The Mother of all Monopolies

Roy Douglas

[Reprinted from Land & Liberty, September-October, 1983]

"Land monopoly is not the only monopoly. but it is by far the greatest of monopolies -- it is perpetual monopoly. and it is the mother of all other forms of monopoly.

Unearned increments in land are not the only form of unearned or undeserved profit but they are the principal form of unearned increment and they are derived from processes which are not merely not beneficial. but positively detrimental to the general public.

I have made speeches by the yard on the subject of land value taxation. and you know what a supporter of that policy."
[Winston Churchill]

Consistency, declared Winston Churchill on one occasion, is the bugbear of little minds.

In one sense, that aphorism summarises his career. He changed party twice, and often caused considerable embarrassment in whatever ranks he chose to join. And his attitude both to Hitler and to Stalin underwent dramatic and swift changes.

And yet, in another sense, Churchill was a good deal more consistent than many politicians. His patriotism was never in doubt. He was always fundamentally a Free Trader, although he was often prepared to make compromises which infuriated purists. And he was a keen land reformer: again, not the sort of man to nail his colours to one mast and go down with his ship rather than abandon those colours, but a consistent believer in the importance and necessity of land reform in the spirit of Henry George.

Churchill's belief in land value taxation went back a long way. At Caernarvon, in October 1904 -- as an Opposition backbencher - he declared that it would be necessary to give effect to the almost unanimous demand for the taxation of land values".[1]

This expression, "almost unanimous", was something of an exaggeration, but not as much as it may seem. Well over 500 local authorities -- Conservative as well as Liberal -- had petitioned for the right to levy rates on the basis of site values, and in the overwhelmingly-Conservative House of Commons of the day, a Bill in favour of site value rating had not long passed its second reading, winning substantial support from Ministerial supporters.[2]

As a junior minister in Campbell-Bannerman's Liberal Government, Churchill did not resile from the views he had expressed in opposition.

· At Glasgow, in October 1906, he spoke of the "determination... to intercept all future unearned increment which may arise from the increase in the speculative value of the land".

· In his first major speech on the land question, delivered at the Drury Lane Theatre in April 1907, he called for "a universal valuation of the land, rural and urban" on the basis of "fair market value of the land, apart from the buildings and improvements of all kinds".

Churchill contended that "the present land system hampers, hobbles and restricts industry... a reform of our rating system and our system of land tenure would be followed by an upward movement in the material welfare of the nation."

He made an important point which is often missed by proponents of land reform. The injurious effect of a bad land system does not lie just in the fact that some people become richer and others become poorer than would otherwise be the case. This imbalance is only preserved by "vexatious obstruction of social and economic progress far more injurious and wasteful than could be measured by their own inordinate gains".

Churchill, however, had a disposition to introduce quasi-moral judgments into his dialectic.

"There are only two ways in which people can acquire wealth", he once declared. "There is production and there is plunder. Production is always beneficial. Plunder is always pernicious…"

The inference seemed to be that beneficiaries under the existing land system were "plunderers". When we read the speech carefully, we see that he disavowed that inference; but people do not always read politicians' speeches carefully, and unnecessary animosity was aroused.

Such speeches from Churchill, and others, served to explain why Lloyd George's celebrated Budget of 1909 sparked off such a furious controversy: a controversy which would hardly have been anticipated after the relatively uncontentious character of the site value rating proposals in the previous Parliament.

Churchill -- by now a member of the Cabinet -- jumped in with both feet. His speech in Edinburgh on 17 July 1909 is a model of lucid argument, largely free of surplus and counter-productive polemic.

"Land", he declared, "which is a necessity of human existence, which is the original source of all wealth . . . is strictly limited in extent . . is fixed in geographical position (and) . . . differs from all other forms of property in these primary and fundamental conditions."

No doubt, he went on to argue, there are examples of people making inordinate profits from things other than land: the sale of a picture, for example. "But pictures do not get in anybody's way." Speculators in stocks may receive "profits . . . far beyond what they expected or indeed deserved nevertheless that profit has not been reaped by withholding from the community the land which it needs, but on the contrary, apart from mere gambling, it has been reaped by supplying industry with the capital without which it could not be carried on".

By contrast, the owner of land who holds it out of use in speculation on rising land values does much harm. "The citizens are losing their chance of developing the land, the city is losing its rates, the State is losing its taxes which would have accrued if the natural development had taken place; and that share has to be replaced at the expense of other ratepayers and taxpayers, and the nation as a whole is losing in the competition of the world - - both in time and money".

