Half of England Is Owned by Less Than 1% of Its Population, Researcher Says
nytimes.com
nytimes.com
— Winston Churchill, 1909
Property taxes in the UK essentially don't distinguish between "nice house" and "an actual palace". A tiny bedsit pays grade A taxes, my nice flat is grade B, My mother's old house (a four bedroom cottage in a pleasant village where lots of rich people live) would be category H. There aren't any categories above H. They're charged to the occupants, so if you own a town of a hundred dwellings and let them out, the residents pay those taxes, not you. The exact mechanism has changed substantially since Winston's time (and indeed was the cause of major riots decades ago) but this general thrust has been true for generations.
It's true that rental income due to a landlord is taxable income, after expenses, but I don't see how that's relevant?
Capital Gains Taxes only kick in if you sell. If you're content to profit off ownership indefinitely you are never charged CGT.
They had a huge advantage over the council tax - and Thatcher's brief foray into a poll tax. Houses don't move, people do. The rates were on the property and were charged on rateable value which was a value distinct from market value, but not banded. People and inhabitants did not matter (at least in the 20th century - not sure about earlier).
Every government from Attlee's in 1945 onward promised to replace or reform the rates. Every one except Thatcher concluded it would be not worth doing, and far more expensive to run. All that was needed was a tax break for the little old widow stuck in the old family home after the family had left, as an exception.
Council tax is in effect a massive tax break for the wealthy, compared to domestic rates, as the highest band is an absurdly low value that catches every property worth more than £320,000 in band H. Same tax for £320k and £25m.
(From A POOR TAX COUNCIL TAX IN LONDON: TIME FOR REFORM, although the same info is on government websites).
Yet no one is complaining, demonstrating or rioting.
Actually, since rich people can evade taxes better, the part of the bag distributed to them is less taxed.
1909 was a very different tax landscape. Income tax was 3.75% and Winston Churchill was trying to raise it. I don't think CGT existed in its current form at all.
Especially seeing as royal family wasn't the greatest fan of him.
That’s in theory though, so what’s keeping this from happening in practice?
When housing bubbles burst, rental prices go up.
I really don't think it's a free market because people must live somewhere.
Further, banks only let you have one normal mortgage, so you can't buy multiple properties unless you're already wealthy.
House building companies in the UK have something like 800,000 plots that permission is granted on but yet they're not building on
Builders have an incentive to liberalize development laws and do push for upzoning. It's those who own condos who have an opposing financial interest in limiting development.
Beyond financial interests there are NIMBY and other cultural interests that seem to be decisive, like heritage preservation.
There is also bureaucratic inefficiency limiting housing development by imposing lengthy and expensive processes for getting permits and approvals.
Many neighbourhoods have zoning laws that impose height limits that prevent high-density developments, and this constrains growth in the supply of housing.
https://www.mercurynews.com/2019/04/14/opinion-california-ca... = http://archive.is/m8ZyV
https://www.holyrood.com/articles/comment/land-reform-and-in...
Edit: In my own opinion, this iniquitous state of land ownership in Scotland is somewhat compensated for by the fact we have the Right To Roam - which means even though a lot of land is kept as hunting estates anyone can wander about pretty much as we please (with some fairly minor restrictions).
English, and honestly can't tell the mood. (Sounds very roughly what I'd expect, for whatever that's worth.)
And that's without looking at the rather nasty and complicated history of land ownership here - but I can recommend Andy Wightman excellent book The Poor Had No Lawyers to explain that.
But, as the sibling comment mentions, there's a long history of oppression of tenant farmers, who until recently were prevented from buying the land they tend. And the economic impact - while some estates have changed hands over the years, as far as I know, they tend to be sold relatively intact, so there's little chance for people of more modest means to own any of this land.
The Church of England, Anders Povlsen, and others have all acquired huge amounts of land recently (that is why there is so much complaining about landowners from England who only come up to shoot). There is tons of forestry to bid on, and if you offer the right price then you will find willing sellers...if you offer the right price.
This is not about opposition to private property. I’m fine if people own a house, or a family farm, or a small business, or even a controlling stake in a large business they built from nothing. (Though it would be great if at that point the public had transparency into their self-serving political activities.)
But passing billions (and the derived political power) down to descendants several generations removed who did nothing themselves to deserve it is ultimately a recipe for a deeply broken society. It creates perverse incentives away from long-term thinking towards large-scale fraud and abuse, and entrenches the political influence of an aristocratic class whose primary goal is to maintain their fortunes rather than contribute to the society.
Thats how I read GP.
1% of 1 million people is 10,000 people, who will be roughly half kids and young adults — the heirs.
So you’re talking 0.00008% of the wealth being passed down, roughly. That’s still pretty unequal in a society with a lot of people, but I’m also not sure smashing any granule of accumulated wealth leads to a vibrant society — the inter generational transfer of structures is essential for culture.
Capitalism is fundamentally just highly mobile aristocracy, though — and that may be the best we can do.
The ownership is probably a power law. If you did a simple "averaging" division, that makes no sense.
It used to be a principle in ancient times that one is not entitled to more land than one can deffend.
Land ownership seems like a much more mundane part of the economy actually but it is being equated with the entire economy. So what does land ownership have to do with monopolies, corruption, and the rich paying proper taxes? What are proper taxes for the rich to pay?
To me the land ownership issue is being used as a wedge to reinforce a different idea that a tiny percentage of people have economically disenfranchised everyone else. I really don't think land ownership should be equated with that however. At this point, the argument is very different. It's gone from why we should confiscate people's land to what tax rates should be, or who the "rich" are, or why real estate prices are what they are. To me the land confiscation case seems like scapegoating of landowners for things like real estate prices or economic inequality.
Really? I'd say that taking peoples' stuff in the name of social justice is inherently unjust.
> But passing billions (and the derived political power) down to descendants several generations removed who did nothing themselves to deserve it is ultimately a recipe for a deeply broken society.
I actually don't disagree with this. But we're talking about England here, and even if you stop the money, you still have the class structure and the connections, which still lead to political power.
But even more, while I agree that the problem is real, I disagree with your solution. "Lets just take it from them, and give it to those who have less" is such a seductive dream, but it destroys societies and economies where it is tried.
Saying it's your stuff, is the misnomer. It was found by your because it was someone else's stuff, but there's supposed to be some moral virtue of you receiving it, because you benefited from it during your upbringing.
