Bill Emmott, a distinguished author and former editor of The Economist, has reviewed Aftershock in Survival, the magazine of The International Institute for Strategic Studies (IISS).
Many of the books about the economic crisis have been descriptions of the dramatic events at Lehman Brothers, say, or of what it was like to be the US treasury secretary at the time of the crash; others have consisted mainly of recriminations about the folly of the capitalist system and open global markets, or of how macroeconomic policy was mismanaged. Rarer have been books that take a constructive approach, proposing an agenda for how things could be improved in the future. Philippe Legrain’s is one of these rare few.
He supports my proposal for a land tax:
Legrain’s second proposal is less familiar and more radical: that governments desperate to reduce their budget deficits and get their debts under control should not raise taxes on income and employment, as many are wont to do, but rather on land values. This is an old idea, of which even Winston Churchill was fond, but one that has been too easily pushed aside by property-owning lobbies and, in the post-1945 era, by farmers. Unlike taxes on income and employment, land taxes do not deter hard work, and given that land is immobile, it cannot emigrate to Switzerland. The trick is to set a rate low enough to avoid mass land sales but high enough to generate sufficient revenue. Given that one of the main causes of this crisis has been excessive investment in property, in scores of countries, this ought surely to be an appealing idea.