Rent controls or landlord subsidies?

by D.J. Webb

Steve Davies constantly intervenes in public debate to argue for what he sees as free markets. However, in the absence of wider economic reforms, some of his arguments may end up, however inadvertently, supporting skewed markets, markets skewed by government intervention, rather than genuinely free markets. As Education Director of the Institute of Economic Affairs (IEA), he may represent the views of the IEA more broadly, and the IEA is an organisation with a reputation for libertarianism. But it is important that libertarians argue for a wholesale restructuring of the economy, to remove existing distortions, and not simply oppose further intervention while retaining existing distortions, because otherwise we may unintentionally end up supporting government intervention that currently works to deliver unearned gains to the well-heeled.

We recently saw Davies write in support of interest rates of more than 5,000% per year charged by loan sharks such as Wonga, without any discussion at all of the way in which immigration and the welfare state have distorted the labour market so that opportunity is removed from the lower end of the ranks of the employed. In his analysis, he didn’t discuss whether the minimum wage would suffice to allow a worker to raise a family in Britain or whether immigration is being used to stop wages rising to their natural level. Some might conclude that those on low wages, competing with Poles and Lithuanians, who can’t afford to pay their rents and energy bills (both inflated by government policy) have only themselves to blame if they take out a payday loan to keep the lights on, and then see the debt spiral to 50 times the amount borrowed, with Wonga emptying bank accounts at will, regardless of disputes over the amount owed. The IEA probably has a considered view on the way in which the labour market is distorted by state intervention, thus forcing the low-paid into desperate financial strategies, and so I think libertarians would agree that payday lenders are as much a consequence of an unfree economy as of the fecklessness of the debtors, and so I think it better to site all such problems in their wider context of economic unfreedom.

Davies’ latest intervention was that opposing rent controls in The Daily Telegraph. Once again, this article opposed fresh government intervention to prevent abuses in the rental market, but unfortunately without discussion of the government interventions that have produced those abuses in the first place. Our theme should not be, however inadvertently, “there must be government subsidy for me, but not for thee!” I’m sure most libertarians would agree there should not be rental controls—but, and here is the main point Davies overlooked—there should not be government intervention to pump up the property market in the first place, and if the government did not intervene in the property market, there would be no need to discuss rental prices at all in any case. It is important to make clear that libertarians do not support state intervention in support of the banks and the existing middle class in a way that can only mean that work does not and cannot pay for large numbers of young people. Organisations that support the free market should constantly raise the question of whether labour and capital should be subject to greater and greater impositions from rentiers, as support for rentierism cannot be accepted as a legitimate form of libertarianism at all.

Davies says, “we would not expect people in any other trade to stay in business if price controls meant they could not make a profit. Why should landlords be any different? The result is homelessness and urban decay”. Countries that do have rental controls do not generally show high levels of homelessness and urban decay. He discusses the example of Germany—where he points out, with validity, that planning laws are less restrictive—but in any case, it would be difficult to argue that homelessness and urban decay were more widespread in Germany than in Britain. The problem in his argument is in the phrase “we would not expect people in any other trade to stay in business if price controls meant they could not make a profit”. Whoever said it should be state policy to ensure that buy-to-let landlords make a profit? So what if they can’t stay in business?

Let us consider the ramifications of arguing that government policy should be drawn up in such a way as not to affect the profitability of the buy-to-let market. Rental controls might cause these landlords to make a loss, forcing them to sell up, and hence the IEA opposes such intervention that would deter the supply of rentals. What about removing housing benefit (aka landlord benefit)? Davies may have not considered this, but the logic of the IEA’s position is that all existing subsidies to the property market that form a vital part of the profitability of buy-to-let landlords’ property holdings must remain in place. To remove or seriously limit housing benefit might cause buy-to-let landlords to make a loss, forcing them to sell and no longer engage in the letting business. We can extend this argument further. Should interest rates be raised? What if buy-to-let landlords, who have bought property at relatively high prices, could not service their mortgages at high interest rates? Maybe Mark Carney should hold off on interest-rate rises in case the buy-to-let market is affected, because any policy move that impaired their business models would cause buy-to-let landlords to leave the industry.

It would be ludicrous for libertarians to argue that government policy should be governed by a perceived need to help the business models of buy-to-let landlords prosper. Given that many landlords have recently bought property at artificially propped up high prices, it would seem we could be left with a policy of opposing anything that would might a house price crash, just in case the landlords lost money and had to sell up, removing rental stock from the market. My heart would fail to bleed if they sold up at a loss en masse. Would the result be “homelessness and urban decay”? Well, if buy-to-letters sold up en masse, what would be the impact on house prices? It would surely exert downward pressure on the property market. Buy-to-let landlords would no longer be outbidding first-time buyers on properties, and they would have to sell to those first-time buyers for whatever price they could get. The result would be cheaper house prices, a development that libertarians ought to welcome if it entails less government intervention in the housing market.

Cheaper house prices do not in fact spell more homelessness and urban decay; they spell the opposite. As the average wage in the UK is around £25,000, I would welcome a collapse in prices, as shown by the Halifax and Nationwide indices, which have the average prices around £170,000, to around £100,000, or even lower than that. This would mean that most people could buy houses at non-inflated prices, with mortgages of around 3 times one person’s income, or less in the case of lower-end properties in depressed towns. But it would impair the market for rentiers.

There are many ways in which the state is supporting house prices, thus preventing people from buying at reasonable price levels and encouraging buy-to-let landlords to buy in at inflated prices that in turn create an argument for continued intervention lest buy-to-letters make a loss and are forced out of the market. The elevated level of house prices is the reason why banks are demanding 25% deposits, or more—the stuff about “responsible lending” is just a cover for lending practices that indicate clearly that the banks believe a 25% fall in house prices is possible when interest rates rise—thus, forcing more and more people into the rental market. We’ve had the Funding for Lending Scheme, the NewBuy scheme, the FirstBuy scheme, and now the two stages of the Help to Buy scheme. These are all designed to prevent house prices from falling, and thus let the banks off the hook. (The various bail-outs of the banks can also be described as a support mechanism for those with property.) It could be argued that immigration and the public-sector London weighting are ultimately policies designed to support property prices. Public-sector salaries in poorer Northern towns often reflect nationally set parameters, once more underpinning local property prices at levels that would not otherwise be obtainable without massive state spending.

