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New at 1909, how the People's Budget was intended to change the whole ethos of tax, asking not merely "how much have you got?" but also "how did you get it?" and giving us ideas just as pertinent today for differentiating between people's justified wealth and wealth gained by exploiting the common wealth and the needs of others.

To Reading this morning for South Central Regional Conference at the wonderful, if somewhat seriously cramped, Oakwood Centre in Woodley. The first, opening, speaker was Sandra Gidley, MP for Romsey. The "Romsey Redhead" herself. She seemed to devote most of her speech to having a go at the Lib Dem parliamentary press operation for watering down anything any MP want to press release so it says nothing at all preferably by the sound of it, but certainly nothing "spikey".

Now, as a defence against charges that our MPs are invisible, even to us, that's one thing, but frankly I don't want to hear that sort of excuse even if it is correct. If it is correct then we should be getting new press officers perhaps. Or not constraining them as much. But it is none of our, South Central ordinary members', business. The Parliamentary Party has to sort this out, not us.

But then she said something that somewhat let the side down - that we should "stop banging on about Site Value Rating and Constitutional Reform" and speak about things that matter to real people. Huh? When last did you ever see a parliamentary party press release about PR, less still LVT/SVR?

I very much suspect that the last press release on SVR was one of Herbert Asquith's.

And frankly, since it is, though I say so myself, the single most important step towards economic and social freedom we could take, perhaps we should be talking about it in press releases. At least it would differentiate us from the anodyne bull turds coming from the red-blue parties.

But to suggest that we do too much of that and too little responding to other issues is just fantasy Sandra.

I recently discovered Tom Papworth's blog. I was browsing his recent posts and one in particular struck a chord:

In The error of labelling he tells of a friend who, having got a little bit interested in politics, had veered off to the "left"...

I have begun to realise that I made a tragic mistake this year. I took to criticising one of my friends for being too "left-wing".
...
I took issue with some of his more radical views, notably what I perceived as anti-Americanism and anti-globalisaiton. Unfortunately, in looking for a short-hand to define his views, I fell to pigeon-holing him as a member of the loony-left. I think this has backfired. It certainly has not help dissuade him. Instead, it has given him a focus for his views. He has begun to identify himself with the very left-wing factions into whose orbit I was most worried that he would be drawn.
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I fear that as a result he is likely to begin to link himself with opinions and views that perhaps he might otherwise have approached with a more open mind.
...
I hope I've learnt a lesson. By labelling him, I have driven him into the very camp I was criticising.

Funny really, my journey seems on the surface to have been quite the opposite. A few years ago, when I was a Lib Dem councillor in Oxford, people would, by and large, have characterized me as being the Trotskyite wing of the Lib Dems...:) It was a bit of a standing joke. I actually can't think why this could have been the case. Thinking back, I tended to be of the opinion that if only things were properly managed, public provision could be just as good, just as efficient and, importantly, make money for us as a community organization.

You know, the constant price rises of the bus fares we had to pay for free bus passes for pensioners were precisely because they were privatized and the quasi-monopoly locally allowed those organizations to fleece us with impunity, and the solution was to give them competition by having a top notch public sector managed competitor. That kind of stuff. (I now know this quasi-monopoly fleecing the public purse as "rent seeking" - just as execrable as protectionism and not at all part of "free trade").

But it has always sat slightly uneasily on me. Public School educated I realize that my school was a place of refuge for me, the first place I could call home in a near nomadic and latterly "broken" family. I could never support policies, for example, that might destroy that option of refuge for many people. And my family's background was definitely "protestant work ethic" style despite my innate laziness.

I would pride myself, though, in being to the "lower left" on the Political Compass test - south west of Ghandi and Tony Benn so to speak.

I don't know what changed me really. Probably Conrad Russell (pbuh!) and his "Intelligent Person's Guide to Liberalism". It was probably the first time I had seen a sort of a "time line" of Liberalism, and being able to link, in my mind, the ideas of the Levellers, Locke, Smith, Paine with those of the Rochdale Pioneers, Mill, Hobhouse and Lloyd-George. In particular, for the first time, having been conned into believing that Adam Smith was all about power to the richest by the likes of the Adam Smith Institute whom I closely associated in my mind with Thatcherism, realizing that these political-economists were much more complex than their later political acolytes wanted us to know about.