Being offended by a perceived slight in Procedural justice is a matter of circumstance - ie altering the principles you were born under for Distributive justice, even if you don't think it's as equitable based on your experience. From a pragmatic point of view, inheritance causes Capitalism to fall into anarchy in the long term...making it inherently immoral, as a practice. Unless you want to dispense with capitalism, in which case it's still immoral to a lesser degree (lesser evil against a greater evil).
You have people like Buffett, Gates even Andrew Carnegie and many other billionaires saying that their wealth should go back to society instead of their kids, are they all wrong?
In romanian history I know 2 positive examples where land was confiscated and redistributed with positive effects: one by Alexandru Ioan Cuza who confiscated most land owned by church(roughly 25% of the country) and another instance during ww1 when the King decreted every peasant fighting in the war will be alloted land by the state.
Nothing bad came from that, the people were already working the land, they just got to take home the fruits of their labor more.
I agree that Cuza's secularisation of monastic estates was a good thing.
The effects were predictably horrifying, with families starving while their land was forcibly taken and misused by people more friendly with the new system.
Because when the state CAN take everything from you, it's up the "wise statesmen" if the taking is for the good or for the bad of the society. You have no saying it is, but one thing is for sure: it’s bad for you and always good for said statesmen and their tools.
My point was, land/wealth redistribution, can and often is a good thing, it's not a sacrilege that aytomatically ends in dissaster as some die-hards make it to be.
Too bad if you (dirt poor and uneducated) went to fight in WW1 to get some land and then spent the years after WW1 working that land like crazy to buy more land because you believed that gave your children a better chance in life than you had.
Because that's what happens when you don't have principles (like "private property is sacred") and you replace them instead with nebulous beliefs that sometimes it's OK to steal from others, as long as they have more than you do and you get some of that booty.
The actual solution is capturing of the rent as the land value increases. The increase on land value is due to society contributing, but the beneficiary is the landlord sitting on it. Tax the consumer, not the producer of the value. Tax land, not labor and business.
The aristocratic power law society has to be broken in order to fix the system. Bolsheviks didn't understand this. Or they did and they organized the coup just to become the new bosses.
Without this understanding our society will still be very primitive and suffer from revolutions and aristocracy cycles. At least in ancient times they understood basic ethics in terms of ethics of ownership and how destructive debt was on a society. It seems like today we are blessed with all these new technologies but live more and more in some medieval dark age dystopia.
Pass that law and nothing would change, the money would go to some offshore bank account which is owned by a secret trust controlled by the kid.
And from there follows a simple equation - when the distribution of benefit from recognizing existing property rights is too skewed in favor of the few, the gains to be had by the rest from refusing to recognize those rights anymore exceed the risks of not being able to secure your own.
When elites forget about this equation for too long, revolutions happen.
Rich can be rich because of great societal or technological improvements as well as somebody stealing legally or illegally from others.
Rentiers can be both very rich or not so much, but always at the expense of other people.
There are other ways you could approach it that would distribute ownership and political power in a more egalitarian way, and as ownership (and political power) become increasingly concentrated in the hands of a few, more and more people will realize that "we protect others' property rights to secure our own" is not meaningful. There's nothing of our own to secure, and never will be in a significant way.
This sort of refiguring of property rights can happen incrementally and peacefully (through tweaking taxes, etc), or suddenly (revolution). We've seen both lots of times in history.
Where we go next is the question; but ending the discussion the way you wanted to isn't all that practical or interesting.
I just object to the "they have to much, so we should take it from them" rhetoric, on the principle that, once they're done taking what the rich have, then they're going to decide that those who have the most at that time are now the rich, and the process will continue. And it won't stop until they decide that I'm the rich, and they should take what I have. In the process, they'll destroy the economy of the country. I really would prefer that that particular genie stays in the bottle...
Isn’t this just the slippery slope fallacy?
> One reason why I am skeptical has to do with the difficulty of the causal reasoning needed to establish that a slope really is slippery; most slippery slope arguments make little or no attempt to do this hard work. Moreover, it is difficult even in retrospect to tell whether a slippery slope mechanism has actually been at work.
I see no attempt on the part of the commenter I replied to, to make this kind of effort. And to save them the effort of doing so- even if they had established the presence of a slippery slope, they’d still need to prove it was the causal agent of the consequences they described.
Short of evidence to prove in advance that action A will lead to consequence B, this comes across as scaremongering.
Overt this period the landowners have accumulated more personal wealth than at any time since the Enclosures.
Your point is naive first-order thinking about a third-order problem. "If we let people take billionaire stuff they may take my stuff" is nonsense.
What actually happens in redistributive economies is high taxation leads to high stability combined with high opportunity - not the false rhetoric of opportunity hiding a reality of very poor social mobility, which is what the US has, but genuine social mobility and business opportunity.
Huge inequalities are actually more like to result in revolution and war than stable economies where wealth is more evenly distributed.
Beyond a certain point massive inequalities are inherently politically unstable and almost guaranteed to result in a seismic social dislocation.
This isn't even a moral point - it's simply empirical.
Nor have "landowners already destroyed the economy of the country". The UK economy is the fastest growing in Europe right now (of the rich nations), unemployment is at record lows despite a long term massive influx of immigrants: its economy is literally the opposite of destroyed. You're lying about the reality of the UK, whilst criticising others for being naive.
Shooting down your trad-Marx rhetoric with economic facts is easy so I'd like to focus primarily on this oft-cited belief:
Beyond a certain point massive inequalities are inherently politically unstable and almost guaranteed to result in a seismic social dislocation. This isn't even a moral point - it's simply empirical.
But it is a moral point. The people who perform "seismic social dislocation" in response to (perceived or actual) economic inequality have a long history of performing that dislocation by shooting peaceful people, stealing all their stuff, building forced labour camps, liquidating all their political opposition and then turning their countries into hellholes. The communists who did all these things absolutely deserve moral condemnation and their acts cannot simply be whitewashed away as some sort of mechanical inevitability, no more than someone could excuse the Nazis as some sort of mechanical inevitability given the inequalities imposed on Germany by the Treaty of Versaille.
Compare the fate of every country where your views have gained critical mass vs America. The latter is one of the world's most successful countries, if not the most. The others are all slowly recovery from absolute poverty, and recovering only because they finally turned their back on your Corbynite views.