An even more egregious subsidy, one that is direct rather than indirect, to the property market and to buy-to-let landlords in particular, is housing benefit, a welfare scheme for landlords paid out of general taxation. To argue there should be no rent controls, but housing benefit should remain in place would be a twisted approach for libertarians. I believe the IEA does not support welfarism, and so logically we can agree that state props to house prices should be kicked away. We have had some minor limits on housing benefit, but restrictions on welfare remain designed to give landlords more or less whatever they want. Where I live in Lincolnshire, you can rent a three-bedroomed terraced house for £275 a month, and yet the Local Housing Allowance offers landlords multiples of this figure further south, thousands of pounds a month in some cases. Apparently, even when Universal Credit comes in fully, landlords will be able to receive the rent direct if the tenant persistently falls behind, in an example of state intervention to prevent the landlord from shouldering the risk of his business. Libertarians cannot accept the idea that business should carry no risk and that the state should intervene to ensure that.

Part of the debate on rental levels surrounds the fraudulent behaviour of lettings agencies, with fatuous fees to “register onto the service” before even taking up a property, and a range of unexpected fees when in the property, including a renewal fee every six months. The law allowing the serving of a Section 21 notice is designed to allow landlords to turf bad tenants out, not to allow lettings agencies to extract a fraudulent fee for renewal under threat of eviction. Often—in nearly all cases, in fact—such notices are served, illegally, on paying tenants the landlord wishes to remain in the property, in order to prevent the tenancy from turning into a statutory periodic tenancy at the end of six months. Tenants could remain in place and challenge the lettings agency to take them to court for repossession or allow the tenancy to become a statutory periodic tenancy without the payment of a fraudulent fee, but in most cases, tenants do not wish to have the hassle, and just pay the fee or move out. Landlords are frequently not told the lettings agency has served the Section 21 notice. Checking-out fees at the end of tenancies have given rise to frequent claims that inspections charged for and cleaning services charged for have not, in fact, been carried out, as it seems most lettings agencies routinely claim to have had to hire expensive professional cleaning services for even the most squeaky clean accommodation, and they are curiously unable to provide documentary proof in the form of receipts for payment for this. While libertarians support the free market, this is not the same thing as saying we support fraudulent business practices, and something should be done about the behaviour of lettings agencies.

Even the otherwise brilliant publication Moneyweek has argued that the lack of availability of longer tenancies is down to the failure of tenants to negotiate with landlords, claiming “if tenants want longer contracts, they are free to negotiate them with their landlord”. They most certainly could try, but it would certainly not work, as property is a rigged market in the UK. Countries with high levels of rentals, like Germany, have better protections of tenants’ rights. In the UK, laws providing for assured shorthold tenancies lasting just six months, forcing tenants to be constantly on the move or to pay constant fraudulent fees, form part of government attempts to force everyone in the UK into the mortgage market. It is no good for libertarians to say that there should never be any regulation of anything. We could try an anarchist approach, but if we won’t try that, there need to be some laws. I would argue that laws should be passed by Parliament and be few in number. There should be no regulatory bodies or regulations/statutory instruments passed without Parliamentary oversight, but in any case there will need to be some laws, and statutes should not be drawn up with the explicit aim of forcing people to buy freehold title that few normal people, with lifespans of around 80 years, really need.

Finally, the taxation system is rigged in favour of rentiers, in  a system that was not supported by J S Mill. This is because the burden of taxation has been shifted from land to labour and capital. A levy on land ownership was provided for in English Common Law: the feudal system of land ownership held that allodial title was ultimately vested in the Crown, which had the right to impose feudal duties or taxes on its tenants. Freehold title, so-called, is not absolute title to land (allodial title), but just a new name for tenancies held in fee simple of the Crown. Libertarians who claim that a land value tax is an attack on property rights are confused: a freehold property is not held absolutely, and so the property rights that go with it can only be those rights that rightly belong to a tenancy in fee simple held of the Crown. Buy-to-let landlords are tenants too.

The reason for this is simple: land is a naturally occurring resource, the gift of God if you like, and not the result of anyone’s investment or ingenuity. When Britain conquered parts of America or Australia, it immediately parcelled up the land there and started handing out or selling off tenancies in fee simple, thus creating freehold property. The Crown’s right to do so was purely based on the fact of conquest. As such, all freehold property is the creation of the state. The origin of land ownership in England is lost in the mists of time—dating back to the Conquest or even to pre-Conquest titles that were then taken over by others at the time of the Conquest. But the ownership handed out then, that has survived as freehold property today, is not an absolute thing. It cannot be, because land in itself is just a natural resource that belongs to the whole of society—as shown in allodial title vested in the Crown.

Yet ownership of property offers an advantage to those who have occupied prime natural resources, such as well-located land. There is no distinction between a tenancy in fee simple and the licences to exploit oil resources in the North Sea. While exploiting oil resources requires investment—and licences and taxation systems have to be calibrated to allow for profitable exploitation—the oil is no one’s creation, and doesn’t belong to anyone, and so its use is controlled by licences issued by the Crown, which is a military power that controls the seas where the oil is located. The Crown takes a share of the profits. Ownership of well-located land is akin to a licence to use a natural resource likely to confer windfall profits on the owners.

The price of anything is just what you can get for it. If you own an oilfield in the North Sea and see oil prices double, you will make a windfall profit. You might find the state wants a larger share of the windfall gained by the ownership of such natural resources. Similarly, land values, and I’m talking about the value of the unimproved site and not the value of buildings sited on them, which do represent a form of investment and ingenuity—the values of the unimproved sites reflect demand for those sites. So those who manage to buy before a site becomes valuable may gain a greater windfall. If you bought in Southwark before the Jubilee Line was mooted, you will have seen your land values rocket, as public expenditure was capitalised into the value of your property. Infrastructure and social activity can improve the attractiveness of a site. We have read recently that Google’s decision to build a headquarters in London in the King’s Cross area has lifted land values of adjacent properties. Once again, we are talking about the unimproved land value (you could get a rough and inaccurate estimate of this by subtracting the building reinstatement value from the property value) and not about anything that is the result of investment spending by the landowner. Public spending and investment decisions by other individuals and businesses enhance the value of a location. A square mile in London will be worth much more than a square mile in a depressed mill town in the North of England.

