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I seem to collect these. Why can't I find a few that pay though! I have just been elected a director of the SE² Partnership Limited (Social Enterprise South East) which takes over from a SEEDA funded project supporting and promoting social enterprise in the South East region.

In my last post I set out what I considered to be the three necessary reforms to create a more equitable society - Land Value Tax (or "The Single Tax"), Citizen's Income and Ownership for All.

In the comments, Tim Carpenter, Head of Policy at the Libertarian Party UK had several objections that I would like to address:

Tim: "LVT can seem fine and dandy at the first off, but over time who decides the future value of your land?"

Why does anyone need to decide the future value of your land? In any case, even if that were necessary the market does that anyway even at present - what people pay for a property reflects their view of what it's worth into the future - they are, literally paying up front, to the previous owner, the rent for a number of years into the future. I agree there are issues with a "100% Land Tax" where the community attempts to collect 100% of the rent (as I and other geo-libertarians would advocate). This would make the capital land value tend toward zero and how would you know whether it's moving up or down over time? Well, the answer I believe is that it would trade at a discount or premium reflecting the buyer's and seller's view of whether the "passing rent" (ie the LVT bill) was set too high or too low.

Tim: "It is fraught with risks, opportunities for corruption and chaos. If you think compulsory purchase was bad..."

As I understand it several of the big RICS member firms have discussed this and have proposed a valuation regime that they would be comfortable bidding for and would expect to be able to handle things like appeals. The Oxfordshire pilot study showed that on average there was only a need to value about one site in ten - ie that that many nearby sites would share the same land value. And there are developing ever more sophisticated data and models for modelling things like "landvaluescape" and how it changes in reaction to things like new infrastructure.

I only don't believe it is as daunting a task as taxing incomes in the multitude of ways we currently do.

Tim: "If CBI is only half what is needed to live on, then surely we will still need welfare."

The Joseph Rowntree report I mentioned included a lot of things that go much further than the "basics needed to survive" (and the headline figure of £13,400 was "pre-tax". Not that I claim that would halve the bill. However the removal of the deadweight loss created by the other taxes that would be repealed, and the ending of subsidies, particularly on agricultural land and other tariffs on the necessities of life would make them cheaper. Two ways to be wealthier - have more money or make everything you need cheaper. As Frank Gallagher in "Shameless" says "Make poverty history; cheaper drugs now!"

Tim: "Removing the minimum wage is fine but be under no illusion, the CBI will be factored into that wage (or lack of)."

But, first, they would also be factoring in the lack of payroll taxes and income taxes - they'd have nearly 40% more in their "wage bill" to play with in many cases. Second, the CBI has two purposes in my mind - one of them is to give people enough to survive, just, day to day, but the intentional beneficial effect of that is that people have a cushion that empowers them to say "no" to a coercive deal from an employer. If the marginal benefit from working x hours for y pay is not worth it and you know you can survive until you get another, hopefully better, offer, this changes the balance of power between employer and employee. And, because it is the same for all workers, and not just the ones currently stuck in the benefits trap, the employers are more likely to have to listen and produce decent remuneration. Though I do concede that there would be hundreds of thousands of currently civil servants in the job market to depress wages...:)

Tim: "It will be no solution to poverty AFAICT and your assertion that it would eradicate x y or x is not explained. I think parish provision is an interesting one, but frankly, look at places like S Wales and you will find that parishes will have little or no wealth creation so no money to spend on their army of dependants - central funding will be needed in precisely the places where people say it causes problems of unconditionality - for once the parish is spending other peoples' money the problems are right back with you again."

However, the LVT is more likely to move economic activity to areas where companies, and employees, and therefore also companies as employers, will pay less tax, which is turn will raise the economic activity in poorer areas and tend to level out regional disparities of economic activity. It cannot be any worse than the current situation where some regional economies make up more than half of their regional GDP from state handouts and subsidies to individuals and businesses.

Tim: "As another person has mentioned, the mutualist company can occur NOW. What is to change here? The fact that it does not happen now should either make you ask what stops it legally/financially or regulatory OR that it is actually a factor of how humans are socially, in that it takes certain individuals the gumption to kick start a company (and that is NEVER to be underetimated) and once they do so, why would they then let a whole load of strangers take just as much out of it as he/she does?"

I certainly don't underestimate the setting up of a company. I have been an employer for precisely one month in my life and it was a bloody nightmare. But it would certainly be less troublesome if I was not burdened with all those damn tax calculations! But again, I refer the honorable gentleman to the answer I gave a moment ago - the "cushion" that empowers the employee to say "no" a bit more; to hold out for a better share of the total returns to a business. This of course goes to the core of mutualism as I see it, as opposed to the anarcho-capitalist type of libertarianism. Mutualists believe that the current capitalist system is lop-sided, "toxic" and that it is itself a coercive and damagingly hierarchical system. Empowering labour to hold out for a better deal, making use of new corporate forms like limited liability partnerships and so on, will accelerate this change.

...and finally...

Tim: "Monetary reform and changes to fiat issuance will not happen by itself. The problem is coming up with something to replace it that actually works. I have seen many attempts and none appear to work or are just a cover operation for hatstand ideas like "social credit"."

As I think I said in response to another comment, I'm actually quite agnostic about how monetary reform should happen and what direction it should take. Personally I like the Hayek idea of fully privatised commercially competing currencies. I am told that the legislation actually already exists to allow commercial "complementary" currencies run by corporations. Air miles, Nectar and Kit-Kash are but early examples.

