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A Fisherman’s Reflections on a beautiful but troubled world
Chapter 24 - Land Reform and Taxation

    “When you enter the land that I am giving you, let the land, too, keep a
    Sabbath for the LORD.   For six years you may sow your field, and for six
    years prune your vineyard, gathering in their produce. But during the seventh 
    year the land shall have a complete rest, a sabbath for the LORD, when you
    may neither sow your field nor prune your vineyard.

    The fiftieth year you shall make sacred by proclaiming liberty in the land for all
     its inhabitants. It shall be a jubilee for you, when every one of you shall return
     to his own property, every one to his own family estate.

    In this fiftieth year, your year of jubilee, you shall not sow, nor shall you reap
    the after-growth or pick the grapes from the untrimmed vines. Since this is the
    jubilee, which shall be sacred for you, you may not eat of its produce, except
    as taken directly from the field.  In this year of jubilee, then, every one of you
    shall return to his own property.  Therefore, when you sell any land to your
    neighbor or buy any from him, do not deal unfairly.

    Do not deal unfairly, then; but stand in fear of your God. I, the LORD, am
    your God.  Observe my precepts and be careful to keep my regulations, for
    then you will dwell securely in the land.

    The land shall not be sold in perpetuity; for the land is mine, and you are
    but aliens who have become my tenants.  Therefore, in every part of the
    country that you occupy, you must permit the land to be redeemed.”

from the 25th chapter of Leviticus
New American Bible translation

As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.

                                       Adam Smith, The Wealth of Nations, 1776


All right of property is founded either in occupancy or labour.  The earth having been given to mankind in common occupancy, each individual seems to have by nature a right to possess and cultivate and equal share.

                                                                    William Ogilvie of Pittensear,
                                                                   The Right of Property in Land, 1782

To put the bounty and health of our land, our only commonwealth, into the hands of people who do not live on it and share its fate will always be an error.  Whatever determines the fortune of the land determines also the fortune of the people.

                                                             Wendell Berry, Conserving Forest Communities, 1995

I had just returned from a series of assignments in Namibia where that small country had reclaimed its fishing grounds from the European and South African fleets that had exploited them to a state of severe depletion, when I got a call from a young university researcher by the name of Andy Wightman. I had written a few articles on national and local ownership rights of marine waters, including one published in a national Sunday newspaper, together with Roger Mullin.  The success of the fledgling African government and its local fishing industry, elicited a number of complimentary responses from fishermen’s associations and those like Wightman who were working on parallel issues of ownership and control of land.  Following a coffee meeting with Andy in the Royal Mile, I was invited to submit a paper to an environmental journal, and later to speak at an international conference on land reform and taxation.   At the international conference in Edinburgh University, I was struck by the number of senior academics and researchers from other countries, who saw the issues of land reform and taxation as lying at the root of much of the inequality and injustice of current relevant laws and management structures. It was particularly interesting to hear senior professors from the USA, UK and Russia, in complete harmony on the issue.  It was at that conference I first obtained an in-depth glimpse of the works and idea of Henry George.  

Andy Wightman, writer, lecturer, and tireless Scots advocate of land reform

Andy Wightman went on to publish Who owns Scotland? and Scotland : Land and Power, and to be a leading proponent and supporter of Scotland’s limited act on land reform, Land Reform Scotland Act 2003.  The Act has guaranteed, 1) the right to roam, including wild camping and canoeing, 2) the right of pre-emptive purchase at government valuation by a community of rural land that is put up for sale, and, 3) in areas traditionally governed by crofting tenure, the right of a community to buy their land at valuation even when the laird has not placed it on the market. An earlier 1976 act allowed individual crofters to buy their patch freehold. That act forced individualism and so was shunned by many indigenous tenants. The 2003 act in contrast, allows land to be bought with tenancies over it to be held by the community.

There are two powerful and privileged groups in most of the world’s societies who increase their wealth day by day with scarcely any effort or sacrifice on their part, save a tenacious defense of their property and power.  The two groups are those with legal title to land, and those who own or control the major banks and financial institutions.  The constantly increasing value of their assets is based on the labour and industry of the rest of society.  Yet they continue to tax society at increasing rates by the tools of rent and usury. 