Rentiers have captured the natural resources of society that were the gift of God. Libertarians once argued that taxation should fall on land, not labour and capital. We have the opposite in the UK: heavy taxes on labour and capital, but none on the ownership of land. There is a council tax, but it is not levied on owners, but on residents, ensuring that people who own not a square inch of the country pay more as a percentage of their minimal wealth than millionaires sitting on large tracts of England, often obtained in dubious ways in years gone past. The result is that school-leavers face high property prices and jobs paying ₤6 an hour that cannot cover the rent in London or any of the larger cities, let alone finance the raising of a family. This is supplemented by a grotesque architecture of welfarism, where in-work benefits make up the difference, being in turn covered by high taxes on labour and capital.

Those who have wealth find government policy designed to funnel more of it to them, and those who have nothing find government policy calibrated to prevent wages from reaching their natural level, a level that the worker must demand in order to live a normal life in society. This is not a free market. The ramifications are endless, including the shocking phenomenon of the elderly sitting on landed wealth reluctant to sell their properties to finance nursing care, despite the fact that they are not in a physical condition that will ever permit them to return to the properties. It is claimed the properties are a legacy, and so the state must step in with more funding for the wealthy to ensure the property heirs inherit a tenancy in fee simple held of the Crown, a tenancy they regard as tantamount to allodial title in nature. High property prices then pin many on benefits, because work, even with in-work benefits, scarcely pays more than the benefits, and state schemes, including nursing care, are shackled with huge land-related costs.

It is argued by some libertarians that a land value tax would be passed on to tenants, and that the council tax therefore represents the reality that a land tax would in any case increase their rents as landlords passed the tax on. However, cost increases may not always be passed on, as there is a hard limit to what people can pay. No one I have met can pay more than 100% of his salary in rent. This is analogous to how retailers cannot always pass on increases in factory gate prices: they can try to do so, but sometimes have to absorb an increase in costs. As a land value tax would vary according to location, attempts to raise rents would be countered by tenants’ moving elsewhere. The advantage of a land value tax, therefore, is that rocketing increases in land values are countered by annual increases in the land value tax, ultimately helping to constrain demand for the best-located land.

It is clear therefore that the removal in the early modern period of taxation from land to labour and capital amounted to a state policy of subsidising rentiers, who gain windfalls from the socially created values of the locations they monopolise. This skewed property market is not just the normal free market, and so libertarians ought not to argue that the state must do nothing to depress the price of land. Davies may be right to say that rental controls would cause landlords to offer fewer properties for rent, but he fails to comment on the downward impact on property prices of rental controls. Probably for reasons of lack of space in the article in the Telegraph, he did not match his opposition to rental controls with opposition to the myriad schemes of state support for landowners. But high rentals are a sign of an already skewed property market, subject to too much intervention, and in each case unpicking state intervention would lower land values and scupper the business plans of buy-to-let landlords and cause them to reduce the supply of rentals, while allowing first-time buyers to buy at reasonable prices (and thus not need to rent in the first place).

Libertarians should oppose the attempt of buy-to-let rentiers to ride a wave of government policy support for property prices in a way that keeps younger workers priced out and necessitates the maintenance of a huge welfare state. Land ownership is not an investment; it is ultimately just speculation, and so the buy-to-letters deserved to be burnt in a future collapse of the housing market. Let us start calling for lower taxes on labour and capital. Let us start calling for a normal functioning of the labour market as support for rentier parasites is eliminated. Let us call for a restructuring of the economy in a way that allows labour and capital their head of steam, to the eventual advantage of everyone in the UK. With things as they are, it is no wonder that teenage girls set their sights on being granted a council flat as soon as they have a child, as working for their living and saving up for a nice property have become an impossible route to prosperity for millions. Yet if the ideas of John Stuart Mill mean anything at all, it is that we should remove the restrictions and impositions that are holding labour and capital back.

38 responses to “Rent controls or landlord subsidies?

  1. What is needed is this :

    1. A massive programme of social housing building by the state.

    2. An annual tax on land that is being hoarded and not built on by developers.

    3. An end to buy-to-let mortgages.

    4. Capital gains tax on all homes including primary residences, the money being used to fund in part the increase in social housing. .

    5. Double council tax on homes other than the primary residence.

    6. Greater security of tenure for renters on the German model.

    7. A restriction, for at least a period, on rent increases to the rate of inflation.

    8. An end to further mass immigration.

    9. The removal to their own countries of immigrants who are here illegally, incapable of work or doing work which could be done by native Britons.

    10. Social housing to be denied to anyone not born British.

  2. I partly agree but believe that all building should be on brownfield sites.

  3. Is the above comment the follow up to your perpetual motion BS?. Because it is just about as crazy. Have you missed the whole Libertarian Alliance website/ Daily Mail distinction?. Your suggestions are tinpot tyranny(–some have an emotional appeal because of the screaming blubbering leftist scum they would put into a world of pain). Usually it is D J Webb I seem to point this out to but on this occasion he has written an entirely reasonable piece. We don’t live in a Libertarian, Free-market society and types like the IEA/Adam Smith etc do Liberty no favours by supporting the kind of actions they do support on the grounds of supposed “free-market” principles. However, if you think MORE statism is the answer, you are on the wrong website.

  4. I would largely support the thrust of Robert’s comments, but would just add that I don’t support the existence of social housing at all, and don’t think that is the way forward. I could be induced to support a policy of giving social homes to their current occupants gratis as a way of getting the state totally out of the housing market for good.

  5. David – in an ideal world social housing would not be needed because there would be sufficient housing to keep rents low enough to be funded by a full time wage even for menial jobs. But we are where we are. and a massive building programme is essential to actually house people in the places where they are needed as workers and to maintain local communities.

