The Land Question
[A letter to the Catholic Times, London,
England, 22 February, 2007]
I was interested to see the land issue raised in last week's edition
of the Catholic Times. T he church has always regarded land as an
important concern. It is key to both economic justice and to the use
of resources in a sustainable way.
Wherever injustice, extremes of wealth and poverty, and political
tyranny exist, we find land ownership concentrated into the hands of a
few. And widespread prosperity and democracy flourish best where land
ownership is also most widely diffused - even though, paradoxically,
those places often lack natural resources.
Although Catholic Social Teaching has asserted the right to private
ownership of property, it has balanced this view with another: "God
gave the earth to the whole human race" - (Rerum Novarum) and "Every
person has the right to glean what they need from the earth" -
(Populorum Progressio, 1967). The same principle lies behind the
biblical Law of Jubilees: "Land shall not be sold in perpetuity,
for the land belongs to me, and to me you are only strangers and
guests". - Lev 25:23.
At first sight, there is a contradiction. This difficulty has perhaps
arisen because modern economists regard Land as a species of Capital.
This is a mistake. By Land, we have to understand that this means
God-given natural resources and sites in their undeveloped state:
agricultural land in its state of natural fertility; virgin forest;
minerals in the ground; and so on. Capital is a product of individual
human labour: planted trees; farm animals; ships and aircraft;
factories, office buildings, and the machinery in them.
Property, which consists of buildings standing on plots of land, thus
comprises both Land and Capital. Once this distinction is
acknowledged, the apparent contradiction in the social teaching of the
church is resolved.
The Church can affirm the natural right to ownership of Capital
precisely because it is a product of human effort, and people have a
natural right to the full fruits of their labour. But if Land is not
the product of the individual's labour, then there can be no natural
right of ownership. The social teaching of the Catholic Church has
repeatedly linked land ownership to the concept of stewardship,
pointing out that property ownership carries obligations: "The
right of ownership is not absolute" (Quadragesimo Anno, 1931); "There
is a social function inherent in the right of private ownership"
(Mater et Magistra, 1961).
The profound truth of this principle can be appreciated when we
remember that land values arise from the presence of the community and
the desire of the community for the products of land, and that these
land values are further sustained by public services such as roads,
railways, schools, parks and hospitals.
Here is the core of the moral issue raised by land ownership. Not all
land is equal and not everyone can own land. Land owners can exact a
payment - which we call rent - for the use of a resource which they
did not make. We have come to accept that whoever happens to hold the
title of the land is entitled to claim the rent, but such a claim has
no foundation in natural justice. In the absence of any obligation to
the community, landowners can enjoy rights and privileges without
duties, which is tearing many societies apart.
THE DUTY OF STEWARDSHIP
How, in practice, might property owners exercise their duty of
stewardship? One method which has been suggested is the taxation of
land values, as a replacement for existing taxes. The land value tax
would operate as an annual tax on the rental value of every plot of
land, the assessment being the market value of the site. The tax would
be paid regardless of whether the land was in use or not.
Land value taxation achieves many objectives. It maintains justice
from one generation to the next; it evens-out the differences between
those who own the most valuable land and those who own land of little
value or none at all; it prevents land speculation, and it raises
public revenue justly in a way which does not penalise business,
enterprise or labour. It is an essential practical means of putting
into effect the teaching of the Church.
Yours, Henry Law