The Young People’s Party

In the United Kingdom, a new political party is in existence. The Young People’s Party is a geolibertarian party, an ideology that combines libertarianism with Georgism. Geolibertarianism is an ideology that espouses that the usage of land should incur a cost paid out to those in the community who lack the right to access this land, while fully supporting a laissez-faire market economic elsewhere.  The YPP is the second party in the UK, alongside the Green Party, to actively support the implementation of a Land Value Tax. Unlike the Green Party, the YPP is thoroughly Georgist to the core. It combines the want for land justice alongside promoting the liberties granted by a free market economy.

This makes the YPP unique, in that it advocates a sort of progressive libertarians. Most libertarians in the UK are usually associated with the Conservative party and its respective think tanks like the IEA and the Adam Smith Institute, or with UKIP. You also get a brand of civil libertarianism existing within both the Liberal Democrats and the Green Party.

The first unique aspect that the libertarian YPP has is its respect for the housing policy in the years of the post war consensus Britain. For many libertarians, the post war consensus was the era of statist socialism in its prime. It was the years in which libertarian ideals were considered a blight on the political scene, a reactionary ideology to revert back to the failed times of the past. This era in our politics was one in which state interference in the economy, via the nationalisation of industries or through fiscal stimulus, was the dominant urge among the elites. Even the Conservative party embraced the perverted interpretation of Keynesian economics, that Keynes was not able to put to rest due to his own passing.

The post war consensus saw the state nationalise some of Britain’s land in order to build council houses, designed to house low income families who would have no access to land ownership otherwise. Council houses also benefited the housing market in general. The low rents of council housing acted as a lid on the amount private landlords could charge for rents in their respective sectors within the market. If public rents were significantly cheaper than private rents, why go private if they would charge a much higher fee? Rationally, it would make more sense to house yourself in a cheap council home away from the travails of dealing with a landlord. Ultimately, the private sector was in competition with the public sector, which kept rents low. As a consequence, unproductive wealth would not grow to significant levels either as to earn more wealth would mean earning it through productive labour. Ensuring a more equal society all round.

The manifesto writers at the YPP refer to this as Georgism-lite. This is true. In a full Georgist economy either a Land Value Tax would be implemented on all land or land would be fully nationalised, a.k.a what Leon Walras proposed. The collapse of the Georgism-lite era also saw the collapse of a more equal society. Thatcherism completely damaged the land reforms that had so positively contributed to Britain since WWII. Inequality and poverty levels rose during Thatcher’s era. It was also an era in which libertarian ideals had the opportunity to become mainstream, rather than being an economists career suicide note.

The final note to take into account is the name of the party. The YPP wants to make the claim that Georgism is best suited for serving an entrepreneurial and creative younger generation who will struggle to have access to land. In other words, the YPP specifically wishes to target young voters who are open to a new way of organising our political and economic system. It is they who should benefit the most from the policies and philosophy advocated by the YPP.

Tax Reform

Obviously, introducing the Land Value Tax is a core policy of the YPP. What’s of interest is how they wish to introduce it pragmatically speaking. They acknowledge that the goal of a Single Tax is not achievable in the short, medium and perhaps long term. As a result, significantly lower rates corporation taxes, alongside a flat rate income tax, will have to be tolerated with a figure of around twenty percent being touted by the YPP for both taxes. As the basic rate of income tax in the UK is also twenty percent, all this means is that those who earn higher incomes will face a tax cut so that a fifty percent cut in income tax would occur for higher income earners and an even larger cut for the those who come into the highest income tax band.

It is good to see that the YPP has a sense of pragmatism in its realisation that a swift move to a LVT would be infeasible. There is the potential that a gradualist philosophy in which incremental reforms towards a Single Tax would occur, once the radical reforms of implementing the LVT have been accomplished. As with all gradualist philosophies, the most likely result would be that no Single Tax would be introduced. The blight of the income tax may still result.

