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I caught in my logs the other day someone visiting my blog from Tristan's piece way back in October about his "Essential reads". He was very flattering about my blog, but I do remember now reading it first time and wanting to defend myself against his suggestion that I was possibly the "LibDem version of a gold bug, seeing LVT as a solution to many problems as a gold bug sees a gold standard".

I admit, occasionally (well maybe more than occasionally for some) LVT seems like a religious belief, and as such one can be very zealous about it and make claims that others feel unwarranted. I know that a much more vocal LVT campaigner (yes, there are some!), Labour Land Campaign's Dave Wetzel, managed to put off a member of their NEC who works in my office because she could not believe that something for which so many beneficial claims were made had not been properly tried before now. And it is also true that for many years, the Lib Dem's own campaign group on such subjects, ALTER (Action for Land Taxation and Economic Reform), of which I am secretary, has focussed more or less exclusively on LVT to the exclusion of other "Economic Reforms" - indeed it has been suggested that "Economic Reform" was only included in the name to make a better acronym!

I hope we will see in 2008 ALTER and with it hopefully the Lib Dems more generally, taking a bigger interest in other economic matters. Already there are suggestions about a book of essays, similar to the Orange Book or Reinventing the State, covering all sorts of aspects of what I like to call the "Liberal Economic Tradition" (I use such a phrase because "economic liberalism" or "neo-liberalism" have all but been hijacked as pejoratives for "beggar thy neighbour" economics which is an utter travesty of the rationale of economic liberalism). We are circulating a motion on seignorage reform in the light of the Northern Rock bailout for Spring conference. And so on.

Indeed my own journey to Georgism was sparked not by an interest in LVT originally, but by reading about the debt-based privatized credit system (I could just as easily be a real "gold bug" or at least a "hard money bug"), with forays into Social Credit and similar ideas. I have said and written many times that economic liberalism is about rooting out and preventing unearned privilege. If anything is key to this it is not land per se, but an aversion to monopoly, especially monopoly conferred by government which benefits one group but disadvantages others.

But as with the late nineteenth century libertarians, anarchists and mutualists, land, in the economic sense of everything in the natural world that's just there, existing without having to join one's labour or capital to it, often finite in extent and needed for survival by most creatures on the planet, is one of the four big monopolies that underpin entrenched privilege. And whilst the others, money and the cartel that creates (and limits) credit, tariffs on trade imposed usually by governments and intellectual property are also crucially important, a better understanding of the proper relationship between humanity and its one planet and its resources is a key way to break some of these others.

It's not necessarily an a priori solution - that LVT must go before reform of these other three - but it enables, especially, the breaking of the tariff and protectionist monopoly by providing a more healthy way of government raising money that has a smaller (and mostly positive) effect on trade and economic activity than taxes on incomes or sales. It also enables a wider discussion on money - if you take away, through LVT, the capital value of land against which so much of our broad money supply is secured you also need to think about how to replace that money supply via a fairer credit supply system. If one takes the Georgist paradigm to its fullest extent, as I do, it enables a new sort of social safety net in the form of the citizens dividend - the distribution of the value of land rents to all as a Citizen's Income as of right.

So, if I focus more on LVT than these others, it's partly because I believe LVT is more saleable at the moment than, say, a wholesale change in the way we allow money to be created, and partly because I understand it better than some of these other issues. But I regard all four as ultimately necessary to build a properly liberal economy and if I have one personal wish for 2008 it would be to more fully develop some ideas for solutions to the other three.

See, some people think I am over the top saying that supporters of drugs prohibition are complicit in the murder of the victims of the illegal drugs trade, but I'm not the only one...

Are you a death enabler?

"If you support drug prohibition policies that make black market drug sales profitable, then you are encouraging violent behavior by criminals and supporting the funding of terrorists. This directly results in the deaths of thousands.

You are a death enabler.

If you support drug war enforcement..."[continues]

There's lots of stuff in the weekend press about the government's plans to tackle housing shortages. The Observer runs with "It's housing, housing, housing as Brown builds a new vision" and is typical of the genre...

"The new Prime Minister has signalled his intent by kick-starting what could be the biggest building programme for 30 years, writes Nick Mathiason

"Sunday July 15, 2007
"The Observer

"Since 2000 Labour has promised a major change in the number of new homes. Headline-grabbing announcements from ministers came and went. But though Britain is now in the midst of the most prolonged housing price boom ever seen, the number of homes built annually has hardly shifted from 80-year lows of about 185,000 a year. Meanwhile, whole swathes of the population have been priced off the housing ladder.

