View RSS Feed


Land Values Creamed Off & Infrastructure Funding

Rate this Entry
[B]Land Values Were Created by Community Activity[/B]

In ye very olden dayes:

[LIST][*]A landowner rarely made windfalls on increased land values created by the infrastructure paid for by the community. [*]The windfalls were mainly because of the communities activities, not the landowners.[/LIST]
It could be said raised land values in selling off land were not the prime form of income from land, just the charging of rent on the land. Few owned property in Ye Olden Dayes.

[B]The Industrial Revolution's Infrastructure Raised Land Values[/B]

Since the industrial revolution:
[LIST][*]Taxpayers have increased the infrastructure of communities exponentially. [*]Taxpayers money in infrastructure does make a highly significant impact on land values. [*]The community needs to reclaim its money to pay for the infrastructure it provided.[/LIST]
The real big licks in land came once the Industrial Revolution took off with the buildings of canals which ran only through aristocrat's lands. They were clever enough to realize the increased land values the canals created. The accounting system at the time hide the real profits which was from the values that soaked into the land.

[B]Railways Created Economic Growth & Landowners Creamed Off[/B]

Later came railways. These went over many people's land. The large landowners would get loans, build the railways, and sell off the railways leaving them in debt because of the high capital cost - the railways made operating profits but not enough to pay for the initial capital to construct. They promoted them as cash cows to small investors, hiding some accounts, who lost their shirts. Who then wondered why this highly popular technological marvel, the train, could not make money.

The landowners walked off with no debt, but the real prize was the windfall profits on the increased values of the land the steel track ran through. They increased rents as the economy rose - market forces they said it was. The more money people made the more they put up rents. The railways brought massive economic growth which they milked via the values that soaked into the land.

A railway in Shropshire, the Bishops Castle Railway, ran for 70 years under the administrators - it created economic growth along its length, yet only drew even in running costs, so was kept running. Land values increased along its length with the landowner creaming off land value windfalls. The administrators were called in as the initial capital debts to construct could not be paid.

[B]Railways Failed With Profits Privatized & Debts Socialized[/B]

The railways were bound to collapse and fall into public hands. [B]Private profit and socialized debts[/B]. In the USA the railways mainly just collapsed and private road vehicles took over as small diesel engines were now feasible for road vehicles. In the UK the railways were vital to the country and had to be run by the government. Like with the Credit Crunch, governments had to step in to save the banks because they were vital to the countries.

[B]Thatcher Does The Same As The 19th Century Rail Sharks[/B]

Thatcher came along and said the railways and coal mines (most output went to power stations) were not making a profit. She did not have the intelligence to see that they were creating economic growth. [B]The massive gap in the governments 18th century accounting system did not detect the money leaking away via a massive sluice, the land market, as landowners creamed it off.[/B]

Thatcher decided to privatize the railways and close down the coal mines exhausting the North Sea gas supplies to create electricity, which is why energy prices are now through the roof. In her simple brain they were not making money. Railtrack was created to run the tracks with other companies running train services on top of them. Naturally it collapsed and 250,000 small investors, encouraged by Thatcher with high publicity to buy shares, lost all. A repeat of the 19th century rail financial fiascoes, except the government were behind it. Tony Blair replaced Railtrack with Network Rail a non-profit making company.

The government still provides the money to upgrade the rail infrastructure. The New electrification projects and the new High Speed Rail which will have a brand new track.

[B]Rail Infrastructure Needs Funding Via the Land Values It Creates[/B]

The London Underground does not make money in ticket sale revenues. No underground rapid-transit rail system in the world does. Imagine what would happen if it was all closed down tomorrow. Land and house values would plummet, travelling around would be a nightmare, people would leave London, the city would die quickly and reach the size of Birmingham - the biggest you could get a city without a rapid-transit transport.

Rail should stay in public hands to keep them away from private sharks, using Land Value Taxation to fund it, not income tax.[/COLOR]

Submit "Land Values Creamed Off & Infrastructure Funding" to Digg Submit "Land Values Creamed Off & Infrastructure Funding" to Submit "Land Values Creamed Off & Infrastructure Funding" to Google Submit "Land Values Creamed Off & Infrastructure Funding" to Facebook

Tags: None Add / Edit Tags