The ownership and control of land is a concept that has come down to us from medieval times, and become a foundation truth of capitalist society.  Yet a number of cultures and civilizations have regarded it as an alien principle.  Under the old Hebrew economy, land was ultimately God’s property (Leviticus 25).  The early Scots constitutional document, the Declaration of Arbroath,1320, and subsequent legal statements, declared that the land was held under God on behalf of the people. The King or Guardian could not utilize lands in ways that offended the laws of God, or were contrary to the interests of the people.

Copy of the Declaration of Arbroath, Scotland’s oldest constitutional document

Illustration of feudalism

Many peasant peoples have had a strong historical attachment to the land they tilled or on which their animals grazed.  Few such attachments were stronger than those of the Hebridean and West Highland Scots which made their eviction in the century of the Clearances – 1750 – 1850, all the more cruel.  American Indians regarded land and nature as a sacred gift of God, and could not conceive of it being sold or fenced off.  To this day, most of the countries of the South Pacific prohibit or limit the sale of land and permit only its lease for a period.  Most states in the world prohibit the ownership of land by foreigners. 

Similarly, the key role played by major banks and financial institutions, in the control of global and national economies, began in medieval times, and has developed to the point today where their tentacles extend to the smallest and most remote pockets of economic activity.  Strangely the fiercest condemnation of excessive interest charges is found in the Hebrew scriptures, and yet that people were to dominate much of the banking world to present times.  Islamic law also prohibits the application of interest charges to lending.  Banks make money out of nothing.  Banking laws permit lending far beyond the original financial deposits, and further credit issue is maintained by a myriad of methods. Today, small borrowers pay obscene rates of interest to the banks through the numerous credit vehicles such as credit cards, hire purchase schemes, overdraft facilities, and direct bank loans

It fell to a young American printer, a 7th grade school graduate, to recognize the key roles of land ownership and taxation in protecting the wealthy and powerful, and how they might be managed for the benefit of all.  Henry George, 1839 – 1897, was a ‘curious and attentive lad with a strong mother wit’.  He was also a voracious reader, devouring the works of Adam Smith, David Ricardo, Hubert Spencer, and John Stuart Mill.  His first major book was Progress and Poverty, published in San Francisco, and destined to be regarded as one of the classic works on economics.  Among its and George’s later admirers were notable figures such as Leo Tolstoy, Albert Einstein, Winston Churchill, and John Dewey. Henry George wrote of the “deplorable circumstances where in large measure a very powerful few are in possession of the earth’s resources, the land and its riches, and all the franchises and other privileges that yield a return”.

Henry George, the proponent of a Land Tax based economic system

He asked, “Why should a man benefit merely from the act of ownership, when he may render no services to the community in exchange ?  What gives the wealthy the right to become rich – not for service rendered to the community, but from the good fortune to have advantageously situated land?”.

His solution to the inequalities produced by the economic system of 19th century America, was a single tax, - a land tax, that would release the value inherent in the nation’s land, to the benefit of the people as a whole.  He reckoned that a single tax would absorb all rents with no tax whatsoever on wages or interest.  A single tax would in effect lead to ownership of land as common property.  While his idea excited interest, it did not lead to such action in its day, but now, over a century later, there are numerous academics, economists, reformers, and students of government, who believe that a land tax would indeed be a hugely beneficial measure for any country. 

In Britain today, we cannot get a land ownership register, never mind a land tax, so powerful are the vested interests that oppose any encroachment on their privileged positions of profit and power.  Scotland is the most backward part of the country in terms of land reform and land distribution.  Nearly two-thirds of the country is owned by around 1,000 persons.  This situation is largely a relic from feudal ages past and from the aftermath of the Jacobite rebellion when King George granted huge swaths of the north-west of the country (the highland estates) to those who sided with him and with the Hanovarian cause.  There is sufficient land in Scotland for every man, woman and child to have 4 acres, yet when anyone wants a tiny plot on which to build a small dwelling house, they have to pay anything from £20,000 to £70,000 pounds or more.  Why should a piece of unused land cost almost as much as a house ? 