But consider this - if you collect 100% land rent and the capital value of land falls towards zero, the structure of the money system is bound to change - a large proportion of our broad money is lent into existence to pay for land in the form of mortgages. At the very least banks are going to need to have to adjust to that.

Actually I believe the real question is what lengths states will go to to prevent what I see as inevitable change if we allowed it. I haven't played there for a long time, and the hype about it seems to have died down a lot, but "Second Life" and "Kiva" are but a glimpse of what might be to come.

Incidentally, I presume I've been linked to in a discussion on the Libertarian Party forums (link will only work if you are a member and registered on their forums).  And that, now they have closed the public forums that were accessible to non-members, I am unable to see what people are saying.  I believe that none of these three policy areas step outside the bounds of libertarianism.  In fact that they address more inequities that create coercive human relationships than, say, anarcho-capitalist flavours of libertarianism do.  It would be nice to get the jist of what you are saying, if anything, over there!

...or maybe that should be "New Labour Years: Clause Four to Guinness Four"...

I remember it quite well; as a blue button on the floor of the Stock Exchange in early 1986, though my stock-jobbing firm did not deal in brewery stocks the partners were taking a great interest in the Guinness-Distillers takeover as their future sugar daddy, merchant bank Morgan Grenfell, were in the thick of it as corporate financiers to Guinness. Then (and maybe now for all I care) the "Takeover Panel" was a committee of senior city figures who acted as a sort of a referee to enforce rules on firms and advisers involved in take-overs of listed firms.

One night it was announced by the Bank of England, via the Takeover Panel, that Morgan Grenfell would have to stop buying its client's shares to prop up the market price since they were approaching the point where more than a quarter of the bank's capital would be tied up in one client. Everyone was eager, therefore, to see what Roger Seelig's team of corporate finance experts at Morgan Grenfell was going to do about this little inconvenience. So when the bell went and the old fashioned ticker screen on the wall of the exchange flashed "Guiness-Distillers: Takeover Panel Announcement" I was despatched to the take over panel notice board to get the gist of the announcement for my bosses. I reported back, amidst some excitement rippling around the stock exchange floor, that Morgan Grenfell had announced that they had formed a concert party of buyers who would be indemnified against any losses they might incur through buying and holding Guinness shares during the period of the take-over. It so sticks in my mind that that may even be very nearly verbatim nearly twenty-two years later!

"Huzzah! What a jolly good wheeze. What a simply splendid and ingenious way of side-stepping those nasty capital adequacy rules!" was the general cry. And remember, this announcement, as every announcement must during a takeover, had had to have been seen and approved of by that committee of senior city folk, the Takeover Panel. So few, if any, had any inkling that this fantastic bit of corporate gamesmanship would lead to the trial and conviction of most of its main players, the breaking of more than a few high-flying city professionals' careers, and wholesale changes to the compliance regulations in force in the City of London.

Why does this come to mind now? Well the latest row over party financing sounds quite similar. Today the Independent on Sunday reports that the Labour donor, David Abrahams, discussed his method of giving, through intermediaries, with the soon to be fundraiser in chief Jon Mendelsohn, who thought, like those city red-braces twenty years before, that it sounded like a "good idea".

The big difference between the two is that the Guinness Four were breaking an uncodified rule, that it was not cricket to manipulate the market to the benefit of one set of shareholders over another in secret - and I for one think that they should not have been tried let alone convicted on an issue where, so far as I am aware, everyone on the floor of the Stock Exchange that morning was congratulating Roger Seelig's team at Morgan Grenfell for the ingenuity that had lately made them the most envied takeover advisers on the London scene. The Labour Party, however, appear to have been playing fast and loose with laws they themselves only wrote a few years before to stop this sort of thing happening.

We're not talking the quaint unwritten rules of the old boys' club at the Takeover Panel here. We're talking law of the land stuff. And we're not talking about a few thousand shareholders and a few billion pounds worth of the international drinks business, the stakes in political funding are one's very ability to challenge for the right to control nearly half of the nation's income, the £500bn or so public expenditure budget as well as the right to create laws for the rest of us to abide by. I hear far too many people involved in politics call it a "game". The prizes in this particular game are life and death to some, war or peace to others, quality of life to all citizens. It's far too important to leave to careerists and hangers-on.

So, whilst it might be tempting for some in the political establishment to say "there but for the grace of God go I" and to tut-tut in public about Labour knowing that everyone's doing it in private, it has to stop here. Someone somewhere has to be convicted of these breaches this time. And do time, or get a friendly doctor to diagnose them with a reversible previously incurable condition to get the sentence reduced. Mud sticks. And while the last pile of poo, cash for honours, produced some pretty watery slurry that could not be made to stick long enough for a prosecution, everyone pretty well assumes there was some truth to the allegations. These ones seem much clearer. The political establishment must not be allowed to wriggle out of this one this time, or protect its own. And it should change British politics in the process.

Nobody, especially at the level of government we're talking about here, is indispensable. A large part of my disillusion with the parliamentary system over the past decade has been fueled by the hubris that oozed from Tony Blair that he was quite simply the only person out of the other 60,000,000 of us who could possibly run the country. I have news for the four thousand or so politicians and their hangers on at Westminster - not one of you is indispensable. And if you do anything that brings the whole sacred notion of democracy into disrepute, you should certainly not be protected from the consequences, whatever your position.