tax

Adam Posen, a member of the Bank of England’s Monetary Policy Committee has opened a catering sized can of worms, reported in today’s Telegraph

“Adam Posen, a member of the Bank's Monetary Policy Committee, said that the Government should consider slapping extra taxes on British properties, suggesting that in future homeowners should have to pay an extra charge if prices rise too fast. In comments which will cause extreme disquiet in the Treasury, he even indicated that this may mean imposing capital gains taxes on first homes and raising stamp duty”.

Now, fair play to the guy, I guess for even broaching the subject. Such bubbles are not earned rewards, but the result of existing policy preventing the market adjusting to the demand quickly enough and other policies putting more pressure on particular areas. Not only that, but they are effectively a zero-sum game - for those who gain, others have to lose out - on the cost of renting often or on their increasing inability to afford to join in the housing boom.

But the real and permanent mechanism is to base all our tax system on land value taxes instead of incomes and profits and sales. A land value tax will collect more, naturally, when the market overheats and prevent bubbles forming, not punish them when they do, or wait till sales happen to charge an extraordinary tax.

I am a "land taxer".

Some people seem to believe one cannot be both. On the one hand, we find people like Lib Dem Matthew Huntbach, who in the comments to this Lib Dem Voice piece on my opposition to the suggested "Mansion Tax" claims that as a self-described libertarian I am likely to drop the idea of land taxes, however much I may talk about them (much more than him I'd wager but there we are) as soon as the opportunity to enrich what he thinks of as my fellow wealthy libertarians allows. For the record, I don't think that I know any truly wealthy libertarians or anarchists, and indeed I know of not a few who, despite being not very well off at all, subsisting on benefits, campaign actively for the destruction of the welfare statist system that seems to sustain them at the moment. On the other hand, we find lots of other libertarians who resolutely refuse to accept even as libertarian those who would appear to want to "confiscate" the value of private property in land they hold as a near sacred element of libertarian thought.

Now I realize that one blog post by an insignificant in Oxford is not going to settle this argument once and for all. Far better economists and political theorists than I have tried. But it is a personal battle for me, because it was the ideas of Henry George that brought me to libertarianism - for his is a libertarian idea, in direct response to the "land question" raised by so many in the history of liberal and anarchist thought - from Locke, Paine, Proudhon, Spencer, Mill, and the individual anarchists Spooner and Tucker. And it is as I have heard, read and hopefully understood more by the likes of the Austrian school market anarchists that my views on George's "single tax" solution have been challenged. Yet I still hold them.

First, a bald statement: I do not believe there are many libertarians of whatever branch or flavour (and we are truly a Baskin-Robbins ideology on that score, whatever the misinformed Lib Dem detractors believe) who do not appreciate that there is an issue of equitable access to land - that which has historically been called the "land question" by many (including Murray Rothbard [pdf] even as he criticized Henry George's solution to it). Sure some place more emphasis on it than others - but I really believe that any who denies there is any issue has not thought terribly deeply about it. I'd go further - that before the early part of the twentieth century it was a touchstone of most or even all of the emerging theories of libertarianism and anarchism; that the four "great monopolies" - of land, of money, of intellectual property and of government - that the individualist anarchists and mutualists described were commonly held to lie at the root of the inequity caused by the statist systems of privilege which they wanted to smash.

It may be that it is merely a difference of emphasis. George, for example, like Proudhon believed that the land monopoly was the "mother of all monopoly" and that solving that, for Georgists as for Proudhon, will tend to render the other three insignificant. When we sat down to discuss the content of the Lib Dems ALTER's recent book "The Case for a New People's Budget" I wanted it to include pieces on the money system and intellectual property but one of the other editors, a better schooled Georgist than I felt that such was completely unnecessary, since solving the land question would solve these others.

On the other side, the Austrians today believe, perhaps, that the fiat state controlled and cartelized money system is at the root of monopolistic behaviour and that sorting that out will render the others nearly insignificant. To this extent, whilst we acknowledge there are other problems, if all we are saying is that sorting this one or that one out first will resolve those others, we are, by different means, aiming at the same ends, of equitable economic distribution of scarce goods.

Others still acknowledge that there is an historical problem - that most land title ultimately and historically descends from aggression or statist privilege - such as monarchs kicking off serfs to give rewards of land to favoured courtiers, or the state sanctioning enclosures without any recompense to those who required the land to maintain life and limb. And they might suggest, as in the excellent introduction to libertarianism by Morris and Linda Tannehill - "The Market for Liberty" (available here as a free audiobook) suggest that at the advent of a truly libertarian society such ancient titles would be revoked since they would be next to impossible to prove and that everyone would have to stake their claims anew. But to me this resolves the problem as a "one off" and not the ongoing problem that land distribution necessarily is given the propensity for populations to change and land requirements with them.

Since it is as a result of hearing Hans-Herman Hoppe on the "Idea of a Private Law Society" nearly a year ago now at last year's Libertarian Alliance Conference that I have become more interested in "full blown" non-state ideas, it is, perhaps naturally, to the Austrian School and in particular the Mises Institute that I have turned to learn more; devouring several years' worth of podcasts of the Mises University series, but also listening to various contributers to the FEE's Freedom University series. And whilst they do indeed talk very little about land, I can glean some of the following with which I find myself in agreement that relates to the "land question" in their thinking:

• If we did not have the corrupting influence of inherently inflationary and statist fiat money there would be much less speculative froth in the system to be ploughed into land values.

• If we did not have state controlled zoning and planning restrictions, more land would be made available as development was needed and land values elsewhere would tend to fall.

• If we did not have state enforceable land titles, we would have to find another mechanism for protecting our rights of ownership of land which would tend to release land that land owners felt was uneconomic to protect compared with the utility they got out of holding it.

• And, I really do appreciate the arguments in favour of the protection of private property (well, I'd rather, after Proudhon, say "possession" than "property") being the mainstay of a civil society, that without which original appropriation and therefore economic production would be all but impossible. And allied to this I feel a sense of unfairness that someone who has, in the Lockean term, "mixed his labour" with "land" and thus brought it into production in the first place, might find that simply because others have later agglomerated around his far-sighted piece of appropriation, he would be subject to paying rent on it that may price him off it.

But...and you knew there would be one...what I cannot get round is the idea that, whilst anarchists anathematize taxation as confiscation of the legitimate product of labour and therefore an attack on Lockean self-ownership, the rental value of land is really a tax on everyone else who cannot use a particular location, even though they may have a more productive capacity to use a particular piece. All of us pay for the monopolization of locations of better quality in terms of our needs, than what we are then forced to settle for. If we have to live further away from work, we pay in time and travel costs to get past those locations that would serve us better. These values feed into land values. It is not merely that land value increment is unearned by the land-owner, but it costs the rest of us in like measure. And it is a huge burden - in the UK it amounts perhaps to about a third of what is the salaries portion of GDP. This effect, whilst it may be smaller if all the other Austrian remedies above were implemented, would never, in my opinion, disappear.