  6. RH, absolutism on these issues would be a little absurd, as we have to see the big picture. So I would accept a council house building programme if I could be sure that only British people would be eligible for such housing and applications for such housing were not dependent on factors such as being an unmarried mother (i.e. the housing was not being used to promote an anti-social agenda by the government).

  7. David – Well, I covered the question of immigrants and we are in agreement. As for unmarried single mothers, you have to ask what will happen to them if there is no housing available to them. Many will not have a relative or friend who has the ability or willingness to house them. Unless you want to leave children to become street arabs. accommodation has to be provided.
    It is also worth bearing in mind that most single mothers are not teenage girls but older women who have been deserted by the father.

  8. Robert – unmarried mothers can live at home with their parents, if their mothers are happy to have the grandchild in the house. Or the child can be taken into care. But on no account should we forge a link between having a child out of wedlock and solving your housing issues for life. For a start, young girls should not get pregnant if they have no husbands – this is not the 1930s – the contraceptive pill and the morning after pill are easily available, so pregnancy is a choice.

    • David – The cost of putting a child into care is many times the cost of paying the mother’s rent, child benefit and income support. There is also a pile of research that shows children do much worse in care on average than they would even with a pretty hopeless mother.

  9. Mr Henderson’s 10 point plan of action is not compatible with the idea of limited government – not just libertarianism, any idea of limits on government.

    A better approach would be to end the Bank of England and its “cheap money” policy. This would lead to a property market crash (especially if Housing Benefit, which is indeed the subsidy of landlords, was ended at the same time – and rents allowed to crash).

    As for mass immigration – end all government benefits and services for immigrants, and end all “anti discrimination” regulations, and then the problem solves itself.

    If people come to the United Kingdom to support themselves and to be judged on their good character (not on “associate with me OR ELSE – for it is THE LAW”) then things are rather different.

    • Paul – you are making the mistake of treating immigration as a purely economic matter. It is not. The real importance of mass immigration is the fact that it is colonisation. It is also worth pointing out that most immigrants who work do not add to the average UK GDP because they earn less than they cost in benefits and services – MigrationWatch calculated a few years back that an immigrant needed to clear (from memory) £27k pa before the break even point was met. Also, many immigrants pay no income tax or NI because they work on the black market. It is also possible for them to come to the UK, earn up to the single person’s tax allowance then return home and get their tax refunded in full.

  10. While I believe the present system is insufficient, I disagree with the argument that we should not have real private property and land ownership. There is no reason why the crown should be the true owner of the land. That part of the article does seem very unlibertarian. That said libertarians should spend more time showing how the state is making things more expensive and hard for regular people to make a living. It is also to be expected that the market will bid up certain resources, and under any regime we would expect very high prices in certain areas.

  11. This all really highlights a problem for libertarians expressed by DJ Webb. When a system is so comprehesive and so intrusive, it is hard to tinker with any part of it. Individual “libertarian” policies, in that context, can have a counterproductive effect. One might use as an example the Thatcherite attempt, which has taught us valuable lessons- the partial, inconsistent dismantling of the Attlee-socialist-state ended up not with a libertarian free market but the statist corporatist carbuncle called the “Neoliberal” Era. Which to my eyes looks to be in about the same state as the Attleean dispensation did in the 1970s, collapsing under its own contradictions.

    My own libertarian-view is that the heart of this is the financial/money/central banking system. Without a major reform of that, anything else is either impossible, counterproductive or plain malignant. And this is the fundamental problem for liberty. Liberal democracies tend to work by evolution rather than revolution. Libertarians need a specific, rather than general thematic, plan for moving by “Fabian” steps to a libertarian society and economy, because the “revolution” ain’t going to happen. We might imagine being a political party, proposing a manifesto, and divide our policy suggestions into those things which can be done immediately, those one might do in a single parliament, and those which may take several parliaments, and so on. Always with the primary thought in mind that if you force people through misery, you are out of office and your plan is defunct so, none of the “throw everyone off the dole immediately” type stuff.

    And those of us who are economics fetishists might look at a practical way to end the bond markets and government borrowing (you can stop borrowing tomorrow; what do you do about the national debt though?) and so on. By ending monetary expansion we can indirectly put the kibosh on the bubbling of property markets and David’s rentier problem in the article. And so on.

    Anyway, a good and thought provoking article by DJ.

  12. Yes, none of what we write here is a staged programme of reforms that can be implemented independent of each other – and this is a major problem. The decision to bail out the banks may have forestalled a very sharp fall in GDP – call it a V shaped recession – that could have seen extreme social pain, followed by the change of a more rapid recovery, along the lines of what happened in Argentina after the sovereign default.

    There would have been many ordinary people who would have suffered much more if the banks had not been bailed out. Including the cashpoints suddenly stopping working, and people finding out that ‘deposits’ are just loans to the bank – and you can lose deposits too.

    But the huge run-up in state debts and the failure of house prices to correct properly both prevent a proper recovery. And then you add on QE – so the government can finance its debts cheaply – and the possibility of a major disaster as interest rates rise and the velocity of money accelerates has increased sharply. This is no ordinary recovery we are witnessing.

    I would have preferred a government to come to power in 2010 that took hard decisions to bring the budget back into surplus by now – i.e. at least 120bn in cuts is needed – with no special policies to boost property prices.

    However, the fact is that it is easier not to stoke the boom in the first place than to adopt policies now that would cause a crash into depression.

    I’m wondering if in the longer run, countries like Ireland that had a proper property crash and were forced by the EU to introduce wave after wave of proper austerity will look back and see their competitiveness restored thereby, whereas the UK will sink under increasing debt. Of course, the internal devaluation of countries like Ireland is more painful than the external devaluation route of countries that can debase their currency – which is why being in the euro is a bit like being on the gold standard.

  13. Yes, I’ve been having heretical thoughts about the Euro. In places like Ireland, the financial shock may be bringing on the shake out of productive investments needed for a resumption of proper growth.

  14. I think reforms can be implemented independently – although (yes) it would be better if they were implemented as a package.