I've heard most of the anti-Marx stories - some invented, some just rumor, a few true. Never heard this one before. Not sure what one of these jibes you are referring to.
Marx traced the history of capitalism in England. Actually in his studies he showed how working conditions had gotten better in some respects. He was writing a history, so of course he referred to "obsolete...long since reports".
You are correct that he predicted capitalism was in a death spiral. Just as he had observed feudalism in a death spiral, and knew about the Roman slave latifundia economy's death spiral before that.
Corporate America going to the taxpayer to bail out "too big to fail" deregulated banks is precisely the kind of thing Marx predicted. Marx said eventually that would lead to the end of capitalism.
Who knows, the amount of carbon poured into the atmosphere increases every year, perhaps capitalism and humanity will both end at the same time before Marx's visions could be realized.
"If we decide that billionaires represent a policy failure that has allowed a few to concentrate wealth and power and society collectively wrests some of that back from those with such a disproportionate power and wealth, then that means eventually 'they' will come after my inconsequentially meager possessions."
I don't see it.
I expect that the crime being referred to was the execution of Charles 1st?
"Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait."
The secret of great fortunes without apparent cause is a forgotten crime, because it was properly/cleanly done," is my fairly literal translation, but I am not really fluent enough to capture subtleties.
I am sure this is attractive to you because you are a member of the "virtuous class" no doubt, but have you checked your family tree? How far back? What genetic crimes prohibit property ownership? Class traitor? Rightist? Capitalist Roader? Perhaps religion?
And why do these people still own land? Presumably you aren't personally being pressed into involuntary labour, so why do you as someone who is doing "all the work" still have nothing? These inbred landowners are presumably so feckless they would take anything (certainly, lots of these estates go for sale every year).
That’s not the point. The point is that a small group today shouldn’t be the inheritors of the entire society’s wealth. We shouldn’t be judging people today based on the actions of distant ancestors. And the way to avoid that judgement is for the majority of absurdly wealthy people’s property to devolve to the state when they die.
And it isn't random. You can acquire this property if you want. But be aware, you seem to be expecting to acquire the "entire society's wealth"...most of this land isn't that valuable and that land that is requires work (which is why it is valuable).
Again, I don't understand what your point is here beyond anger that someone else has something you want?
EDIT: Are you actually familiar with the population distribution and density in Scotland? A good chunk of this land is just agriculture and rough grass that has few economic uses. This isn't land that anyone wants to live on. The main concern of the govt, as I understand it, is to encourage forestry (which will mean more large owners, not less).
Why should large landholdings beyond individuals’ management abilities be left to particular families?
https://www.britannica.com/topic/land-reform/Types-of-reform
That just makes the state the owner of most of the society's wealth--which in practice means the small group of people who control the state own it. How is this better?
I base this on the number of new billionaires vs the number of major new political initiatives.
I think it’s quite easy to have a vision, but very difficult to filter those through the will of the people. In the sense that a great vision is very subjective and may not be believed by the large number of people necessary to change things in a constitutional republic.
History shows that such people are much, much rarer than people who have a great vision about how to use wealth they have either inherited or built up themselves for everybody's benefit. Or, to put it another way, people with a great vision that will actually work are far more likely to become entrepreneurs than politicians. Bill Gates is eradicating malaria using his own wealth while governments have failed to do so for centuries.
What they find disturbing though is that they as a society have to pay for all these property related services like internal protection (police, courts, law system) like external protection (army) and give these to the sitting and do-nothing landlords for free. While paying for them from their pocket through income taxes and receiving nothing back.. Actually the landlords are then so kind as to increase their home rents as a Thank you.
Without such a tax, compound earnings on investments implies that over time, a very small fraction of the population will control the vast majority of all economic resources.
I don’t believe the rates have changed much, but the base amount which is excluded has increase to ~$5.5million per person, $11m per married couple.
Why do you say “used to”? This is not nearly so much of an exclusion amount as to approach an effect where “a very small fraction of the population will control the vast majority of all economic resources.”
>half the country belongs to just 25,000 landowners, some of them corporations.
Might as well say that "More Than 2% of England Is Owned by Less Than 1% of Its Population" - still true, nearly as misleading.
In Scandinavia Right to Roam (alle-mans-rätt / All Men's Right) predates even the earliest modern laws, so is generally not even codified but based on an immemorial legal tradition.
It really is a fantastic tradition. As a Scottish expat, but frequent visitor, it's nice to be able to hike, bike, canoe, and camp pretty much anywhere. Trying to do the same in much of the US is likely to result in being chased off with a gun.
0 - https://en.wikipedia.org/wiki/Land_Reform_(Scotland)_Act_200...
1 - https://en.wikipedia.org/wiki/Scottish_Outdoor_Access_Code
this is a real problem in the West of the US. There is so much land fenced in that it's really difficult to do cross country hiking. When I visited Scotland it was a breath of fresh air to see how easy it is to get around there.
Also, these are typically situations where someone owns land on both sides of a river, and illegally strings wire across the river. Ignoring the fact that the river is a public waterway. Even though their land is posted against trespassing.
I think there's more public lands in the county I live in currently (Boulder, CO) than there is in all of the State I grew up in (CT). I know many places in this state that I could walk 100 miles through, without hitting a paved road. I live 30 miles from a National Park, and 18 miles from the nearest Wilderness Area.
A, "right to roam" law would certainly be nice to have, but we're not being suffocated by private land ownership. Things are just different here, than in Scotland. Less people per area of land.
California has 199,490 km2 of protected public lands, more area than 2.5 Scotlands.
for example, although the summit of berryessa peak is on BLM land, the only access is through private land. fortunately one land owner was convinced to allow an easement on a short section of trail to allow the opening of the berryessa peak trail, and access to this peak, but for years it was public and yet off-limits.[1]
on the west side of lake berryessa, cedar roughs wilderness, currently has no access. there are old roads/trails in there which are accessible from private land, but no public easement.
there was an article posted here last year about similar issues surrounding the crazy mountains in montana[2].
[1] https://www.summitpost.org/berryessa-peak/766290 [2] https://www.bloomberg.com/news/features/2017-10-25/this-land...
There are plenty of public lands in CA where you can walk around off trail.