One quote, though not its source (except that it was a late 19th century Liberal woman), sticks in my mind - that "any attack on the trade unions is an attack on the free market" made me feel that there could be some kind of fusion between concern for the poor, and empowerment of individuals to reach their potential, and the freedom to pursue the accumulation of wealth. And the medium for this fusion, also first really introduced to me by Conrad, is the "level playing field".

I can agree with the basic principle that in theory both sides in any voluntary trade, because of the price mechanism, benefit equally. In practice, without that "level playing field", I don't believe that all trade is that voluntary (especially in the practice and still necessity for the vast majority of people of selling their labour to someone else). I'm still incredibly ill-informed about all this. Wealth of Nations is far too daunting a read, as is most of Marx (though I can understand his and Engels' diagnosis of some of the problems in the Manifesto), I've never read any Hobhouse, and have but dipped into Hayek, Keynes and Friedman.

So if there is any great Liberal commission, it is in my mind to try to ensure that "level playing field" exists. That monopoly and monopsony are attacked so that competition is fair. And that government interferes as little as possible in peoples' choices. There are two great monopolies (well, at least quasi-monopolies) that governments of either political hue have done little to address - the creation of credit and the enclosure of land and other natural resources that human labour and capital do not create. And doing something about either or both of them would significantly level the playing field at a shot.

The twentieth century has a lot to answer for in political-economy. There was surely a need at the beginning of the century to redress centuries of democratic deficit and powerlessness on the part of the majority. But now we need another revolution, based on the realization that we do not want to live in an increasingly authoritarian state, where public services are a byword for inefficiency precisely because they cannot possibly measure their own worth if they are protected from competition. This does not mean wholehearted endorsement of things like GATS - I believe that forcing someone to invite tenders from the other side of the world is as much protectionism for big multi-national corporations - if they want into my local market, let them come and court me, not force me to go to them and save them the effort. And of course if the service concerned was not publicly run and financed it would not be an obligation - it's only because state money in involved that GATS says it must be hawked around the globe to compensate for the "advantage" of state subsidy - if we ran a Friedman-esque cooperative PTA run voluntary school system it would not be demanded of it.

Friedman and Hayek railed just as much against corporate welfare as they did against social welfare - we should remember that. Just as much as we should remember that Robert Owen was no socialist about to give his factory or his wealth away to his workers as part of some great dream of worker ownership - he treated his workers better than anyone else in the business because, he realized, that they would work better for him if they were better fed, better educated, better rested and had a better chance at a family life.

The middle road is liberalism. The aim is economic freedom (on a personal level the ability of all to live without being forced to sell themselves, and is based solely on the accumulation of income producing assets to enable one to survive without working - assets that are not well distributed to be sure at present, and getting if anything possibly more polarized) and personal freedom to live as one chooses. How either of these are anathema to either "right" or "left" somewhat escapes me - except that tribally, they contain some core tenets of both sides and are therefore part of the "other".

Again, I'm starting a new post to respond to some very interesting comments by Tim Carpenter. My inept attempt at a Drupal template means it's almost possible to follow a thread of comments and especially given this is going to be another long response I think it deserves an airing on its own.

For anyone coming new to this debate, it follows on from my original "three point plan" for equity and economic justice and some clarifications and responses I gave yesterday to comments on that original by Tim Carpenter, Head of Policy at the Libertarian Party UK.

Tim, thanks for taking the time to respond. However I think we are, as a colleague used to say to me "talking past each one another". Paul Lockett has put it all a deal more eloquently than myself , and for that, and if I have caused any confusion, apologies.

I am a geo-libertarian (of the "geo-mutualist" variety if you will). The main thing you seem not to have appreciated is that in calling for the "Single Tax" I mean just that - the community/state can only take economic rent on the land resources within its jurisdiction and has no call on incomes or trade. As I understand it this is the "purist Georgist" position.