A close friend of mine, author of the book, Soil and Soul: People versus corporate power, Alastair McIntosh, has been a powerful and articulate voice for justice in our management of land resources, and for respect for our historical and spiritual roots.  His book is largely about land reform and the community land trust of which he was a founder on the Isle of Eigg.  He noted that when Keith Schellenberg first bought Eigg, in 1975, he paid £ 250,000 for it.  When the island was sold on to Marlin Maruma, two decades later, he got one-and-a-half million (though it was less than he might have got had it not been for the market-spoiling tactics of the Isle of Eigg Trust). By this time it no longer conferred respect to claim to be “The Laird” in many parts of Scotland. It had become thinkable to challenge the system whereby one class of people live from the proceeds of a tax known as “rent” paid by those who lack control over the place where they live.

McIntosh goes on to say that ‘rent, after all, is a tax from the relatively poor to the relatively rich.  Even the land component of our mortgages can be traced back to such a transfer of wealth from poor to rich. Land is not in short supply in rural Scotland. There is no earthly reason why the building plot should typically cost as much as building the house. After all, there are 5 million Scots and 20 million acres of Scotland. That’s 3 football pitches each, which is not bad even if two of them are on mountain sides. The central cause of the rural housing shortage continues to be control over land ownership and a planning system set in place when county councilors were typically lairdic types, who valued the countryside not for the number of people whose lives it could support in dignity, but as a playground for themselves and tied housing for their servants.’

                              Island of Eigg, Scotland                          Members of the Eigg Trust

Scotland’s west coast

Alastair believes that the 1976 crofter’s right to purchase the land he works, did not sit well with the crofting communities or accord with their views on rural communities, environmental sustainability, local entrepreneurship, or affordable housing.  He believes, under land reform, crofting communities can be democratically accountable landholders unto themselves, and that it is essential to block the leakage of community assets onto speculative private markets.  “This can be achieved in various ways.  Burdens on title deeds are one.  Joint ownership (or shared equity) is another, where the community retains a controlling interest.  And a third is to develop existing crofting tenure so that communities retain inalienable control of the land upon which private properties are built. Crofting matters for the future of Scotland.  It matters as a pattern of tenure by which people can live with the land if not necessarily from the land. This generates a cycle of belonging, identity, values, and therefore, responsibility that sustains both people and place.” 

Alastair McIntosh, writer, lecturer, poet, and advocate of crofters’ rights

My own view, which is mirrored in the land laws of some of the small island states of the Pacific, is that there should be no private ownership of land, but that all should be held by the state for the benefit of the people.  Land then may be leased, but not held in perpetuity by a single family or corporation.  In rural areas, communities could control local land use and distribution in much the fashion as described by McIntosh.  These are my views and if ever put into practice, they would channel the enormous income from increasing value of real estate, to the people who live in the country, instead of to the banks and speculators as at present.  However, those powers are so entrenched in our society and its legal and fiscal structures, that the chances of such reforming legislation ever coming about, are close to zero!

Similar land reform issues are being faced by the descendants of the once mighty tribes of American Indians whose reservations today amount to just 4 % of the land area of the USA.  Winona LaDuke, a Muckwuck or Bear Clan, Mississippi band, Anishinabeg Indian, struggled with the land issue for many years, trying to win back or buy back, their reservation lands.  Her tribe, of which there are some 250,000 around today, is known as Ojibways in Canada, or as Chippewas in the northern USA. Spanish historians of the post-Columbus period have estimated that 50 million American Indians perished in a sixty-year period.  In addition to the genocide, there followed cultural extinction that eliminated knowledge and records of America’s indigenous peoples from most of the country’s libraries and schools.  White settlers believed they had a God-given right to the continent, and that led to a denial of any rights for the natives.

Access road through the White Earth Reservation

Winona LaDuke, advocate of native Indian’s rights

The White Earth Reservation of Winona’s people was created by treaty in 1867.  In 1887 a General Allotment Act was passed to teach Indians the concept of private property and to facilitate the removal of more lands from that nation.  The reservation land was divided into 80 acre parcels and distributed among the Indians with scant regard to the ecosystem or to traditional land tenure patterns.  After the land parcels were allocated, the “surplus” land was given to white homesteaders. The federal government then began to tax the Indians for their ‘allocated’ lands, and when they were unable to pay the taxes, the land was confiscated.  Speculators also came and cheated illiterate Indians out of their reduced land-holdings.  The sad story is a tale of land speculation, greed, and unconscionable contracts.  The White Earth Reservation lost 250,000 acres to the State of Minnesota.  Throughout America, reservations lost on average a full two-thirds of their land this way.

