Right-to-buy, property rights and the cause of liberty

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Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place. ~Frederic Bastiat

In the 1970s some local councils - including Bromley where my Dad was then Chair of Housing - began to explore the sale of Council houses to sitting tenants. These initial 'right to buy' ideas were tentative and limited - Councils lacked to power to incentivise the sale (beyond help with the actual process) and couldn't offer discounts or subsidies. However, these initial ideas led to what I consider - more than headline grabbing controls of trade union misbehaviour or the application of monetarist ideas to macroeconomic management - to be the defining piece of 'Thatcherite' legislation: the Housing Act 1980:

The act nationally implements a scheme of discounts against the market price of houses, to reflect the rent already paid by tenants and to encourage take-up. The scheme gives a generous minimum discount on the market price of 32 per cent for a house or 44 per cent for a flat, increasing each year to a maximum of 70 per cent.

Free market purists quail at this use of public subsidy and the progressive left bewail their loss of control over working-class tenure but this single act signalled a shift from the idea of collective ownership to the liberation that is private, personal ownership. Some 2 million properties transferred from state ownership to the ownership of the people who lived in them. It was the biggest ever transfer of wealth in the history of modern Britain.

The criticisms - leaving aside bien pensant nonsense - always boil down to a view that some people simply can't be trusted with owning things. The truth, however, is that - as even the Joseph Rowntree Foundation have shown:

Eighteen years on, there can be no doubting the impact of the Right to Buy. Some 30 per cent of tenants have exercised the Right to Buy. The majority of these have benefited considerably from the process. The volume of sales and capital receipts has far exceeded expectations.

The residual nature of council housing means that the rate of sale under right to buy has declined  - there were just 3,700 sales of this sort in 2011. However that was still 3,700 families who have moved from the dulling embrace of the council to private ownership. And we know from experience just what this means - new doors are put in, gardens are better kept, the walls are fixed, leaky gutters mended and a sense of difference stamped on the place. All because ownership implies a desire - perhaps even a duty - of care for the property, a care that simply doesn't exist in circumstances of so-called common- or state- ownership.

Those who attack the government for promoting home ownership - all that chatter about bubbles and so forth - miss this point entirely. And to suggest that having a mortgage isn't ownership is to misunderstand the reality. Ask that man with a mortgage whether it's his house? He'll tell you it is and will behave as such - making sure it's looked after, sorting out its problems and defending the value of the property in whatever way he can.

Those who take the problems faced by a minority of homeowners - negative equity, mortgages stretching beyond retirement, foreclosure due to loss of earnings - and use them to condemn the idea of a property-owning democracy are peddling an extremely dangerous myth. The myth that the alternative - renting (I assume from the state out of preference) - is somehow preferable. Or rather preferable for that group of people most likely to get into trouble with mortgages - the people our bien pensants like to patronise.

If we are to have government fund the development of housing - and so long as the planning system remains as it is now this is the only way we will meet housing need - let it be on the basis that those moving into those homes will in the fullness of time get the chance to own those new homes. Instead of subsidised rents being simply a way to reduce housing benefit costs, let's use them to build up the funds to support people on the road to property ownership. And if that means deposit subsidy, tax reliefs and mortgage support so be it.

In the end property ownership makes democracy stronger, promotes independence and takes us another step nearer to a free society. To deny property rights, to claim government knows better or, worse, to assert that rights are created by man is to do the opposite - to take us back towards tyranny.

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Politics and the tragedy of the commons

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In the context of Hardin's classic 'Tragedy of the Commons' essay, I was struck by the truth of this observation:

One thing that Hardin overlooked is that the political process often replicates the same economic dynamic that encourages the tragedy of the commons -- a dynamic fostered by the ability to capture concentrated benefits while dispersing the costs. Like the herder who has an incentive to put out yet one more animal to graze, each interest group has every incentive to seek special benefits through the political process, while dispersing the costs of providing those benefits to the public at large. Just as no herder has adequate incentive to withhold from grazing one more animal, no interest group has adequate incentive to forego its turn to obtain concentrated benefits at public expense. No interest group has adequate incentive to put the interests of the whole ahead of the interests of the few. The logic of collective action discourages investments in sound public policy just as it discourages investments in sound ecological stewardship.

The rest of the article is worth a read and addresses the importance of property rights in driving environmental improvement and conservation.

