, and I can argue this is appropriate if anyone is curious. Local governments (counties, townships, school districts, water districts, and so forth) will levy taxes against property with proposed levies being required to stand for a vote of those affected. I’ve long imagined the cliché – all politics are local – to center on the balance between income taxes vs. sales taxes vs. property taxes as local means to pay for government.

    On the issue of ‘economies of scale’ and the possible correction or limitation imposed by ‘diseconomies of scale’ – it’s not clear to me where your point comes to rest. Are you suggesting Boeing and Airbus are a sufficient set of airline competitors for a planet? Perhaps airlines fall into a surfeit of technology we don’t need. But seeds likely avoid the issue of unneeded technology – and the present global experience of seed commerce seems to have at least some characteristics of plutocracy. Diseconomies of scale haven’t kicked in on that front from my vantage point. I’d like to test your thinking on this matter a bit further.

    Looking forward to your future thinking in this space.

    • Clem, land value tax (pioneered by Henry George) is not a tax like we have in the US. It is more properly a fee for the use of the land (and only the land). In other words, it is a fee for taking the land out of the commons for private use. I’ve heard that those few places that have tried it have been successful. Pgh being one of them.

      • Vera – the little checking I’ve done (Bruce’s link to Churchill’s speech, and a piece on George) makes me think it less a fee for taking land from a commons to private use and more a tax similar to some of the property tax regimes here in the states. If one combines a property tax and the capital gains tax you essentially achieve a result along the lines of what Churchill advocated (if I’m reading him right).
        As an example – say a speculator buys up some land that could one day become expansion for a city. The speculator would pay the rural (agricultural) CAUV so long as the property is used thus. If the value of the property increases because of city expansion and the need for “higher use value” (in quotes here because of how this site values land)… an increased assessment can be made to capture this value. A farmer can protest the higher assessment (and in many cases I’m aware of here in Ohio) will successfully avoid a serious tax rate increase so long as the land is farmed for profit*. Once the land is sold to a developer and the sale nets the farmer (or our speculator) a large capital gain then Uncle Sam steps in to capture a big chunk.
        * NB, the profits are taxed as income – either as personal income or as corporate income; either way, the government does realize some tax income from land held by private citizens in some approximation of its value. Leaving a speculated land holding fallow (generating no income) is treated differently depending upon where you are.
        Eminent domain laws, and zoning regulations also factor as checks to private property rights which help a polity get along. Many of Sir Winston’s complaints in the speech have been addressed (in the US at least) by these various taxes and other government remedies.

  3. Yes, Happy New Year, and welcome to the future! I am impressed with your erudition and ambitious list of topics too.

    I want to say right from the start that it sounds to me as if I would like living in the polity that you are proposing. And I am certain that you have anticipated all manner of difficulties getting there from here, so I will just mention a few things that popped to mind.

    ‘… centralized state oriented to public wellbeing…’ Currently not so many of these, eh? Does Bhutan count? Any others? I don’t think this dearth is only random happenstance. On that note, I am looking forward to your Mesopotamian history for some clues about the origins, ubiquity, and solutions to state kleptocracy.

    Similarly for widespread private property rights. It seems that the emphasis by my government lately has been toward concentrating property rights in fewer hands.

    I do enjoy my own private property rights though, but it is a tricky balance. I know and like many of my neighbors, but as you say, I don’t think I want to be in a series of meetings deciding what any of us may do with our land. But if we want to live in an equitable society there will need to be some changes, and I think they will have to be much deeper than just electing a better government representative. It looks like we have swallowed the greed pill, and it will probably take some serious purging to heal up our value system.

    On a Land Value Tax; I pay property tax here in the US, as Clem says. I also have a job that pays me money, so I am not relying on my property to provide for those taxes. If I needed to extract money from my land, I would object much more strongly to property taxes. I would much rather pay a portion of my crop to the lord.

    The way I see it, money was invented for the purpose of making it easier for the king to extract value from the public, and taxation is the method that makes money valuable. This results in a strong motive to subdue more and more of the natural world and turn it into money. I will not go all the way into this same rant again, except to say that I believe that taxation ‘in kind’ is substantially different than taxation in money.
    And I do support individual contribution to the common welfare. How to avoid tipping into kleptocracy is the trick, it seems.

    Thanks

  4. Andrew, Clem, Eric – thanks for those comments. Only time for a brief attempt to answer a few points. Also, there’s much in this arena that I feel uncertain or ignorant about so my answers are tentative. Probably I need to write something better informed on land tax issues in the future.

