LAND AND LIBERTY ECONOMICS • POLITICS • PHILOSOPHY Sep./Oct. 1992 (UK) £2.00 (USA) $3.50 long tve rate of ure i term: Rritisn economy rd ^^S grovrtiv of He cnti- ECONOMY: FORECASTERS EXPOSED EARTH: HOSTAGE TO FORTUNE RUSSIA: IDEOLOGY DIVIDES LVT WORKING IN JAPAN LAND AND LIBERTY UNIFORM Volume 99 No 1159 Established 1894 MISERY IN COMMON EDITORIAL 2 YELTSIN HOSTAGE MARKET Alan Spence 3 TALKING POLITICS Lewis Little 4 THE PROSPECT of free trade was the best reason for defending the existence NEWS BRIEFS 5 of the European Economic Community. A single market, we were told, would promote the production of wealth; FEATURE and tie the fate of warring nations into a single destiny. Prosperity. Peace. But what about freedom? Eurocrats and politicians would justify their FORECASTERS EXPOSED actions as compatible with freedom, but look at what they mean, when it comes Fred Harrison 6 to taxation. The European Community wants all nations to use the Value LAND & LIBERTY ESSAY Added Tax with a minimum rate of 15%. Britain - whose rate is 17.5% - SAVING THE PLANET challenged the right of the Euro-centre to dictate tax rates. But why should David Richards 7 the EEC care about the tax system employed by its members, so long as the law on the freedom to exchange goods anywhere in the EEC was enforced? BOOK REVIEWS What has the tax system got to do with how people - producers and B.W. Brookes: consumers - make decisions in the markets? Well, actually, quite a lot. But Amazon Tragedy; 10 the bureaucrats are justifying the intrusion into the affairs of member nations Bob Clancy: on grounds that call into question the very ethos of the Treaty of Rome. They Tolstoy's Bad Dreams; 11 argue that, unless taxes are uniform across the EEC, high-tax nations would Richard Noyes: not de-control trade at the frontiers. Why? Because their citizens would be The End of History 12 tempted to nip over the border to buy and bring back cheaper (lower taxed) FRONT PAGE goods. The Guardian report of the British In other words, the foundation principle of the EEC - free trade - won't Association conference in August. happen, UNLESS the tax system is pitched at the perniciously highest level set by the most unenlightened government. That tax philosophy is the most destructive of all to the production and exchange of wealth. For the sake Editor: Fred Harrison Editorial Consultant: V.H. Blundell of uniformity of misery, the bureaucrats want to enforce one kind of "free Picture Editor: Keith Hammett trade" in Europe, which disallows any one member gaining an advantage by Art Editor: Nick Dennys its use of a more efficient system of taxation. The implications for freedom are serious. What would happen if, say, Editorial Offices: 177 Vauxhall Bridge Road Denmark - whose citizens threw the spanner in the works of the Euro super- London SW1V 1EU state with the thumbs down in their referendum - decided to restructure her Tele: 07] 834 4266 tax system? What if she wanted to favour higher taxes on land, and drastically reduce the other taxes? Denmark is the only European country with the fiscal 121 East 30th Street New York, N.Y. 19916 infrastructure in place to accomplish that reform. It would give her producers Tele: 212 889 8020 an enormous price advantage, for the land-value tax cannot be passed on in higher prices. ISS No 0023 7574 There would be uproar. Competitors across the Danish border would Annual Subscription: bleat. But if governments learnt the lesson, they, too, would similarly restruc- U.K.: £12, USA $20, Canada $25, ture their tax systems. That would be the result of competition in a free market. Australia $25 But not, it seems, if Brussels has anything to do with it. Publisher: Land & Liberty International at the London editorial offices PAGE LAND 8c LIBERTY SEPT/OCT 1992 LAND LAW: YELTSIN IS A HOSTAGE THE FUTURE ofRussia will be settled dent Boris Yeltsin's decree that the solution is beginning to move fast in the next 12 months, and that future freehold of land should be sold. But here in St. Petersburg. I return on will turn on what happens with the city politicians know that their presi- Sept. 21 with US land assessor Ted land. Politicians and intellectuals are dent is an ideological hostage of Gwartney and Fred Harrison of the confused, for the IMF and the World western bankers, because he needs London-based Centre for Incentive Bank are urging them to privatise. But dollars to bail out the collapsing Taxation to help the Institute of their gut instincts tell them to keep economy. Urbanism to establish a course on land in state ownership. City governments, therefore, face a land valuation. This means that St. The new wave of politicians in St. dilemma: does a decree signed by the presi- Petersburg is establishing the tax-and- Petersburg frankly acknowledge their dent supercede the law of Russia, which