I am concerned though with the suggestion that a flat rate of income tax be imposed. Some Georgists and libertarians will see no problem with this proposal. As the LVT would act as the primary form of taxation in the UK, the distortionary effects of the income tax would be reduced. The Land Value Tax itself would take care of the loss of tax paid for by high earners, defined as those earning above £31,886 per year in the UK, ensuring the tax system remains progressive in terms of not only what is being taxed but also the level of taxation on the most affluent in society.

The trouble with the tax reform policy is a political one. A flat income tax is a regressive tax because twenty percentage of a poor person’s income is more valuable to that person than someone with a significantly higher wage. Younger people are also more likely to be lower earners so, without sufficient persuasion, this policy could ensure the YPP miss their target audience in gaining support. In particular, this policy takes no account for the recent legislation passed by the government that means the poorest earners in society have no need to pay income tax. Introducing a flat tax would mean a substantial increase in the financial burden for those whose wage is under the government’s tax allowance. Also, a LVT would be introduced alongside them paying their current taxes, or additional taxes for the poorest workers, which would be seen as a tax rise on the poor and a tax cut on the rich.

Now we come to primary problem that any Georgist party will face. One reason Georgists support a Land Value Tax is because it is a transparent tax, in other words the tax payer knows exactly what they’re paying. Stealth taxes are taxes implemented in which the tax payer is unaware they’re paying, or unawares of how much tax they’re paying. Even though the elimination of stealth taxes and the introduction of a LVT should lower the tax burden on the less affluent in society, it will not be perceived that way because the visible taxes they will pay will increase in monetary terms. This danger is that opponents of the YPP will pounce on this fact to ensure it never gets a fair hearing.

To get a fair hearing, it would be better to stick with the progressive income tax scheme and introduce income and corporation tax cuts all round. The rate of the tax at different income bounds would be defined in such a manner that all income tax bands would be paying in accordance to the same purchasing power that on a mean average every individual in that tax band is granted. Such a policy would make it visibly easier for the less affluent to see the benefits of the policies advocated by the YPP. It would also allow the YPP to brand itself as the libertarian party of the less well off, giving it a contrast to libertarians who exist within UKIP and the Conservative party.

Is my call for a progressive taxation consistent with the libertarian principles of the YPP? Yes. A flat rate tax fails to take into account the purchasing power of economic agents holding different amount of wealth. Libertarianism is a philosophy about maximising liberty, including maximising the amount of money an individual can utilise for themselves. Taking into account the purchasing power of a poor person relative to a rich person makes perfect sense in ensuring we maximise the liberty of individuals to spend their money as they wish. Rather than promoting the ideal of individuals paying the exact amount of cash to the government in taxation, or the same percentage; a libertarian would be better to argue that all should pay a tax equivalent to their own purchasing power as individuals. We tax income equally in the ability of individual to purchase goods within the market.  Inevitably, this means libertarians should support a specifically designed progressive taxation system that supports that end.

Personally, I would support the introduction of carbon taxes on top of a Land Value Tax. Carbon based pollution will lead to changes in the climate which will effect the usage of land by others which most certainly could be considered unjust. Is it just that a peasant loses their land to flooding when they have contributed little to polluting the nature we all live in? Is it just a farmer looses their land to soil erosion caused by a heating climate in their area of the globe? If we can justify a Land Value Tax based upon the notion that we all have a right to access the common land we all live on, which we never produced. Cannot we justify taxing activities that will deface that common land to the eventual detriment of all, but in the medium term to those who never contributed to such unpleasant activities to our natural surroundings?

Welfare State

The YPP support a citizen’s dividend scheme in which every citizen is entitled to a set figure per week irrespective of their earnings. The figure would be reduced however based upon the tax obligation a particular individual faces. This measure will mean that the government, in theory, does not discriminate between people in who receives what amount of state help. Everyone receives the same amount of support from the state, those that don’t need it though just get it took of their tax contributions.

In practice, it will mean the poor still get assistance from the state to ensure that they have a basic standard of living. The purpose of the citizen’s dividend, or a universal basic income, is to replace the current welfare system so that we have a more simpler state apparatus offering a safety net while ensuring that individuals do not have the disincentive to not go to work due to it being worse of for them. It will also mean my recommendation of a progressive income tax would not act as a disincentive to work, while a flat rate of income tax would.

