LVT: history of the idea

Not new or left wing

Land Value Tax is not a new idea, nor is it a left wing idea - it was first mentioned in the 18th century by the "classic" economists Adam Smith and David Ricardo - darlings of the right in today's politics. Karl Marx actually ignored it!

Winston Churchill (certainly not left wing!) felt it unfair that those who owned land benefited from its increased value as a result of taxpayers' investments while giving nothing back to society by way of tax. See our page on LVT: history of land ownership for a quotation from Churchill.

Taxes on land are extremely old. Peasants have always been taxed by land owners (that's why land owners were willing to fight wars and kill one another to steal land) and from 855 the Christian church was given the right to tithe peasants based on the value of produce (crops and animal products) generated by the land.

Over time the tax on land became known as "rent" and was charged by the land owner irrespective of what produce could be generated by those who actually did the work. This remains the case today.

In 1836 church tithing was also included within rent and the process was (almost) brought to an end under the Finance Act 1977 - just over 40 years ago! In fact a relic of tithing remains a problem because the Church Of England continues to demand "Chancel Repair Liability" - a tax or charge on freeholders irrespective of their religious beliefs. The Church of England has always fought hard for taxpayers' money - it refused to give up its slaves in Barbados until it was paid financial compensation - despite slavery having been abolished in 1833.

Theory v practice

Ecomomists failed to predict the crash of 2007/8, we still live with the consequencies and the guilty still live in their mansions and roam free on their yachts and private jets.

Theory was trumped by the reality of naked greed.

  • Economics is used to justify a world view, a political line, and the teaching of the subject in schools and Universities is strictly from the "classical" side. At best, a Marxist world view, and the labour theory of value, gets a passing glance before being rapidly dismissed in favour of "the importance of capital and free markets".
  • Economists can't even agree with one another, let alone explain their theories in simple terms.
  • Economists, like all professions, use shorthand, "private" language and seemingly impenetrable jargon.

Some of us in the Labour Land Campaign have been at it for over 35 years, we have read endless books, we have engaged in endless debates, we have given endless presentations, we have written endless papers - so we know the theory and the buzzwords.

However ...

In real life, as opposed to theory and statistics, the big questions get lost amongst the abstract:

  • What is society for?
  • How can we organise a fair society?
  • How can we best share the benefits that society generates?
  • How can we ensure that each of us contributes to the social good according to our ability (work) and according to our means (taxation).

Henry George

Henry George (1839 - 1897) was an American political economist and journalist whose economic philosophy, known as Georgism, was based on the belief that people should own the value they produce themselves, but that the economic value derived from land (including natural resources) should belong equally to all members of society.

No objection to land ownership

Henry George in a nutshell:

"I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless.

Let the individuals who now hold it still retain possession of what they are pleased to call their land. Let them continue to call it their land. Let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel.

It is not necessary to confiscate land; it is only necessary to confiscate rent."

"Confiscate" is an awkward word in modern Britain. Like the word "naughty" (which was a very strong term at the time of Shakespeare, more like "criminal" today) it has changed its shade of meaning over time. Today "tax" would be better than "confiscate" in George's second use of the word.

George felt that we should each be rewarded for our efforts, for the work we do, for the contributions we make to society. He felt it unfair that those who owned land, or who had inherited land, should lead an idle life while living off the labour of others.

All of history is a battle for rent, a battle to sieze and inherit land (in a multitude of ways: violence, marital alliances, purchase etc.) and a battle for the right to live off the work of others. That right has been enshrined in law by law makers who were themselves land owners or the servants ("representatives", "lackeys", "lickspittles", "flunkeys", "toadies", "puppets", "agents", "lawyers" - take your pick) of land owners.