How we can share the earth

People have the right to use their fair share of the earth. If they do not take more than their fair share of the earth and do not initiate force, they have the right to live how they prefer.

We need some of the earth in two ways. First, we need a place to build our homes, grow our food, run our businesses, and have some fun. Secondly, we need the option to use some common space. Each of us has the right to sail the sea, walk on the beach or use some space on land needed for travelling. If we cannot travel we are unfree. To enable us to use common space some of the earth should not be turned into private property.

Having our private part of the earth

Let’s first discuss the part of the earth that we need to build a home, grow food or run our business. This is only possible if we can exclude others from using some of the earth. Every person on earth has the same right to use some of the earth exclusively. We may decide to share our space. With our family or friends. Or with a whole community. But we should have the options to escape. We should be able to decide for ourselves how to use our own place on Earth.

Fairly sharing the earth seems complicated. Should we divide our country into equal pieces and allocate a piece to each? That would be quite a hassle. Fortunately, there is a much smarter solution.

Let’s assume that people are entitled to have an equal (rental) value of the land. We are entitled to a very small piece of a metropolis or a much larger piece of a remote swamp. We don’t need to exactly claim our share. Some entrepreneurs need a lot of space for their businesses. Other people like to live in an apartment and hate gardening. Even when people have equal rights to the earth this needs not be a problem.

Land Value Tax (LVT) and citizen’s dividend

A Land Value Tax which is combined with a citizen’s dividend may be the most realistic method for sharing the earth. How does this work? Let’s repeat that the primary goal of this tax is not to fund the government. We just want to enable each of us to have our fair share of the gifts of nature. For this reason, some people prefer to speak of a fee instead of a tax.

It is easy to find out who is the owner of any piece of land in the land registry. Determining the value of each piece of land is a bit more complicated, but much easier than appraising each house. Man-made improvements such as houses do not count towards the land value, as they are no gifts from nature. LVT is a tax on merely the value of unimproved land.

Location may be the most important factor for land value: are there many people who would like to use land in this place? Is the land in the centre of a big city is it far away from other people? Is the ground close to a highway or in a quiet place? Is the ground adjacent to a waterway? Is there a supermarket and a train station nearby?

Of course, some properties of the land itself will also have some influence: is it dry sandy soil or fertile clay soil? Is it well drained or a swamp? So for land value, just imagine a plot of land overgrown with weeds. Usually, location in particular determines its value per square meter, but other factors can also count.

In a Georgist situation, land values should be expressed as the rent value for a certain period, e.g. one year. This is because a Land Value Tax will strongly affect the sales prices of land.

A land value tax means that everyone who owns land pays a certain percentage of tax on its value. The revenues of this tax are shared jointly and severally, as a citizen’s dividend. This citizen’s dividend will enable each of us to have our fair share of the earth for free.

People who own an average amount of land receive as much as they pay. These people, therefore, do not notice too much about the system of LVT and citizen’s dividends.

Ideally, people who do not own any land receive exactly the amount for which they can have their fair share. They may decide to spend it on land land, but they could also use their citizen’s dividends for other goals.

People who own much land pay compensation to people with no land. If we recognize that the earth is a gift for all humanity, that is correct.

Individuals or communities who are not willing to join this system of paying LVT and receiving citizen’s dividends are not forced to do so. We do not like to force people to join a system. However, they are not entitled to take more than their fair share of the earth per capita.

The level of the LVT determines to what extent people without land truly have access to their fair share of the earth. This should therefore be chosen in such a way that the yield is sufficient to enable people to rent (almost) their fair share of the earth. An LVT that is too low means that the revenues are too low to allow each person to dispose of their part of the earth. The right level would theoretically correspond with the rent of the unimproved land. Georgist authors with extensive knowledge about the economy such as Nicolaus Tideman and Brian Hodgkinson have discussed this topic in much more detail.

As a result of LVT, the sales prices of land would decrease to almost zero. Those who buy unimproved land would pay almost nothing. Those who buy a house would just pay for the value of the house. Those who sell unimproved land, do not receive a significant sum but are relieved from paying LVT.

We would not have to pay for buying land but would have to pay for owning land. If we just want to own our fair share, we could exactly pay this from our citizens’ dividends.

The Geo-libertarian approach also consists of two elements:

1.         An unconditional basic income, or a citizen’s dividend, whatever name we prefer to use. Every person will receive a certain amount of money every month. The amount equals the price needed to have our fair share of the earth.

2.         A land value tax (LVT) or fee, whatever name we prefer to use. Its level should equal the market value of the right to use the parcel. Other scarce natural resources, such as fossil fuels can be treated in the same way. The tax should equal the value as nature has provided it to us or the unimproved value. For land, we should imagine a plot full of weeds. For fossil fuels, we should imagine oil or natural gas as it is below the earth’s surface.

As a result, each of us can have our fair share without paying for it.

And we can have more or less than our fair share. In this case, we will pay less or more LVT than we receive as our basic income. This is the way how we can compensate others for using more or less than our fair share.

The commons

Places such as nature reserves, lakes and the beach are common properties. Everyone can use these places freely. They are a gift to humanity and shared use poses few problems. No one may force anyone else to pay for the use of these areas. Although these areas sometimes need protection, as much as possible must be allowed in these areas. Only actions that harm the areas or other users of the areas can be banned. A ban on staying, parking or staying overnight in most places makes travel and recreation unnecessarily expensive and should not be accepted.

We should emphasize the importance of the difference between common rights and collective rights to use land. Common rights hold that every individual has certain rights, for example, freedom of speech or the right to use the sea or certain pieces of land. Collective rights mean that a group of people decide together, for example about how the sea or certain pieces of land are governed. The latter offers little guarantee of individual liberty. If a collective decision is made that people are only allowed to sail at sea under all kinds of strict conditions, this affects our individual liberty. It is important to be aware of this distinction.