    For example, the “cheap money” policy of the Bank of England could be ended – this would cause the property market (both to buy and to rent) to crash, even if “Housing Benefit” (the other big landlord subsidy – which has effects on rents that would not have surprised even David Ricardo two centuries ago) was kept.

    Also an end to the insane policy of inviting immigrants with government benefits and anti discrimination regulations could be ended right now – and if international authorities (such as the E.U.) complain, then tell them to go jump in the nearest lake.

    Norway and Sweden seem to be even more eager to welcome in “refugees” who turn out to be rapists and welfare types. “We have an international treaty saying…..” then LEAVE the treaty or “Convention”.

    On the Euro – I have seen many good people defend it, on the grounds that the rules it was set up under are relatively sound. My objection to that line of argument is that these rules have been torn up (for political reasons).

    On the recent situation of the Republic of Ireland – I must confess ignorance, I know the British position is terrible – but I have not checked the recent Irish position.

    I continue to believe that the government of the Republic of Ireland should have let Anglo Irish bank go bankrupt – and the German creditors go hang.

  15. Robert, the point of not making unmarried motherhood a career choice is to deter such behaviour. It may be more expensive to place a child in care, but the need to put children in care would decline rapidly once it became known that extraordinary family arrangements would no longer unlock taxpayer largesse. It is only expensive to house children in care because they are not adopted out – babies taken into care should be quickly put up for adoption – the cost to the state is then zero.

  16. It would be cheaper still by far to give every girl over puberty access to long term contraceptive injections. If a girl then does not use that faclility and falls pregnant, you may then have some justification for the State taking their babies away, although personally that is not a policy I am comfortable with, since it strengthens the idea that the State owns children, and we know from the past how much distress it causes.

    Part of the teen pregnancy problem is down to the official “sex educators” who are heavily Feminist biased and thus want all the responsibility put on males, hence the deification of the condom as our society’s holy prophylactic. But condoms for young people are not a good contraceptive method; they are expensive, you may not have one to hand, they are fiddly and awkward[1] and reduce the male’s sexual pleasure, all of which act against consistent use of them.

    Ultimately, logically, pregnancy should be a female responsibility since it is women who do the getting pregnant, and in other spheres (e.g. abortion, divorce) women are very keen to assert their ownership of that which is inside, or has emerged from, their wombs. The best thing by far would be automatic “pregnancy proofing” using contraceptive injections.

    Unfortunately of the two dominant types of women- Feminists and Bluestockings- neither want reliable contraception. Both are actually in favour of “abstinence” training for girls, and see contraception and abortion as simply protective measures agaisnt predatory males. Hence, they both prefer condoms, since failure to use them and thus unwanted pregnancies can be blamed on men. Neither group wants a situation in which girls can have carefree sex, hence the deification of the condom combined with constant low level ideological warfare against hormonal contraceptive methods.

    [1] No, the penis is not actually like a banana or plastic model of a penis. A teacher showing the ease of unrolling a condom on a rigid substitute model is not the same as an awkward and over-excited teenager, perhaps not fully erect, with the elasticity of the foreskin to deal with and so on.

    • I just want to add that, since the above comment by me implies a mass State contraception programme, I would argue that it is not necessarily statist. It could be seen as a parental responsibility to ensure that teenage daughters have appropriate contraception, a growing up matter, rite of passage, what have you, like dealing with the onset of menstruation.

  17. Sean, maybe they shouldn’t be **forced** to give up the children for adoption – but the state should say “the only thing we can do to help is rescue your baby from you; you can surrender your baby for adoption, or you can sort yourself out financially, but in either case we won’t fund the unmarried mother lifestyle”. That is not the same as being forced to surrender the children – rich women or women whose parents are prepared to help could keep the child. Poorer women could look for husbands who would support them. But in no case should the state fund unmarried motherhood. If the woman wants help, the state can arranged for the baby to be adopted out to a middle-class couple who could raise the child properly.

    A horrible video can be viewed at discussing Julia Gillard’s apology to women who gave up their babies for adoption in the 1950s. It is gag-inducing to watch these women pose as victims and pretend a wrong was done to them. They gave their babies up because they had no husbands to support them, no money to live on, and there were no state benefits to fund the unmarried mother lifestyle. They weren’t “forced” to give their children up by the state – it was just put to them, plainly, that they had no money with which to raise the children and so would be harming the children by keeping them. None of these women has any justifiable complaint.

    • David – you are leaving the interests of the child completely out of the picture. Even if you were right about providing a disincentive to single motherhood – and all the evidence is against you because, as I have already pointed out, most single mothers have had husbands or partners who have deserted them – there would still be a large number of children who were neglected or given a miserable life in care, foster homes or adoptions which are a disappointment to the adopters. I for one would not be willing to visit the sins of the parents on the children.

  18. I would just mention there is evidence that a state controlled tenancy regime makes for bad housing. I am old enough to remember the late 60’s and controlled tenancies, where family houses were rented for pennies and as a result, absolutely nothing was ever done to them. ( my mum paid 11/6 week in old money for a ropey two bed terrace in 1965) That is, until the tenant died, and they were sold to builders to ‘do up’ for a profit.

  19. DannyL: rents can be set at a sensible level with due allowances made for reasonable maintenance charges and inflation.

  20. No, Robert, you are leaving the interest of the child out! If you care about children, you should support the old traditional morality, which meant that nearly all children were brought up by their parents. Pretending to care about victims of various sorts – and this is the moral narcissism of the left which likes to grandstand, but doesn’t really give a damn about the supposed objects of its compassion – in order to argue for state funding for family breakup leads to much more distressing consequences for far more children.

  21. DJ-

    We’re back with the problem of a generally illibertarian society, and only looking at one part of it. For instance, the question here of “take the baby away if the mother cannot afford it”.

    The problem is, other parts of the current system discriminate against the baby being affordable to the mother. Firstly, if she is under 16 she cannot in practise get a proper job. There is no reason a 14 year old could not work in a shop, or factory production, or many other roles. But legally she is a minor and a child, a ward of somebody else, and cannot make free economic choices. SHe is thus dependent on somebody- parents, or the State, provisioning her. So “child” labour laws act as an imposition against (her) freedom of action. My father started work at 14. That is now illegal. That is the State’s fault. Should we blame the mother?