Austrians, of course, reject the value theories on which this hypothesis of land values is based - the labour, or cost theories of Smith, Ricardo and other Classical Economists. They prefer their subjectivist or utilitarian theories based on the work of the likes of Carl Menger and Eugen von Böem-Bawerk. And, whilst I also do not agree with a wholly unmodified labour theory, I am becoming more and more convinced by the likes of Kevin Carson's critique of Menger's and Böem-Bawerk's criticism of the Classical cost theories in his "Studies in Mutualist Political Economy" - which is just as well since I describe myself as a "mutualist"!

On the other hand, I am with the anarchists in that I do not want a government or quasi-government institutional structure to value and collect such "rent". And so I am attracted to ideas such as those of geo-libertarian Dan Sullivan in the US, of how it could be handled by a voluntarist system of community management companies. And it is on his ideas that I think can be developed a system that fits with both the Georgist aims of collecting land rents and the anarchist aims of not having government structures impose taxes on us. In his essay "Are you a Real Libertarian or a Royal Libertarian" he says, toward the end:

Can't we do this without the state?

There are, in fact, proprietary communities operating on the single tax model. Arden, Delaware, with a population of 4900, has had no local taxes since 1900. The Arden Corporation collects a fair market rent on each land parcel, which is reappraised annually. (They actually collect only about a fourth of the rent to which they are entitled.) From that they not only pay for all the municipal services, but rebate all property taxes levied by the county and school district.

There are excellent reasons for libertarians to prefer the land trust route over the political route. Private communities can be built on explicit contracts (leases) with the citizens, can have internal democratic processes that are vastly superior to electoral democracy, can be far more flexible and free of state intervention, and can be downright profitable (even with trust investors pocketing a mere fraction of the rent). Most of all, dealing with investors is far more pleasant and self-affirming than dealing with politicians.

But what worries me about this approach, taken literally at least, is that we might end up with one agency acting as a local monopoly that becomes a de facto government, just like Nozick says that private protection would combine into one agency with a monopoly in an area (though I am yet to read "Anarchy, State and Utopia" - I bought it and promptly lost my copy! - and so haven't read his arguments, I instinctively disagree with this as an inevitable outcome) and be to all intents and purposes a coercive albeit limited government.

However, I think there is a resolution. Admittedly I have not gone into this too deeply as yet. I have not followed all the economic incentives through the processes. It is based on the idea that in a "private law society" (necessarily the case of course in a no-state anarchist system), defense of one's life and property would be handled by competing insurance, protection and arbitration agencies.

In the absence of a single, state-provided, system of land titles, one's ability to hold onto a piece of land (that is, not to fight for, but legally to defend one's right of occupancy against any other claims) would usually be handled by your insurance and protection agencies. Of course, you could opt out, but then you would have to pay for such physical protection and legal protection against claimants by yourself and on a simple division of labour basis it is likely to be more cost effective joining with others via an insurance and protection agency system. But your premiums would likely rise to be something similar to the market rent value of the location - because it is on that basis that other possible claimants would be likely to be basing their claims on. If your insurance agency were a mutual agency operating with profit policies, they would effectively disburse the equivalent of the statist "citizen's dividend" to the members with with-profit policies.

Here, there could be competition. My insurance agency would make a (probably class action on behalf of all their clients inconvenienced by your monopoly holding of land that costs us money to avoid) claim against yours, yours would pay up and that would go into the profits of my insurance firm for distribution to the with-profits members. And these firms could compete across whole areas of productive land. So, for example, you couldn't have only those in expensive locations in Mayfair joining together and insuring against each other and effectively doing so cheaply because you're hardly likely to lay claim to your neighbour's similar property if it's going to cost you money and you're both pretty happy with your lot and are not costing each other anything by your occupancy of neighbouring sites. My firm may be based in Sutton or Dagenham and have most of its clients there, but will still be likely to be making claims against yours.

Eventually it is likely that these individual claims would not be processed at all, but that reciprocal arrangements between these agencies would spread premiums around amongst them such that the dividends paid to each one's clients would tend to even out, but all the same, the claims mechanism would remain available where there were disputes, just as, for land taxers operating within a state system, there would be tribunals to adjudicate on land value disputes.

UPDATE:  I've thought of perhaps a simpler way of understanding this - it might be looked on as competing land registries paying each other premiums for recognizing and upholding each others' clients' titles.  Does that make sense?

As I say - I have not followed the economic incentives right through such a system. But I think it contains the germ of a possible solution that does not rely on confiscatory quasi-state bodies but does equitably distribute the values created by and paid for in other ways by all who need to use land within an agglomeration area.

Remember please, this is a genuine search for a reconciliation between two sets of ideas with which I generally agree but which in contemporary libertarian discourse seem to be all but irreconcilable. But if you've read this far, I'd love to hear your responses.

It seems I might be a wee bit out on a limb here - a familiar position it has to be said; but this leopard (out on his limb you see) is not going to change his spots.

It seems colleagues from around the Lib Dems, including folks from ALTER, and also land tax campaigners from outside the party seem to think the so called "Mansion Tax" announced at Conference the other day, in which residential properties worth more than a million pounds will attract a new half pence in the pound property tax, is "A Good Thing" or a "Step In The Right Direction". I absolutely disagree.

I'll go further: I think it is "A Bad Thing" and a "Step In The Wrong Direction". It threatens to undermine a broader implementation of a proper land tax. It raises very little, by way of a tax deliberately targeted on a particular group of people; a group of people who have considerable clout, in the main, and who have already shown, through the successful agitation of a similar group in getting Tory policy on Inheritance Tax changed, to whip up the fear of an "envy tax" amongst people unlikely ever to fall under its regime.

It combines everything we know to be bad about the Council Tax with none of what we promote as good about Land Value Tax. It sends precisely the wrong signals about land tax - that it is about raising a bit more revenue, not creating a new fiscal system where tax can be used to benefit directly the least well off (in the case of the land taxes by reducing markedly their costs of maintaining a basic living in the form of their shelter).

It seems to me that it is primarily aimed at sating the desire for a particular type of modern liberal to hammer the wealthy in order to "redistribute" to the less well off, rather than to create a genuinely more equitable system in which taxation is transparent, applied as far as possible to everyone of a similar class - ie land owners or income earners and so on.

The greatest benefits of land taxes can only be gained when land taxes are applied to the sort of land that those of us struggling to find a home need to be cheaper - which means taxing all land. If we cannot show these benefits, and quickly, then the arguments for land taxes will go stale before the benefits are apparent, and this sort of measure will foreshorten that process.