There are plenty of places where just having visitors regularly hike across the ground off-trail does significant damage to the ecosystem, which is why fragile or popular parks restrict public access to marked trails and designated campsites.
Living soil which can be destroyed by footsteps. Cyanobacteria and lichens and algae. One of the oldest organisms on Earth.
Afaik, the only solid evidence against is an apparent lack of "participation" from local communities on land use. Unfortunately, this is an issue that applies as much to council as private landowners in Scotland and also tends to elicit opinions on what "should" be the case, rather than what is actually possible (i.e. people who live in the middle of nowhere complaining about the lack of economic development, complaining that the landowner isn't selling them a house at a cheap enough price, complaining that the landowner only comes up from England to shoot, etc.)
There has been an abundance of loose reasoning on that is justified only by the perception that of unfairness (and, unf, a bit of light bigotry about the English). One of the sources for the rather brief Land Commission report was some political theory on power and participation (https://landcommission.gov.scot/wp-content/uploads/2019/03/R... - Section 5 - I studied Politics postgrad btw, theory shouldn't be used this way...it is basic). Madness.
Scotland's second biggest problem is England, in the form of unbalanced monetary transfers from borrowing from London, and the brain drain to England, and for that matter the rest of the world. But its greatest problem is itself, and the domination of control in a few families hands.
life is inequitable you have to fight to get a higher station. substituting taking responsibility to create wealth for convincing yourself you're entitled to it just disempowers you.
I'm not saying it's not hard. but that it is hard is not special and that it is hard is the motivation to overcome it. and when you get there that your hard earned achievement can be taken away by people who don't want to overcome is wrong.
The fundamental point is this wealth is not some free right it's not some magical thing that just exists. wealth is precisely the value created by overcoming difficulties.
wealth is made by work and the people who make it ought to be free to choose what they do with it rather than coerced into surrendering it in the name of equity, a false equity which is inequitable to the moral nature of wealth, responsibility and hard work. that kind of idea is a disease that will erode away the social foundation.
I'm not saying wealth disparity is easy nor that it creates no problems. it creates a lot of problems but I don't believe the solution is by redistribution. at least not at this stage of human and economic evolution. while our species is still bounded by the amount of energy we can extract from our surroundings.
taxes yes, State yes, a social welfare net yes, but not to an excessive degree, and not to cure inequality.
if energy was free of course it should be distributed to all without cost. like air.
but it's not. to do so would bankrupt our species in the name of compassion. the greater compassion is the realization of the poor state we're in, and the preservation of all. not the temporary satisfaction of some who convinced themselves that things should be easy.
one day as a species we will get there. no crushing disparity. but we're not there yet. trying to live like we are already there is a toxic delusion that doesn't help us get to that more compassionate future.
Whenever you see concentrated wealth with such extreme disparity that you have one person owning more than a million others, there are only two possible conclusions: either they really are a million times more productive, or it was actually produced by that million, and extracted from them via rents.
You could argue that those rents are fair, since they stem from legitimate ownership. But what makes it legitimate? Most land was originally taken by force, for example, and the result enshrined in law (that was written by the people who did this) post factum. If that doesn't make economic advantages that stem from such ownership unfair, then surely the same standard holds today, and those people have no right to complain if society decides to take it away from them by force, and enshrine it into law, just because it can.
I’ve found the writings of David Ellerman to be very elucidating on this topic, and admirable for giving a deep critique of capitalism without any reliance on Marxism. He relies on a labor theory of property rather than a labor theory of value, and a Lockean liberal notion of inalienable rights. Two short texts that make a good introduction:
https://www.abolishhumanrentals.org/human-rentals/the-great-...
https://www.abolishhumanrentals.org/human-rentals/the-fundam...
The sentiment we hear often, however, is yearning for benefits of co-owning a (ideally mature and profitable) business while retaining the hired hands' rights. Not many are keen to give up their 8 hour workday, benefits, social welfare net for the upside of owning their share of corporate profits.
I realize that's not what most people have in mind when they ask for profit sharing. They want to be a part of an already successful operation, and take no risks. And that's precisely what I've been talking about. The process of building a successful business is given little thought, as if they grow on the trees or are being brought to Earth by meteors.
Then there's that thing with businesses statistically being just slightly more often in black than in red. Would your profit sharing scheme involve absorbing the losses as well? How many takers you think it will have? If not them, who will get to absorb the losses, potentially reinvest to weather through rough times etc? The expense would be not negligible, on the order with the profits.
When the firm spends more than it produces, it needs access to capital. This can be in the form of savings, credit, or new investment. Small new businesses are routinely launched through loans. Credit institutions are quite used to absorbing losses.
A worker-owned coop can also take investment from external capitalists. It would just be in the form of a profit-sharing contract rather than equity with voting rights.
> Credit institutions are quite used to absorbing losses.
They are also quite good at taking the profits on their investments. If a bank bails you out, it wants to take its pound of flesh. You essentially arrived at status quo.
It’s also naturally abundant in the form of land, those cadastral game tiles on which life plays out, dominion of which are allocated by the state in a system of hereditary monopolies.
Wealth is not allocated the same way it’s created. That’s why we have the concept of rent-seeking, behavior that increases one’s share of wealth without creating more wealth.
Owning wealth lets you accumulate more wealth without working, because you can charge other people rent in exchange for using your wealth. Not only that; you can also hire people in an arrangement where you automatically own everything they produce using your capital goods.
Rich people know that labor is a very inefficient and tedious way to increase one’s own share of wealth. That’s why they prefer rent, interest, and staying on the top of the employment hierarchy where they have a legal claim on the products of others’ labor.
Yes, work is a true source of wealth, and so is capital and land and the other factors of production. There’s a long history of criticizing how most of the wealth created by working ends up owned by the owners of capital and land—that’s the essential critical point in the discussion of capitalism, whether Marxist or Georgist or Ellermanite.
Or you could say the crucial question is how can we cure the rich people from the delusion that they have a right to appropriate what they have not produced?”