    Secondly, we live in a manipulated economy in which inequality (the “Gini Index”) is growing, apparently deliberately to suit the preferences of the ruling class. In particular, jobs at the lower end of the economy are placed under enormous wages pressure by a policy of continual immigration flooding, leading to depressed wages and greater difficulty for the poor to support themselves. The result is increasing numbers of people who are actually working, having to claim top-up benefits, while many others cannot work at all, or it is just economically not worth it for them to do so. Again, this is deliberate State policy.

    So I will re-iterate that unless we look at this thing holistically, we end up just introducing more skew to the system by trying to think up “fixes” within the current context.

  22. Yes, there is no reason why a 14yo should not work. But as an unmarried mother with a newborn child, even if we allowed 14yo’s to work, she would have difficulty providing for the child. And that is really exactly how it should be. Why should anyone think raising a child without a husband should be a good idea?

    I think that, by law, anyone who has given birth to a child should be seen as an adult. So, with a baby in tow, she should be told her schooldays are over, as school is for children, and she is a mother. She can forget the GCSEs. And she should be allowed to work – and denied any state assistance on her grand plan of raising a child without a father. She could use her private money, or ask her parents or a charity for assistance, or leave the newborn at home while she works long hours in the factory – those would be her choices.

    No, we should not take the baby away (unless she decides to give it up for adoption – I have not said anything about forcible seizure of children), but having decided to become an adult at 14, she is and should be on her own. How to feed the child that she decided to have in an age of contraception – is simply her problem.

    While inequality is growing – why on earth should it be feasible for a mother to raise a child without a father, unless she is backed by private money?

    This whole thing is simply a product of state spending. Not only could she not do this without benefits and a council flat – what about the baby’s healthcare and future education needs? Who will pay? At the moment, these girls calmly assume I will pay for their children’s healthcare and education, but if these services are privatised (and personal tax is abolished), she would have to come up with hard cash to even see the health visitor. Are you getting me, Ian B? In a libertarian society, it would simply not be possible for an ordinary (non-wealthy) girl to raise a child without a father. This phenomenon is entirely a creation of the state.

    I am not suggesting it should be illegal to be an unmarried mother. If you can afford to be one without asking for public assistance – be my guest! But we should not go out of our way to fund this sort of “family” structure.

  23. DJ,

    The question is which end of the stick you grasp first. My argument is that the sprawling welfare dependency is a consequence of decisions made over the past century by the powerful, so as Libertarians we should concentrate on correcting those first. You can’t expect *anyone* to be independent in a crippled economy.

    So yes, once we’ve got our libertarian state, we can say that people need to bear the brunt of their own actions, if we like. Again, it’s transition that matters. In that sense, we don’t start our hypothetical programme with welfare, we end with it.

    However, one thing that could be done “at the start” is what I suggested above, which is to create a culture in which starting contraception is seen as a normal part of growing up for every adolescent woman, rather than the futility of the Cult Of The Condom.

  24. Ian B, these single Mums know exactly which end of the stick to grasp. A little less grasping of the sticks and maybe there will be fewer little charges on the public purse.

    Of course, you are right that welfare dependency is a consequence of the structure of the economy, and my article did point out that single mothers made a rational choice to have babies out of wedlock, precisely because they were automatically independently housed as a result in an economy where house prices are out of reach for most young people. If house prices weren’t so high, maybe the calculation would not be so straightforward that the mums are better off with a kid out of wedlock sitting in a council flat. I see house prices as the key to much of this – and bringing down house prices is the first step in ending welfarism.

    As for the cult of the condom, well I think the male contraceptive pill has been a long time coming, but if it does arrive, it will even things up a lot. Most young men would take a pill to allow them to have their fun and fire blanks.

  25. I disagree fundamentally on the land issue. A person should have allodial title to their homestead but no person (including fictional corporate personages or collective interests at large) should be able to have ownership of more than a few acres.

    You guys just aren’t thinking out of the box enough, a radically different operation of society is going to be the result if a truly moral order is to exist.

    Your argument about the finite nature of land meaning it requires collective ownership implies no ownership of practically any natural resource when taken to it’s logical conclusion. The premise is a fallacy – there never will be an inifinite number of people that simply can’t happen in the real world for a whole swath of reasons. Resources, including finite resources, are completely valueless unless somebody makes use of them and yet they can be effectively destroyed (or at least sequestered) by mis-allocation. Land being an important example. We don’t need all these roads, for a start – and we never really did.

  26. On the specific point of growing inequality, it has been known since the 1700s (since the writings of the Irishman Richard Cantillon – John Law’s partner in “legal” crime) that credit expansion boom-busts (i.e. the lending out of “money” that does not actually exist – followed by a phony “boom” and inevitable bust) tend to favour some rich people (not all rich people) at the expense of many poor people. Even at the end of the boom-bust things do not go back to how they were. Some people (normally wealthy people) are better off than they otherwise would have been, and many other people (normally poor people) are worse off than they would otherwise have been.

    If people really do oppose the increase of inequality the first step they should take is to end the “cheap money” policy (indeed to get rid of the Bank of England all together – and to end the government deficit finance it was set up to finance).. Lending should be for productive industry (not government schemes) and should be entirely financed by REAL SAVINGS (not credit expansion).

    And, yes indeed, such government policies as the stimulation of house building (by various government schemes) and “Housing Benefit” are, in fact, the subsidy of the RICH (not the poor).

    Government schemes to boost house building (and-or to encourage house buying) are a subsidy for the house building companies (indeed when a new scheme is announced one can actually watch their stock market value rise).

    As for “Housing Benefit” its effects are much the same as government backing for “student loans” in the United States. As has been known for at least two hundred years (see the attacks on farm subsidies) – the effect of such scheme is to raise prices (such as rents). They are an subsidy for producers (universities in the case of government backed American student loans, landlords in the case of British housing benefit).

  27. John Pate, you are thinking in the dead centre of the box. A person cannot have allodial title to land, because it is in the very nature of land – being a natural resource that is not the product of anyone’s labour – that it land ownership cannot be absolute. In fact the word “ownership” is a little excessive. It would be better to say “possession” or “occupation”.