Also at conference, ALTER published their long awaited book of essays on the benefits and effects of land taxes. For those who read it, I cannot imagine that they would not conclude that land taxes are, in fact a "no brainer". We should get on and do it, or not at all. Not trifle around with a measure that will act to galvanize opposition to "any idea of a property tax coming out of the Lib Dems". In his foreword to the book Vince Cable says that, in contrast to 1909 we now need to know precisely what it is we want to implement and have a plan for doing so.

The "Mansion Tax" is part of neither.

(Technorati claim code: d529s7ntuk)

Following on from the "social contract debate" started on Charlotte Gore's blog Oranjepan has further developed some of Barry Stocker's critique in the comments on my last piece and on Charlotte's summary with an historical context. I hope I don't misrepresent them - Barry is far better versed in philosophy and philosophers than I and Oranjepan much better versed in historical detail. But both wanted to point out that the "Social Contract" also contains within it not just the "Labour" style definition of being bound to obey whatever the demos decides via the government or state but a set of rules as to what we can do when we don't like the government, when it oversteps the mark.

Now sure, I know full well that Locke, for example, sets out some reasons why and when we can reject the current government and set up new arrangements - when it oversteps its original remit and is no longer acting solely to protect our lives, liberties and property in the main. And I hear what Oranjepan is saying about this let out being a guard against tyranny. But I disagree with both.

Both make the "statist" (I don't mean that pejoratively either of you, but merely technically) assumption that the benefits we get out of being part of this "social contract" must necessarily be delivered by a monopolistic state type entity which needs to be subject to some kind of control (preferably democratically) other than that which the natural operation of truly free markets could provide. Indeed, Oranjepan states explicitly that "to deny the social contract is to pave the way for tyrants". I'd say quite the opposite - to create a territorial monopoly of arbitration and force, a state, paves the way for tyrants.

To turn to Hoppe again, this time from his essay "Reflections on the Origin and the Stability of the State":

Let me begin with the definition of a state. What must an agent be able to do to qualify as a state? This agent must be able to insist that all conflicts among the inhabitants of a given territory be brought to him for ultimate decision-making or be subject to his final review. In particular, this agent must be able to insist that all conflicts involving himself be adjudicated by him or his agent. And implied in the power to exclude all others from acting as ultimate judge, as the second defining characteristic of a state, is the agent's power to tax: to unilaterally determine the price that justice seekers must pay for his services.

Based on this definition of a state, it is easy to understand why a desire to control a state might exist. For whoever is a monopolist of final arbitration within a given territory can make laws. And he who can legislate can also tax. Surely, this is an enviable position.

Given such a definition, however, it is quite difficult to understand why anyone would accept such an institution. But this entire paradigm, that there must be some form of over-arching monopolistic and usually beneficent state type entity is inculcated upon us from the earliest age. In most cases we simply believe that the state "does" education, health care, welfare, justice, policing, defense, rubbish collection and a host of other things and accept it without question.

We are told that those who buy private education do so in order to take advantage of the network benefits of their children hob-nobbing with the rich and well connected, but this ignores the fact that most private schools are not filled with the well-connected (though increasingly by the rich or those making tremendous sacrifices because fees have often risen - though there has been a flourishing of more modestly priced private schools more recently). We don't actually stop to think, terribly often, that what these parents are doing is deciding that the state system does not produce the best educational results and that they are paying for a better, or perhaps more personalized, education rather than for the network benefits.

We are told that those who pay for private health care just want to jump the queue or get access to more expensive drugs the local NHS service will not sanction, but don't really stop to think that those queues themselves indicate vast inefficiencies or that those inefficiencies are a function of the system itself rather than an inevitable consequence of the scarcity of health care resources.

But it is on the police and implementation of justice that I want to focus, since that forms the core definition of the state. Even those who think in terms of a "night-watchman" state seem to think these are functions that only a monopoly that can be enforced on everyone can deliver. But it's inconsistent to insist on some national monopoly when, at a level above states for example, we do not insist on a similar thing. There is no world government that has the monopoly of force and final arbitration in disputes between sovereign states. We have all sorts of treaties, voluntary memberships, in specialized areas of trade or resource disputes, of handing over alleged criminals to another jurisdiction and so on; we have bodies such as the UN whose main weapon is more a version of shunning or ostracism such as economic or political sanctions (and this often for people in charge of countries who are unashamedly mass murderers and psychopaths! At a level beneath the state we have arbitration systems enforceable by contracts that do not insist on the state provided justice system as the last line of appeal.

These polycentric arrangements indeed are often better - instead of Mr Justice Jack-of-all-trades, where arbitrators are chosen by, for example, a trade body, they are often chosen for their particular expertise in the type of dispute. Complicated, technical cases are likely to be quicker, less costly and the judgement respected more by both sides if they know there is a level of expertise on the equivalent of the bench.

Just as there are positive reasons for choosing a polycentric justice system, so there are powerful negatives for insisting on a monopolistic state run system. It is hugely wasteful for a start. It rarely actually solves cases, unless someone is caught red handed or there is some extreme public pressure, such as perhaps in a murder case. How many times do they respond to a burglary with the message to call your insurance company, we're unlikely to get anywhere investigating this and you may as well just make a claim. So not only are you not getting value from the system you are paying for through your taxes, but they are increasing your costs elsewhere - in the form of your insurance premium, because you can bet full well that this inability to provide restitution at the hands of the state system is factored into the costs of insurance.

Even if they do catch the perpetrator and put them on trial, the outcome is very unlikely to give you real restitution, and indeed will likely cost you, and the rest of us as tax payers, a small fortune in paying for the punishment, especially if they end up in jail. The fact that the same body that creates new laws and raises taxes also runs the official protection agency means that they can allocate these resources to their own causes and for political ends. So, despite the odd step here are there towards "Neighbourhood Action Groups", they don't really prioritize what the local people who have to rely on their protection services want, but what politicians decide is important that week - victimless drug use for example.

Incidentally, I notice just today a story about a community in Southampton deciding enough is enough of a lack of policing and are clubbing together to pay for their own visible security guards on their streets. And why not - just because thus far private security guards have tended to be associated with businesses doesn't mean they could not be just as effective in a residential neighbourhood. In fact, there are more "private police" of this kind employed than there are publicly financed police.

Given a system of openly competing private insurance firms insuring people against the effects of crime, together with competing arbiters whose salary rests on a reputation for handing down good judgements that people respect and private security firms acting primarily to prevent crime more efficiently than the current state police arrangement all the correct economic incentives are there to prevent crime happening in the first place, to solve crimes when they do happen and to exact restitution from the criminals when they are caught. So much more incentive than the system we have now.

