fredag 23 februari 2007

Land and the Catholic Church

Land has always been an important concern to the Catholic Church. In feudal times, much land was held by the church with the aim of providing it with an income from the rent, to support the religious orders, who provided the services which are nowadays the responsibility of the state - care of the poor, the sick, teaching, etc.

The land issue was raised in last week's edition of the Catholic Times; the writer, who works for the Institute of Economic Affairs, a "right wing" think tank, was making the case for private ownership of land as essential for development.

Land tenure is indeed key to both economic justice and to the use of resources in a sustainable way. But this is not the whole story. What people need for development is secure tenure, which is a different thing from land ownership. In fact, land ownership gives benefit to some at the ultimate expense of others.

Wherever injustice, extremes of wealth and poverty, and political tyranny exist, we find land ownership concentrated into the hands of a few. And widespread prosperity and democracy flourish best where land ownership is also most widely diffused - even though, paradoxically, those places often lack natural resources.

Although Catholic Social Teaching has asserted the right to private ownership of property, it has balanced this view with another: "God gave the earth to the whole human race" - (Rerum Novarum) and "Every person has the right to glean what they need from the earth" - (Populorum Progressio, 1967). The same principle lies behind the biblical Law of Jubilees: "Land shall not be sold in perpetuity, for the land belongs to me, and to me you are only strangers and guests". - Lev 25:23.

At first sight, there is a contradiction. This difficulty has perhaps arisen because modern economists regard Land as a species of Capital. This is a mistake. By Land, we have to understand that this means God-given natural resources and sites in their undeveloped state: agricultural land in its state of natural fertility; virgin forest; minerals in the ground; and so on. Capital is a product of individual human labour: planted trees; farm animals; ships and aircraft; factories, office buildings, and the machinery in them.

Property, which consists of buildings standing on plots of land, thus comprises both Land and Capital. Once this distinction is acknowledged, the apparent contradiction in the social teaching of the church is resolved.

The Church can affirm the natural right to ownership of Capital precisely because it is a product of human effort, and people have a natural right to the full fruits of their labour. But if Land is not the product of the individual's labour, then there can be no natural right of ownership. The social teaching of the Catholic Church has repeatedly linked land ownership to the concept of stewardship, pointing out that property ownership carries obligations: "The right of ownership is not absolute" (Quadragesimo Anno, 1931); "There is a social function inherent in the right of private ownership" (Mater et
Magistra, 1961).

The profound truth of this principle can be appreciated when we remember that land values arise from the presence of the community and the desire of the community for the products of land, and that these land values are further sustained by public services such as roads, railways, schools, parks and hospitals.

Here is the core of the moral issue raised by land ownership. Not all land is equal and not everyone can own land. Land owners can exact a payment - which we call rent - for the use of a resource which they did not make. We have come to accept that whoever happens to hold the title of the land is entitled to claim the rent, but such a claim has
no foundation in natural justice. In the absence of any obligation to the community, landowners can enjoy rights and privileges without duties, which is tearing many societies apart.


How, in practice, might property owners exercise their duty of stewardship? One method which has been suggested is the taxation of land values, as a replacement for existing taxes. The land value tax would operate as an annual tax on the rental value of every plot of land, the assessment being the market value of the site. The tax would be paid regardless of whether the land was in use or not.

Land value taxation achieves many objectives. It maintains justice from one generation to the next; it evens-out the differences between those who own the most valuable land and those who own land of little value or none at all; it prevents land speculation, and it raises public revenue justly in a way which does not penalise business, enterprise or labour. It is an essential practical means of putting into effect the teaching of the Church.

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