Fine the Landlords

Part 1

By M. Randolph Hamilton

I came across a site recently that claims to be libertarian in nature. This site calls a title to a parcel of land a "welfare permit". They also go so far as to compare a "landlord" to government and rent to taxes. The first thing that should be noted is the incorrect use of the term "title" as it is used on this site. I only point this out to support the author's lack of knowledge in real estate. A "title" is usually the certificate of ownership issued by a state as proof of ownership for personal property. A "deed" is the proof of ownership of real property that is filed with the county clerk.

Their basic argument is when a landlord rents a parcel of property to a tenant, he is renting something that was not "produced" by the landlord. They claim the landlord is therefore receiving welfare. We will address this issue that The Thomas Paine Network claims libertarians do not want to address. Hopefully this will give you a better understanding of what a free market is, what real estate is and the difference in welfare, tax and voluntarily paid rent. It seems that some people who claim to be libertarian don't have this understanding.

Socialism

To fully understand what we are talking about, we should first look at a definition to a common political structure. The one that primarily fits that being proposed by The Thomas Paine Network is socialism. Let's take a look.

As defined on Dictionary.com we have for socialism

1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
2. procedure or practice in accordance with this theory.
3. (in Marxist theory) the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles.

Take note of the first definition wherein land is included as one of the items listed as controlled by the "community as a whole".

Also take note of the last definition. This is exactly what is taking place in the united States of America. We have been going through a "transition of society to communism". We just have not move far enough in that direction for the government, or collective, to own all of the means of production. This gives us an understanding that although the "community as a whole" does not have "ownership" of the land, it is still a socialist ideal to have the "community as a whole" control the land.

Real Estate

Now let us take a look at what real estate is. Different dictionaries define it differently, but all of them include two things. They include "land" and "buildings" or "appurtenances to lands, as buildings, crops, or mineral rights". This means that anything that is attached to the land is part of the land or real property or real estate. (A real estate is that part of an estate made up of real property as opposed to personal property or chattel.)

The Thomas Paine Network states, "The only kind of legitimate land title is one that gives a landowner the right to control the use of that land, the right to own buildings and improvements, or to rent buildings, or sell them to other people, if he wants - but not to collect welfare payments from people, by charging them for merely using the land, which the landowner did not produce."

Two things are at issue here;

1. the right to own buildings and improvements or rent them
2. and the landowner did not produce the land.

Libertarian or Not?

The Thomas Paine Network lists several noted "libertarian" people from our past as a basis for improvising this socialist idea.

Determining whether or not an idea or ideal is libertarian or socialist requires putting the idea or ideal though a litmus test. We have seen what a socialist is. Let's take a look at the what a libertarian is.

A libertarian is best described as one who believes that people have the right to live theirs lives anyway they see fit so long as they do not infringe on that same rights of others. That means that people cannot have government intrude on the free workings of the market and still call themselves libertarian. Well, to be fair, they cannot call the idea to involve government as libertarian.

OK, so we now know the difference in a libertarian and a socialist. Why then would this site have a common thread of thought from multiple libertarians? When one is described as libertarian or socialist, it is a description used for the individual because most of his leanings or beliefs are libertarian or socialist. If I have 8 libertarian beliefs and two socialist beliefs, that does not make my socialist beliefs libertarian by default because I am generally libertarian. We cannot claim on the one hand that government should do no more than protect our individual liberties and on the other that it should control rent of land. That is ...well...hypocritical.

As pointed out previously, this site is proposing that we "fine" landlords who rent land without buildings. They claim it is okay to rent buildings or sell them, but people should not rent the land alone without being fined for it. Their basic philosophy is we should all get some free land and not have to go very far to get it. This is not only unreasonable, but impracticable. People tend to congregate in cities where they can get access to modern conveniences. They do this usually voluntarily in some cases and because they happened to be born there in most cases. Sometimes, there will be a large influx of people to a given area, because of new industry creating new jobs. Usually, when there is a large demand for any given item, the cost for that item goes up.

So if there is enough land in a given area, like Miami, to give each of 1 million people free land "of average quality", what do we do with the 1,000,001st person?

People have the opportunity to buy real estate just like anyone else. This site proposes they should not have to; equating the buying of land to paying "a one-time freedom tax". People have to live somewhere and they do have a choice. There are still places where people can get free land. I was once offered a lot in a town in Kansas by the mayor of the town if I would agree to build a house on it. So there is a free market solution without interference by government, even though it was a lot owned by the town that was being offered.

We should also take note at this point, that although it is a nifty idea to give everyone upon his birth a parcel of land, there will still be people, and I am sure a good portion of them, who will sell that parcel for the money so they can blow it on gambling, drugss a new boat or whatever got their fancy that week. We cannot force people to live responsible lives, although, in a libertarian society, people are more likely to do so, because government would not be forcing producers to pay for failures.

Fruits of Your Labor

John Stuart Mill is quoted as having said,

Landlords "grow richer as it were, in their sleep, without working, risking, or economising." It is "a kind of income which constantly tends to increase, without any exertion or sacrifice on the part of the owners." (John Stuart Mill, Principles of Political Economy, bk.5, ch.2, sec.5) [Note that Mill is referring to ownership of land itself, which landlords did not produce, which is different from ownership of buildings, which are products of human effort]

This is not actually an accurate opinion. People who invest in real estate are doing so in the hopes of making an income. As was evidenced by the number of businesses and towns that dried up after the building of the federal expressway system in the united States of America, it is not always as sweet potato pie as those who do not participate or have participated in real estate investment would have you believe. The value of much real estate decreased along with the increase of real estate along the highway system.

It is also not accurate that the funds use to purchase land is not the product of the landlord. The money earned to pay for the land was due to the fruits of his labor.

The following quote was sent to me by the author of the first page you will see when visiting The Thomas Paine Network. I do not understand the reason for this, because when reading it, it supports the argument that one's labor is his property. If he labors to fund the purchase of land, he has produced the right to the land. It is true that he didn't actually make the land, but he did labor to have control over it. That is his land.

[John Locke]: "...Every man has a 'property' in his own 'person'. This nobody has a right to but himself. The 'labour' of his body and the 'work' of his hand, we may say, are properly his. Whatsoever, then, he removes out of the state that nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property. ... For this 'labor' being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others. ... (John Locke, *Second Treatise of Government*, ch.5, sec.26-35)

In a free market, I can choose to pay a landlord to rent his land, or I can choose to buy my own land. I can choose to rent someone else's land if that is what I so desire. I can also choose to homestead in those areas where that still exists. If the landlord cannot get someone to rent his land, then he has a choice o either sell it or reduce the rent until he gets a tenant willing to pay his price. Rents can only be increased in any given market when there is someone willing to pay the price. That is why land in some ares cost $1,000 per acre to purchase and that much per square foot in others. The market always discounts everything. That is how a free market works. When the supply exceeds the demand prices go down. When the demand exceeds that supply, then prices go up. On one hand, people do need a place to live. One the other hand there are still places that one can homestead. You just need to be willing to move.

As to the quote above by John Locke, it is better served as evidence to the income tax debate, because it has nothing to do with land ownership and everything to do with owning your labor.

Defend Freedom™