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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 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...

US election

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Republican candidate McCain says he will clean up Wall Street. His opponent Obama says that he does not subscribe to the Republican economic philosophy which has led to the unfolding economic disaster. So what are they going to do about what now looks as if it will be the worst economic dislocation since the 1930s. And would they do to prevent a recurrence? They aren't saying, are they?

But one question that comes to mind is this. Vast numbers of people work in financial services. How many of them are doing a useful and necessary job in directing funds to where they can be used most effectively and how many are just running in what is nothing more than a casino, and imagine that they can create wealth by moving money hither and thither? It will be painful for the individuals concerned, but a shake-out is overdue and perhaps they do not deserve too much sympathy.

What prospects for LVT?

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Having been out of the UK for several months, I have had an opportunity to get a sense of what the politics of the country is, viewed from the outside. It does not look good. The economy of the UK is undoubtedly in a bad way, but neither politicians nor economics commentators seem to have much idea about what is going on. William Keegan and Will Hutton, who write for the Observer, are ureconstructed Keynesians, and even when their account of events is perceptive, they have nothing to offer apart from old failed policies. The FT commentators stand out from the mass but even they offer little that sounds convincing. Particularly depressing is the general quality of the comments made in response to columnists' blogs, even on the sites of the "quality" newspapers, again with the exception of the FT. With rare exceptions these display an outstanding level of ignorance. They are the views either of The Man in the Pub or unreconstructed Marxists in the Arthur Scargill mould. These are the people whose opinions would have to be shifted if LVT were to enter the field of public debate.


Fannie Mae and Freddie Mac nationalised

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It is curious how people with an absolute faith in the free market have suddenly turned into socialists now that things have turned nasty. But the market points to a reality - that US housing values (in reality, the price of the land that houses stand on), was just a bubble value. Either the price must adjust to reality or the currency must be debased to the point that inflation has the same effect. Nationalisation is just delaying the inevitable for a while.

What is reality when house prices are concerned?

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