    1. Private/public property. Private property is intrinsically social or collective, however strong the rights associated with it, inasmuch as my ‘ownership’ of a thing is only meaningful as a relationship between me and other people who agree or are coerced into respecting my rights. Ownership of something complex like land involves numerous kinds of rights, which in practice are never completely individualised. So I think the boundaries between private, public and commons are never clear-cut and there will always be scope for definitional wrangling.

    2. Free markets in land – in relation to agriculture, I think it’s good if farms aren’t generally too big and if it’s relatively easy for new entrants to gain secure tenure of farmland. Achieving that is tricky, but I think a market in farmland for farming that’s managed so that it approximates to a competitive market could be a big part of the solution.

    3. The poverty of commoners – agreed, agricultural commoners aren’t necessarily poor by the standards of their own societies. But I’d argue they’re usually poor in terms of mobile capital and access to energy by the standards of contemporary capitalist society, and this is largely why commoning of this kind doesn’t have much of a contemporary role.

    4. The ubiquity of past commons – a complex question. I’m not (yet) entirely willing to concede this point, but I’d agree with Andrew that the further back into the English middle ages you go the greater role commoning arguably had. Again, the factors we need to bear in mind here are relative wealth (especially between gentry and commoners, but also between different classes of commoner or peasant) and the availability of energy and labour. I can imagine future scenarios in which people returned to strong commoning arrangements as a result of these wealth/energy balances, but it’s not something we’re very good at at the moment. I think part of the present enthusiasm for commons stems from a kind of yearning for lost community which is somewhat over-invested in Andrew’s second sense of the term, whereas I’d prefer to keep the idea more tightly defined around the first sense.

    5. Limiting private gain – I’m not sure that this would necessarily have to be organised at a local level. In fact, in some ways I think it would be better if it wasn’t (though see point 8). Land and inheritance taxes are quite easy to levy centrally, perhaps land concentration not so much. I need to think about this some more.

    6. Land Value Tax in the UK – I’d say no, we don’t really have it. There are property taxes and commercial rates with a very rough ‘land value’ component, but no real LVT and no taxes on farmland as such (in fact, presently a negative tax in the form of CAP subsidies, though that seems likely to change imminently). Policies currently are very friendly towards land or property ownership.

    7. Economies of scale – a brief answer to Clem which I may have to expand another time. From my inexpert perspective I’d agree that there seems to be plutocracy in seed commerce, and in much else relating to agriculture. The diseconomies of scale are there, but they manifest in ecological and social dysfunctions which are more repressed and hidden and/or unfurl over longer timescales than the ‘economies’ of scale (= ‘economic rent’?) achieved by market concentration. Hence the need for stronger government action to break the monopolies.
    8. Taxation in kind (Eric’s point) – interesting, this is something Malcolm Ramsay talked about on here. I need to think about it some more. First thoughts – it could be a good idea but unlikely to play well with centralised states that require simplicity and social ‘legibility’. It fits much better into regimes of parcellised sovereignty – feudal lordship, local tax-farming etc. The problem with that is that it almost inevitably becomes an inegalitarian patron-client relationship, with quite arbitrary social implications. The alternative is a kind of local peasant semi-independence from overlordship, where commoning arrangements indeed might proliferate. This could be quite good, but there wouldn’t be much money in the exchequer so not much health care, social security, education etc. I suspect most people would baulk at the prospect. I wouldn’t necessarily, but the implications are profound.

    9. Not many centralised states oriented to public wellbeing – well, yes and no. Most states claim to be so and have to back the claim up with actions, but generally there’s an awful lot of monkey business, buying off or playing off of factions, corruption, caving in to elites, dubious alliance building and ideological manipulation that goes on…so in that sense agreed, no not many. To my mind this is probably the biggest stumbling block we face in creating future viable, healthy communities and I don’t see any easy answers. But I hope to play around with a few ideas in future posts.

    • Yes, the limit to a state’s size and complexity that comes when the use of money is diminished is exactly my objective. I have the idea that our situation would be much improved if states, corporations, etc. were only just smaller, even with their current structure.

      As for Gilgamesh, yes, what a perfect example! I am fascinated that the woman who seduced Enkidu was the priestess from the temple to the grain god. I will have to look for Stephen Mitchell’s translation.

  5. I’m a big fan of land value tax, as was Winston Churchill (http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html) which you would imagine would have every right thinking Englishman, the Daily Mail, Boris Johnson and probably Mr Farage demanding it’s immediate implementation – but alas no.

    I’m not sure I agree with your idea of a commons being managed by community meetings – in the Forest of Dean they still have a Verderers’ Court which enforces the laws of that particular commons – maybe you’d need a community meeting to establish those laws.