So, if the very core of the state, the ability to legislate - which is the mechanism by which it can grow, arbitrarily, from a night-watchman or minimal state into an ever increasing burden on us all, both controlling us and taxing us is not necessary, why should we need any of these other things that are commonly, unthinkingly assigned to this inefficient and coercive monopoly system to be delivered that way? Why ought we surrender any of our personal sovereignty or basic right of self-ownership to a system that has been shown to be extremely difficult to hold in check even when in theory the mechanisms exist to permit us to do so?

As Hoppe puts it, in dismissing the idea that the state must do some particular function or another - "just because monkeys can ride bikes doesn't mean that only monkeys can ride bikes" - in fact, because of its inherent inefficiencies and its tendency to grow and encompass ever more aspects of life, the axiom ought to be unless you can show me that the state is the only body that could possibly do something, we should assume it ought not to do that thing, because letting it in creates this "social contract" that eats away at our basic freedoms until one day we will not have the means to fight it, whatever the principles in that contract.

I received a little missive through the local community mailing list today reminding members of the notice they had received to the effect that Oxford City Council will no longer, as from 3rd August, collect any extra bin bags left with your wheelie bins or wheelie bins whose lids won't close because of the volume of the contents, and that you will receive an £80 fine for not complying, and reminding you of the "rules of collection" like that you bin must be in a specific place by 7am on bin day and not before 6pm the night before and so on and so forth. I am not subject to this little "customer service" regime since on site my rubbish is collected by the cleaners who service the flats and so on but I replied...

Time to open up waste collection to proper competition I'd say.

These people are your servants not your masters. You are their customers. You pay them. They take these excuses, such as land fill regulations or health and safety assessments, and turn them into rules that have the effect of new laws that can be enforceable with punishment fines and make your life inconvenient.

It seems to me there is plenty of room for a premium service for example

• One that will actually come onto your property, round to your kitchen door if necessary, to get your bin, wash it out when they've emptied it and put it back neatly.

• One that will give you a scale of charges so you know you will be billed by weight or volume (and not "fined" which by definition is a punishment) but will take whatever you leave for them.

• One that promises not to go through your rubbish bins in the dead of night categorizing you, not your rubbish, by some new socio-economic measure and treat you differently as a result.

• Ones that come on different days and you can open accounts with more than one of them so that if you have something particular you want rid of one day that isn't your main collection they will take it anyway and bill you a little.

• One which will pay you for any recyclable waste for which they get money upstream - indeed I know of one firm dealing in a plastic bottle crusher who does just that - sends you bags that you can send back full of crushed PET bottles and get money back off them, eventually paying back the cost of the crusher and then some.

All over the country council bureaucrats are being metamorphosized into "refuse tzars" (nice pun - for of course what they do is "refuse" to take your refuse except under ever stricter rules); and some day these pavlovian conditioned customers are going to bite back. You wait; after the "fines" will come the "SWAT" teams to haul you out and embarrass you, and maybe worse, in front of your neighbours - because monopolies, especially ones with statutory force, can do that sort of thing. "Public servants" - pah!

Ah well, we can but hope. Why *do* all of you who have to work to their rules just roll over and accept this escalation of hostilities, this change of role from servant to policeman? You just watch what happens when you don't pay these "fines" on the grounds that they are no longer giving the service your tax pays for!

Maybe, in future, someone will quip:

"First, they came for the extra bin bags, but I said nothing, because I didn't have extra bin bags"

Oh - by the way - be careful what you flush down the loo too - I was reading this week of some research in Oregon where they were testing equipment intended to check for drugs use by sampling sewer water. By the time they've got us all on their DNA database, they'll be able to match that with individuals and potentially use it for evidence (but don't assume it will stop at drugs - if there's too much sugar shown the diabetes SWAT team will land in your back garden and steal all your cakes no doubt).

According to the BBC, today both Tories and Lib Dems will formally outline their current plans for dealing with the regulation of the banking sector in a post election world. Neither, it seems, are prepared to think "outside the box" as that early century cliche went: the Tories looking at returning banking oversight to the Bank of England, whence it came a few years ago, the Lib Dems more firm on plans to break up the biggest banks, starting at least with the ones in de facto public ownership. However, one thing we can be pretty sure of: neither will be proposing the single most important possible change to banking that would do the most to stabilize the money system and longer term the economy...Free Banking.

As a concept it's pretty simple: Free Banking is where banks, and potentially other organizations such as communities, trading companies and so on, issue their own currencies instead of trading in the "national" currency of the territory in which they are operating. These currencies compete against each other for users. The value of each rests solely on the soundness of the business practices of the organization issuing them. If one bank/issuer over-extends itself all the others who would normally accept their currency at par with their own (say when a business customer of theirs tries to deposit them at the end of each day) will want to pay less for them and the message will soon get round that the over-extended bank needs to change its business practices, its risk profile say, or risk complete devaluation of its issued currency. There are also lots of other mechanisms that, in a free market, but not a fiat system, would come into play to ensure the currency issuers play responsibly.

The system we have today, fiat currency "guaranteed" by the nation is whose name it is issued, is the result of a long term grab for power by the state. Why would they do that, in a market that functioned quite well? Well, there are profits to be had in issuing currency - so called "seignorage". However in the current system where fiat money tends to be introduced via lending by the commercial banks regulated to do so this seignorage profit has reduced, and has also been passed to those issuing banks rather than to the state. The big reason is inflation. We take it as axiomatic that inflation can be a good thing, if you are in debt. With your future repayments more or less fixed in numerical terms if you can inflate the money supply your payments will tend to fall in real terms with time.

Who are the biggest single borrowers in our economy? Well usually the government. So the government can inflate away the running costs of their debt. Well, okay, says you, but it also eats into the costs of everyone else's debt too, doesn't it - so we all benefit from inflation, right? Wrong. Lots of us may well be in debt, but after many decades of inflation and only a few of burgeoning private debt, the lenders have become savvy to this. How many of you are now on variable rate mortgages? Government induced inflation really assists really long term borrowers on fixed rates (ie gilt issuers predominantly).

And on that subject, on the other side of the coin, if you pardon the pun, inflation erodes savings. All of us need some of those, even if we are in debt - for example for our retirement. Inflation keeps eating into our pension funds - firms and returns have to grow faster in monetary terms just to maintain the value of our savings. But equally, if inflation undermines our savings, so it also undermines the money we have in our pockets now. If we think the prices are going to go up, we want to buy more now. Inflation actually drives us into more debt, transferring more in interest from less well off to the better off lenders, so we can buy now before the prices rise.