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Dear Slow Food, what consumers - rich or poor - need is something called a "free market"

I was going to treat you to a critique of Bradford's newly-minted food strategy - replete with locavore priorities and fair trade mumbo-jumbo is canters through the catalogue of trendy, greenie food nonsense with absolutely no connection to the real food needs of Bradfordians (other than the small number who buy locally knitted lentils and home grown pomegranites).

And then Julian Dobson tweeted the link to an article in Slow Food (an organisation for which I have an enormous soft spot - despite their tendency to peddle piffle) about moving to something called a "food commons". The author begins with a diagnosis:

Because the “solutions” to these crises offered by governments, agri-food monopolies and multilateral institutions—e.g., more “free” trade, genetically engineered crops and the spread of giant retail chains—brought on the crises to begin with. With a billion people “stuffed” and a billion “starved” on the planet, why do the G-8 countries, the World Bank, International Monetary Fund and World Trade Organization continue to prescribe catastrophic solutions to catastrophe?

Now there's some truth in this since our international trade in food is hideously skewed by the persistence of developed world subsidy for basic food. Not only are these systems - Europe's Common Agricultural Policy, the USA's corrupt farm support systems and Japan's nonsensical protectionism - largely responsible for much of the dysfunction in food commodities markets but they act primarily to support the big producers and big food businesses. Thousands of small farms have closed despite billions in agricultural subsidy.

Yet the words free trade are not mentioned here as a solution. Instead - under the banner of a "food commons" - we get what amounts to a proposal for managed trade:

A food commons is not only a physical place where food is produced, processed, sold or consumed; it is also a social space where decisions are made in the interest of the common good. Whenever food activists take back a part of the food system in the interest of the common good, they are constructing a food commons. This is why food sovereignty as an organizing concept and precondition for food justice, food democracy and the right to food is so important: it implies a space that is sovereign to the corporate food regime. It is a space in which people—not corporations—decide.

Bluntly, the most efficient way to do what this author suggests is called a "free market" where producers, processers and consumers interact to set prices, distribute scarce resources and meet needs. The great thing about free markets is that everyone understands them and they are proven to work.

The problem is that too much of our food production and distribution takes place in anything but free market conditions. From the arbitrary governments that plague much of sub-Saharan Africa to the grant-farming that typifies agriculture in the developed world, food producers are fighting against a system run in the interests of others.

Yet amidst all the waffle about neo-liberalism, the author seems more concerned with creating some kind of collective farm system:

The public control over land based food producing resource can be established through a Food Commons Trusts that allows neighborhoods to own farm land and food system infrastructure in perpetual (public) trust for the benefit of all citizens. Food Commons Banks can provide financial services to food system enterprises, producers and consumers. In order to aggregate and distribute local and regional food, create and coordinate regional markets, and provide services to communities and local food enterprises, Food Commons Hubs can be established. 

We know precisely what the result of this approach will be - reduced yields, target-based production systems, malnourishment, corruption and, in the worst cases, starvation. It sounds good to call it a "commons", to make out that somehow this approach is superior and liberating but the reality is that it removes individual choice, denies property rights and creates the very environment that led to catastrophic famines in Russia, the Ukraine and China.

Rather than this sort of argument, we should instead be looking to do three things that will transform the world's trade in food:

1. Abolish agricultural protection, price fixing, quotas and local protections
2. Establish defensible property rights in developing countries
3. Replace managed trade in commodities with open and free markets

Do these three things and much of the problem we see diagnosed here will go away. Go down this trendy-lefty, "food commons" route and the result will be more malnutrition, more starvation and more international oligopoly.

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A note on property rights

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One of those things about rights is that they don't come about because a kindly king granted them to us. This was the whole point about the Glorious Revolution and subsequently the US Constitution. and this includes property rights:

By the "absolute rights" of individuals is meant those which are so in their primary and strictest sense, such as would belong to their persons merely in a state of nature, and which every man is entitled to enjoy, whether out of society or in it. The rights of personal security, of personal liberty, and private property do not depend upon the Constitution for their existence. They existed before the Constitution was made, or the government was organized. These are what are termed the "absolute rights" of individuals, which belong to them independently of all government, and which all governments which derive their power from the consent of the governed were instituted to protect.

Ownership of property is an inalienable right - unless of course you're Richard Murphy:

"...tax is a legitimate property right created by law like any other but which happens to belong to the gov't."

To the socialist - and others who believe tyranny is the sole way to order society - property rights are granted by a benign government. And therefore the act of taxation is a right granted to itself by government rather than a fee paid for that government's protection.

