Book review by Andrew Purves
This is an excellent and timely book, re-connecting us with where we stand, what we rely on for all our daily needs, and with something that has been misplaced as an investment asset class: Land.
Although it is peppered with academic references for those who need reassurance and have time to study in great detail, it is very readable, and the chapter headings and sections follow a clear path to explain how we have got to where we are, and how we might return to a happier place.
Starting with a philosophical analysis of the justification for land ownership designed to overcome the need both to enjoy exclusive rights to land but also to give back what belongs to the wider community, the book moves on to explain how this conundrum has been corrupted by the conflation of land with capital in modern neo-classical economic thinking.
Its main thesis is that we are living through an age of ‘residential capitalism’ whereby policies have emerged to support the notion that land (or house) ownership defines us as democratic participants in society. Successive governments in the UK, which is the main focus for the analysis, have introduced policies to promote home ownership, which have been enthusiastically endorsed and packaged by the financial industry to their advantage. The book charts tax reforms which gradually excluded land ownership from assessments, and financial deregulation which combined to set up property as a most attractive “asset class” whether used as a home, or a buy to let investment.
However, the erroneous foundations of these policies have inexorably led to market distortions and inequality to the point where home ownership is now declining among the population as a whole, but with enormous differences between regions and generations.
The final chapter offers some convincing remedies, in the fields of tax, finance, land tenure, planning and economic theory. Perhaps more could have been made of the benefits to regional development and a potential re-balancing of the economy as a result of some of the suggestions, but as the authors say at the outset, many of these topics would justify a separate book for each proposal!
I can recommend this book as a primer to anyone trying to understand why over seventy years of successive government induced reform and social engineering have failed to deliver a more equitable society, and why more of the same tinkering will only delay a brighter future.
Andrew Purves is a guest author. He runs a furniture business, is taking a Masters in Spatial Planning at UCL, and has written about the public revenue regime in Hong Kong.
Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd and Laurie Macfarlane
Published by Zed Books