The ideal 'state' would be limited to collecting the rent and distributing it all as a dividend to citizens for the reasons Paul outlined. "Commonwealth" - you are right, it's lazy, I should put a space between "common" and "wealth"! Economic rent from the finite natural resources we all require to share is "common wealth" and should be collected as such and distributed as fully as possible whilst every other tax is a tariff.

Tim: "1. When I say who defines the value of your land, you say "why does anyone need to decide", yet immediately go on to talk about collecting the tax! Someone DOES decide the taxable value and that affects the actual value. Can you not see that?"

No, the market sets a location's value. It does it all the time at the moment. And it will continue to do so in an LVT system. Even in a "100% LVT" system. If a location is appreciating in value, buyers will be prepared to pay a premium over last year's rent bill and vice versa, in a falling market sellers will effectively have to be prepared to pay someone to take the rent bill off them. The following year's rent bill will reflect that premium or discount by going up or down respectively.

Tim: "2. As you should know, we aim to eradicate income tax., so the comparison does not hold."

See above - I'm a single taxer. No income tax here either. It is a tariff on employment and trade. Though I would say that if a local community decided mutually to have a local tax on incomes or sales to finance some mutually agreed local project it would be doing so in competition with neighbouring communities that perhaps were not or were charging a different rate or a different tax. Tax competition is good, in itself, isn't it? Also I am aware of some "single" taxers who would justify retaining some income tax at least temporarily in order to try to address the "embedded" historical advantages of monopoly ownership. I don't.

Tim: "The problem comes when some local area under the influence of whomsoever, adjusts taxation on land they wish to gain access to because a new development is coming. So, building a road, whack up the value of land next to it. Farmer has no CAPITAL to develop it, so has to sell it for a knock-down price because he HAS to sell to meet the tax bill. If this does not concentrate land into a few hands, I do no know what would. This is just one example of the potential risks."

This appears to be Churchill's "market gardener" bogey, or, to others, the "poor widow" bogey. If you look at it under the current system, that same farmer, in similar circumstances is perfectly able, regardless of the squalor growing around, to sit on that land, not paying anything and watch its value "ripen" until the value, created merely by excluding others from what they need to use, is so great it becomes irrational not to sell. That process is outright extortion.

In fact, under an LVT system, land values at the margin would tend to move much more incrementally in any case. In the absence of other restrictions - zoning, green belts etc (it is your policy to remove those restrictions once an LVT system proves practical isn't it?) - you would not get these large leaps in hope value. I would actually retain green belts and such like for a while after LVT was implemented so that it can have its greatest effect in turning existing urban land to its most efficient use before going for sprawl. But I am prepared to be convinced on that. After all, we know that at relatively low densities compared with what planning guidance seeks nowadays, it would take up less than three quarters of one per cent of the non urbanized land in England to build the three million new homes predicted to be necessary over the next twenty years.

But once a point of equilibrium was reached between supply and demand rents at the margins of production would move slowly and via the democratic influence of the market. If that market and the community that makes up its participants eventually get as far as that farmer's land and all that remains to bring it in from the margin to profitable development is to develop a road, the farmer will have had plenty of opportunity to see it coming long before the tax bill becomes an issue for him.

Tim: "3. Living costs - if you have CBI as described you would still keep the most expensive parts of the Welfare bureaucracy - the entire means-testing apparatus. Housing benefit would probably remain in all but name."

I disagree. But I don't think what you understand me to have described is what I think I have! ie, in particular, that I am not paying for CBI out of income taxes, but out of the community collected rent on economic land. Land at the margins tends as I said towards a nil value. More people will be able to own their home because they will not be borrowing twice as much as the value of the capital good (the building) in order to pay the land value in up front capital. Renting a basic home at the margins ought to be achievable out of the Citizens Income.

With so many pulled out of poverty anyway by not having punitive benefits withdrawal regimes that reduce the marginal value of doing even the smallest amount of paid work and by the reduced costs of living owing to tariff eradication and the better off keeping more of their own money, the capacity of private charity or local mutualism to assist the much smaller number of people that would be needing top up hand outs above their CBI would be much increased.

