Left Libertarian Alliance

Indigo Edina (Chair and Spokesperson for North West England)

“What man has produced belongs to the individual producer; what God has created belongs equally to all men.” – Henry George

A persistent feature of all debates about equality is how we, as a society, ought to distribute wealth. We live in a world of vast, and growing, inequalities between rich and poor. Inequalities which cannot be explained by productivity alone. History reveals that a major source of this inequality is the monopolisation of natural resources, whether fossil fuels, ore, or even the land itself. These endowments, created by no one, have nevertheless created whole lineages of landed gentry and business families whose inherited wealth deprives the rest of us of our share. In an egalitarian society, this unearned privilege cannot stand. To this end, theorists and economists devised geoism (geo- being the Latinate prefix for land) as a potential remedy.

I: What is Geoism?

Geoism refers to the view that natural wealth, including the land itself and other resources such as fossil fuels and ore, is the common inheritance of mankind and its fruits should thus be distributed in an egalitarian manner. Rather than insisting upon full common ownership, as communism does, geoism retains a mechanism by which individuals can gain an exclusive property right over natural resources. However, given the equal entitlement of all persons to natural wealth, this appropriation is only regarded as legitimate under geoism if the individual adequately compensates the rest of society in some way for the loss of something which was previously available to everyone.

While the precise nature of this compensation is up to interpretation, the most common proposal put forth by geoists is that of a tax on the unimproved value of the land. This tax, often initialised as LVT, has been proposed by economists for centuries. In particular, geoists owe the formulation and popularity of this proposal to 19^th Century American economist Henry George (hence why geoism is sometimes referred to as georgism by its proponents). In his landmark work Progress and Poverty, George put forth a critique of society predicated on the persistence of poverty in spite of the abundance brought about by industrialisation. He connected this injustice to the extraction of rent by a class of landowners at the expense of productive economic activity, arguing that taxing this unearned increment and using it for the public good is the remedy.

II: The Basis of Geoism

The claim that natural wealth is subject to egalitarian concern in this way is contestable on both libertarian and egalitarian grounds. Geoism is predicated on two simultaneous claims derived from the Lockean tradition: (a) that individuals are equally entitled to natural wealth, and (b) that individuals can bring unowned natural resources into their own personal ownership subject to a proviso that enough and as good is left in common for others. This twin dictum can be disputed on either count, creating four distinct views regarding what qualifies legitimate world ownership. On the libertarian right, the Rothbardian view denies both (a) and (b), arguing that there are no restrictions on what individuals can legitimately appropriate from nature. Also on the libertarian right, the Nozickian view takes the more moderate view of affirming (b) but denying (a). Conversely, those on the left affirm (a) but deny (b). In order for geoism to hold, it must substantiate both (a) and (b).

Refuting the right-libertarian theories of world ownership can be done through an exercise concept of individual rights. Placing no or few restrictions on the appropriation of natural resources will lead to monopolisation, which will leave many with little or no land of their own. Given that individuals have the right to decide who is allowed on their property, a non-trivial number of people would not be allowed anywhere on earth without someone else’s permission. This defeats the point of the individual rights libertarianism promises, thus necessitating at least some form of egalitarianism in world ownership for libertarianism to not collapse in on itself. Once intervention in world ownership is granted, you might as well draw the line at full egalitarianism rather than the limited Nozickian proviso, given that both views are no more or less compatible with libertarianism than the other.

With (a) granted, geoism merely needs to argue why unilateral appropriation is preferable to full common ownership. While some left libertarians do support a scheme of full common ownership, geoism offers a number of practical advantages. Given that a property right entails the ability to decide what happens to something, common ownership thus means that every person on earth has a say in the use of all natural resources. Regardless of whether we interpret this as each individual having a veto or majority consent being required, requiring billions to ascent every time someone wants to chop down a tree or plough a field is completely impractical. This issue could be solved by requiring consent only from those in the immediate area, this has the side effect of diluting egalitarianism to a postcode lottery where some are better off than others merely because the natural resources near them are more valuable. By comparison, the geoist solution of saying that individuals may appropriate unilaterally so long as they compensate others fairly is a stronger and more practical guarantee of equality than common ownership.