Georgist perspective doesn't blame the rich capitalist, but the rentier, no matter if rich or poor. Rentiers provably extract others people's and businesses' labor.
you could just as well say that people are rent seeking with their labor, using the capital of their bodies.
if you deny personal ownership of property and land and the ability to extract wealth for rent from that ownership you may as well also deny personal ownership of one's own body and personal space and the ability earn income for renting out one's time, or professional service or the capital of one's body. that gets you to slavery in one step, well done.
so the simplistic argument that labor capacity of people is fundamentally different to other capital is false. consider that you invested your time and your money in your education to better your skills increasing your ability to rent on your own capital. if you want to deny people extracting money from their investments and property why not also deny them extracting money from their investments in their own education?
so again I think on the premature path to compassion and equality in your mind you have actually found a shortcut which disempowers people and limits their freedoms. I don't think you did this intentionally, you just haven't thought it through.
I understand the temporary appeal but it does not actually provide a workable solution to the problems you are trying to address.
the next step is consider what the second-order effects of policies inspired by your theories would be. the ultimate goal of this is to create a dependent slave class to do the bidding of the elites. these theories have been designed for mass appeal.
Agriculture in the United Kingdom uses 69% of the country's land area. 476,000 people work on those farms. That farms take up a disproportionate amount of land compared to urban areas doesn't tell us anything about income inequality. Most people in England want to live in cities, so even the wealthiest citizens might own little to no land (how much land does a wealthy penthouse owner own if all they own is that penthouse).
To be clear, I'm not saying that income inequality doesn't exist. We just don't see examples of it by looking at farmland.
69% of all the land in the UK is farm land. Most farms are owned by individual farmers. Those farmers make up roughly 1% of the total population. The numbers absolutely support this (feel free to research it yourself if you don't want to take my comment as gospel).
There are legitimate signs of income inequality. This just happens to not be one of them. No one defines income equality as everyone in the country owning roughly the same acres of land. The vast majority of people live in urban areas, so we wouldn't expect that those city-dwellers all owned roughly the same percent of farmland.
Traditionally England only had Leasehold ownership of 3D space, you couldn't own it in perpetuity. Since the penthouse is presumably above many other properties belonging to other people its owner could only own a "long lease" (e.g. 100 or 250 years) on the penthouse, with the permanent freehold rights separate, often owned by brass plate companies with the ground rent and other fees paid to them disappearing into opaque foreign corporations.
Some years ago, recognising that this is crap, the British government introduced Commonhold, a way to own 3D space that acknowledges that the property owners who share the same physical building need to work together but rejects the approach that the Freehold should be a profit centre for rent-seeking third party investors.
So in principle today a penthouse could be owned Commonhold, which means it comes with membership of a "Commonhold Association" an entity that exists only so that the Commonhold owners can all be members, and to own the Freehold that they're all dependent on instead of it being possible for somebody else to own that.
In practice people didn't say "I demand Commonhold" and accept a price premium for this improved ownership. So if you developed a piece of land after the reform you had the choice, sell a property Commonhold for £X or sell the same property as Leasehold with say a £1000pa escalator ground rent going to Property Holding Corp 3472 based in the British Virgin Islands, for £X. It was a no brainer, and there are very few Commonhold properties today and plenty of these mysterious property holding corporations earning fat stacks.
>It is encouraging that a man whose family first got rich because his ancestor was the fat huntsman (gros veneur) of William the Conqueror has £9 billion today, 950 years later. It shows that our culture respects private property over government interference. It gives hope to us all.
https://www.telegraph.co.uk/news/2016/08/13/a-dukes-wealth-i...
I'd love to know how they think William came to acquire that property.
https://www.theguardian.com/world/2015/mar/04/east-india-com...
https://www.goodreads.com/work/quotes/27232308-the-wake
Here's Kingsnorth writing about the consequences of the Norman invasion upon England today:
> [...] legacies of 1066 remain with us. Take that law enacted by Guillaume in 1067. In Anglo-Saxon England, the idea that one man — the king — literally owned the entire landbase of the nation would have been unthinkable. Today, it remains a legal reality: England is still owned, as a whole, by the Crown. The hereditary monarchy introduced by the Normans remains too, and the French concept known as ‘primogeniture’ — in which estates are inherited wholesale by the first-born son, rather than parceled out between children as was more common in Anglo-Saxon England
> [...] Today, Britain is the country with the second most unequal distribution of land on Earth, after Brazil. More than 70 per cent of the land is owned by fewer than two per cent of the population. Much of this is directly traceable to Guillaume, whose 22nd-great-granddaughter sits on the English throne today.
> [...] ask yourself whether the development of early modern capitalism in England would have been possible without that concentration of land, and therefore power and wealth. What about the consequent empire? Did the industrial revolution begin in England because that funnel of power and money made it possible? Or what about class, which is directly connected to all of those things? We are still one of the most socially and economically stratified countries in Europe. In today’s England, the rulers still drink wine and the ‘plebs’ still drink beer, just as they did in 1066.
https://aeon.co/essays/why-1066-wasn-t-all-that-england-s-en...
Quite, some good old fashioned respect for the rule of law there...
Looking at that history it’s easy to think that might be how the “born to rule” mentality among the aristocracy in the UK became so entrenched.
The alternative view is that the people in these families have the personal characteristics that allow one to build wealth, and that those characteristics are passed down (either by some kind of conditioning, or genetically, or some combination). This doesn't require much stability at all, since the wealth can all be lost but the capacity to build it is not as long as the person survives.
Examples of the second view can be found in diverse examples like: Wealthy Irans who lost everything in the '79 revolution, moved to America, and rebuilt from nothing to become wealthy again, often not even speaking English to start. Jews after the Holocaust, who lost everything and rebuilt from nothing to now become >17% of global billionaires on 0.1% of global population. And so on.
Though both views are obviously in effect, given the massive instability present throughout history, I'm inclined to say the second causality is dominant over the long term, while the first is only effective over the short term (e.g. trust-fund babies who lose everything in one generation, pro sports players or lottery winners who get millions and lose it all within a few years, etc).
I think it's important to keep both causalities in mind.
I'm not sure it really changes the dynamic very much though. Even if the cream always rises to the top, theres no harm in shaking the milk bottle every so often.
With no cataclysms to prove their ability to rebuild if needed, wealth's ability to self perpetuate means ascribing it to stability makes sense. Since they would remain wealthy as both with and without the 'virtues' (in the sense of self-promotion as opposed to morality) its presence is irrelevant. All they need to do is avoid doing anything extraordinarily stupid and wasteful.
https://anarchimedia.com/2019/01/15/rich-families-in-florenc...
https://en.wikipedia.org/wiki/Hugh_Grosvenor,_7th_Duke_of_We...