The LaDuke project, if we can term it that, seeks to restore land to Indian ownership and utilization on the lines of the traditional economy.  It also addresses the issue of absentee landlords, and works to restore and strengthen cultural values and practices.  Through numerous legal battles they attempt to redress the Federal Government’s failure to honour treaty obligations, and to reverse past decisions that were clearly illegal.  Winona believes that the term ‘sustainable development’ is a misnomer.  She says that it is communities that are sustainable, not development per se.  But proper use of land is at the centre of the project.  Her tribes are entering into a co-management agreement with northern Wisconsin and northern Minnesota to prevent further environmental degradation of the region.

The pattern of ‘colonial’ expropriation of land from indigenous peoples has been repeated all over the world.  In South Africa we had the shameful Apartheid policy that forced people into miserable townships from where they had to serve the labour needs of the mining industry or of the affluent suburban whites.  In Kenya, Lord Delamere told a Native Labour Commission of 1912-13: "If ... every native is to be a landholder of a sufficient area on which to establish himself then the question of obtaining a satisfactory labour supply will never be settled."

During my years in the Philippines, I saw the social inequities, environmental damage, rape of resources, and exploitation of the rural poor, that all result from ownership and control of land by a privileged few.  The situation continues all over the country, but especially in Negros, and the Visayan islands, and in huge parts of Luzon.  It is the leading factor contributing to the nation’s four main ills : wealth and political power in the hands of a small elite; an over-powerful army that treats rural peasants with callous brutality; NPA and Mindoro (extreme Moslem) led terrorist reprisals; and blatant corruption throughout the government and its institutions or organs. 

What has and continues to happen in the Philippines, is going on throughout Latin America, Africa, South Asia, and Indo-China, to varying degrees.  Rural peoples who had traditional ownership or user-rights to their lands, are having these disregarded or overthrown by legal thievery or the power of the market in a situation of escalating land values. Poor families are being pitted against powerful property developers.  The basic problem to me is the privatisation of land.  When it is a saleable commodity, (as with fish quotas or fishing rights) it leads to a trade in people’s jobs and communities’ futures.

Land ownership and land tenure are extremely sensitive and contentious issues in the Pacific states and small island countries of the Indian Ocean and the Caribbean.  Over 90 % of land in the Pacific islands is customary land, - held by individuals or families under traditional or legally recognized customs.  Land may not be bought or sold, especially to foreigners, except under arrangements that are strictly controlled.  This can be frustrating to colonial powers or investors from abroad, who continually badger governments for more flexibility, - fortunately, with little success in most cases.  But land can be leased for a period to a foreign company, or to a local joint-venture company with oreign partners. 

Perhaps no other issue is more delicate, or discussed more often by the Pacific states and international bodies like the World Bank, and the Asian Development Bank.  These institutions, accustomed to globalization and to western capitalism, are not normally sympathetic to traditional practices when they conflict with modern business attitudes, - but they have come to recognize that in those island societies, land has deep cultural, tribal, historical, and even religious significance for the people, and outsiders meddle in the arrangements at their peril. Australian governments tried to impose their laws on land ownership or title to Papua New Guinea, but failed, and probably caused some damage in the attempt.

As expressed elsewhere, I personally believe that all land should be kept under national control, and all income from escalating land values should be shared between the people and government, and used to assist young couples to obtain their first home, or to help small or emerging businesses with locations for their establishment.  At present it is mostly banks and speculators who benefit.

Changing land values in Cambodia

The lovely people of Cambodia went through such horrors during the period of the Khmer Rouge regime, are now somehow putting the past behind them and building a productive and sustainable future for themselves and their children.  Among the many threats they face is land-grabbing which is increasing at an alarming rate. 

