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The LVTC blog, by Henry Law

The comments in the LVTC Blog are a personal view of our Hon. Secretary Henry Law and do not necessarily reflect the official policy of the Campaign.

This is a place for personal observations and comments on politics, economics, current affairs, on-going discussions on the potential for LVT to remedy some of the current ills, and the impact on Society of any of the above. 

Please read and enjoy, and feel free to respond to Henry if you have any thing you would like to add.

The Keynesian Option

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During the Great Depression, a programme of public works was initiated by President Roosevelt as a means of relieving unemployement. Will the same thing be needed again?

Choosing Recession

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Derelict land, BrightonA recession is coming, says Governor of the Bank of England Mervyn King, and there will be pressure on sterling. We have been, say commentators, living beyond our means. This does not altogether add up. Are we about to be subjected to an economic storm, blown in from the Atlantic like a weather system?

Recession is a loosely used term which suggests a decline in the total size of the economy. Leaving aside important questions about the significance and reliability of the statistics, and whether perpetual growth is desirable or practicable, there is, presumably, some kind of build-up of unsold goods which leads to reduced orders and hence a lack of demand for those goods. But that should not in itself lead to a decline in demand within the economy as a whole. Producers may need to adapt to changing demand but that should not lead to reduced overall demand.  On the contrary, the process of adaptation should create a demand for labour and new physical capital.

The British wealth gap

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The gap between rich and poor people in the UK is one of the widest in the developed world, according to a study by OECD reported in the Daily Telegraph.

No surprise there. A commentator on the BBC mentioned the huge amounts of taxpayers' money being spent on wealth redistribution. A goodly chunk of this money comes from the poor in the first place and is just churning in the system. Nobody asks why income is maldistributed in the first place.

The Menace of the World Bank

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The mischief being perpetrated by the World Bank is much underestimated. Throughout the underdeveloped world, it promotes the desirability of introducing a system of land titles. This is perfectly reasonable when it argues that titles protect the poor against the weak and powerful and so improve their security of tenure, making them more likely to invest. But the bank is hopelessly wrong to advocate land titles as a means of gaining access to credit so that they can develop small businesses or invest in agricultural land to generate job opportunities. What they are talking about appears to be the use of land titles as collateral for loans. In the long term this results in small scale farmers falling into the clutches of bankers and ending up by losing their property, usually when things go wrong, for example, when harvest failures occur. And land titles, in the absence of land value taxation, is the driving force behind a class system of haves and have-nots, the have-nots being those who do not have the titles to the best land.

Proper banking is not moneylending against pledges, usually real estate. That is pawnbroking. The prevalence of this practice is the main cause of the present financial crisis, and of most of the previous ones as well. Proper banking involves the creation of credit, and the appropriate question that needs to be asked is whether the borrower will pay the money back. If the risk of default is high, the money should not be loaned in the first place.

Read the World Bank Report

Recession can still be averted

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Recession can be averted by an infrastructure and public works programme.

After New Labour

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Polly Toynbee is again writing in the Guardian, saying that Labour still has a chance if it changes its ways. Too late. By the time another Labour government comes to power in Britain, she will probably be too old to care anyway. Britain and the Labour Party are going to go through the toughest of times in the next few years. Labour may not even survive as a party. Nobody knows how the financial disaster will unfold as it is unknown territory. "Rescue packages" will probably fail.

Who or what to blame?

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Who or what is to blame for the present economic crisis? How about sloppy thinking? Such as using the phrase "Capitalist System" without being precisely clear what the terms Capital and Capitalism mean.

So in a sense, we have nobody to blame but ourselves. Most supporters of the movement for land value taxation - I will call it the "Single Tax movement" as shorthand - are 50+. They learnt their economics whilst in their twenties, at institutions such as the School of Economic Science or the Henry George School of Economics in the years after World War II. In the 1970s, for instance, the Henry George School started two of its twelve-week classes three times a year at its premises in Vauxhall Bridge Road, with fifteen or so students in each class, whilst students thronged to the SES courses. What happened? Interest died out during the Thatcher years, when young people were encouraged to go out and make money and that there was no such thing as society. But was that the reason or is it just that people got into the habit of staying at home with their computers? The result is that the Single Tax movement has a demographic problem.

There is a a huge volume of debate on the net, in blogs and in the comment pages of newspapers. Land value tax and the theories that underpin it receive hardly a mention. Today I had the opportunity to post a response to one of the Guardian journalists, and it went like this...

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