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The air, the air, twas God who made the air,
The air, the air, that all of us must share,
Why should we be beggars when democracy's our heir,
God made the air for the people.

(with apologies to the great political song...:)

But it makes a point. The other day I said I wanted to return to one or two things that Chris Huhne said about climate change.

Apparently carbon trading is better than carbon taxing because, said Chris, the incentive of being able to trade away your surplus allowance and make some money is a bigger incentive than simply saving tax.

I'm not very happy about that from someone who is President of ALTER.

The air is ours. Collectively. The air is land. Yes, land. In the economic sense anyway. If we take some and use it (pollute it) and don't leave as much of as good quality for everyone else to have their share we are breaching Locke's Proviso. Clean air, therefore, has a potential economic rent. Why should we "enclose" some, in the form of some kind of carbon allowance, that someone can make money out of?

The mechanism of working out how much one has used is just the same as if one were trading an allowance, every process is still going to have to have a carbon tariff. But it is all of us, collectively, that benefit financially from overuse and increasing air/carbon values. The incentive lies in devising processes that will use less than your competitors and therefore enable you to make more profit from your activity.

Why is that any less an incentive than trading away your surplus of something that doesn't belong to you in the first place? Carbon taxing is just as much an incentive and philosophically and ethically better justified.

Now that Bloggers for Burma Day is past, my attention has been drawn to an article written thirty five years ago by Milton Friedman as then President Nixon was preparing to step up the "war on drugs". I think it appropriate today as President Brown prepares also to step up the "war on drugs" here at home (at the same time as the Czech Republic apparently starts the process of decriminalizing). You'll find it, which I reproduce in full below, along with lots of other useful documents and research hosted at the Schaffer Library of Drugs Policy:

Prohibition and Drugs

by Milton Friedman

From Newsweek, May 1, 1972

Stop Cannabis Prohibition
Originally uploaded by Professional Recreationalist

"The reign of tears is over. The slums will soon be only a memory. We will turn our prisons into factories and our jails into storehouses and com-cribs. Men will walk upright now, women will smile, and the children will laugh. Hell will be forever for rent."

That is how Billy Sunday, the noted evangelist and leading crusader against Demon Rum, greeted the onset of Prohibition in early 1920. We know now how tragically his hopes were doomed. New prisons and jails had to be built to house the criminals spawned by converting the drinking of spirits into a crime against the state. Prohibition undermined respect for the law, corrupted the minions of the law, created a decadent moral climate-but did not stop the consumption of alcohol.

Despite this tragic object lesson, we seem bent on repeating precisely the same mistake in the handling of drugs.

ETHICS AND EXPEDIENCY

On ethical grounds, do we have the right to use the machinery of government to prevent an individual from becoming an alcoholic or a drug addict? For children, almost everyone would answer at least a qualified yes. But for responsible adults, I, for one, Would answer no. Reason with the potential addict, yes. Tell him the consequences, yes. Pray for and with him, yes. But I believe that we have no right to use force, directly or indirectly, to prevent a fellow man from committing suicide, let alone from drinking alcohol or taking drugs.

I readily grant that the ethical issue is difficult and that men of goodwill may well disagree. Fortunately, we need not resolve the ethical issue to agree on policy. Prohibition is an attempted cure that makes matters worse-for both the addict and the rest of us. Hence, even if you regard present policy toward drugs as ethically justified, considerations of expediency make that policy most unwise.

Consider first the addict. Legalizing drugs might increase the number of addicts, but it is not clear that it would. Forbidden fruit is attractive, particularly to the young. More important, many drug addicts are deliberately made by pushers, who give likely prospects their first few doses free. It pays the pusher to do so because, once hooked, the addict is a captive customer. If drugs were legally available, any possible profit from such inhumane activity would disappear, since the addict could buy from the cheapest source.

Whatever happens to the number of addicts, the individual addict would clearly be far better off if drugs were legal. Today, drugs are both incredibly expensive and highly uncertain in quality. Addicts are driven to associate with criminals to get the drugs, become criminals themselves to finance the habit, and risk constant danger of death and disease.

Consider next the rest of us. Here the situation is crystal clear. The harm to us from the addiction of others arises almost wholly from the fact that drugs are illegal. A recent committee of the American Bar Association estimated that addicts commit one-third to one-half of all street crime in the U.S. Legalize drugs, and street crime would drop dramatically. Moreover, addicts and pushers are not the only ones corrupted. Immense sums are at stake. It is inevitable that some relatively low-paid police and other government officials-and some high-paid ones as well-will succumb to the temptation to pick up easy money.

