Sunday, 24 October 2010

A capital tax directed at land with sufficient personal allowance would remedy economic serfdom

Without intervention serfdom is a stable economic scenario for at least part of the population. Economic serfdom, as distinct from legal serfdom can exist in a situation where the individual has insufficient resources to survive and must rely on selling their labour, to those who have more than enough assets. Someone in this position can never alter their standing in life because those purchasing the labour earn more than they spend, through rental income, primarily of land; and so they will never sell their land in fact they are more likely to accumulate yet more. The labour of the serf is used to rent land or to purchase food to survive, there is none (not a significant amount) left over to save, they must pay to eat and have nothing meaningful left over. If land is not for sale at an affordable price, we, the serf, will rely upon either charity, renting land or selling our labour to eat and survive, none of which offer a route to escape their (our) position since they (we) remain landless.

If the (wealthy!) landowners do not want to sell their food, or rent their land, or be charitable, for whatever reason, we (the serf) will have nothing to eat, since to grow and produce food requires land. We then are a slave, not of legal provenance but due to our economic (capital) circumstances, our inheritance, we can refuse to comply without suffering violence (unlike a legal slave) but still we will starve so the outcome is comparable.

The only remedy to ameliorate this situation is to constrain land, capital ownership in some way, perhaps with a tax, but we must pay attention to the profitability of manufacturing food. If it becomes unprofitable to make food then everyone starves. A certain way to avoid this risk would be to ensure a generous personal allowance for land assets so that food can always be made at a profit.

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