But inflation also distorts in all sorts of other ways - if it is more difficult for us to work out as individuals whether we should borrow to buy that new Hi-fi today and pay the interest, or wait until we don't need to borrow because it will still be there at the same, or perhaps a lower price, how much more difficult is it for people who have to make borrowing decisions about investing in capital goods? Inflation corrupts the signals that prices are sending to manufacturers for example - they don't know necessarily whether they are getting a better price because of inflation or because their product is in greater demand.

Since the US finally adopted central bank run currency, followed by a fully fiat monetary system a few years later, the state has overseen a devaluation in the currency of over 98% - roughly a period of a hundred years; the Federal Reserve system was established in 1913. But this most recent decade shows the problem at work perfectly and the government's part in it. At least until 1997 the government, through the regular collaboration between the Treasury and the Bank of England, was instrumental in setting the base rate as we call it here. That is used to create a signal to all the banks who are regulated to lend in sterling that they should lend more, if the base rate goes down, or lend less, perhaps call in loans, if the base rate goes up.

After the political turmoil caused by the events of "Black Wednesday" when speculation against the pound led the government to raise interest rates three times and to 15% at one point, we were left with hundreds of thousands of households who could no longer afford their mortgages. A housing slump ensued and led to a policy for the next few years of keeping interest rates as low as possible - lower probably than the economy deserved. Just as the housing market was getting back to relative values from before that crash, another asset was bubbling - the "dot com" stocks and shares.

When that bubble burst, there was a great concern in Treasuries on both sides of the Atlantic that the burst would turn to recession (and indeed it did in the US). Gordon Brown in the UK was so concerned that Labour's first term in twenty years would end with a recession that again base rates were kept artificially low, signaling to the commercial banks that were part of this cosy central-commercial bank cartel that they should lend even more, even more irresponsibly, and we had the housing price bubble that has resulted in the current economic carnage. All the way up that price bubble the least well off are encouraged to transfer more of their wealth to the lenders and now, all the way down, that cosy relationship means that the banks, the lenders, are the ones being baled out while everyone else will suffer vast capital losses with no compensation.

And finally, central banking and its bastard daughter inflation kills. Literally. You'll notice that the history of central banking has been closely related to when government wanted to borrow to fight wars. In the past century, more of this has been done via inflation than by direct government borrowing. If there's an inflationary surplus already in the economy, go to war, destroy some capital goods, and with it some human capital and all of a sudden there are things to spend that surplus inflationary money on. If you are already n a war, perhaps an unpopular one, and you cannot finance it via extra taxes or selling debt, inflate, inflate, inflate and you'll be able to buy up your war-goods before everyone else sees the inflation in the form of a reduction in the value of their money.

So, which of Vince, or George, will take such a brave step? Of course, we know the answer - what they really want of course is for themselves to be in charge of this vast power inflation gives. But wouldn't it be great if just for once, politicians made the right policy decision for us not them.

Let me make no bones about this: I am now of the opinion, and have been for some while, that the only true way to Liberty for all is by abolishing government entirely: traditionally termed "anarchism". I'm also not much good at gradualism: someone once said to me that gradualism is a recipe for ultimate failure, and I agree. Give me a revolutionary change; get it over and done with and let us enjoy our new way of life as quickly as possible.

This is because I am, in Hayek's terms as explained in his "Why I am not a conservative", a genuine liberal - one who is willing to take a leap forward into the unknown without first having to know absolutely the outcome; that I have an unshakeable optimism that humanity is so damned clever that it will find, co-operatively rather than coercively, ways of dealing with any problems such change throws up; that if the cause is important enough we will find along the way solutions to issues as they arise.

More importantly (and not merely because I am a recent convert to voluntarism) I feel that the best time for such revolutionary change for many generations is now. Not only that but if we do miss this present opportunity we could actually find ourselves being carried away from the direction of liberty, both nationally and globally and for a considerable time - a dark age. The way governments have been able to finance themselves and their bribes of "safety nets"- both in terms of welfare and physical security - thus far, through control and taxation of their citizens, is being challenged and undermined in ever more popularly accessible ways - whether through travel, virtualization or communication - which happen also to be the best tools for helping to spread the revolution.

For the state to maintain this control in the face of these ever widening vistas of freedom open to its citizens will require ever firmer crackdowns and monitoring of things like travel and communications, if only to try and "follow the money" to ensure that people are taxed "properly". When most international trade had to be done through intermediary companies it was relatively simple to have someone at Custom House Quay signing things in and out of the country, but when we can buy and sell things individual to individual around the globe that all arrive here in millions of small packages addressed direct to the individual involved in the trade it requires a great deal more effort to monitor. Just because electronic communications leave traces that make it possible to track them automatically does not mean we should do so. If the Royal Mail steamed open every letter or package we would be appalled - but of course if it did the whole thing would grind to a halt. In an era where we can potentially work online for anyone in the world and be paid in a location and currency of our choice, where do our taxes go?

But, where the printing press heralded the death-knell of clericalism and the steam engine of agrarian feudalism so mass communication and transport heralds the end of the need for representative government. And just as, even if the first stages of the reformation ushered in by the end of clericalism and industrial capitalism taking over from agrarian feudalism were painful for some they have both been beneficial for most in the longer term, so the wrench from a deeply entrenched statism will also likely affect some more positively than others, the pace of contemporary change and innovation is such that this could be one epochal change in which we are able to fix those problems in "real time" and spread them rapidly around the globe.

Now I am of course familiar with many arguments that most of you might want to throw at me about "positive liberty", and how collective action is essential for giving people opportunities the "market" could not give everyone: after all, I used to make such arguments as well. Let me start with what ought to be an obvious statement: there is nothing a state can do that individuals, sometimes acting together in some way other than through government, could not do, by way of creating these "positive liberty" opportunities.

Leave aside for a moment the obviously crucial issue of whether they would create such "positive liberty" opportunities in the absence of a government forcing them to do so; can you honestly think of any positive function the state currently provides that only a state could provide? Leave aside also, which is a part of the previous question, whether non-state non-coercive mechanisms could deliver such "positive liberties" as "efficiently" or "cost effectively" as the state alternative. I am merely trying to get your agreement at least that yes, we could have private education, we could have private health care, we could have private charitable welfare safety nets, we could have non-state constructed and owned transport systems and infrastructure, we could have non-state security guards, investigative services and arbitration services.

Assuming that you are with me so far then, that the state is not the only conceivable mechanism that could deliver such positive liberty opportunities we ought to look at what price we pay for having a state provide all these things. I don't mean the direct cost of these "positives" but any "negatives" having a state provide them brings; the "collateral damage" if you like.

