Has anyone ever succeeded in getting the subject of land value taxation mentioned on "Any Answers?", the programme that follows Any Questions? at 2.00pm on Saturdays. This week, the first question was "Who is to blame for the crisis?" Just to see what would happen, I sent in this email, to no effect.

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?

A 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 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 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

I came across this in the Guardian's Comment is Free

"At some stage I listened at length to an economist's elucidations on land title, and its importance for a solid banking system. Generally, he explained, all credit in the US system is created by underlying real estate values."

Which explains a great deal A banking system based on land title is an evil system. It has ruined people's lives for generations. An economist who makes such an assertion does not know what he is talking about. These periodic boombusts like the one we are going through arise from the dynamics of the system. The present one seems to have been accompanied by massive fraud, and ought to be the subject of criminal investigation - with the implication that no amount of bank regulation would have prevented it.

Banking based on land title should be allowed to go to its inevitable self-destruction. It is an abuse of banking, which should be about giving credit to allow for the creation of actual physical capital. The only criterion for that credit should be the credit-worthiness of the borrower, and it should be interest-free, with charges made only for administration of the service provided, plus some kind of insurance or bond cover against loss.

If the right system of land value taxation were in place, this kind of evil and sometimes fraudulent banking could not exist. Which could be why the powers-that-be are so much against it.