    Land “ownership” ultimately comes down to the conquest or occupation of territory by population groups. E.g. the Palestinians were pushed out of Israel and the Jews dominate the territory and are in a position to commandeer and buy and sell land in a way that ignores prior claims to it by people in refugee camps in the West Bank. Freehold title in Israel ultimately depends on the Israeli state and its ability to hold the territory.

    Take Vyborg in Russia – this was once Finland’s second city, but the city is now rightfully Russian because of the fact of conquest. All land claims are settled in line with Russian law and according to the views of the Russian authorities. The Republic of Ireland long maintained an outrageous claim to Northern Ireland, but national borders are just lines on the ground – when one population group replaces another or has actual control on the ground, it decides how to apportion the land there. There are no “ultimate” claims when it comes to land.

    Land “ownership” is thus a way to allow society to exploit a common resource, with title to it in England ultimately dependent on the British state. Freehold title is a state creation, and without the state there would be no such thing. If the Germans conquered Kent, they could do what they liked to the land.

    The point of the Common Law is not that land is “collectively owned” – although British land claims ultimately depend on the survival of the British state, a military power that controls the land. Rather, land is individually “owned”, but that ownership is not an absolute thing; it comes with some duties, because it is an “ownership” of something that is not the creation of anyone and title to which is only accorded by a military power that is the expression of our nation. No state – no land ownership. Interestingly, the legal principle in England is that possession is 9/10 of the law. This refers in particular to land. Long possession of land is unlikely to be disturbed by the judicial authorities without very good reason. Even if you squat in a house for 12 years, it becomes yours, because, by the very nature of land ownership, the former owners’ title cannot be absolute. Even a decree by the state that it was absolute would simply be a decree declaring black was white.

    Take for example, native land title in Australia. Some people would say that the Aborigines had prior title. But English law decided the land was “belonging to no one” (terra nullius). Now, in terms of English Common Law, if the Aborigines had no “state” to militarily defend the territories, their claims to it simply amounted to an inability to defend the territory. Once we conquered it, it was ours to all intents and purposes, and the people who the Crown gave it to are the rightful owners by long possession of it, and possession is 9/10 of the law. For this reason, native title is simply redundant.

    All land belongs to those with established possession of it. This applies to Australian title on former Aborigine lands. It applies to Russian possession of Vyborg. It applies to Israeli possession of former Palestinian land. It applies to Unionist title to part of Ireland. It applies to land taken over by squatters. It even applies to a future breakup of England if some areas fall under the entrenched control of a single non-English ethnic group and declare their independence. But land ownership is therefore really a de facto thing – not a de jure thing – and it can only ever be so. De facto control = ownership, but as that ownership depends on the state, there are certain duties, such as the payment of levies to fund the state, that land owners should pay, and that should not be removed and placed on labour and capital.

    Of course, someone could say “the Aborigines don’t agree with English Common Law anyway”, but then that just proves that our land ownership system, imposed by conquest on Australia, is ultimately a function of conquest and thus of the state.

  28. The idea that private individuals and private organisations (such as Churches or trading companies) can not have ownership (or “free hold” as it is known in English “feudal” law – which whilst not technically private ownership, actually safeguarded real private ownership much better than late Roman Imperial law) of land (or other resources) or may only have ownership of a “few acres of it”…

    Using the excuse that land is not produced by labour – or some other excuse for unlimited government power…..

    This idea is basically Oriental Despotism – more in line with the practices of a Despot, than with a Western Monarchy or Republic. Even in the time of the Edict of Quierzy in 877 (yes as far back as that) it was understood (as an “old right”) that even the King of France could not take a fief of land from one family and give it to another.

    As for the idea that government ownership of all land (or most land) would improve the housing situation (or have some other good economic effect).

    This idea is nonsense – in fact it is nonsense on stilts.

    These doctrines of Henry George were refuted a century ago – by Frank Fetter.

  29. As for the specific historic examples that Mr Webb raises.

    In Israel some land (including land that is in what the Western media call the “West Bank” – although much of this area is actually closer to the sea than it is to the west bank of the river Jordan) was voluntarily bought (by the Rothschilds and many others), but other land was never voluntarily bought. I do not believe there is any right to take this land from the ownership of Muslim farmers and give it to Jewish ones – just as there was no right in the First World War for the Ottoman government to steal land owned by Jews (which they did) or for Islamic powers to steal land owned by Jews in the so called “West Bank” after 1948 (which they did)

    The private ownership of Jews, Christians and Muslims should be respected – and the collective ownership of land (by the state) of much(although not all) land in Israel has been a clear failure as regards house prices and so on (as recent protests make clear).

    The Australian example need not detain us – as the various tribes there were nomads (with no clear idea of land ownership), the various tribes fought each other and spoke different languages and none of them (as far as I know) had any clear idea of private land ownership. One can not steal something when there is no owner.

    As regards Northern Ireland.

    There is not, and there never has been, any ownership of land by “Unionists” as a collective group (although a bit of land may be owned by Orange Lodges and so on).

    Individual Unionists (mostly Protestant – but there are some Catholic Unionists, as the late Enoch Powell was fond of pointing out he had some supporters who were Roman Catholics) own land as individuals. NOT as a collective group.

    The argument is that in the early 1600s land was unjustly taken from the ownership of Roman Catholics – and thus is not rightfully owned today.

    The argument of (James the First and his defenders) was that these Roman Catholic landowners were plotting treason (Cromwell and many others made the same argument much later – to justify their land confiscations).

    Let us assume (for the sake of argument) that this defence was FALSE – that the Roman Catholic landowners were unjustly accused.

    Does this give a moral right to confiscate the land of private landowners in Ulster (or elsewhere) now?

    I say “no” – as Edmund Burke put it, the correct reply to “confiscations” is NOT “counter confiscations” (something that could be pointed out to people in many parts of the world).

    One might as well say that the unjust invasion of Kent by the Jutes means that modern Kentish (and “man of Kent”) land owners should have their land confiscated today. Sean Gabb did not arrive in a ship with Hengest and Horsa waving a battle axe and robbing the Romano-British, it would be absurd to confiscate any land he may own in Kent.