And what an appropriate statist phrase that is, for we should start with the area in which that phrase resonates the most. It has been estimated that somewhere between 175 MILLION and 230 MILLION people have lost their lives over the past century in wars between and within states and in politically motivated atrocities, human rights abuses and recklessness about the consequences of political policy - things like the often forgotten million or two Germans that died having been ejected from Eastern European countries after WWII not caring where they were to go or how they were to get there alive. And that doesn't include all those killed, for example, through law enforcement where the "crimes" being enforced against do not or should not breach the "harm" principle beloved of liberals.

Then there is the direct cost of governments providing these "positive liberty" opportunities; the welfare state, redistribution and so on paid for largely out of taxes. Here in the UK we are approaching a point at which tax will take 50% of our national income. Despite decades of many governments trying to create a system that is fair and redistributive (what they like to call "progressive"), it is still the case that the least well off taxpayers tend to be paying a greater share of their income in taxes than anyone else. So whatever the benefits various political parties may have tried to bribe the electorate with, assuming that when liberals express concern about lack of these positive liberty opportunities they are mostly concerned about the least well off, we find that for much of the time the poor (especially the working poor) are paying the most, proportionately, for providing these services to their fellow less well off citizens. As it has been said when you rob Peter to pay Paul, you are sure of the support of Paul.

Indirect costs are just as important, though. When the state provides all these things it usually does so as an actual or a de facto monopoly. Yes, we have a small private education system, a small private health care market and so on (and even in both of them they are heavily regulated by government so don't offer an open choice), but essentially most of what the state provides is done by way of monopoly. Even if the state only finances and hires corporations actually to provide the service, as it does with much infrastructure, including all the so-called privatized utilities in the UK, the state either controls who gets the contracts or heavily regulates those who provide quasi-private services.

There is little incentive to do all this efficiently, except that at some point, and the tax-paying public are remarkably tolerant about this, we might vote them out if we think they are spending too much or not efficiently enough. There are few price mechanisms even to indicate if they are doing things efficiently and they end up inventing measures and league tables to approximate for some market mechanism. And they are frequently done on a massive scale, so that initiative is difficult and best practice spreads slowly and with deliberate politically controlled pace. The tax paying public are of course very tolerant because so long as they perceive that more people are paying more than them as individuals then they must be getting as good a deal as it is possible to get.

And finally, but crucially for me, there is the play-off, for liberals at least, with "negative liberty" that all this, and the rest of the state's interference in our lives, creates. Monopolistic services reduce choice. Regulatory burdens reduce entrepreneurialism both in the areas dominated by public provision but also throughout the economy - 80% of the sample of 25,000 small businesses surveyed recently in Oxfordshire said that their biggest headaches were regulatory burdens, especially keeping pace with what often seem like arbitrary change in regulation.

Tax, whichever way you cut it is an imposition on peoples' earnings and wealth. Even for those who feel that the democratic process means that the citizen is effectively agreeing to this as a price of their involvement in that society, in reality we always know that there are people who will not agree with the particular mix of taxes, the particular uses the money is put to and so on. For them, and this could be 49% of the voters, never mind the electorate, it remains an imposition.

In order to enforce this agreement of the bare majority (or the first past the post here in the UK of course - so it is most of the time not even a majority) the state must have the power to threaten people who do not wish to comply. This monopoly of the use of force must always be a challenge for the lover of Liberty. This monopoly is what gives the state the ability to impact on so many other arbitrary areas of our lives. Like any other monopoly it in inherently inefficient. As a monopoly wielded by one group of citizens over another and for which fierce political competition to control it exists, there is always a temptation to bid for that power by offering new restrictions on others, until you end up with the sort of bloated over-legislated state we see in the UK today, which, even with a willing government and citizenry will take many decades to dismantle.

So, for me, given all these costs of having a state monopolistic form of government, against the possibility that there are many other mechanisms for delivering the "positive liberty" type functions social liberals say makes that state essential, even if some of them are prepared to admit it might be a "necessary evil" it is they who must prove the negatives are worth those positives. Circular arguments, or arguments solely from previous authority, are not enough - "the state provides education because people look to the state to provide education, or because the state has 'always' provided education". If you want to be considered in the least bit liberal, for me, you need to have a robust cost-benefit narrative about the state that it is the most efficient, most equitable and, given those other negatives, least impacting on other aspects of life way of delivering these goods.

Is there anyone willing to give such a thing a go. I personally believe it is an impossible case to argue.

I don't normally do the "fisking" thing as I find it quite tedious to base a post pretty much solely on someone else's. But this is different. Richard Murphy, who runs the "research" group called "Tax Research UK LLP", recently produced an extraordinary rant about libertarians who had had the temerity to comment on his blog. Libertarians are, he seems to believe, neo-Victorian, un-Christian, sociopathic, contemptuous, vicious, self-interested enemies of civilized society who are as repugnant as racists and ought not to be allowed to have a voice in any sensible media outlet, especially his own blog (of which he has, I suspect, a more overinflated opinion than most of us do about ours) and the Guardian, which patronizes him by allowing him far too many column inches.

"Naming libertarians for what they are": July 13th, 2009

Traffic on this blog has been very high of late. I have noted (and those who read the comments on this blog will also have noticed) that my blogs in support of government spending – which is the only (and I stress only) way to avoid depression in the UK and other economies - have not gone down well with the libertarian community. They think that all tax is theft; all government activity is bad and those who win a mandate for government spending from democratic electorates are ‘statists’.

Interestingly, or not, I went off and had a look at the OED for "statist" because whilst it seems always to be used as a pejorative term it must have a "real" meaning somewhere. There are several definitions, some of which clearly do not apply:

1. One skilled in state affairs, one having political knowledge, power, or influence; a politician, statesman. Very common in 17th c. Now arch.

Hmm..."skilled in state affairs"? I think not!

2. One who deals with statistics, a statistician.

Given some of what Murphy produces, I suspect not!

3. (With capital initial.) A member of a conservative Belgian nationalist party which sought to maintain the power of the provincial assemblies or States in the late eighteenth century.

Still a no then...

4. A supporter of statism.

A-ha! Yes, indeed, that looks more promising. So what is "statism" then? We find...

Statism: 3. a. Government of a country by the state, as opposed to anarchy.

So, yes, the very definition of the word, even if not used pejoratively, describes Murphy quite well. He does believe that the state is essential and government basically a good force. As he describes it in glowing terms, his is a way in which people "win a mandate for government spending from democratic electorates". When last did any government in this country have a "democratic mandate"? Even getting more than fifty per cent of the votes of those who actually bother is quite rare, let alone any kind of true majority mandate - i.e. a majority of the whole electorate - which I doubt has ever happened. At the moment we are ruled by what, the choice of just under a quarter of the adult population. A quarter of the adult population is able to decide on how much to take from everyone else who didn't agree with their choice. A quarter of the adult population is able to decide to create thousands of new criminal offenses, some of which, though the penalties are of course not the same, make Siad Barre's outlawing of "gossip" look like reasonable governance!