    The distinction between capitalism and market economies is probably to subtle to make it into public discourse which is unfortunate because such an understanding would have important political implications – I’d never really thought about it until now.

    Looking forward to reading in 2018

    • You might well be right Bruce about the distinction between capitalism and market economies being too nuanced for public discourse. But you’re definitely right that it’s an important insight, and a new and useful one for me, that I’m now mulling over. Thanks Chris!

      And glad to hear that you’re trying to focus on that larger-scale writing project too!

  6. Very interesting essay as ever Chris. I still owe you a response to your piece about artificial meat and the task of saving me (sorry – pledged my soul to the Devil way back). Still trying to find some time. Meanwhile I’ll follow your new writing with interest.

  7. I found your comment that with the CAP figured in, farm land in the UK might well have a negative tax value to be very interesting. So much so I grabbed for the proverbial envelope to do some figuring on the case (for me) here in Ohio. The local CAUV – the agricultural land tax rate – has just gone up a good bit on a percentage basis (and with it a good bit of grousing)… but it is still no where close to rates for developed property. If I factor in the countercyclical (a direct subsidy) and estimate some value for a crop insurance subsidy, and then do a little more guessing in terms of indirect subsidy of corn through the RFS… this plus that, carry the two, divide by impatience… there – still a net tax; but much less than one could argue by merely presenting the tax bill from the county.

    Now a clever farm tax payer might like to observe that the county (the local government entity) is itself being subsidized here – because the countercyclical, the largest piece of the calculation for my farm, comes from the federal government (as does the indirect support of crop insurance subsidy and the RFS mandate which is not directly a subsidy, but often has the effect once the market speaks). There are other subsidies one might point to for the land and the rural (read agricultural) tax payer, but most of the ones I can imagine are similarly available to our urban kin (public schools, extension advice, transportation infrastructure, etc).

    Land values will respond to changes in the subsidy profiles – so if indeed the CAP goes away you should see at least some downward pressure on land prices.

  8. PS: I take it from your Mesopotamian comment that you’ll be reading James C Scott’s latest? It’s fascinating and transformative. I would also strongly recommend Stephen Mitchell’s translation of Gilgamesh, which has a very interesting introduction. (Also a wonderful translation – leaves the others in the dust). Gwendolyn Leick’s general history is useful too.

    • Thanks for commenting, George. Don’t worry, I know you’re with the angels really! Good spot – I read Scott’s book over Christmas and will post something on it soon. Fascinating stuff. I’m also reading Gilgamesh, though not the translation you mention…must chase that up. The thrill of reading such a song of the ages has been tempered somewhat by Scott’s critique, but still… Ah well, hope to see you here again soon to consider meat, commons and so forth. Thanks as ever for your ever-stimulating thinking.

  9. Chris, curious if you’ve seen this (compelling, IMO) analysis on a Georgian land value tax from Brian Davey, from FEASTA:

    http://www.credoeconomics.com/georgist-macro-economics-and-the-land-value-tax/

    Snippet:

    “A land value tax would remove the incentive for land price speculation pumped up by bank credit creation. There would be no point in speculation because gains would go to the taxpayer. There would be no point in buying and hoarding land and then leaving it unused, on the anticipation that its value will rise. Hoarded land would have to pay tax, and if it was unused, it would still pay a tax, thus, speculative holding of idle land would lead to loss. A site value tax would release land onto the market and actually bring down land prices.”

  10. Obviously, the property taxes we have in the US do not serve the purpose that Davey outlines, and so I’m not sure they qualify, at least, if price speculation reduction and an attendant moderation of the bubbles that they blow is in fact part of the objective.

    • Oz:
      In a reply to Vera above I’ve made a case to suggest a combination of property taxes and zoning regulations (plus capital gains taxes) begin to address the issues outlined. But there is also another angle to consider… the other side of the coin as it were. From your link to Davey (thanks for that BTW):

      Snippet:

      A modern day example can make this point clearer. London’s extension of the Jubilee Tube Line to Canary Wharf cost £3.5 billion but increased property values by an estimated £13 billion along the route. Landowners did nothing to earn this windfall except owning the land. (TransportforLondon, 2004)

      Did all the landowners along this route desire to have this change to their environment? Would any of these owners – if they could – choose to forgo the “windfall” to have the peace and serenity they had purchased the property for originally??

      And to the original argument that property owners along the route did nothing but “own land”… here in the US at least these owners would have been paying taxes all along. Further, when a large scale “improvement” is taken on (such as building infrastructure that will benefit a given polity) there are typically bonds sold on the credit of the community. These bonds are usually repaid by the taxpayers of the community through increased tax levies (read property taxes). So if the London tube example were to be replicated in Ohio the land owners would pony up for some of the cost.

