Congestion Charges

Land and Liberty (Summer, 2003) asks “Is road pricing effectively a form of mobile LVT – levying a charge on those who monopolise valuable locations with their cars”.

Geoists support congestion charges as a tool to promote land value taxation and as a way to get them up there with the latest environmental economists – and thus with the Green movement.    It all makes good sense.  

But Henry George wrote in The Land Question that “to a clear understanding of the whole subject, the question of principle must necessarily precede that of method”.    Land values taxation, congestion charges; both are methods.    The question is what is the principle?

The Principle Involved

If congestion charges are a form of land value taxation then they are governed by the same principle as LVT.    That principle George tells us in Progress and Poverty is equal rights to land.    Where persons lay claim to the exclusive use of land (as landowners) they should pay to the community a ground rent that reflects the market value of its advantages.

Other land is common land where George suggests in A Perplexed Philosopher its multiple use is more like the use of a club (see Ch.IV).    Equal rights in that land is maintained by custom and courtesy.    Thus, for example, there are customs that govern the use of beaches.    One also has the rules of the road (written and unwritten) by which we as a community try to maintain the equal use of the road among motorists, pedestrians, cyclists and so on.

To put a charge upon such common land for the purpose of excluding some from using it is contrary to the principle of the equal use of land.    The way in which Geoists have dealt with this problem is to use words which suggest that what we are dealing with is private land subject to rent.   

Thus, Land and Liberty uses the word “monopolise” to suggest what motorists are doing when they use the roads.    Another says that moment by moment motorists are asserting “exclusive use” of land, and thus they must pay a rent.    Those terms are not just strained when applied to common land, they are wrong and dangerous.     Simply, motorists (or any other user of the roads) are not “in effect” or in any other way possessing land.    Let one of them stop for just an instant in Sydney when they might move, and that is made abundantly clear.

Joint Rights in Land Not Equal Rights

The idea that makes it easy to think that common land has been privatized springs from the idea that the land is owned by the community.  The land is not owned by the community; it is the rent of land that is owned by the community.  Land is there for all to enjoy equally.

Once it is thought that land is jointly owned by the community, or nationalized, some body representing the public such as a council assumes the right to say what will happen to it.  And, just as in the Soviet Union where the State owned the land, the individual has then effectively lost any rights in it.   

Not only this but the officers of that public body administering “our” joint rights in land begin to assume that it is this body which owns the land which means, in effect, that those officers (elected and unelected) own it.     As Henry George warns us government will always attempt to take as much power to itself as it can.    In other words, these congestion charges will multiply, grow in complication and breed other interferences with freedom of movement.

Congestion Charges not Georgist

For some time George himself was unclear upon this vital question.   As we know, in both Progress and Poverty and in The Land Question George maintained that land value taxation was just a more practical and subtle way to make land common property than schemes of land nationalization.

It was only in A Perplexed Philosopher that he asserted that equal rights to land were not joint rights to land.     Whereas before he had been ambiguous, here he most definitely  denies land nationalization.

If we define congestion charges as Georgist we group ourselves with those “advanced thinkers” who are well on the way to taking charge of our private lives, who are substituting a mass of legal prescriptions for the customs and courtesies by which we have lived for generations; who are replacing principle with rules.

These congestion charges which are a type of tax on movement contradict George’s own view that no charges should even be made for the use of public transport (let alone for using roads).    You will remember that he pointed out that, in the same way as putting a charge on the use of lifts in buildings would diminish rents in those buildings so too charges for public transport would diminish rents along thoroughfares.

Congestion charges are just another interference with that spontaneous or unconscious cooperation which George said in The Science of Political Economy lay at the base of production.    Congestion charges are an interference with movement; they are a fillip to Statism.   

It is not the way to go but they are here to stay.    From my own experience the glamour which seduces Geoists so that congestion charges are not seen as base and dangerous can only be dispelled by absorbing the ethos of George’s The Science of Political Economy.     But, as they say, pigs might fly.