Rural villages in Cambodia’s Tonle Sap basin

The land-grabbing is fuelled by escalating prices to meet the demand for commerce and tourism, and housing for the wealthy.  Individuals and families that acquired a few hectares of land ten years ago, have become millionaires as a result.  This has tempted thousands of others to engage in land speculation.  Small farming communities where cash income is as low as one dollar a day, can be sorely tempted to sell out to these opportunists.  Where they do not sell, the would-be buyers can get around that obstacle by bribing local officials and individual community members to connive in legalising an improper purchase.  But if the buyer is very rich, or a senior military officer, or a high-ranking government person, then even the legal niceties can be disregarded.

Take a community that has lived for generations in the Tonle Sap region (which the United Nations has declared a biosphere to be protected), and which engages in simple sustainable agriculture, fishing or forestry.  Located nearby are the magnificent temple complexes of Angkor Wat.  That national treasure attracts tourists from all over the world and these tourists need to be housed and fed.  The expansion of hotels and restaurants in the provincial capital of Siem Reap has been phenomenal.  That in turn has raised demand for real estate and so escalated the cost of local land. The growth in business has benefited those with opportunity and some capital, but it has largely left the rural people behind, apart from a few who have been able to obtain work in the service sector.

The main temple site of the immense and historic Angkor Wat Temples

So, while foreign tourists can reside in 4 or 5 star air-conditioned hotels, and enjoy good dining at cheap prices, there is hardly a village in the surrounding countryside where the people have access to clean water.  Their schools are barely equipped, and village school teachers get a poverty-level wage.  Health services are also minimal.  Water-borne disease is the main cause of high infant mortality.  Tuberculosis is prevalent as are dengue fever and malaria.  And as elsewhere in the world, HIV and aids are on the rise.

Now the land and water on which they rely for survival and livelihood, has become an attractive commodity for business and investment.  The possible existence of petroleum deposits underneath the basin could escalate the demand for ownership and control of the land.  So the future of the 3 million rural inhabitants of that region of Cambodia, looks uncertain to say the least.

Luxury hotels springing up in Siem Reap, near the Angkor Wat site

The question such situations raise is – should land be traded for the benefit of the wealthy and powerful, or should it not be held in trust or controlled for the benefit of the whole nation?  If industrial development is to take place, should not the enormous wealth it generates be shared substantially with the people it has displaced from their generational source of livelihood?


In the Celtic lands, waged labour was needed in land-owner-controlled industries such as fishing and processing seaweed for industrial uses. But equally, the vacated land was wanted for sheep farming, wool being more profitable than tenants. As for the Potato Famine, that was a political famine. In both Ireland and Scotland tenants had become over-reliant on the single crop that could produce high yields from little land.  Meanwhile, as the people starved, food was exported from Ireland to English cities. These are colonial realities that have to be faced so that our peoples can move on. [Most of the above section draws on Alastair McIntosh’s brilliant and scathing review of a book written by Michael Fry, Wild Scots: Four Hundred Years of Highland History, John Murray, 2005]

The idea of individual or private ownership of of fixed parcels of land is a relatively recent phenomenon, and by no means universl, writes Ed Iglehart.  It is the result of replacement of custom in earlier more innocent societies by statute in later more individualistic societies.   When property is created by a legal title, transferable for money, the deep relationship between land and occupier, gained through residence, labour and improvement, can be ignored, and the land acquired or disposed of at will.  Absentee owners, inconceivable before, can evict residents with the full support of the law.

Scotland and Land Reform

map of northwest Scotland

The need for a reform of the law and taxation relating to land ownership and use, is nowhere more pressing than in Scotland.  That country has a land area of over 19.0 million acres, 3% of which is urban and 97% is rural. Over 16 million acres of the rural land is privately owned as follows:

One quarter   is owned by

    66 landowners  in estates of

   30,700 acres and larger

One third       is owned by

  120 landowners  in estates of

   21,000 acres and larger

One half        is owned by

  343 landowners  in estates of

     7,500 acres and larger

Two thirds     is owned by

1252 landowners  in estates of

     1,200 acres and larger

So, as Ed Iglehart says, in Land and Democracy, quoted above, two-thirds of Scotland is owned by one four-thousandth of the people. (1999 Territory, Property, Sovereignty and Democracy in Scotland, web site).