  11. OK, I wish we had access to the Monbiot interview because I’m not clear about what a land value tax is and how it differs from a US-style property tax (leaving aside how the taxes are sliced and diced and distributed for now). The idea is that annual land value tax increases as the value of the land goes up ? Is that right? Which is more or less how property taxes work where I live. (And we even have some democratically determined uses for those funds, such as 2% of the property tax funds go to purchase high priority lands for conservation or cultural preservation.)
    Doesn’t a land value tax have potentially detrimental effects on your small holder that happens to own land that increases in value simply because it happens to be in the wrong (right) location? Of course the small holder could just sell his or her now more valuable piece of land and move elsewhere, but would that elsewhere have the soil and climate necessary for agricultural success?

  12. Thanks everyone for the further comments and links. Another good article that sketches out the implications of LVT is by Alanna Hartzok (with Simon Fairlie) in The Land, Issue 8. It doesn’t seem to be available online in the same extended form as the print version, but there are some extracts from it here: http://www.cooperative-individualism.org/hartzok-alanna_land-value-taxation-panacea-or-placebo-2010.htm

    Michelle, I’d prefer to hold off trying to answer your questions just now – mostly through work pressure, but also I’d like to think in a bit more depth about LVT and then try to write something that focuses specifically on it. Meanwhile, I’m hoping you might find the various links posted here of interest.

    And let me give a shout out for The Land magazine – the best periodical I’ve come across for discussing the issues raised on this blog. It focuses mostly, though not exclusively, on the UK, but much of it is of general relevance. If your bank account has survived the holidays, I’d recommend a subscription…

    • Chris, I just tried to sub, but no go. They have a link that is to direct you to int’l rates and other types of subscriptions (I am hoping for an online one) but the link does not work.

      • A message from Gill at ‘The Land’: “True the original international subs link has disappeared – so a work-around is to take out a standard sub (£24) and add a £21 donation to make up the £45 for international. Expensive, but it’s the postage. OR order one-off copy, £5, and add £3 donation for extra postage. I’ll know what’s happening when I see the address.”

        Superb improvisation, I’ve got to say. All that remains is to work out how to turn $$ into ££.

  13. The more I think about LVT the more I’m not sure I’ve got it. I do wonder though if it’s more appropriate to the transition to a small farm future than to an actual future peasants’ republic.

    A crucial premise seems to be the need to calculate the rental value of land on a regular basis, so that it can be taxed. But if rent is what someone is willing/able to pay on top of the all the other things they have to/what to do with their income, then it’s at least partly an emergent value, dependent on all sorts of implicit factors, like the quality of life the rent-payer considers appropriate, and all sorts of decisions about where their income is best spent/invested, etc. Calculating rental value via some kind of algorithm would have to make all those factors explicit.

    Another crucial premise seems to be that the productivity of land is monetised. That’s fine when dealing with a speculative developer, whose banked land would realise value in the rents paid by potential tenants – the productivity of the tenants depends on the jobs they are able to get having decided to live there. But the situation seems different in the case of farmland, where productivity is directly connected to the land itself.

    A peasant living a largely self-sufficient life on their land would presumably not want to pay any rent on top of that, because all that they produce is meant to be consumed on-site, or at the very least money-making activities would be intended to allow purchase of things not produced directly. The difference is between a lifestyle geared around steady-state land-based provisioning in he case of the peasant, and one geared around making as much money as possible in the case of the average tenant in our present society.

    There is then a problem in terms of the assumption, made in calculating rental value, that the land will be used to produce as much money as possible – the issue in the gravel pit/ sheep farming example in the Harzok article. But the problem isn’t just about making adjustments to compensate for different ideas about socially useful land use, or finding ways of democratically zoning such land use. The problem is that LVT is totally inappropriate in cases where the landowner has no desire to realise the economic rent of the land, and whose activities on that land do not result in such realisation, as is surely the case with the kind of peasant lifestyle usually envisioned on this site.

    LVT may well have potential to break up the concentration of landholding in few hands, and to deter land banking, but does it become less relevant the more successfully it does this?

    I’m not actually sure any of the above makes sense. If not, apologies for taking up space…

    • No, it totally makes sense. I struggle to get my head around LVT too. I think you’re right that it may be more useful as a transitional arrangement – I suspect the devil is in the detail, as always. I guess I’d say in brief that LVT fits better with the modern western mindset in terms of it being a mechanism for managing markets so that they deliver more beneficial results. An alternative might be to make land available for self-reliant peasant production by fiat (you could argue the allotment act does this, but only very weakly. Or the Scottish crofting legislation, more strongly). In both cases, the government takes it up itself to manage the market, so indeed there’s a chance of state failure as well as market failure. It was ever thus.

