Land Value Taxation and the Green Movement

David Richards

[A paper presented at the Joint Georgist Conference,
University of Pennsylvania, Philadelphia, Pennsylvania, 1989]

I discovered land value taxation through the Green movement and was attracted to it for three reasons. First, it promised to solve the basic problems I was encountering: the difficulty of gaining access to land without first being well-off. Second, it was a practical, self-regulating tool for doing the job, not just a statement of policy intentions to be implemented by bureaucratic fiat. Third, it promised to appeal to Greens and non-Greens alike, and within either group to the whole spectrum of political opinion from Left to Right. It seemed, therefor, a likely horse to back.

I made my discovery and backed my horse precisely 10 years ago, in July 1979. In the decade since, however, I have come to accept three rather less comfortable truths. First, though the basic moral axiom that every person in every generation has an equal right to the use of land appears to be common ground, land value taxation is not commonly seen as its necessary logical outcome. Second, the law of rent is indeed, as J. S. Mill wrote, the pons asinorum of political economy ("i.e. 5th proposition of 1st book of Euclid, hence, anything found difficult by beginners" - Concise Oxford Dictionary, 4th Edition). Third, just as land value taxation offers something to all political viewpoints, it also fells between all stools.

The Green movement is strong on goals (of the alternative kind) but weak on practical policies for achieving those goals. It is therefore host to many nostrums claiming to show how things really work and how to put them right. In the UK, land value taxation is seen by many Greens as one such nostrum, propagated by a quasi-religious sect preaching the American frontiersman Henry George and reciting mumbo-jumbo about land rents. Although it has found its way into the rolling Manifesto of the Green Party, it occupies a cobwebbed compartment of its own ("Land Tenure") and is not seen as an important part of economic policy.

The case of the UK Green Party is instructive, as it is one of the few Green parties that has been faced with the claims of Georgists. In 1981 it devoted both its conferences to land tenure policy, but despite intense and exhaustive debate it failed to reach agreement and so has let sleeping dogs lie ever since.

The aims of the policy were quickly agreed as being to "1) reestablish land as a common heritage and community asset, no longer subject to monopoly or speculative pressures; 2) establish for all equal rights to occupy land, so providing a proper framework for the ecological use of land in small units; 3) guarantee security of tenure to occupiers of land on this new basis; 4) ensure that returns from land which are in no way due to the efforts of individuals shall accrue to the community."

The controversy raged over whether these aims were best achieved by "positive" land redistribution or by a land value tax (Community Ground Rent). It was waged by a few initiates on either side whilst the majority of members attempted to understand the complex issues involved. Those against CGR were convinced that it was a flat rate tax per acre of farmland, such as was supposedly used by colonists to drive peasants into cities, which would only result in the concentration of land in the hands of rich farmers and force it to be over-used. They also thought it unworkably complex to implement - unlike their own proposals of stripping the public sector of its surplus acres, putting statutory limits on the size of holdings, and selling or letting the land thus obtained by a National Land Bank or local authorities to individuals and collectives. Apparently CGR found its way into the Party Manifesto despite time running out before the alternative proposals could be put at the first conference. It was then rejected in favour of statutory limits at the second conference, but the "Great Land Debate" was not formally concluded, and the Manifesto was not amended.

The presence of CGR in the Green Party's Manifesto therefore seems to be an accident of history. Although opponents have softened their attitude somewhat since, they are still awaiting a two-sentence explanation of why CGR would be good for small fanners. CGR is still a mystery to the majority of members, and hence an electoral embarrassment when picked up by opposing parties in search of scare stories.

Turning to other Green parties, the forerunner of them all, the Values Party of New Zealand, appears to have understood the land value tax, perhaps because of its Maori connections, but it barely survives. The most famous, Die Grunen of West Germany, is not acquainted with it, just as (apart from its Marxist elements) it is not acquainted with any economic policy. Its economic spokesman in 1985 regarded the existence of vacant houses in German cities as "a political problem, not necessarily a problem of property," which could be solved by having the will to enforce already existing laws "prohibiting this kind of abuse."

The emergence of "shallow ecology" in the last few years, the mainstream response to the international issues of acid rain, the greenhouse effect and the hole in the ozone layer, may hold out more promise for the spread of land value taxation than the earlier emergence of the Greens, or "deep ecology." This is partly because market solutions to problems are more intelligible to Rightward-leaning non-Greens, and partly because such solutions involve creating new types of property which have not yet been converted into private vested interests and thus do not present the usual compensation problems. Carbon emission charges on fossil fuel burning, such as are currently being considered within the EEC, effectively extend the public domain and charge rent for its use. Pollution and resource taxes (advocated by Friends of the Earth and the Green parties), and marketable pollution "permits," are now in vogue and are essentially Georgist ways of sharing scarce resources. In view of the revenue that sufficiently onerous taxes or permits might raise, it is possible to envisage a big shift away from current forms of public revenue to "green revenue." Given its educational impact, and dialogue over compensation, it is possible that that process may spill over to existing forms of land ownership.

Deep Greens and the Left, however, either instinctively distrust market solutions or reject them categorically. A summary quote from an "eco-socialist" active in the UK Green Party may serve to show how little Georgism has penetrated this comer of economic thinking: "... while Green rhetoric often implies a wholesale rejection of the economic status quo, few of the concrete proposals envisage basic structural change, tending rather to suggest piecemeal ecological or social reforms. There is no advocacy of changes in the ownership of large companies, for example; and although the 1987 Green Party Manifesto carries a marginal note pointing out that '52% of the UK's land is owned by a mere 1% of the population,' the policy on land tenure - levying of Community Ground Rent - stops short of envisaging any expropriation of that rich one percent."