III: The Case for Geoism

This theoretical framework is all well and good. But what does geoism have to offer in the realm of practical politics? Given the vastly unequal, and often arbitrary, distribution of natural wealth at present, geoism plays a central role in rectifying this injustice. Take LVT, the main policy proposal put forwards by geoists. As a form of wealth tax, LVT has a progressive effect in which large proprietors must pay their fair share, which would be decisive in the public finances of countries where land is a major asset like the UK. Given the valuation of UK land not owned by the state at £5 billion, a roughly 20% LVT could provide for the entire national budget. Even a modest LVT of just 1% would raise around £50 billion, enough to make a decisive difference to public spending. This revenue could be used for a great variety of purposes, such as greater welfare provision, investment in infrastructure, or cutting more regressive taxes like National Insurance. 

From a leftist perspective, the chief aim of LVT would be to wage class war against landowners. Given that the explicit normative mandate of geoism is to evenly distribute the bounty of nature, the tax is designed to eliminate the possibility of earning a passive income merely through ownership of the land. Meanwhile, the use of land for productive purposes such as agriculture and development is rewarded given the fact that the tax does not extend to property on top of the land. Because landlords cannot raise rents without raising taxes on themselves, which can be enhanced by taxing raises disproportionate to property improvements at 100%, there is an incentive to sell and thus free up housing stock for new homeowners. Of all the promises geoism makes, the elimination of the parasitic proprietor class is one of the most enticing.

Equally, land value tax has merits from a more libertarian free market perspective. If one subscribes to left libertarian philosophy, then LVT becomes one of the few taxes which can be raised without violating individual rights; where individuals are entitled to their own person and what they produce, they do not have the same entitlements to natural resources. The prospect of raising the whole national budget from LVT thus allows more coercive taxes on income and sales to be eliminated, ending the theft libertarians believe tax collection to be. Additionally, the elimination of other taxes affords businesses which use land productively a large potential profit margin, easing fears of capital flight as a response to the tax.

LVT has also been praised by economists from across the political spectrum for being less distortionary than its alternatives. Unlike income tax or business rates, which target economically productive activities responsible for growing the economy and sustaining communities, LVT targets the speculative gains derived from mere ownership. Thus, LVT does not produce negative externalities or dead weight losses in the ways other taxes often do. On this basis, Chicago School economist and Nobel Laureate Milton Friedman described land value tax as, “the least bad tax,” integrating it into his vision of a free market economy. So even if you are sceptical of the more progressive case for LVT, the tax is still amenable to a more right-wing vision.

IV: Conclusion

For all its merits, geoism should not be sold as a panacea to all social problems. There are many injustices in society, and geoism is only suited to directly tackling one of them. In tackling this particular injustice, however, geoism is hard to beat. By offering a theoretically coherent framework for how natural resources should be distributed, geoism is able to substantiate a tax regime which is best suited towards the attainment of liberty and equality so valued by left libertarianism. The effects of the tax are enough to satisfy the radical desire for change sought on the left, while its efficiency cannot be denied even by the most rightwards economist.

Why is land value tax not already utilised? While a number of developed economies have implemented some form of LVT, such as Australia and Germany, the list is still relatively small. The UK came close in 1909, with the People’s Budget of Herbert Asquith and David Lloyd George proposing a version of the tax to tackle poverty. Alas, these provisions were ultimately abandoned in the following years. Across the pond, the passage of the 16^th Amendment to the US Constitution steered America towards more distortionary taxes on income as the main source of the federal budget. This might be the direction history took, but it does not need to be the direction we continue along.

Tax the land!