Again, there are a number of problems I have with this proposal. First, it assumes that the needs of every individual are either equal or irrelevant to the implementation of a safety net. We have those who are mentally and physically disabled whose needs are not only different to most peoples but also more expensive. Access to specific institutions, or even land, may be necessary to ensure that an individual can function as much as possible in accordance to what their disability will allow. Those who are mentally incapable of looking after themselves will need dedicated carers which is far too expensive for a citizen’s dividend to cover, unless it is an extremely generous dividend.

The simple route of is to add a specific fund for the extra costs incurred by having a disability. This way the welfare system would not discriminate against those who needs are greater than most people. Such considerations will complicate the welfare system, but the beauty of simplicity should not be confused with the blight of the simple. The YPP also does allow the income for pensioners to be twice as high as most adults, with younger people receiving less. Also, why shouldn’t 18 year olds be treat the same as a 31 year old?

Second, how do we define a basic living standard? What criteria should the government use in determining what the basic standard of living is? Should absolute poverty, or relative poverty, alleviation be the goal of the safety net? These are all questions that need answering if we are to determine what the attitudes to poverty the YPP hold. We must also be concerned with the the figures they have used. How can we be sure that those figures will provide a sufficient safety net, especially when we do not know how generous of a safety net is being proposed?

The voter would inevitably ask these sort of questions, but in a more colloquial manner. There is the risk that the conservative and concrete thinking of the voter will mean they do not take the policies of the YPP in light on the consequences Georgist theory predicts will occur once these reforms are made. So the average adult may look at £75 per week and scoff at the credentials for helping an unemployed 41 year old living in with a family. Even though Georgist theory stipulates that the costs of living such reduce dramatically once rent seeking within the economy is taxed rather than productive activity.

Global Warming

I find the ‘agnosticism’ on the issue of global warming staggering. The scientific evidence in favour of anthropogenic global warming is as abundantly clear as the evidence for the theory of evolution. We have a good account of the science of how the warming process works, the main work climate scientists are attempting to do now is translating that into how it will affect the global climate. The difficultly here lies primarily in the chaotic and complex systems that evolve within our climate, making them difficult to model. Whether this view is the result of trying to appeal to libertarians, who can be rather backwards when it comes to scientific understanding, or is a genuine reflection on the inability of the parties founders to look at the plentiful of evidence I don’t know. It’s the one issue about the YPP that is troublesome.

Immigration and Racism

I find the parties policies on these matters unsatisfactory. It is appalling that the party seems absent minded on the role institutional discrimination plays in large parts of society. They even acknowledge such discrimination exists within the police force and companies, but their attitude seems to be vague utopian hope that we can all get along with one another. However pleasing that is, and I wish we could all get along with another without bigotry in a purely voluntary fashion, why haven’t we arrived at such a state already? The whole political correctness movement is based upon the principle that we need to be made consciously aware of the institutional factors that allow racism, sexism, homophobia, transophobia and the other forms of bigotry to propagate influencing our behaviour and attitudes.

Government Spending

I find this unappealing and appealing at the same. It most likely has to do with what I think is useful government spending. Do I have a problem with government subsidies to wind farms? No. Any perversion caused by subsidies is of far less consequence than the affects of doing nothing on climate change.

Otherwise, I fully support abolishing subsidies for home building, mortgage payments and private finance initiatives plus many more initiatives that can be called corporate welfare. Corporate welfare ensures the benefits that a market can provide stop functioning as governments become less concerned ensuring that a market remains healthy; they’re more concerned with ensuring businesses and shareholders have a nice time of it.

Banking Reform

The YPP are right to insist on the connection between land prices and the role of speculative finance which led to the last crash. Personally, I would also add a Minskyian bent to this. Even after land speculation results in a dramatic reduction in financial speculation, the financial system would still be unstable at its core. The result should be much less severe recessions though as the size of the boom should be much smaller than the one leading up to the Great Depression and rose to being in the Great Moderation.

