patrick.net

Paying money for land probably stems from feudal arrangements, where land ownership rested in few hands, then ownership was slowly leaked to the masses for a price over many centuries. New World countries appropriated land from the indigenous inhabitants, and then proceeded to parcel it out under much the same arrangements. The centuries-old system of claiming and valuing land title could be called into question.

Henry George, the great American political economist, proposed (more or less) that land should really have no value, but should be taxed according to its use.

If land was free, property bubbles (really land value speculation bubbles) arguably could not occur. Following George, land could be made available for housing, industry, and so on, allocated under planning controls, and taxes levied accordingly. Thus, a house sale price would consist of the labour and materials value of the house, plus some allowance for a land tax. A farm would be taxed on being a farm, a factory a factory, and so on.

Here is a long excerpt from Wikipedia about Henry George:

George lived in California at a time of rapid growth. In particular he had noticed that the construction of railroads in California was pushing up land values and rents as fast or faster than wages were rising.

On a trip to New York City George was struck by the apparent paradox that the poor in that long-established city were much worse off than the poor in less developed California. This paradox supplied the theme and title for his 1879 book Progress and Poverty, which was a huge success, selling over 3 million copies. In it George made the argument that a sizeable portion of the wealth created by social and technological advances in a free market economy is captured by land owners and monopolists via economic rents, and that this concentration of unearned wealth is the root cause of poverty. George considered it a great injustice that private profit was being earned from restricting access to natural resources while productive activity was burdened with heavy taxes, and held that such a system was equivalent to slavery - a concept somewhat similar to wage slavery. The appropriation of oil royalties by magnates of petrol-rich countries may be seen as an equivalent form of rent-seeking activity: since natural resources are given freely by Nature rather than being products of human labor or entrepreneurship, no single individual should be allowed to acquire unearned revenues by monopolizing their commerce. The same holds true about every other mineral and biological raw resource.

Henry George - Wikipedia

I am not suggesting Henry George was always 'right', or that his proposed systems should be adopted wholesale. But should land be free, or valued at a nominally low rate? I suppose I am considering the large planned tracts of suburban residential or commercial land we see daily, not oilfields or goldfields. (Then there is the question of valuing water views...) And I'm more interested in depressing land prices than raising land taxes.

Have at it. There's something here for everyone -- you know who you are. Any mathematical paradoxes put forward will be viewed with the utmost suspicion. Trolls will be tolerated, except when obliterated.

DS

#housing