      I’ll have to think some more about the points you, and others, have raised…I’ll aim to write about this again in due course. Your point about over-monetisation is interesting – a bit like some of my misgivings about the term ‘commons’ in relation to George’s suggestions. But I still think an LVT situation could potentially make ‘peasant’ smallholding more feasible than it currently is, where land and food markets are such that you pretty much have to be independently wealthy (or lucky, and highly ascetic) if you want to be a relatively market-independent ‘peasant’. My guess is that a lot of would be ‘peasants’ would be quite happy to see a situation that weakly incentivised them to maximise fiscal returns from the land, but didn’t force them to do so – it would be a marked improvement on the present.

      Meanwhile, working my way through the latest issue of The Land, I’ve just read Simon Fairlie’s brilliant article on shepherding, which brings some further issues to the table vis-a-vis commoning, in addition to the points that you and others have raised here. So thanks – more thinking to do!

  14. Chris, I had been holding back on LVT, as you said you’d probably write something that focuses on it specifically. But, on the whole, I’m so sceptical about it, I don’t think it deserves a blog post from you – so I’ve decided to throw in my twopenny worth here.

    The points Michelle and Andrew have raised both make sense to me. One of the advantages of the current system is that, amid all the other uncertainties of life, at least you know in advance what it will cost you to buy a bit of real-estate. As Michelle points out, though, LVT effectively shifts some of the purchase price into the future and makes it dependent on external circumstances. When you’re deciding to move onto a place, you’d have no way of knowing what it’s going to cost you to stay there. That doesn’t just apply to rural land; in many ways, it applies more to urban land where nearby development may be more likely to significantly affect local property prices. (Actually, most of the LVT advocates I’ve engaged with seem to regard rural land as a sideshow, on the grounds that its ‘value’ is so much lower than urban.)

    Andrew’s comment also resonates with one of the objections I always raise: that LVT treats landownership as essentially economic. I can see that it might shift control of land to a ‘better’ (i.e. more entrepreneurial) class of owner but, to my mind, it’s a poor substitute for giving people a proper right to land. Relying on market forces to correct a fundamental misallocation of resources seems absurd to me, even if it could be expected to work.

    Personally, though, I’m not convinced LVT would have the effects its advocates believe, so I don’t think it would even be useful as a transitional measure. The idea seems to be that it would make land so much cheaper that everyone would be able to buy what they need. But, as I see it, that’ll be self-limiting because it won’t just make it cheaper for the poor, it’ll make it cheaper for the rich too. So they’ll be able to ‘consume’ more of it – keeping prices too high for the poor to get a look-in.

    I’d expect it to be self-limiting politically too, particularly if it really is implemented as a replacement for all other taxes, as many of its supporters advocate: the more successful it is in broadening the base of landowners, the more voters there’ll be who would benefit from the rate being lowered and taxes being shifted back to other things. Anywhere it does get implemented, I think it’ll quickly become just another political football.

    As for the technicalities, like Andrew, I’ve never managed to get my head around how it would work in practice. As I understand it, LVT’s supporters are advocating a tax based on imputed market rental values, with the explicit purpose of removing one of the principal drivers of the landowner/tenant relationship (the rentier profits from controlling an essential resource). Market values seem to involve a good deal of guesswork even when valuations are being tested by the need to get a buyer and seller to reach agreement; without that discipline, and in a radically changed market, I find it next to impossible to get a clear sense of how the value the tax is supposed to be based on will be arrived at.

    From a jurisprudence perspective, too, I’d say LVT is deeply flawed, because it unnecessarily conflates two distinct issues which are both individually highly complex: questions around how natural resources are shared out, and what different people need in order to sustain themselves, are clearly related, fundamentally important and difficult to answer; similarly, how the activities of government are paid for, and what each person should contribute to society, are clearly related, fundamentally important and difficult to answer. As far as I’m concerned, those two sets of questions are distinct. And both issues are tangled enough on their own; putting them together is just asking for trouble.

    Anyway, I look forward to seeing your future posts, Chris. But I’d say LVT doesn’t warrant one!

    • Thanks for those thought-provoking comments, Malcolm. From my point of view it would be worth writing another post about LVT if only to dismiss it…and you marshal in your comments some good reasons for doing so. My feeling is that some of the problems you mention are problems with any kind of tax – either you tax too lightly to make a difference, or so heavily that it strongly steers people’s behaviour, but not always in the intended ways. Other forms of regulation have other problems… Still, you make a good case against. I’ll try to come back to it at some point.

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