No one has researched and advocated the case for land reform in Scotland the past 20 years as much as Andy Wightman.  Below are some excerpts from one of his papers.


Land and politics have been intimately related since the beginnings of modern society. As Jean-Jacques Rousseau argued, 'The first man who enclosed a piece of ground and found people simple enough to believe him was the real founder of civil society' (Rousseau, 1754). In Scotland, as elsewhere, the history of landownership began with a system of governance based upon the feudal relationship between the Monarch and the nobility - a system of land tenure still with us today 900 years later and an indication if ever it was needed of the resilience of Scotland's land laws and our historic failure, indeed inability, to do anything fundamental about reforming them. Rights over land which began as political rights of civic administration, evolved over time and under the control of those who possessed them, into full-blown property rights.

This transformation has been carefully and assiduously protected and nurtured by landed interests for many centuries. And it has been this careful definition and assiduous protection which has denied Scotland the kinds of reforms enjoyed by our West European neighbours. And closely associated with politics has been the phenomenon of power - political power, economic power, and cultural and social power. As Loretta Timperley observed in her academic analysis of landownership in Scotland, 'Power and land ownership have been synonymous in Scotland from time immemorial'.     


The 19th and early 20th century saw radical action on land reform and delivered lasting social and economic progress. In the aftermath of the Second World War, however, despite Labour's commitment to land reform, little has happened.  It was not until the 1970s that political attention again seriously engaged with the land question. That period ended of course with the election of the Conservative Government in 1979 and led to those long years of political discontent in Scotland. Ideas have, though, moved on since the 1970s. No longer, for example, is the land reform debate conducted across the ideological divide between private and public landownership. And the denial of a land reform agenda by the Conservatives also resulted in civic society picking up the issue and responding in a practical way on the ground to the problems it faced. This approach, most prominently captured in the activities of the Assynt crofters and of the islanders of Eigg eschewed the barren rocks of political ideology and instead generated a revitalised citizen's agenda for land reform, an agenda it should be noted which has a long and honourable history going right back to the Chartists and the National Land Company, the Highland Land League, the Stornoway Trust and the Scottish Farms Alliance.

For much of this country's recent history the political process has failed to respond to 150 years of  civic effort to promote more equitable and socially beneficial forms of landownership (Boyd, 1999). He argues that there have been four great failures. These were:-  the failure between 1840 to 1886 to legislate to break up sporting estates and sheep farms into smallholdings and thus secure the continuity of peasant society in Scotland;  the failure between 1890 and 1940 to legislate to protect scenic landscapes, provide a right to roam and establish national parks ;  the failure between 1950 to 1980 to legislate to fully protect and safeguard areas of national and international significance to nature conservation and;  the failure between 1950 and 1999 to legislate to protect the public and local community interest in land for livelihood improvement and economic development.

Typical of the vast tracts of land in the area which remain largely un-taxed

The lesson is that civic society can articulate and develop the case for land reform but without the political means or will to deliver, its efforts are largely in vain. The political means are now in existence but what of the political will?  How have the various traditions in Scottish political life responded to the need for land reform and what has been their record?  Labour, to the extent that it gave much thought to the land issue at all over the past 20 years has, right up until recent years, remained burdened with the legacy of state socialism and state ownership - this was the response of McEwen himself to the land question. The legacy goes right back to the early days of the Labour movement. In response to the excesses of Victorian and Edwardian capitalism, the left sought refuge in the power of the state to solve economic and social problems. In the process it rejected the social democratic model which had merged on the continent.

A social democratic property owning society with strong mutual and cooperative institutions exists right across Scandinavia and Western Europe. Walk into any village in the Netherlands, in France, in Denmark or Norway and you will find farmer-owned supermarkets, banks and food processing factories. The revolutions which swept Europe in the 18th century laid the groundwork for today’s rural economy of small-scale proprietors linked by a strong network of collective institutions which give European social democracy a distinctive and culturally rooted constituency of support.