LAW AND ORDER

Legalizing drugs would simultaneously reduce the amount of crime and raise the quality of law enforcement. Can you conceive of any other measure that would accomplish so much to promote law and order?

But, you may say, must we accept defeat? Why not simply end the drug traffic? That is where experience under Prohibition is most relevant. We cannot end the drug traffic. We may be able to cut off opium from Turkey but there are innumerable other places where the opium poppy grows. With French cooperation, we may be able to make Marseilles an unhealthy place to manufacture heroin but there are innumerable other places where the simple manufacturing operations involved can be carried out. So long as large sums of money are involved-and they are bound to be if drugs are illegal-it is literally hopeless to expect to end the traffic or even to reduce seriously its scope. In drugs, as in other areas, persuasion and example are likely to be far more effective than the use of force to shape others in our image.

As a side observation, the self same predictions as Milton makes here, 35 years ago, have been repeated just this week as Trading Standards officials fear the recent increase in the age at which youngsters can buy tobacco products will lead, as it will inevitably, to rogue traders flogging them fake fags over the school fence to get round the law. As the Schaffer library presents in a different article, the banning of something that is itself addictive is fraught with so many dangers as to make it nigh on impossible and certainly counter-productive. For those of us who already understand this, it's like watching a horrific train crash happening in slow motion knowing you are unable to prevent it.

This is more than a little parochial for me, and just a tad conservative with a small "c" - it reminds me again why little changes can deeply affect people in all sorts of ways. And whilst my own thoughts on this are probably unprintable, and not only because the decision has been made by my employer and landlord and I wouldn't really want to find myself sleeping under a hedge next week, I cannot let this little bit of Oxford's history disappear without some commemoration...

Headington Hill Hall, mark II (mark I is to the far left of this picture), built by James Morrell.

When John Henry Brookes was entering his job as first principal of the Oxford City Technical School in 1928, which, by a circuitous route is the fore-runner of Oxford Brookes University (and so allows us to celebrate our "150th anniversary" in 2015), the Morrell family, already an unusually important non-university influence in Oxford had, six decades previously, built not one, but two grand houses on this side of Headington Hill and had laid out the arboertum/park in their grounds that is now Headington Hill Park, Oxford's most beautiful urban park, if I do say so myself.

Indeed, their estate straddled what is now the main Headington Road out of town, encompassing what is now South Park, Cheney Lane, Cheney School and Oxford Brookes University's main Gipsy Lane Campus, its sports centre and the Cheney Student Village (another hall of residence). They built the land-mark iron bridge across Headington Road on the hill when it replaced what is now Morrell Avenue and Old Road as the main London road, and they owned a farm and other properties on the north west side of Headington Hill Hall that are now allotments and, until yesterday at least, "Morrell Hall" of residence.

The family, which included I believe two Liberal MPs and of course the famous Lady Ottoline Morrell (who started the nearby Garsington Opera which will also, once again, be coming to an end soon I gather) had not lived in Headington Hill Hall since before the second world war, during which it and its park was requisitioned as a wartime psychiatric unit and in 1953 the family sold the hall and park to Oxford City Council until Robert Maxwell started renting it off them ("the best council house in Britain" I believe he used to describe it).

But they retained some of the land around, including that set out by then as allotments on the Marston side of Headington Hill and when the last of the family directly connected with the hall died in 1965, James Herbert Morrell (son of Emily, the last occupant of the hall, and George Herbert Morrell) they made available part of the allotments to the City Council for the development of residences for the students of the now named Oxford College of Technology which had some twenty years previously managed to acquire some of the other Morrell family estate on the other side of Headington Road, which is now our Gipsy Lane campus.

New signs, no sign of Morrell Hall (I'm not sure I'd put the lavatorial status on a road sign!

And those halls have been called Morrell Hall ever since. Until now.

Ten years ago the by then Oxford Brookes University bought land adjacent to Morrell Hall that had been used by government offices since before the war and built what is now called "Clive Booth Hall", named for Sir Clive Booth, the last director of the Oxford Polytechnic and first Vice-Chancellor of Oxford Brookes University who left office the year after I arrived at Brookes. It seems right and fair to want to commemorate the person who managed that momentous transition from polytechnic and council ownership to fully fledged independent university. Indeed I like Clive, for all that he has made his later career out of high office in some of the most powerful QUANGOs in the country - first SEEDA and now the Big Lottery Fund, he is down to earth and always friendly and happy to stop and chat. He was telling me last week in fact how flattered he was, or he thought he maybe ought to be, that there was now a bus running around Oxford with his name on the front (it stops at the halls on Marston Road)!  One of the nice things about working in a university community is that the chief executives, in my experience at least, are nowhere near as remote as they probably would be in private sector businesses of a similar size.

