Thoughts on Ownership

Harry Pollard

[Reprinted from a Land-Theory online discussion, 13 November 2003]

I don't think we should regard land-value taxes as a payment for a right to put up a fence to keep everybody else off. The right to exclude other people from our land is bound into our title deed of ownership.

Before you react against my "ownership", remember that there are a number of definitions of ownership -- in the case of land, I believe we hold it in fee simple. We hold a bundle of rights about which John is certainly more knowledgeable and perhaps would like to contribute.

Although Georgists like to insist that philosophically land -- the Earth -- properly belongs to everyone, in practice, land must be owned and held by the person who uses it -- or he won't.

We are inclined to point out that land need not be owned, that what is important is security of tenure yet, outside the classroom, this argument falls flat. It is part of our nature, everyone's nature, to want a piece of ground that we can call ours.

"This land is mine."

The problem is that land prices, unlike most things including people, you is not controlled by the market price mechanism. As a result, land prices escalate to a point where much of production falls into the hands of the landholder rather than the producer. Indeed, land prices may well rise to a point where production ceases, leaving "holes" in the urban landscape.

These holes consist of empty land or acreage supporting improvements that don't improve very much. However, this condition can be ended pretty quickly.

Any holder of a location gets a bonus from the surrounding community -- and bonus called Economic Rent. This bonus increases with any increase in population enjoying access to this location. Conversely, it disappears if the surrounding community heads somewhere else.

As Economic Rent is produced by the community, they surely have a right to their production, so collecting Rent and returning it to the people who created it is quite just. However, the important economic affect of collecting Rent is to return land to the control of the market price mechanism.

So we collect rent because it's proper to do so, and the affect of collecting rent is to return a major part of the economy to market control. Then we can have an economy controlled by the impersonal market, rather than the personal, occasionally venal, and often ineffective, control of politicians.

It would be interesting if a Georgist legal researcher where to place into a database all the legislation that, no matter its posted reason, was actually designed to handle problems that originated with land monopoly.