In Scotland, however, two further centuries of landed power prevented that pattern from emerging and so the engine for an alternative social democratic model based upon co-operatives of small scale proprietors controlling the land and economy was lost.  The Tories meanwhile were busy privatising public assets and promoting a property-owning democracy which could be relied on (or so it thought) to vote Conservative. What was inconsistent about this ideology, was that it attacked public monopolies but not private ones, and limited the ideals of property ownership to the home. There was no promotion of a property owning democracy in the countryside - precisely the opposite in fact. Tory politicians would have as soon countenanced an extension of a property owning democracy in rural Perthshire as they would have engaged in a massive programme of nationalisation of heavy industry. Some later actions of Michael Forsyth did begin to acknowledge and develop the idea on state-owned agricultural and forestry estates, that giving individuals and communities more power over land was a good idea and consistent with Conservative philosophy.

       Andy Wightman,   6th John McEwen Memorial Lecture on Land Tenure in Scotland,  1998

Croft settlements

Crofters at work on the Isle of Harris

The issue of land reform is one then that concerns historical justice, cultural and spiritual values, economic opportunity, sustainable communities, and a taxation system that is truly fair and equitable.

There is a much less well known and parallel need in Scotland, to address an evil that has robbed communities of their assets, and continues to do so.  Much land and property in urban areas and countryside regions, was classed as “Common Good Property”.  This includes parks and museums and libraries, parts of green belts and some buildings of charitable institutions, that were donated to the townsfolk in years past, by wealthy benefactors.  These public assets have been brazenly disposed of by Councils for private developments that benefit only the councils themselves and the commercial developers. The whole process is illegal and unethical, but has been perpetrated without any transparency or public accountability, so that today few in our towns and cities realise it has happened.  Yet at the same time they wonder why council tax and water charges escalate year by year.  The assets they have been robbed of by stealth, could have comfortably covered the costs of water, schools or waste disposal. 

While I believe in a basic land tax, I recognise that there are other imaginative ways in which taxation could support land reform and sustainable land use.  Lester Brown of the Earth Policy Institute, has written about the value of an environmental tax which is being introduced in a number of countries.

Lester Brown of the Earth Policy Institute

“Several European countries are benefiting from a steady decline in income taxes as governments lower taxes on income and raise taxes on environmentally destructive activities—like burning gasoline or coal. The purpose of this tax shifting is to incorporate the environmental costs of products and services into the market price to help the market tell the environment truth. This rewards environmentally responsible behavior such as reducing energy use.  Among the various environmentally damaging activities taxed in Europe are coal burning, gasoline use, the generation of garbage (so-called landfill taxes),   the discharge of toxic waste, and the excessive number of cars entering cities. Germany and Sweden are the leaders among the countries in Western Europe that are shifting taxes in a process known there as environmental tax reform. A four-year plan adopted in Germany in 1999 systematically shifted taxes from labor to energy. By 2001, this plan had lowered fuel use by 5 percent. It had also accelerated growth in the renewable energy sector, creating some 45,400 jobs by 2003 in the wind industry alone, a number that is   projected to rise to 103,000 by 2010. In 2001, Sweden launched a bold 10-year environmental tax shift designed to convert 30 billion kroner ($3.9 billion) of taxes from income to environmentally destructive activities. Much of this shift of $1,100 per   household is levied on cars and trucks, including substantial hikes in vehicle and fuel taxes. Electricity is also being taxed more heavily. This tax restructuring is an integral part of Sweden’s plan to be oil free by 2025.

Among the other European countries with strong tax reform efforts are Spain, Italy, Norway, the United Kingdom, and France. There are isolated cases of using taxes to discourage environmentally destructive activities elsewhere. The United States imposed a stiff tax on chlorofluorocarbons to phase them out in accordance with the Montreal Protocol of 1987 and its subsequent updates. When Victoria, the capital of British   Columbia, adopted a trash tax of $1.20 per bag of garbage, the city reduced its daily trash flow 18 percent within one year. Cities that are being suffocated by cars are using stiff entrance taxes to reduce congestion. First adopted by Singapore some two decades ago, this tax was later introduced by Oslo, Melbourne, and, most recently, London. The   London tax of £5, or nearly $9 per visit, first enacted in February 2002 by Mayor Ken Livingstone, was raised to £8, more than $14, in July 2005. The resulting revenue is being used to improve the bus network, which carries 2 million passengers daily. The goal of this congestion tax is a restructuring of the London transport system to increase mobility and decrease congestion, air pollution, and carbon emissions. While some cities are taxing cars that enter the central city, others are simply imposing a tax on automobile ownership. New York Times reporter Howard French writes that Shanghai, which is approaching traffic gridlock, “has raised the fees for car registrations every year since 2000, doubling over that time to about $4,600 per vehicle—more than twice the city’s per capita income.” In Denmark, the steep tax on an energy-inefficient new car doubles the price of the car.