This Edinburgh speech is typical of others which Churchill delivered about that time; it must be read in full to savour its penetrating logic.

Yet there was the usual confusion in the public mind between attack on a system and attack on individuals who benefit from that system. Churchill's opponents returned the attack in full measure. A few weeks later, the bloodthirsty Duke of Beaufort proclaimed his wish "to see Winston Churchill and Lloyd George in the middle of twenty couple of dog hounds".

What happened, in the end, to Churchill's land taxing enthusiasm?

This is not an easy question to answer. In 1917, he accepted office in Lloyd George's Coalition, after a period out of government. As the law then stood, he was required to submit to a by-election in his Dundee constituency.

Questioned on land taxing, he replied: "I have made speeches to you by the yard on the subject of land value taxation, and you know what a strong supporter I have always been of that policy."[3]

And yet, three years later, that same Lloyd George Coalition, with Churchill still an important member, abolished the very land taxes which had been the matter of such intense controversy in 1909-10.

Lloyd George's defence of his own apparent volte-face would doubtless have been echoed by Churchill: that the yield of those taxes was so trifling that it did not justify their continuance. In a sense, that was correct; but it misses the most salient argument advanced at the time of the Budget debate.

Lloyd George had not introduced those taxes in the first place for their own sake but because they seemed to offer a device for slipping through a general system of land valuation, on which it might later prove possible to apply land taxation.

That valuation had not been completed by 1914, and there was not the remotest chance of persuading the Parliament which sat in 1920 to resume it. So why preserve futile taxes whose object had been to facilitate a now-impossible valuation?

In 1922 the Lloyd George Coalition fell, and Churchill suddenly found himself "without an office, without a seat, and without an appendix".

In the following year, Prime Minister Baldwin called a General Election on the Protection-versus-Free Trade issue, and Churchill unsuccessfully sought election as a Liberal.

At the beginning of 1924, the first Labour Government took office, and Churchill rapidly moved towards the Conservatives. In October there was another General Election, and he was returned as a "Constitutionalist". To everybody's astonishment, and not least his own, Churchill became Chancellor of the Exchequer in the new Government which resulted, and over which Baldwin again presided.

Within that Government he had his work cut out to preserve the essential fabric of Free Trade against great Protectionist pressures some of his colleagues: indeed, many Free Traders criticised him for serving in an administration of such complexion at all.

What was absolutely clear was that no faint chance existed of making any sort of useful fight for land taxing as well as Free Trade. Challenged in Parliament in December 1924, Churchill adroitly side-stepped the question: "I took occasion to inform my constituents in the Epping Division during the recent election that I was not seeking a mandate from them for the taxation of land values during the present Parliament."

That Parliament lasted until 1929, and from time to time, land taxing enthusiasts in the Labour and Liberal parties sought to draw Churchill into either avowal or repudiation of his prewar position on the subject always without success.

Cast into opposition in 1929, Churchill soon found himself at loggerheads with his erstwhile Conservative colleagues on the future of India. Eventually, in 1931, the National Government was formed, and as the decade advanced the voice of Winston Churchill was raised increasingly on international rather than domestic causes. What appears to have been his last public observation on land taxing came some time after the Second World War. I have sought without success to discover the reference (perhaps a reader can he]p me there?) but there seems to have been a Parliamentary exchange with one of the leading Labour personalities who taunted Churchill with having once sung the 'Land Song". The retort was to the effect, ". . . and I shall sing it again".

So what do we make of Churchill as a land taxer?

He was firmly convinced that land value taxation was desirable, although he probably never shared the most sanguine and enthusiastic forecasts as to the benefits which would supervene from its introduction. There is no reason to think that his opinion on the matter ever changed. Yet he was a politician who believed politics to be the "art of the practical". He was willing to fight in that cause as in others, where he judged that positive results could be produced by so doing; but he was not prepared to die in the last ditch for one cause when he had a chance of living and continuing to fight in defence of some other causes in which he also believed.

The world needs both the idealists who willingly suffer martyrdom, and the realists who fight only where they think they have a good chance of winning. Neither group has any right to sneer at the other.


  1. This quotation, like others in the article, is from Land Values, predecessor of Land and Liberty.
  2. See list in Liberal Magazine, 1904, pp.161-2.
  3. Dundee Advertiser, 28 July, 1917.