> Upon his father's death, in August 2016, as well as the peerages, he inherited a wealth currently estimated at £9 billion, with considerable trust funds for his sisters. This wealth is held in a trust, of which the Duke is a beneficial owner but not the legal owner — an arrangement which received considerable press attention due to the inheritance tax exemption this confers.
The standard Inheritance Tax rate is 40% in the UK when above a certain threshold - https://www.gov.uk/inheritance-tax
Seems fair!
Do you have a dataset showing people without children work less hard and create less wealth?
That wouldn't be the right calculation. If a person has children, their children will contribute to future GDP. So a proper analysis of having children on the economy would compare the output of:
- someone without children; and - someone with children plus the net output of their children discounted to present day value.
I wouldn't be surprised if it turned out that the average person without children individually contributes more to GDP than the average person with children. However, that's largely because raising children takes time, labor, and resources. The person with children is sacrificing their own individual wealth and production and investing it their children. However, when the children's future production is taken into account, discounted by the future value of that production, I suspect that it turns out the other way.
I don't have data on this and although my suspicions feel correct, maybe they aren't. I'd be genuinely to see such data.
I think you're taking that in the wrong direction. The op was suggesting that the primary reason people work hard and create wealth is because they want to leave money for their children after they're dead, and that a redistributive estate tax would prevent that. Essentially: people are primarily motivated to create because of their children.
No, I was not. I was saying that that is one of the main reasons, not the main reason.
That's not what I was claiming. I was only claiming that providing for one's family is one of the main motivations for people to do productive work and create wealth, not that it is the only motivation.
Do you have a dataset showing that people with spouses and children do not do productive work and create wealth?
Ownership is a fiction of society, as are most rules, and its probably up to us to decide what "fairness" means. I find it hard to make an argument that someones great grandchildren to the nth level has any claim on this property. So inheritance taxes do seem reasonable.
I have wondered if the modern trend of the rich establishing "foundations" is a way to sidestep inheritance taxes. The foundation will accumulate assets that will be controlled by the heirs some goes to charity which is good for society, but still more and more assets will of necessity be controlled by the foundation and all tax free.
The problem is your small money has no power, rich people with their big money can buy governments and pass laws that benefit just the rich.
The law is fighting the symptom instead of the root cause there.
Edit: reworded first couple of words
I don't think it's fair that public services for all have to be cut so that some people who's parents (not themselves!) got very rich can stay rich. Let them start out from "wealthy" or from "well off" instead, and let everyone else go from "scraping by" to "okay" in return.
A more logical view is to think of inheritance as just usual income to other person and hence eligible for usual income tax as contribution towards shared goal of the society.
2. I agree that an inheritance can/should be treated just like an income. And that's why I applied the usual tax fairness argument of "the more wealth you have, the more responsibility you bear for financing public services, because you have greatly (if perhaps indirectly) benefited from them."
I'd argue that it's even less fair that the government feels it's entitled to a percentage of your income. Taking money from a dead person doesn't seem as bad as taking money from a living person.
Nobody likes taxes, but they have been a part of society for several thousand years.
Really if we valued equality of opportunity at all cost we would either collectivize or randomize children but needless to say that would be incredibly unpopular and not lead to good outcomes given aspects of mammalian child-raising and bonds - we already know from our experience with orphanages that calling the results sub-optimal is an understatement.
IIRC, they only lease the land for as much as 999 years, don't sell.
There seems to be a major cultural force in the UK of enforcing their own bubbles of hereditary elite self-justification at all costs - and that is sadly by no means unique. It has been seen many times throughout history and around globe and usually ends in utter disaster when reality comes along and slaps them in the face - often after many smaller disasters which should have been major warning signs were ignored.
[0] http://www.lse.ac.uk/website-archive/newsAndMedia/news/archi...
[1] https://www.cnbc.com/2013/10/30/whats-in-a-name-wealth-and-s...
[1] https://www.washingtonpost.com/news/wonk/wp/2017/12/21/ameri...
it would seems so, and if so, i would argue it needs to be stopped before it becomes completely intractable...
Moral: if you have significant financial assets and no real property and you want to provide lasting wealth for your descendants, then a portfolio rebalance is in order.
This means that you for example can buy a flat in a newly built development and you’ll have to pay like £100 a month for the land use.
The lease itself is assigned to X number of years with laws being passed to force longer and longer leases as well automatic renewal as there have been issues with homes towards the end of their lease with <100 or even <50 years left essentially tanking in value since technically at the end of the lease the land reverts back to its owner.
Don’t get me wrong this system is completely shit but this is a click bait.
How many people own 50% of Britain's land by value?
Are you talking about England?
I'd bet quite heavily that in every city in England outside of London 99% of people would have no trouble finding an adequate freehold home
Imagine a 100x100m piece of London with an 80-storey high-rise where every storey is a massively luxurous penthouse apartment. If you own one of those apartments, that would be 1.25% ownership of an area which is 1% of a square kilometer. -- But it's pretty obviously worth more than 125 square meters of agricultural land.
Add to that the fact that the majority of land by area is agricultural land. Add to that the fact that the land ownership of an agricultural business needs to be of a certain size for the business to be profitable.
This will inevitably lead to the conclusion that this statistic is completely an artefact of the weird way it is constructed. At the same time it pretends to be saying something about wealth disparity.
"The distribution of net wealth is highly skewed in Norway. While average net wealth for households is NOK 1.6 million, the median net wealth is NOK 900 000. Households in the highest 10 percent for net wealth own roughly 53 per cent of total net wealth, the richest 1 per cent control 21 per cent, while the top 0.1 per cent own 10 per cent of total net wealth." [1]
So not as high but still quite high here as well. 10% is about 520.000 which is still substantially more people than the 25.000 that own 50% of the UK wealth.
[1] https://www.ssb.no/en/inntekt-og-forbruk/artikler-og-publika...
Home ownership is quite high here [1], 77% of households own their own home. A lot of that is mortgaged. I can't really find equivalent numbers to that in the UK. A lot of the land is "utmark", like out side of cultivated areas, and can be used by pretty much anyone and a lot is just government owned.
[1] https://www.ssb.no/bygg-bolig-og-eiendom/artikler-og-publika...