Traffic in the streets of Shanghai

London traffic

Traffic in Tokyo

An excellent model for calculating indirect costs is a 2001 analysis by the U.S Centers for Disease Control and Prevention (CDC), which calculated the social costs of smoking cigarettes at $7.18 per pack. This not only justifies raising taxes on cigarettes, which claim 4.9 million lives per year worldwide (more than all other air pollutants combined), but it also provides guidelines for how much to raise them. In 2002, 21 U.S. states raised cigarette taxes.  Perhaps the biggest jump came in New York City, where smokers paid an   additional 39¢ in state tax and $1.42 in city tax—a total increase of $1.81 per pack.  If the cost to society of smoking a pack of cigarettes is $7.18, how much is the cost to society of burning a gallon of gasoline? Fortunately, the International Center for Technology Assessment has done a detailed analysis, entitled “The Real Price of Gasoline.” The group calculates several indirect costs, including oil industry tax breaks, oil supply protection costs, oil industry subsidies, and health care costs of treating auto exhaust-related   respiratory illnesses. The total of these indirect costs centers around $9 per gallon, somewhat higher than those of smoking a pack of cigarettes. Add these external costs to the average price of gasoline in the United States—just over $2 per gallon in 2005—and gas would cost $11 a gallon. For Americans, this is shockingly high, but it is not that much higher than the $9 per gallon that British, German, French, and Italian drivers now regularly pay for gasoline.

Asia’s two leading economies -- Japan and China -- are now considering the adoption of carbon taxes. For the last few years, many members of the Japanese Diet have wanted to launch an environmental tax shift, but industry has opposed it. China is working on an environmental tax restructuring that will discourage fossil fuel use. According to Wang Fengchun, an official with the National People’s Congress, “Taxation is the most powerful tool available in a market economy in directing a consumer’s buying habits. It is superior to government regulations.”

Environmental tax shifting usually brings a double dividend. In reducing taxes on income—in effect, taxes on labor—labor becomes less costly, creating additional jobs while protecting the environment. This was the principal motivation in the German four-year shift of taxes from income to energy. Reducing the air pollution from smokestacks and tailpipes reduces the incidence of respiratory illnesses, such as asthma and emphysema -- and thus overall health care costs.

Some 2,500 economists, including eight Nobel Prize winners in economics, have   endorsed the concept of tax shifts. Harvard economics professor N. Gregory Mankiw wrote in Fortune: “Cutting income taxes while increasing gasoline taxes would lead to more rapid economic growth, less traffic congestion, safer roads, and reduced risk of global warming -- all without jeopardizing long-term fiscal solvency. This may be the closest thing to a free lunch that economics has to offer.”

Accounting systems that do not tell the truth can be costly. Faulty corporate accounting systems that leave costs off the books have driven some of the world’s largest corporations into bankruptcy.  Modern right wing economists and businessmen cleverly externalise social and environmental costs, in order to maximise corporate profits.  In the wake of their ruthless push for economic efficiency, we see an erosion or collapse of pension provisions, a decline in health benefits, and enormous increases in the cost to all consumers of basic services such as water supplies.

The risk with our faulty global economic accounting system is that it so distorts the economy that it could one day lead to economic decline and collapse.  If we can get the market to tell the truth, then the world can avoid being blindsided by faulty accounting systems that lead to bankruptcy. As Øystein Dahle, former Vice President of Exxon for Norway and the North Sea, has pointed out: “Socialism collapsed because it did not allow the market to tell the economic truth. Capitalism may collapse because it does not allow the market to tell the ecological truth.”  One might add that neither system was prepared to recognise the spiritual truth that they both devalued and degraded their human capital.

Oystein Dahle, former Vice President of Exxon Norway, now Chairman of the WorldWatch Institute

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