Scotland’s Feudal Shame
The French philosopher Pierre-Joseph Proudhon’s famous declaration that “property is theft!” is still pertinent in Scotland. From the ruthless land grabs of the Scottish nobility in the sixteenth century to the brutal injustices of the Highland clearances; the history of landownership in Scotland is largely a story of plunder, coercion and violence.
In his 1909 classic ‘Our Scots Noble Families’ Tom Johnston, the former Secretary of State for Scotland, summarised the tradition of private landownership in Scotland in one eloquently crafted passage:
“Show the people that our Old Nobility is not noble, that its lands are stolen lands – stolen either by force or fraud; show people that the title-deeds are rapine, murder, massacre, cheating, or court harlotry; dissolve the halo of divinity that surrounds the hereditary title; let the people clearly understand that our present House of Lords is composed largely of descendants of successful pirates and rogues; do these things and you shatter the Romance that keeps the nation numb and spellbound while privilege picks its pocket.”
The barbaric evolution of private land tenure is not unique to Scotland; such circumstances were commonplace throughout post-medieval Europe. What makes Scotland unique is that such a primitive pattern of land ownership has survived relatively intact into the modern era. Whereas land ownership has been democratised and modernised elsewhere in Europe, Scotland is still living in the past.
Today Scotland has the most unequal distribution of land ownership in the developed world; 50% of the land is owned by just 432 individuals, 16 of whom own a staggering 10%. That such an ancient pattern of landownership could survive for so long is testament to the significant influence that landed interests have had in the development of the legal framework underpinning the system of land tenure in Scotland. It was not until the latter part of the nineteenth century that ownership of land was removed as one of the criteria to be an MP and it was only in 1918 that non-landowners became eligible to vote.
Throughout history, Scots land law has been shaped by the landed elite as a means of legitimising their ill gotten gains and advancing their own interests. Beginning in 1617 with the Registration Act and the Prescription Act, the look of Scotland’s landscape today is the direct result of a line of perverse laws enacted to perpetuate the monopolisation of Scotland’s natural commons in a few privileged hands.
The establishment of the Scottish Parliament in 1999 provided a welcome opportunity for much needed land reform in Scotland. For the first time in Scotland’s history genuine democratic land reform was possible; proposals could no longer be blocked by unelected aristocrats in the House of Lords in London.
Chief among the reforms introduced by the new parliament was the abolition of feudal land tenure. Although usually being perceived as a relic of the ancient past, Scotland still operated under a system of feudalism at the turn of the millennium. This meant that tenants could do almost nothing without the permission of their landlord and the landlord could name their price, even if families had lived in one location for hundreds of years. Feudalism was only finally abolished in Scotland on the 28th November 2004 when the Abolition of Feudal Tenure etc. (Scotland) Act 2000 came into force. By comparison, feudalism was abolished in England in 1660 and in France in 1789.
Another of the reforms introduced by the new parliament was the introduction of Community Right to Buy, which provided rural communities with a right to register an interest in land outside of Scotland’s largest towns and to have the opportunity to buy that land if it were to come up for sale. Community Right to Buy has provided an inspiring means of empowering local communities, and there are now moves underway to extend it to cities too in a way that could seriously challenge neoliberal development in favour of cooperative and smaller scale enterprise. This would mean fewer supermarkets and signature office buildings and more community development, affordable housing and public space.
Radical land reform in Scotland need not involve authoritarian seizures or violent revolutions. One of the most powerful ways in which reform can be achieved is through the introduction of land value taxation (LVT). This would replace the council tax system in which someone with a two bedroom flat could pay the same council tax as someone with a two bedroom cottage attached to an estate covering a chunk of the Highlands.
Historically land was the primary source of all taxation, however over time the landed elite of Britain succeeded in passing the burden of taxation on to labour and enterprise. Today nearly 75% of public revenue is collected through income tax, national insurance and consumption taxes. Given that the people paying those kinds of taxes keep the economy going, weighting the tax burden so heavily on labour hampers productive activity and stifles economic progress. As the supply of land is fixed, however, taxing land has no such distortive effect.
The value of land is not determined by the work or effort of the owner. Its value is determined solely by the demand for the location, which is predominantly a function of the activity of others in the area. A landlord might experience significant increases in the value of their land due to the construction of new local public infrastructure, such as a new railway line, or due to new private investment such as a housing development nearby. In this instance the landowner benefits significantly through the increase in the value of their land despite no increased effort on their part; the increase in value enjoyed by the landlord has been created by the community at large. It is these ‘social’ characteristics that separate land from the other factors of production – increasing land values reflect the progress of society as a whole, not the effort or skill of individual landlords.
Without lifting a finger landlords see their wealth increase significantly over time as wealth is distributed away from those that create it towards a rent seeking landlord class that grows wealthy by being idle and economically unproductive.
The early classical economists were well aware of the merits of raising public revenues from land. John Stuart Mill, who was hardly a gun-toting revolutionary, once wrote “Landlords grow richer in their sleep, without working, risking, or economising. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title”
LVT only captures unearned income accruing from the ownership of land, utilising this value for the benefit of society as a whole rather than only landlords who currently enjoy a monopoly over this precious natural resource.
LVT is inherently progressive and efficient. The more land somebody owns, the more the need to compensate society for the exclusive right to it. LVT would also eradicate speculative investment in land, as it would only be profitable to own land if it were being put to productive use. No gains could be made by remaining idle and unproductive and simply waiting for land values to rise. As well as freeing up investment for the productive use of land, LVT would significantly reduce house prices and eradicate unsustainable property bubbles which have a destabilising and toxic effect on the economy and push up prices to unaffordable levels for most in society. LVT would attach a cost to holding significant amounts of land for unproductive purposes, thus incentivising owners to either put land to productive use or sell it to someone else who is willing to.
It is the unique ability of LVT to stimulate the productive economy, reduce inequality, redistribute socially produced wealth and minimise unproductive speculation that renders it a particularly useful way of raising public revenues. Additionally, since land cannot be hidden or moved to a tax haven, LVT is difficult to avoid or evade. Professor David Bell of Stirling University has pointed out that Scotland’s oil will run out but land will be there forever. It is the ultimate nature resource.
Recognising that the natural wealth of the land should be shared equally among the populace is not a new idea. The Anglo-American revolutionary Thomas Paine proposed that the value accruing from land should be collected in a national fund and distributed via a one off payment to young adults and an annual payment to those over the age of fifty. That was in 1797.
Such an old idea could prove the making of modern Scotland, but rather than being anachronistic it is the current model that is out of place in the 21st century. This has endured because, until recently, the rule book that governs land tenure has been written by landlords to serve the interests of landlords. With the independence referendum presenting an opportunity for people to radically reconsider what the country should look like, the earth beneath our feet is a good place to start.
This article was first published in Post Magazine Issue 2. You can buy or download the magazine here.