    There is no such as “collective guilt” – just as (to a libertarian – not to a Communist or a Nazi) there is no such thing as “collective ownership” by a “people”.

    The lands now known as England did NOT belong to “the Celts” and it does NOT now belong to “the English” the various bits of land belong to the various people (of many different blood lines – for DNA shows thing are far more complex than simple population displacement, especially in Western England) who have peacefully owned the land for centuries.

    One does not need Common Law (still less hopelessly DISTORTED “Common Law”) to show this – as the Roman Law tradition agrees with the Common Law tradition that the land belong to the individuals and private organisations (such as churches) that have peacefully held the land for centuries – regardless of what crimes may have been committed a thousand years ago by various people (long dead) against various other people (also dead for a thousand years).

    There is no collective ownership of all England by “the people”, the Common Law does NOT recognise such an absurd concept, which is quite alien to the Common Law.

  30. I regard PVM as a troll, and try to avoid engaging with him, but I will clear up some points.

    1) Land previously owned by Palestinians that was not voluntarily sold by them – well it is 2013, not 1948, and the land belongs now to whoever has the existing title to it, as enforceable in Israeli courts. You could only hold otherwise if you disputed the legitimacy of the Israeli state. From a natural-law perspective, there is no such thing as a de jure/de facto state distinction: a people who control a territory and have done so for some time and look likely to continue to do so are the legitimate national population, and their state is legitimate. It is their country, by right of conquest. That is how all other population groups in the world gained their territories too – although this may not have been done in the historical period. The English gained England after the 5th century – by right of conquest. The Palestinians in the West Bank have no valid claim on any part of Israel.

    2) The Australian example does need to detain us. Because although the Aborigines had not parcelled up the land individually, the tribes knew which was their tribal land and which was not. The only reason they lost it was that, like the Palestinians, they couldn’t defend it. They owned their tribal lands, where they had lived for millennia, just as much as anyone in England owns his land, even if they didn’t individualise their title. If the Chinese conquer the Isle of Wight, settle it, impose their law there – in 100 years’ time it will be idle to talk about pre-existing claims to the land the Chinese “own” there – as all land possession results from the fact of territorial conquest anyway.

    3) Northern Ireland. The Gaels had no freehold land – the Unionists settled in Antrim where there was pasture land where Gaelic shepherds led their flocks (transhumance), but no system of land tenure. Freehold land was imposed by British conquest. The whole of the territory of Ireland was eventually divided up and granted to British settlers, with very, very few Gaels owning any part of Ireland in the 18th century. Of course, the Land League campaign resulted in land reform in the 19th century, leading to state subsidised purchase and other schemes that eventually allowed peasants to gain their land. The system of freehold was imposed as fully on Ireland as it was on the Aborigines, by Conquest.

    Once again, another dreary post that does not evince any reading of my argument here. I argued that land belongs to those who possess it, under the Common Law principle, not that the descendants of Hengest and Horsa should or could be expropriated today. [Hengest and Horsa are believed to be legendary and non-historical figures by scholars today.] Any Passport to Pimlico scenario, where ancient documents reveal Pimlico to be part of Burgundy, are ridiculous: as land ownership is purely de facto, and determined by long, peaceful possession by the state, which is the controlling military power of the territory, and the state’s control of territories is purely de facto too.

    I cannot really engage in a discussion with someone whose method of argumentation is hysterical assertion. Land does not belong to the government – allodial title vested in the Crown does not mean “the government” owns the land – and land does belong to whoever has peacefully owned it for a long time, here, in Israel, in Australia, and in every other country. That ownership is individual, but not absolute, as it ultimately is based on the national state and its territorial jurisdiction. As freehold is a creation of the state, and requires armies, police and courts to uphold it, a land value levy on the owners would pay for those structures. All land ownership is just de facto possession anyway, so there is nothing unusual about this.

    There are Finnish extremists who continue to claim they own parts of Russia – waving their title deeds to farms their grandparents owned before World War II. But such title deeds were only meaningful in the context of Finnish sovereignty. Once Russia had conquered the territory, it did what it liked with it – first collectivising the land, and since the fall of the Soviet Union introducing private ownership once again – and so the ownership of those parts of Russia will be determined according to Russian law, and as Finnish claims date back prior to 1944, the Russians have had long possession of those areas, and so they are Russian, and the landowners are whoever Russian law says they are.

    I will not reply any further to PVM in this thread.

  31. Mr Webb it is not “trolling” to point out the truth about the various historical examples you raised – which is what I did.

    Not is it “trolling” to point out that the Common Law (in land disputes and everything else) is based upon individual cases – disputes between private parties.

    There is no collective ownership of England by the English people in the Common Law – indeed such collectivist thinking is alien to the Common Law.

    You are a liar Mr Webb – your entire position is based upon lies.

  32. The idea that if someone neglects their estate the Common Law gives it to someone else, is a falsehood.

    The Common Law is about (for example) the claim of Mr B that he, not Mr A, is the rightful owner of such-and-such – and that has nothing to do with Mr A. neglecting this estate .

    As for “population groups” – that is another lie.

    The Common Law could not care less if an individual was black, white, or purple with pink spots. Such collectivist thinking as “population groups” is alien to the Common Law.

    The Common Law is concerned with the rightful ownership of specific individuals and private organisations (such as Churches or trusts) it is not about “population groups”.

    A “Common Law” approach to a specific piece of land in Judea (BBC please note there was no such place as “First Century Palestine” – the Emperor Hadrian first started to use the word Palestine in the second century of the Christian era), would not be “does this land belong to the Jews or to the Palestinians?”

    “The Jews” and “the Palestinians” would not come into the case at all.

    The case would be …..

    Does this piece of land rightfully belong to Mr Cohen or to Mr Hussain?

    Both parties would present their case – and it would be naught to do with “the Jews” or “the Palestinians”.

    Any more than showing that Mr Powell (or Mr Gabb) is a “Celt” rather than an a “Englishman” has anything to do with their owning a specific piece of land.

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