I also think that the YPP are right to insist that banks ought to be allowed to fail. The ease that governments are willing to bailout failing financial incentives has led a a financial system in which moral hazard has become systemic. This itself promotes a culture in which speculative finance will play a prominent role in the system.

My understanding of the financial industry is that the central bank plays a big role in how banks lend to one another anyway. Banning interbank lending would most likely harm the financial industry rather than produce any economic benefits. Having directors with greater levels of liability should help ensure that the banks would become fiscally responsible. The bank asset tax raise proposed sounds like a promising proposal as well.

Housing and Planning

The policies in this section are wholly sensible. The YPP recognise that it is the state’s responsibility to ensure everyone has access to land. They plan to ensure that a sufficient provision of council houses is available for the least affluent so they have access to housing. They also wish to liberalise planning laws. The effects of the LVT should ensure that land is used more efficiently so less need exists for construction of homes, other than council houses.

I would prefer more voluntary forms of association in developing cheap housing, such as establishing a mutual bank that is essentially a cooperative run by a community that lends money out to the less affluent so they can build a house on a set of land. Such land could be owned by the individual, in which the LVT would act as a deterrent to land speculation, or preferably owned commonly for the benefit of the wider community. Failing that though, I would recommend the YPP’s proposals or the proposals made by the Co-op party

Other Policies

Naturally, I find their position on civil liberties and drug legalisation very appealing. I also admire them for taking the utilitarian approach to the matter rather than a deontological support for allowing individuals to take drugs. Overall, I find their views on these matter very sensible.

When it comes to the relation between labour and capital, the two work in tandem when they become the same thing. In other words, when the labour force own the means of production through businesses operated as worker cooperatives. This market socialism is the origin of my mutualist belief system which I think is just as important as the Land Question. I do not share the YPP’s optimism that getting rid of red tape will make it easier for new businesses to start. It will certainly remove state sanctioned obstacles to creating new businesses, but not make it easier. A high amount of positive liberty is necessary in order for setting up a business to be considered easy. Removing red tape will mean nothing if no one has the means to set up a business in the first place.

On Law and Order, they have a fascinating proposal to change the punishment system in prisons. To be released from prison, prisoners must achieve certain goals during their time in prison. For instance, they must have an educational spell, helping out in the community, etc. The concept appears to be that prison should be a productive activity for the prisoner in assimilating themselves back into society by providing potential deficiencies that resulted in their crime. Not only that, but prison would be seen as an apparatus for law breakers to earn their way back into society while gaining the necessary skills to contribute in society and the economy.

Conclusion

Would I vote for the YPP? Yes, it is a Georgist party committed to abolishing as much as possible rent seeking within the economy. It promises to establish economic justice via achieving land justice. It wants to abolish state funding that grants privileges to the elites within society. It wants to maximise liberty in order that individuals can express themselves how they wish, not in accordance to what the government feels is appropriate. In some aspects of his manifesto, it gives a good blend of Georgist and libertarian thought placed under a pragmatic framework designed for implementation at the national level.

There are aspects of the libertarianism within the YPP which I dislike. It is willing to propose a flat rate income tax which is politically, economically and morally detrimental to its agenda. To implement a progressive tax with a recessive tax, on which is already a recessive tax, is not productive to gaining support from progressives who are libertarian inclined. Neither will those most likely to benefit from such policies wish to vote for it, which will only result in a market economy that rewards rent seeking over productive economic activity. I do not grasp how you can be a climate agnostic when so much evidence points to anthropogenic global warming, let alone the Earth’s climate actually warming.

Gareth Mawer
I consider myself a left libertarian committed to promoting the philosophy of liberty, even though I do not always support proposals that are normally considered libertarian. Georgism and mutualism have had profound influences over my beliefs, though I'm not afraid to digress from them were necessary. My mains interests are politics, economics and philosophy.
  • Ben Jamin’

    Gareth gives a pretty fair appraisal of YPP policy. However, there are a few of points he raises that it might be helpful to clarify.