This is why socialists like Richard are so very wrong. And so very dangerous.

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Second thoughts on a limited understanding of "the progressive"

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It is clear that, when the left use the term “progressive” it has a different meaning from the meaning most people attach to the idea of “progress” – for the left “progressive” is another way of describing the idea that man can be improved. Clearly this idea of “progress” differs from the orthodox socialist concept of “progress”. In a paraphrase of Trotsky here:

“The greater the expansion of the productive forces, the nearer do men approach the kingdom of freedom, and the looser become the chains of necessity. The Marxist, therefore, always supports that society whose productive forces are expanding.”

But “progressives” must have rejected this approach or else how could modern Trotskyite groups and the Greens co-habit a realm of “progressive values”? If “green economics” is about anything it is about the rejection of the orthodox Marxist economics described above – and to the society implied by socialism: a society led and controlled by those engaged in production (however defined).

It seems to me that progressive values are, in fact, unconnected with economic progress but are reflections of attainable social conditions: non-discrimination, freedom of lifestyle choice and the defining of entitlements as rights.

Non-discrimination: the idea that we should not “discriminate” (in the modern sense of the word) is a core mantra for the left. Indeed accusations of racism, sexism, homophobia or other discriminatory action are central elements of the debate between left and right in both the UK and the USA. The problem is that the “progressive” conceptualisation of non-discrimination differs from what I’ll call (for the purpose of absolute distinction) the “liberal” understanding of the concept. For the left – using the collectivist group definitions they favour – non-discrimination is dealt with by the enforcement of non-prejudicial rules of behaviour: we pass laws to punish sexism, ageism, racism, homophobia and prejudice against the disabled.

A liberal says the laws should not be used to control behaviour – for sure the various group prejudices are wrong but I have a right to be racist or sexist if I wish. Saying this doesn’t make me racist or sexist and there is an argument for saying that racism or sexism represents aggression – worthy therefore of society’s intervention. But what about all the other possible prejudices and discriminations? Do they not also merit protection – must left-handers, the short-sighted, the overweight and the ginger-haired “mobilise and organise” to campaign for legislation outlawing discrimination based on these conditions?

Freedom of lifestyle choice: as with non-discrimination this “progressive” idea draws on the importance of group-think and the rejection of individualism. Social policy is formed so as to support people in their chosen alternative lifestyles rather than as a means to improve the general welfare of the population: we craft policies directed at “communities” rather than at individuals. As with non-discrimination this forms a debate between left and right – with the left accusing the right of either not “respecting” those who have made “alternative” lifestyle choices or worse of actively promoting an orthodox lifestyle through policy.

As before the liberal critique of this approach rests not in responding to the left’s stereotyping of the right as racist, sexist homophobic bigots but in understanding that it isn’t the role of the state to govern the choices of individuals. People making lifestyle choices (or having those lifestyle choices made for them by circumstance) need to be aware of the challenges and costs that choice entails. By dividing society up into groups – often into “good” groups and “bad” groups – we present again the problem of the outsider, the person who does not slot neatly into the left’s stereotypes. Because the “progressive” idea is anti-individualist there is an assumption that each person will submit to a group – and that policy will be directed at those groups communicated to them through the moderation of the selected group leadership.

Entitlements as rights: to the liberal, entitlements are not inalienable so are ipso facto not rights – not so for the “progressive”. Entitlements – to work, to education, to welfare benefits and so on – are described as “rights” even when they are self-evidently things that cannot be assured or left unchanged. Thus the minimum wage is portrayed as a “right” given to workers by a benign progressive government. Partly this remains a matter of semantics – even spin – “rights” is a far more accessible idea for the ordinary man than the more nuanced concept of being entitled to something.

Interestingly though the “progressive” view doesn’t accord the same strength to rights to property – be that land (or rights to use land) or other property. Again the liberal position relies on property rights and their absolute protection in law – the “progressive” view that property rights can be alienated to suit some specified group need runs counter to the liberal ideal of a free society. Again a debate between left and right arises – once more centred on the key difference: “progressives” focus on group needs rather than individual rights.

It seems to me that the core principle of “progressive” thinking lies in supporting group rights rather than individual rights. Good things have come from this focus – our changed and changing attitude to women, gays and those with a different skin colour, for example – but also great damage is done to property rights, economic freedoms and to freedom of speech. In the end one of the divides in politics will always be between those who promote the idea of the free individual and those who see the individual in terms of the groups into which that person falls.

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