tenure infrastructure for leasing land social and economic problems, which states that land is a social assetT to users in return for rental income, are visible in the sewerage-filled rivers The gut feeling that land should similar to what happens in Hong Kong. and in streets designed to test the not be privatised is supported by just In charge of the new course will springs of tractors. This city is run one coherent alternative philosophy, be Tamara Chistyakova, director of down even by New York standards. imported into Russia by the advocates Ecograd, a research centre within the But the leaders don't know what to of Henry George, the American land Institute of Urbanism. She impressed do about it. reformer who had an ardent fan in me with her dynamism and awareness Leo Tolstoy. of the case for land-value taxation. I George, in Progress and Poverty therefore have great hopes that St. (1879), explained how to set up an Petersburg will blaze the trail: the City efficient market economy while re- of Moscow, unfortunately, is ham- serving the rent of land to pay for strung by interference from Yeltsin's public services. This model would be federal government. the perfect solution for Russia, today, Russians are racing against the but the West favours land privatisa- desperate need to invigorate the tion. economy. St. Petersburg, in attempt- I can report, however, that there ing to kick-start a market economy, is are signs that the political struggle privatising small businesses - shops, just might go in favour of the Georgist hotels, soap factories: you name it, model. and it is for sale. At a conference organised by the It's a different story with the big Mayor of St. Petersburg in August, enterprises, where workers want to some of the top-level speakers used know what is in it for them. When the BORIS YELTSIN concepts that were recognisably Berlin Wall came down, the political "Privatisation" keeps the politi- Georgist. Key officials of the Research barriers were dismantled: the West cians awake at night, and radicals and Design Institute of Urbanism now has the duty to make sure that churn out pamphlets warning of the realise that western entrepreneurs it does not infect the former Soviet perils of private property without could locate their investmen ts on land economy with the economic viruses offering an alternative approach. The leased from the state. that have destroyed millions of jobs debate has been sharpened by Presi- Progress towards a land-value tax in Europe and North America. TOLSTOY IN RUSSIAN DAVID REDFEARN'S new study of Leo Tolstoy as social activist is being translated into Russian. Political activists in Moscow who have read the English edition - published in London by Shepheard-Walwyn - were delighted, for David Redfearn (pictured right) argues that Russia would have enjoyed a happier fate if the tsar had accepted Tolstoy's land tax-and-tenure reforms. See Review on page 11 LAND & LIBERTY SEPT/OC T 1992 PAGE WHEN Mr John Smith and Mrs Margaret Beckett were bers, except in their benevolent society role. elected leader and deputy leader of the Labour Party The modern "growth" and service industries reject old- recently, they had the 190,000 block vote of the Confed- fashioned trades unionism. Today's workers do not join eration of Health Service Employees behind them. This unions or they join unions which do not affiliate to the union, which militates in the public sector and was noisily TUC. Women workers are even less interested in unions critical of the Government before and during the General than their menfolk. There seems to be very litde future Election campaign earlier in the year, held a postal ballot for the TUC, except as a talking-shop, on the CBI model. of its members on the issue. The response was rampantly The challenge facing the old trades unions is whether apathetic, with fewer than 5% bothering to back Mr Smith. their best interests are being served by still acting as Only someone over 30 is likely to recall the power of paymasters to the Labour Party. What do they hope to the big names in the big unions, and to remember when get for their money? Are we seeing the TUC clinging to the Government (any government) could decide nothing Labour solely because its tired old men can think of without consulting them or taking elaborate steps to nothing else? Are there no bright young men and women forestall their reaction. Yet the TUC is about to open the who cannot see how continued attachment to the Labour 1992 political conference ___________________ Party is bringing them season, and its leaders, down? The Labour Party is Plummetting membership of Britain's trade onions has largely unrecognised by an now no more than the led to the call for Trade Union Congress leader Norman uninterested public, will biggest of the minority Willis to resign.