    The YPP believes that a fair system of paying for the services we share, also happens to be a flat and simple one. (flat tax systems are not necessarily fair in themselves).
    Fair means we all own an equal share of the value we create together. At the moment this value, is funneled into the hands of a landowning elite, by a tax system heavily tilted in their favour.
    If we have a level playing, where we pay for the benefits we receive(exclusive use of land), and keep the fruit of our labour, re-distribution of capital is both unnecessary, costly and ultimately plain wrong.
    So, for example, under the YPP tax system, the average UK household would be around £11,000 pa better off in their pocket. That’s what a fair, flat system looks like.
    And, it has to be borne in mind, that this only the first step. Although LVT brings in an extra £150bn per year at the moment, because we are proposing to drastically cut income taxes and abolish VAT, land rents will rise accordingly. We will therefore get more revenue from LVT and get rid of the flat 20% Income/Corp tax quite quickly.This will benefit working taxpayers even more.
    Housing affordability is huge issue for young people. It is not under supply that is the problem(we have chronic under occupation and vacancy caused by capitalised land rent) , but the amount of discretionary income people have, after they’ve paid their taxes and housing costs.
    As we can see above, under a simple, flat and fair system, discretionary incomes get much better for the vast majority of people, particularly the young and those who rent. But, we also anticipate, that as long as 100% of land rent is collected, house prices should begin to drop. Perhaps to their improvement only value. This means mortgage payments should half. Putting a further £6,500 pa back in the pockets of the average first time buyer.
    Taken together, housing affordability improves four fold, as a ratio of discretionary income, for an average UK household.
    What of building more homes? Of course, once we have a level playing field, the housing market would be able to function correctly, and supply should respond to demand. However, abolishing Greenbelt planning regulations, without first de-capitalising land rent, will only cause more inefficiency and urban sprawl, consigning the poorest further out to the margins.
    It’s also very doubtful that unconstrained house building on it’s own will deliver any real improvement to affordability issues to where demand is highest. Only LVT makes housing efficient and affordable.
    But, one thing is for sure. Under LVT, NIMBYs will be either pay or be compensated, accurately by the market, for any changes(or lack of) in the spatial environment. Again, a product of a fair system, and a level playing field.
    A large part of the problem of why people view each other with prejudice and suspicion, is our economic model makes people think this way. Foreigners are taking our jobs, benefits and housing. The poor are benefit scroungers, and the rich exploitative capitalists.
    Because we don’t share land rent, we resent having to share our capital. Or anything else. Once we learn, that we all share this Earth as equals, perhaps our suspicions of what other people have got, and how they got it will become less problematic. Utopian perhaps, but that is the ultimate goal, not just dry economic outcomes.
    Perhaps “agnostic” on global warming, or general ambivalence on environmental matters needs looking at. If the YPP had a bigger membership, I dare say these sorts of issues would be more thoroughly discussed resulting in firmer policy positions.
    As it is, the most important issue the YPP can make a difference to, is highlighting that the choice between the main political parties is really no choice.
    Only a radical step on to a different path will give young people today the future they deserve. That means learning to share this Earth and the value it provides.

    These are my own personal views, and not necessarily those of the YPP.

    • Hello Ben, Sorry for the late reply. I’ve been busy with other things recently.

      Thank you for clarifying a few things on quite a number of the topics I covered. I hope the readers of my blog take in what you have had to say. What you have said has helped me understand the thinking of the YPP even more.

      My post was designed more as a critique of the YPP rather than a full exposition of your policy aims. Without stating it, I did assume the reader would read up on the manifesto for themselves and have some working knowledge of what Georgism was about. Perhaps making such assumptions was mistaken which made certain elements of my critique unclear, but such mistakes are one’s I can learn from in future posts.