The Chancellor of the Exchequer (Mr Philip Snowden)
1933 - 34 Financial Year "... a tax at the rate of one penny for each pound of the land value of every unit of land in Great Britain..."
"By this measure we assert the right of a community to the ownership of land. If private individuals continue to possess a nominal claim to the land they must pay to the community for the enjoyment of it, and they cannot be permitted to enjoy that privilege to the detriment of the welfare of the community."
You know that the Queen is still the head of state for most of the commonwealth countries? And half of Europe still have Kings and Queens, and quite a few countries in Asia. I wouldn't be surprised if over half the nations of the world still had a monarch.
Plus it didn't happen in 2019, it evolved over more than a 1000 years. Things get a little warty over that period of time.
The Commonwealth has 53 member states, only 16 of which have the Queen as the head of state. And those 16 contain only 6% of the Commonwealth's population (144 million out of 2.4 billion).
List here for everyone else https://en.m.wikipedia.org/wiki/Commonwealth_realm
Like the enlightenment and the industrial revolution, democracy wasn't imposed, it came into being here for the first time, and while it's not perfect, there's a lot of factors, including sentimentality and inertia, keeping the status quo going. You could argue that a clean start with a proper written constitution and federal government (with separate state governments for the different countries) would be a good move. But like for any working system, it's painful to disturb entrenched structures, and there's always the risk of breaking something important. The US was able to do a better job; it's easier when you can start from a clean slate with the knowledge of hindsight.
Also, the monarchy has for the most part been a net positive. Compared with what elected MPs have done to the country, I see it as a rather more benign institution in comparison, in recent centuries anyway.
I know I'll get downvoted, but I am genuinely amazed by how a small minority of people can gain so much control, and absolutely no one complains. I know there are historical reasons, but it is fascinating nevertheless.
But now, you have a problem in that your Parliament is essentially unchecked, and e.g. all your human rights protections are mere laws that are within Parliament's authority to repeal (well, and ECHR, for now - but even there UK got a special exemption for this exact reason).
What proportion of people in your country support your head of state? I guess it's less than 75%. Ours really represents most of us.
The effective head of state is the PM.
If you make a new constitution under the current system, it can always be undone-they _can't_ abandon that power. Furthermore, Parliament doesn't have the power to get rid of the Queen, but Parliament requires the Queen in order to have power so she can't remove herself. If you change it on a standalone basis, and completely abandon the old ways, what legal authority do they have to do that, and will it be recognised? I imagine the Courts especially would be sceptical about such a big divergence from the constitution (without an intervening event, which seems unlikely given the Queen polls well).
Realistically, the Queen only have has power on paper (she can never exercise it, except as required theoretically to give power to democratic decisions), so it'd be a big upheaval for little gain.
In theory. In practice they can, and have.
Fun fact: 89% of Canada is 'Crown Land', so about the size of the continental US.
'Crown Land' in Canada is de-facto literally government land, parks, open spaces etc...
In the UK there is 'Crown Estate' (which you are referring to), i.e. the Queen's landholdings, from which a bunch of revenue is derived ... and 'Public Estate' i.e. regular public land in the UK, which is more like 'Crown Land' in Canada.
Look at the small army of police they deployed this weekend for some climate activists. What would the response be to anyone more violent...
The small army of police being friendly and respectful as the demonstrators are being entirely peaceful. Demonstrators who are going out of their way to get arrested, and who have complained enough have not been yet. How did the civil rights protests achieve change? By civil disobedience. Which two deprived regions of England got most immediate help, and a regeneration programme led by Heseltine, during the 1980s deindustrialisation? Why the two that had riots of course - Toxteth and Brixton. Not the regions hardest hit or the only deprived or affected regions.
For a more violent protest you might not even need as many police. They would no longer need to be quite so considerate and use 4 officers to carry away each lying down protester, or other friendly methods of control and containment.
In many ways the extinction rebellion protests have been truly heart warming - in the nature and scale of protest and also in the police response. Mainstream media is finally discussing the issue properly.
Funny that.
The transition from feudalism to capitalism would require land reform for equality and meritocracy to have some measure of credibility and meaning but capitalist states seem to have 'forgotten' the crucial step of equalization and moved straight to talking about conceptual 'equality' and 'meritocracy' as if they are operational. This is disingenuous.
'Capital'ism by definition favours capital and the only group that had it in the transition from feudalism were the feudal class who had monopolized all resources and used it to accumulate more wealth and power.
Humans have fought for land and resources for millenia and the equitable distribution of this most basic fundamental resource is the prerequisite for an equitable society. It can't be ignored in any discussion about equality and meritocracy and to do so is so deeply flawed and untenable it requires some level of self interest or simplemindedness to accept.
But a population who fail to have empathy for their fellow citizens and are disingenuous about equality and meritocracy every time they talk about it is perhaps a bigger problem.
They either have to give it to one person, split it up amongst multiple people, or run it themselves. If they do the first, the headline is unaffected, if they do the last, the headline becomes "half of England is owned by the state".
That leaves splitting it up. But splitting up a farm in a useful way is not always trivial. And if you split one farm into three, how do you choose which three people should inherit these tremendous blocks of land?
It seems almost like we have a simple choice between socialism on one side and pronounced inequality in land ownership on the other, when it comes to large-scale agriculture.
It's a silly metric.
As someone else pointed out in this section, you need to look at holding by value not by area. That's the more important figure.
I can by 1 acre of land in the country for say £20k but I can do nothing with it except perhaps mow the grass. But that £20k wouldn't get me 1msq in the City of London - because that land (well more of it) can be used to generate lots of economic activity due to its proximity to/location within the world's economic centre.
An alternate interpretation is half of the property taxes are paid for by less than 1% of the population, who also are acting as environmental conservators by not subdividing and developing large tracts of unspoiled wilderness.
As I understand it, "unspoiled wilderness" is exempt from the nearest things the UK has to property taxes, council tax (on residential properties) and business rates (on commercial properties).
You can buy whole Scottish estates, complete with castles and lochs and hundreds of square miles of wilderness, for less than the cost of a small flat in London. They aren't necessarily particularly viable economically, despite their size, and the owners aren't necessarily wealthy (though some are of course). They get put up for sale all the time for a good reason! They are a huge money sink.
Extremely interesting information. Thank you for contributing that important insight, which significantly changes the nature of the debate.