Democracy is two wolves and a sheep voting on what's for dinner as someone once said. We even have to do it in secret so our neighbours don't find out we've been voting to take more of their property from them! What is tax if not taking property with menaces? If anyone but government did it you'd fight back or expect someone to do so for you and hopefully get your property back, or replaced. All you are doing is using this formula of "democratic mandate" to say that this particular form of theft is justified because a "majority" agreed to it and that it therefore becomes something that is voluntary, consensual, a little bit like the difference between cannibalism and that German chap who volunteered to being eaten!

These people – who wish to undermine society as we know it and who would end all social security, state pensions, public health services, state education and much more besides – want to overturn society as we know it. As one said recently – we should rely for support on our families churches, synagogues or mosques – but not the state.

This would be the "state" that has had years, decades, nay centuries to get these things right and yet still has so many kids unable to read properly before going to secondary school, has 950,000 young adults milling around with nothing to do, decides when people will live or die by refusing to pay for drugs that might save them and denying them the right to chip in for themselves. The state in which even a Labour government in power for more than a decade has presided over a widening wealth gap and has failed even to meet its own targets on child poverty.

As Spencer observed a century and a half ago, "To mitigate distress appearing needful for the production of the “greatest happiness,” the English people have sanctioned upwards of one hundred acts in Parliament having this end in view, each of them arising out of the failure or incompleteness of previous legislation. Men are nevertheless still discontented with the Poor Laws, and we are seemingly as far as ever from their satisfactory settlement."

I suspect that even Murphy would balk at the cost if people actually stopped relying on their personal connections and informal communities.

But why stop at the list of the "bribes" with which government and politicians get us to vote for them, even though they are not as great as they are made out to be? Why not look at the bad things that the state gets up to that will also go on the bonfire: the ability to wage war; the history of mass murder in war and otherwise that all states, including ours, have engaged in; the curtailments of free speech that J S Mill thought democratic government would protect and has failed to do; the prying into peoples' lives; the minute regulation of so much of our lives and especially businesses that simultaneously protect their big business buddies and prevent real competition by making it so much harder for others to set up in business.

This ignores the fact that many are simply outside those communities of support. For them I suspect the workhouse would beckon.

And how many of them are actually trapped in the state of welfare and by the difficulty of doing something about it for themselves because of regulation. Murphy ignores that we hand over half of everything we earn to this state of welfare and other government programs and protection rackets. Why do people like Murphy assume that if, as he says, we "voluntarily" agree to the state taking so much from us to help such people we would not do so voluntarily in the absence of the state threatening us if we don't? If society with a state does not stand for the "workhouse" type of Poor Law any longer why would society without a state suddenly find that acceptable?

This Victorian concept of grudging charity is what these people promote – with the consequence of a random lottery of survival – and destitution for many.

One of the biggest fallacies of the statist is to suggest that without the state we would return to some pre-welfare hell - a pre-welfare hell that is largely a fiction in any case, because the mere fact that government thought welfare was a good idea reflected the fact that people were already doing it. All state provision did was to make that compulsory, subject to someone else's decision. That may have speeded up a more universal provision; but there's really no way of telling - because compulsion and centralization stifled all the alternative attempts, whether doing well or not so well. They were not all perfect, but then neither, after a century of trying, is the state's monopoly version.

It says that we are all by nature entirely unconcerned about anyone but ourselves. What a depressing view of humankind! And one which, despite the predations of the state on our capacity to be generous, is contradicted time and again by conspicuous acts of voluntary kindness day in day out. Yet even if I were entirely selfish, having nearly twice as much money in my pocket without a tax man taking it from me would give me more consumption power, creating more jobs, enabling more people to look after themselves and have something left over for others if they choose.

I do not believe in this callous, self interested view of life. It offends my Christian beliefs that suggest we have a duty as a society to fulfil the instruction – present in all major religions – but not in libertarianism that we love our neighbour as ourselves.

You are the one calling it callous and self-interested, not us. I don't recall Christ saying that we should have someone waiting to throw us in prison if we didn't share our coat. Whilst the bible mentions taxes, it is quite clear that these are not about welfare - and that welfare is a personal, charitable thing expected of everyone who has sufficient for themselves and finds someone in need.  The state, Rome, the Jewish temple tax, are about the upkeep of the trappings of those in authority, nothing at all to do with the injuction to love our neighbour. 

All these major religions do indeed focus on charity for that, not on coercive force. It's even one of the five pillars of Islam. It offends my Christian beliefs to suggest that we force those beliefs on others through a violent monopoly. Indeed, the state seems to me to be quite inimical to such a belief. How on earth can I love my neighbour if I suspect he is plotting to take more of my property from me?

Of course that requires that we love ourselves and that means we have rights – and that they should be respected. But there is no way on earthy civilised society can ignore the needs of others – and tax is the way we meet this need in our modern, complex society in which expectations of medical and social support are high –and the cost of meeting them as high.

Wouldn't we be "loving ourselves" even more by believing that we can achieve all this without the threat of violence with which the state goes about it? We do have rights, the right of self-ownership that the state infringes upon at every turn. Besides, this is an appalling circular argument - we do things this way, so we must do things this way - what a poverty of imagination this man has! It's also economically illiterate - the state, as a monopoly in many of these services has little, or any, incentive to do things efficiently, no free price mechanism to decide whether it is efficient even if it wanted to.

The various institutions, like fiat money, the state has created enable it to spend effectively what it wants. Even the threat of the electorate voting them out once in a while if taxes get too high for a majority of people need not stop them - they can inflate the money supply, as has been seen through this latest decade of the abolition of boom and bust, according to our current dear leader, they can create crises, either deliberately or through incompetence which, because the state is so big, affect every last one of us, as we are seeing now.

Those who say otherwise are not offering an alternative within out society – they are suggesting we tear down our society and replace it with another. In doing so they show complete contempt for many, some (most, I suggest, by far)of whom are in the positions they are through no fault at all of their own. One on this blog has called those in need ‘an underclass’.

An accurate term for the large group of people who are kept in dependency. And yes, I think tearing down the "society" that keeps a stratospherically wealthy elite in place and at the other end of the scale actively prevents people helping themselves. This society that legitimizes violence, but only by itself, on our property and freedoms, on the say so of a minority, no matter how powerful or sincerely held the contrary belief or however much better the alternative idea.

I make clear I think this as repugnant as racism.

I think it's clear that I regard Murphy's defence of this majoritarian thuggery we call democratic governance as repugnant as racism.

I would reject this language from a racist. I would reject a call from the far left to over throw society.

