To EFF
Ownership of land
Dear absolutely unknown friends.
By chance I saw that you advocate nationalization of land.
The following is because I agree with you and at the same time, I disagree.
First: I think nationalization is a dirty word.
Second: Because there is another method. – Probably much better.

Some background:

Size of holdings

For efficient use, both of land and manpower, the farms / the systems should be large.
It has been seen in USA, Europe and in Russia (the old Soviet)

India

Too often a “little farmer” needs money for his daughter’s wedding and takes (foolish) loans.
As a consequence he will later loose the little he has.
Better commit suiside.

The old China

The plots were subdivided between the too many sons and the result was starvation in bad years.
Or drifting to what at this time was an almost sure death during a short and cold vinter in the towns. (At least in Shanghai)
No problem: New supply next year. (It was back in 1930)

England

The good land was kept by the landlords as hunting-grounds and the surplus manpower drifted to the even more horrible conditions as workers in the new industries.
During the WW2 the consequences were looming starvation in a country with a good agricultural potential.

My country, Denmark

In the “good times”, before the economic crash (2008), farmers were tempted to take huge loans for expansion and / or private consumption.
Now – at the not so good times – both farmers and banks are in deep troubles because the land was given as guarantee for hopeless loans.
At the same time young, strong and clever people cannot get land.
They can be hired labour, unless they inherit from their father.

It was the obvious troubles.
Now, what may be a solution:
Land Rent or:
Socialism using the Capitalistic tools ! ! ! !

Long time ago the American economist / politician activist Henry George tried, and failed, to introduce land rent in such a way that the person or the company occupying and using the land payed rent for using the land.
(Land Tax is a dirty word.)
The land rent will reduce, or almost eliminate, the need for ordinary taxation.

We pay house-rent for using the landlord’s house / flat.
We should pay land-rent for using the land.
This land, that should belong to all of us – represented by the government.

If the occupier is not efficient and thus not able to pay the land rent.
Then he will have to give up and let another take over.
Of course, the new occupier will pay the higher rent.
The true and just value of the land will soon be established by the
“Market mechanism”

It is my strong opinion that Zimbabwe would have been much better off
if the long time dead and almost forgotten Henry George had been listened to.

In a more established economy, as in South Africa, the system can be introduced slowly without creating too much political and economic
shock-waves.
Somehow the same, in other African countries, where land has been grabbed by the political elite.

Price fluctuations – Bobbles

For good and bad we live in a capitalistic world.
Here we see prices fluctuate depending on the unstable market.
In “good times” the price of property will go up.
People follow the market, take loans and are happy.
The voice-les underclass will get a little.
UNTIL
Later, the market turns round and the one buying the property may lose his job and will have difficulties paying the banks.
The banks will not be able to offer loans for new and useful investments.

With the proposed system – in reality nationalization – it will reduce or almost eliminate these harmful fluctuations.
In “bad times” these fluctuations will be seen as lower “land rent”.

Other types of property

Although taxation of other property is difficult to accept and even more difficult to evaluate, I think a similar system may be the answer.
At least some of it.

If the system should be introduced democratic against the wishes of a capitalistic minded (western) population, it may be necessary to follow a “soft approach”.

I have already written too much and refer you to another post: http://wp.me/s1RKWc-47

Final Remarks

I know, that it may not be proper that I, an old and privileged white, living in a country where the wealth originates from misuse of others, just write to you.
However,
As you may see on http://wp.me/p1RKWc-2h I have my heart in Africa – Tanzania.

Greetings and best wishes from a distant friend
Thorkil Søe

Advertisements