But the university has decided to extend the Clive Booth Hall name to the adjacent, Morrell Hall, site - they were already functioning in terms of management as one site with two identities - with the utilitarian description differentiating the two halves of the hall of either "Clive Booth Hall (ensuite)" and "Clive Booth Hall (non ensuite)".  One might wonder what these titles may be shortened to in the sometimes wicked humour of students!

In a very real sense, we're not talking about a family who happened to live on this hill side but who quite literally made the hillside, in a similar way to the Churchill family or Cavendish family created the landscape of Blenheim or Chatsworth. And so we have to say goodbye to the university's only commemoration of the family without whom the university might still be looking for a suitable home.  You could say that wittingly or unwittingly the Morrells have been the university's biggest benefactor.

"Here lies James Morrell Esq, who died at his bedside at Headington Hill Hall, Sept 12th, 1863, Aged 53" - the grave near the entrnace to St Clement's Churchyard which the family used to reach through the park via the gate on Marston Road.

New blocks are replacing the old at the former Morrell Hall, and they are to have some kind of green energy plant. Little did I suspect at the time that what was intended was to harness the power from over the road in St Clement's churchyard where James Morrell lies no doubt a-spinning in his grave!

You can find lots more information about the Morrell family and Headington Hill Hall and its history at Stephanie Jenkins' very informative Headington website (which also has other links to more information).

And in other news about destruction of historic local interest, here's now what's left of the the majestic old chestnut tree the City Council have just killed in the Headington Hill Park grounds that James Morrell planted 150 years ago:

Felled horse chestnut in Headington Park - apparently this was dangerous. Or something.

Last week Vince Cable seems to have unilaterally added to Lib Dem tax plans in response to repeated more-heat-than-lght stories in the media about private equity bosses and their tax treatment, "non-domiciles" and their property in the UK going untaxed and the continued cris de coeur of middle England against Inheritance Taxes on their homes. Later in the week it seems George Osborne joined in, on what must be pretty unfamiliar Tory territory.

And then yesterday there was a story on the BBC about how buy-to-let property owners are able to avoid up to £2bn in taxes by offsetting their mortgage interest against their rental income before tax.

This seems to me to be something of an unhealthy return to the politics of envy, where the only question the taxman asks is "how much have you got?" As I wrote last week at the 1909 Group website, our Liberal forebears wanted to change that attitude. They realised that "equity" in the tax system was not solely a question of how much someone has, but just as importantly of how they got that wealth. Whether it was through healthy economic processes, creating new wealth, or by exploiting such things as protectionist policies, negative externalities or land and other natural monopolies.

Take supermarkets as an example. Private Equity firms have been circling Sainsbury's recently. Though they may have been seen off by other investors such as Robert Tchenguiz, he himself, a noted property tycoon, said he was investing in a "property company with a retain business". Indeed, with a Stock Market capitalization of £8.7bn, estimates value their property estate at more like £10bn - more than the whole business! If someone were to take over Sainsbury's they would not be creating new wealth but releasing the embodied profit of land ownership.

Many new entrepreneurs are basically leveraging land values to make a killing, hiding behind diverse operating businesses. INTO University Partnerships is an international English Language teaching business, but the partnership deals it forges with universities all seem to revolve around land acquisition and becoming a successful and profitable landlord to the students it brings from all corners of the planet. Last year, the HBOS banking group attempted to become a major player in the UK house building industry, pipped by Barratts in a contested bid for what had been the fifth largest house builder - this last is a double whammy - not only do they get to build your home, and capture the land value profit for themselves, but they get to charge you for borrowing the money to pay them for that land!

As to "non-doms" why should only they be penalised for owning property in the UK? Why not a land tax that would fall on everyone regardless of domicile status and instead of income and other capital taxes, including the hated Inheritance Tax? The non-doms would not be able to avoid it - and neither, incidentally, would the company involved in the outsourcing of the HM Revenue & Customs property estate, Mapeley, who subsequently off-shored the ownership of the property to avoid any taxes on it.

Anyway, the point is there are ways of making a tax system which is fair and equitable, that is not complicated, and doesn't seek to fleece people just because they have made money, but on the basis of how they make that money, and where that wealth is accumulated by processes like land ownership, where the value is created not by themselves but by others' need for their monopoly locations, they will be taxed the most, automatically, and according to market valuations not intrusive tax assessors. Land Value Tax.

Technorati Tags: vince cable, lib dems, tories, land value tax, Henry George, property tax, george osborne

I spotted someone seemingly scouring my blog for articles relating to "citizens' Income" and came across this now seemingly very prescient post I did nine months ago about our tax policies hitting the mark or not.