Why is it then that this vicious, self interested and, might I suggest inherently socially violent group are allowed to make this sort of contribution – as they do all over so many blogs where those with real concern for society, from across the mainstream political spectrum, seek to discuss issues in an open, rational and respectful fashion?

Inherently socially violent? Coming from a man defending the practice of theft with menaces, the institution that decides with horrific frequency to go to war, effectively careless of the casualties inflicted, that inflicts the will of a few on everyone else, ,millions of us, by force of law and threat of force, this is an astonishing statement. Of course, we can perhaps understand his anxiety. Murphy's world would indeed be turned upside down by a stateless society - for he would no longer be able to make a living out of helping to enforce state regulation. He himself would have to find something more productive and wholesome to do than promoting this institutionalized violence. And judging by his output, this would indeed be a huge wrench.

I would love, for example, to see far-right libertarians thrown off the Guardian bogs as a matter of course – which might improve their appeal to many others as a result.

The Guardian website is indeed private property. They are free to do this if they wish. I suspect that its appeal, as a forum in which everyone basically agreed and never had their ideas challenged, would be limited.

It is time we named these people for what they are – as being amongst the enemies of civilised society.

I am happy to do that. It would be good if others would do the same – and fight them as we do racists.

What an odious, censorious, weaseley little man Murphy is.

Just a brief post to recall that today, 29th April, is the hundredth anniversary of David Lloyd-George's 1909 "People's Budget". Thanks to the wonders of the interwebs you can now read the whole budget online.

He ended (the main section - in the "Balance Sheet" section) with these words which have stood for a century accusing his successors of all parties for not having solved the problems he set out on the road to do:

"This, Mr. Emmott [in the chair of the Ways and Means Committee to which the budget was addressed], is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests."

[from "Balance Sheet": Budget 1909

From the financing of the newly created Old Age Pension and Disability insurance to the funding of the preparations for real war in the form of spending on Dreadnought battleships there was much for Lloyd-George to find in his budget. He didn't miss a trick, and more or less anything that could conceivably be taxed was, in many cases for the first time, taxed.

But for many of us it is for what ended up not being taxed that this budget is most remembered. The debate surrounding this budget, with speeches up and down the country by Lloyd-George himself and more notably perhaps Winston Churchill, must be one of the best documented in history, for it was a first attempt to implement some permanent form of Land Value Taxation. A tax shift that Churchill described as:

"the new attitude of the State towards wealth. Formerly the only question of the tax-gatherer was, "How much have you got?" We ask that question still, and there is a general feeling, recognised as just by all parties, that the rate of taxation should be greater for large incomes than for small. As to how much greater, parties are no doubt in dispute. But now a new question has arisen. We do not only ask to-day, "How much have you got?" we also ask, "How did you get it? Did you earn it by yourself, or has it just been left you by others? Was it gained by processes which are in themselves beneficial to the community in general, or was it gained by processes which have done no good to any one, but only harm? Was it gained by the enterprise and capacity necessary to found a business, or merely by squeezing and bleeding the owner and founder of the business? Was it gained by supplying the capital which industry needs, or by denying, except at an extortionate price, the land which industry requires? Was it derived from active reproductive processes, or merely by squatting on some piece of necessary land till enterprise and labour, and national interests and municipal interests, had to buy you out at fifty times the agricultural value? Was it gained from opening new minerals to the service of man, or by drawing a mining royalty from the toil and adventure of others? Was it gained by the curious process of using political influence to convert an annual licence into a practical freehold and thereby pocketing a monopoly value which properly belongs to the State—how did you get it?" That is the new question which has been postulated and which is vibrating in penetrating repetition through the land."

[From "The Spirit of the Budget", a speech given in Leicester in Sept 1909, recorded in Churchill's own memoirs "Liberalism and the Social Problem" and put online by Project Guttenberg.

When at last the Finance Bill of 1909 was rejected by the House of Lords (an action that led directly to two General Elections and the eventual imposition of curbs on the Upper House's power in the form of the Parliament Act 1911) Richard Cobden's comments in the Corn Laws debates in 1845 had come to its most extreme conclusion:

"For a period of one hundred fifty years after the [Norman] Conquest, the whole of the revenue of the country was derived from the land. During the next one hundred and fifty years it yielded nineteen-twentieths of the revenue. For the next century down to the reign of Richard III it was nine-tenths. During the next seventy years to the time of Mary it fell to about three-fourths. From this time to the end of the Commonwealth, land appeared to have yielded one half of the revenue. Down to the reign of Anne it was one-fourth. In the reign of George III it was one-sixth. For the first thirty years of his reign the land yielded one-seventh of the revenue. From 1793 to 1816 (during the period of the land tax), land contributed one-ninth, from which time to the present [1845] one-twenty-fifth only has been derived from the land. ...Thus, the land which anciently paid the whole of taxation paid now only a fraction. ...The people had fared better under the despotic monarchs than when the power of the state had fallen into the hands of a landed oligarchy who had first exempted themselves from taxation, and next claimed compensation for themselves by a corn law for their heavy and peculiar burdens."

Source: School of Co-operative Indivdualism, Quoted authors on the land question

The course of that "implacable war against poverty and squalidness" was set and as we know today, continues now and will continue until we learn to stop taxing production and honestly gained incomes and start instead to undermine the fundamental inequities of the economic system that traps so many in inescapable poverty, as people like Lloyd-George, Churchill, J S Mill, Henry George, and many of the individualist anarchists of the nineteenth century, like Benjamin Tucker knew only too well.

A century is long enough - real poverty reduction will never be achieved by redistributing the power of real economic growth but in eradicating these fundamental inequities that prevent people from bettering themselves. Alistair Darling, you have no hope of matching Lloyd-George. Learn from them, or give it up!

I am reminded by Henry Law's blog also that this month sees the 350th anniversary of the take-over the Diggers under Gerard Winstanley of various bits of land across several counties of the south of England and south Midlands.  Later in summer sees the anniversary of their arrest and removal.

What the Beeb could not do for Gaza, John Redwood does today as he boldly launches an appeal on behalf of struggling "public sector fat cats":

Today I would like you to spare a thought and a few billion for the public sector fat cats. They have been going through a miserable time lately.

Fred Goodwin has been pilloried for his noble action in creating the largest loss making bank in UK financial history and for delivering it safely into the public sector.

Chief Executives the length and breadth of local government and quango land have been subject to abusive intrusions in to the privacy of their rewards by the Taxpayers Alliance, the Redwood website and others.

They should be supported for increasing the costs of public services year after year, for keeping productivity down, and for tirelessly recruiting so many extra administrators, spin doctors, regulators and management consultants to help them. We need all the jobs we can get in a recession. One man’s productivity gain can be another man’s job loss.

Read the rest at The Sunday appeal. I thought it was quite funny anyway.