"To remedy a chronic supply shortage, last week Gordon Brown unveiled plans to build 3 million homes by 2020. While it is easy to dismiss his announcements as yet more froth, Whitehall officials, housebuilders and regeneration specialists say radical reform and even action is in the air."

Yet, as Tristram Hunt points out in his defense of nice views for the haves against housing for the have-nots (the BANANA argument), we are told by other government figures that there are at least 65,000 hectares of derelict or underused brownfield type sites in urban areas (which is space for 2.6 million of the three million Gordon wants to see built at current urban density guidelines of forty per hectare). While Anne Ashworth, in Friday's Times, reported that the PropertyFinder website claims that 420,000 homes stand empty in disrepair in England - enough, you will notice, with the underused urban land figure, to complete Gordon's 3 million properties without putting a single JCB into the greenbelt.

Low density	High density
Which would you prefer?

But also, we have to realize that there are not 1.5 million households (the council house waiting list) out on the streets. They are mostly living somewhere - often in overcrowded and/or unaffordable conditions. Whilst research also suggests that up to 46% of all housing is "underoccupied" - with 2 or more unused bedrooms, and that contrary to the usual cris du coeur that people should be allowed to stay in their family home regardless of how empty it is, 45% of households aged 50+ say they are open to the idea of downsizing before or after retirement - though most don't and cite a lack of suitable local properties to which to downsize into as the main factor.

All of this suggests that the better way to address current housing needs is not in fact to build net new units on virgin land at all, but to promote policies that bring empty homes into use, derelict land into bloom, and remodelling of existing communities so that the needs of different ages, for downsizing as well as for growing families, can better be accommodated without chucking anyone out to the farthest flung edges of a new suburban edge of city sprawl.

But, as the TV development programs tell us, location, location, location is what matters. We are a small island. It doesn't take long to get practically anywhere. We also need mechanisms to promote natural population movement to areas that are now economically down at heel and suffering from blight - since it would probably be a good guess that most of the empty homes and a high proportion of the unused urban land is in such areas.

And here it is not just land use policy that could make a huge difference. Many international inward investors want to be near to their global markets - which means proximity to ports and airports; much of the concentration of high tech businesses in the "western arc" of the South East region is put down to proximity to Heathrow - they are competing not with Hull, but with Silicon Valley or Osaka. A proper market in landing slots encompassing all airports in the UK could make a big difference to the viability of international traffic into regional airports, and so also attractiveness for international businesses to set up around those regional airports instead of around the London ones and bring employment, and therefore housing demand, out of the South East to those airport hosting regions.

But in the final analysis, the only measure that could achieve all of these in one, together with providing a replacement revenue stream for both local and national government, and recovering government and community financial inputs to localities from the beneficiaries who see their property values rise with regeneration money and so on (Sarah Beeney et al will explain it no doubt - it is fact not conjecture), is Land Value Tax.

All other things being equal, if your corporate tax bill (or even your competitor's) in, I don't know, Bolton, is a quarter what it would be in Bracknell, and your wage costs are a quarter less because your employees don't have to pay as much for that most basic of life's needs, a home, given the chance, wouldn't you, or rather your shareholders, jump at the chance for that extra post-tax profit? And, on top of that, your investment in that low value area would be far better for that area than continuing welfare payments because of a lack of economic opportunity for the people who live there - saving huge amounts of current government redistribution welfare payments.

Land values are by nature unearned by the occupier. They are created by the growth (or decline) in the popularity of a location, the expenditure of others, including government, that goes into the services and infrastructure that creates that popularity, and the effective monopoly current occupiers have in a location. Property values are also a "false" kind of wealth - for most people, those who live in their one and only property, they only really matter in relation to their next desired home. Those land values then, are a supremely appropriate thing on which to base a tax. And the non-doms, currently the fashionable whipping boys of the property market, cannot escape them to boot.

Who could possibly ignore an idea that claims to be able to achieve all of this with one simple reform. No more forcing urban expansions where people don't want them. Lower welfare transfer payments because of a more balanced regional economic outlook. Recovering money spent on an area from the people who benefit most from that expenditure. Lower housing costs. More efficient use of the housing we've got. And encouraging redevelopment of blighted areas or underused land. It's win-win. A no-brainer. A one size really does suit all package.

Technorati Tags: affordable housing, house building review, land value tax