You don't have a right to the wealth of the 1% anymore than they have the right to your wealth.
It's not insane for people to pass their property from one person to another.
Arbitrary definitions of 'earned it' are far, far scarier.
Surely, it's important to consider issues such as private wealth, inheritance etc. but the OP is effectively correct, this issue turns into 'mob rule' very, very quickly.
In 2019 we forget this, because we don't have any such topsy-turvy situations in living memory, but the 19th and 20th centuries were full of blood and fury over this kind of stuff.
Everywhere East of Berlin does however have this in 'living memory'. Ask a Polish, Ukrainian, Czech, Russian etc. immigrant over the age of 60 about it for an earful. Or someone Chinese over 60 as well. Or Cuban.
'Private Property' is a very, very careful issue.
I am a Russian immigrant, by the way, born in the USSR back when it was still a thing. I don't have much sympathy for the kind of wealth redistribution that was practiced there. But it's important to understand that the reason why it happened was because inequality was allowed to grow high enough that a sufficient number of people in the country could be motivated to revolt, because they felt the risks justified the potential rewards. And it doesn't even matter if they were right or wrong - the point is, if you are afraid of that history repeating, then you should support measures that prevent the conditions that caused it from happening again. And that involves acknowledging what the society deems fair and unfair, when it comes to property ownership.
2) The Sovereign's holding are, and always have been something different than a regular person's holdings. They have always beens somewhat matters of State.
3) Today, the monarchies are constitutional. They do not 'own' the land as you and I would 'own' land.
4) Most wealthy people today did not inherit their land from people 100's of years ago who got it from plunder - this is ridiculous. About 1/2 of the wealthy people today are 'self made'.
5) Almost everyone in modern civilization has access to opportunity, and as you'll notice from this thread, 90% of Canadian land holding for example is by the government, i.e. commons - there is plenty of land and resources to go around. Everyone can participate.
Inequality today is not even comparable to what is is even 100 years ago. People receive free healthcare, almost free banking services, cheap water, cheap transport, cheap entertainment, cheap clothing, cheap access to information, free social solidarity.
Ex post facto law has since the Enlightenment recognized as unjust and even tyrannical. Digging back across generations in search of some offense generations ago and punishing innocent parties today is at best a recipe for chaos.
Lavrentiy Beria was head of Stalin’s secret police and famous for saying, “Show me the man, and I’ll show you the crime.” Expropriating present people because of unfair advantages — a criterion never precisely defined and forever subject to political fads of the day, which is to say meaningless — allegedly enjoyed by past ancestors or owners of property is merely another form of the Beria method.
By your own reasoning, neither did the state today do anything to deserve the property that they’d seize. Even if it were justly redistributed, you’re forgetting about the cut taken by the middlemen in charge of carrying it out — who also did nothing to deserve taking a share of the loot.
No sound economic case can be made that the distribution of wealth was a cause for the Great Depression. Considering how many human abilities have normal and power-law distributions, e.g., attractiveness, musical ability, intelligence, vertical leap, height, programming skill, lifetime poker winnings, writing quality, golf handicap, typing speed, cooking skill, time to change a tire, ability to plan and manage complex tasks, future orientation, etc., etc., etc., income and wealth accumulation being anywhere remotely uniform would be amazing. Considering the math of power-law distributions, your approach would have a huge majority ganging up on a comparatively tiny minority but ironically in the name of fairness.
“No legal plunder; this is the principle of justice, peace, order, stability, harmony and logic.”
In my mind this would be the ideal role of government to encourage behavior that makes society better.
That's not what's going on here at all. The idea is that property gained through unjust means originally means that the wealth derived from it is still unjustly derived, even if this unjust appropriation happened long ago when it was not deemed unjust then. You would be right if the case were if you were to be punished for the fact your ancestors owned slaves, but the issue is the benefit gained which is currently there.
>income and wealth accumulation being anywhere remotely uniform would be amazing.
Nobody is saying it would be uniform, they're saying that the situation at the moment is not due to the difference in those abilities other than perhaps brute strength in subjugation and plunder. It is difficult to imagine what the world would look like if it hadn't happened, but the distribution of wealth would not be as we see it today in any case.
>By your own reasoning, neither did the state today do anything to deserve the property that they’d seize.
The state may act on behalf of those at a comparative disadvantage, and we have an easier case for arguing they deserve something.
In all other revolutions elites stayed mostly the same.
The circle of life ...
Say I own 5 acres of undeveloped forest, valued by the market at $100k. Can I immediately know what my tax bill will be, given the tax rate in my district?
What happens to my tax bill if I cut down the forest and build a factory? Or a grocery store? Does my tax bill remain unchanged?
What if I do nothing with my woods, but the guy owning the adjacent lot opens a supermarket? I'll pay more then, right? How is it calculated?
Is there a Georgist story about incentives to preserve natural ecosystems?
Flipping it around to suggest that the real problem is the original proponent needs to step it up so the state can take more of her money triggers a shift in perspective. Everyone thinks he pays his fair share, but that guy down the street is another matter.
You talk about 'fairness' but you could argue that many different ways. Everyone paying $10000 a year flat rate tax is 'fair', as is leaving everyone with the average income.
Clearly those 2 approaches have problems. At minimum the rich don't want a French revolution type event. But society benefits when people attempt risky ventures, that work out. So clearly you want a balance between these 2 extremes.
The traditional defense of letting richer people keep more of their money is that they worked to earn it through their superior skills. This kind of generational wealth makes a mockery of that.
Personally I would argue for a higher inheritance tax, let each generation compete on a leveller playing field, decrease the tax burden on the living.
As for leveling the playing field, what evidence do you present that it is not already more or less level in jurisdictions that do not prop up class systems? Sure, you can cherry pick Paris Hiltons, but the plural of anecdote is not data. What is the distribution of wealth inherited by present millionaires? What studies can you point to that show conclusively that people who are good at building wealth are also good at transmitting these skills to their children, which would be remarkable?
Perhaps natural processes take care of the problem well enough already if overcontrolling micromanagers would only get out of the way.
Did the same families/people/organizations own this land five centuries? If so, England is in the company of Florence families.
Who was the owner at different points in time?
See Taleb on inequality https://medium.com/incerto/inequality-and-skin-in-the-game-d....