      The Mutualist fully supports the implementation of a Land Value Tax with a hundred percent rate on rents. Overall, I do think the tax system based mostly on a LVT would promote a greater amount of economic justice than seen in the present economic system. I agree wholeheartedly with your conerns about why young people cannot get onto the land market. The LVT will deliver in lowering house and land prices in the long run. I also agree with you about the need to decapitalise land before liberalisng planning regulation. I’d hope that mortgage rates half in the long run, in fact they can drop even further as far as I’m concerned. It’s economically inefficent for so much income to be spent on land rather than on allowing people to raise capital to set up their own businesses, etc.

      I don’t agree with the implication that the distribution of wealth is unimportant. I do think inequalities in wealth could still cause damaging economic justice that a land value tax itself may not fully solve. I personally support an implementation of market socialism in which we have a economcally liberal market in which cooperatives/entrepreneurs, rather than conventional businesses, act as the primary business model in the economy. I’d rather not redistribute wealth through income taxes for the reasons many Georgists oppose the income tax. You could say I’m a radical predistributionist.

      As I would support the abolishment of the income tax, in an ideal world, my concern about the flat taxes isn’t too major. I fully understand why the YPP would wish to implement one. I just don’t think it would be as good as keeping a progressive income tax in which the rates have been severly cut especially towards low income workers. My main problem with the flat taxes is that it could prove a big stumbling block in getting voters, especially low income workers who should benefit the most from a LVT, from supporting the party. It’s primarily a political concern I have.

      In regards to racism, I do think there is more to it than mere economics. Even though our economic model does encourage such bigotted behaviour, ultimately that is a result of human nature. This is why I think fighting racism, sexism, homophobia, transophobia, etc, should be pursued more rigorously.

      On climate change, I do think the YPP is missing a trick here. The LVT has the potential to help us combat climate change by changing our cultural attitudes towards the usage of land. We currently view land as a commdity that we can abuse to our leisure because we own it, an LVT would change that by establishing a culture that land is commonly all ours. We are getting taxed on the ability to exclusively use a particular amount, so we still have responsibility to look after the land. The LVT should play a central role in libertarian solutions to combating climate change which will only cause another form of land injustice, the dispossession of land as it becomes uninhabitable by the actions of others. To be agnostic about climate change is unwise.

      The mere fact that the YPP is a Georgist libertarian party is enough for it to be considered radically different from the mainstream parties. Some of my criticisms, such as on the flat rate of income tax, are concerned with whether they will help sell the YPP as the alternative party to the mainstream. Naturally, the YPP will want to gain followers from its target audience: young people. For it to succeed, it must find a way of stikcing to its principles but being pragmatic enough to bend those principles to what will most likely encourage young people to support the YPP. I’m not sure the YPP has fully succeeded, but it is close. I am a young person myself, though i don’t claim to speak for anyone except myself.

      Best Wishes,

      Gareth Mawer

      • Oops, I only just stumbled across this. If you’re not entirely happy with our manifesto (and nobody will be, it’s all compromises), why don’t you sign up and influence the manifesto from the inside?

        As to robins comment about Islam, history seems to be proving us right. (And he is genuinely racist, he dies not like coloured people full stop, he told me so, which I found shocking).

  • robin smith

    I’ve been involved with the YPP since inception. Racism is at their core. As is a staggeringly irrational fear of Islam. But the major problem in terms of justice, the thing they claim to want most, is their proposal of a citizens welfare or ‘income’ as they euphemistically call it, to run alongside LVT. They say the surplus form collecting all the rents must be paid back out as welfare. But whence the fund for this new form of welfare? If 100% of the rents are being collected already and government were functioning at 100% purity and thrift, there would be no surplus by implication. If there were a surplus with LVT that would signal are far more devastating latent social problem in play which few are yet aware of or willing and able to explore further, and even more important than the staggering income equality we hear about from them. I’ve tried over the years to have them investigate this. All I get is a bitter and spiteful response. Analysis shows this is die to the hidden ideological ‘spirit’ if you like sensing its God being scrutinised seriously for the first time. So their ideology, or ‘god’ is limiting their whole world view just as it does for any ideology or dogmatic world view. The irony is that many of them stand proud on their atheism.