Tim: "4. Income. You need to clarify here - are you saying that COMPANIES have 40% more or that wage earners do? Be under no illusions, if you have CBI, income tax will be enormous. I worked out once that if we went for CBI with no other tax changes but a cull of QANGOs, income tax would need to be about 64% flat from the very first penny (IT is currently £140bln, 7k x 50m = £350bln pa). A HUGE disincentive to working especially at the lower end. Result: black economy, unproductive citizens, more companies shutting down and a growth in imports (and do not say "cheap imports make us richer" because that only holds if we are simultaneously exporting a greater amount of higher value exports)."

I hope you'll agree that that objection is moot given I am not talking about income taxes at all. My calculation of the CBI cost at £5200 pa for adults and a decreasing proportion for under-18s to 20% for 2 year olds is around £285bn. £245bn if only the adults. I reckon there was about £200bn a year's worth of economic rent in residential land alone at the recent peak of the market. I don't think it is beyond belief that there's another £85bn in commercial, industrial, retail and, possibly, agricultural economic rents.

Tim: "5. Movement to low tax areas: A company will consider workforce supply as a prime consideration, not just rental costs. If that were not the case, expensive London would be empty. People pay top dollar for London rents because of a massive pool of labour - they can gain access to many cheap or more chance of snaring the best. To think LVT would make a company move out to a depressed area? Those places are already cheap. Why doesn't it happen now? Limited skilled labour pool. As you say the Government does it now and did it in the past (remember the Hillman Imp?) and it creates quasi-soviets. If LVT has an influence, it might IMHO move a few companies, deter some from even setting up where they need to and the rest of the companies will be bled paying higher rates just to keep near the labour pool they require. In the case of London, the move will be to New York or Hong Kong and we all lose out."

There are so many issues in this paragraph I can only assume again that I have failed adequately to have explained my position. At the moment businesses pay rents, yes? In an LVT system they will still pay rents. The only difference is that whereas currently the entire rent, that which accrues to both the building and the site or location goes to the current landowner, ie it is enclosed, privatized. Under an LVT system, the same rent is due (assuming they were paying the market rent originally), only the portion of it that accrues to the location goes to the community and that attributable to the building to the building owner. There's no corporation taxes, no more employee taxes. There's no increasing of rent or rates; there's no bleeding anyone. Except those, as landowners, who have bled the rest of us for centuries.

Areas of low land value will also be areas in which it is cheaper for employees to live (lower LVT for them too). For a business operating at the edge of profit it would seem to me to be quite an attractive move. But one that remains in London because their key skills are there is not penalised by that. Indeed, if sufficient other businesses do it who do not need to be in London for optimal profitability do move, costs will also likely fall for those left behind, increasing their profit, distributable to capital and labour.

I think there is, in particular, one form of LVT that could have a significant effect in this regard...the auctioning of air-space, via "landing slots" at airports. Making more efficient use of regional airports would draw business into those areas. I'm likely to propose this to our regional conference this autumn as part of an "anti third runway at Heathrow" motion. Interesting choices of examples though - Hong Kong of course is famous for having state owned land - everything except the Anglican Cathedral is leasehold and that has been used to raise revenue in a form of LVT and keep income taxes low. Modern valuation tracking and billing systems would make that far more efficient and not prone to some of the problems Hong Kong suffered by having too infrequent valuations.

In China before Mao took over, I understand that Chiang Kai Chek's regime looked into LVT as a way of staving off the rise of Mao's totalitarian collectivism. And in the former Soviet Union, Gorbachev I believe looked into LVT as a way of capturing the value of natural resources and in not implementing it allowed the so called "oligarchs" (really "kleptocrats" in my opinion) to enclose the revenue from that vast pool of common wealth.

I'm getting a bit tired here! I'm going to call it quite at this point and maybe think some more about the issue of mutualism. I think Paul answered the point about the "state as landlord" objections quite satisfactorily and there's no need for me to repeat it. But for fairness, other readers can read Tim's further points in the comments on the previous post.

Tim: "p.s. your page has a script that my browser asks me to kill due to risk of resource hogging."

Yes - I only notice this on older machines or slower network connections - I never experience the problem at home or at work. I think it must have been an advertising panel I have just removed, but if others still experience the problem let me know and I'll have another look.