The Erosion of Living Standards in Scotland: A Georgist Perspective

These days, it feels like no matter how hard we work, the bills just keep piling up, and our pay doesn’t go as far as it used to. For working families across Scotland, it’s becoming tougher to keep our heads above water. But here’s the thing: it’s not just bad luck or bad timing—the system is stacked against us. Let’s dive into why that is, and more importantly, what we can do about it.

The Disappearance of Trickle-Down Benefits

Since the 1990s, life has become more challenging for ordinary working families. While the wealthy continue to prosper, the rest of us are left scrambling just to make ends meet. You’ve likely heard of “trickle-down” economics—the notion that when the rich get richer, we all benefit in the end. But let’s face it: that hasn’t happened. Instead of lifting everyone up, it’s left most of us behind, fighting for scraps.

Understanding the Root Cause: Land and Wealth Concentration

To understand why living standards have eroded for so many, we need to look at the root cause: the concentration of land and wealth. Henry George, a 19th-century economist, argued that land is a unique resource because it’s not something that individuals create—its value comes from its location and the development of the community around it.

For example, when new infrastructure is built, such as roads, schools, or parks, the value of nearby land increases. But who benefits from this increase? Typically, it’s the landowners, not the community members whose tax money and efforts contributed to the improvements.

George believed that the wealth generated from land should be shared with the community. He argued that by allowing landowners to capture the full value of land increases, society is essentially rewarding them for doing nothing while everyone else pays the price. This results in higher rents, unaffordable housing, and a greater share of income going towards meeting basic needs, rather than improving living standards.

The Impact on Working Families

For working families in Scotland, the consequences of this system are all too real. With a growing portion of their income going towards rent or mortgage payments, there’s less left over for savings, education, or leisure. The cost of living has risen steadily, while wages have barely kept pace, making it harder for families to achieve financial security.

Moreover, the concentration of land ownership in the hands of a few has made it increasingly difficult for young people and new families to enter the housing market. This creates a cycle where wealth and opportunity are passed down within the same families, while others are left out in the cold.

A Georgist Solution: Land Value Tax

So, what can be done to reverse the erosion of living standards? One of Henry George’s most compelling ideas was the introduction of a Land Value Tax (LVT). This tax would be levied on the value of land itself, not on the buildings or improvements made to it. The idea is simple: land belongs to everyone, and its value should benefit society as a whole, not just those who happen to own it.

By implementing an LVT, Scotland could reduce the tax burden on working families by shifting it onto those who own valuable land. This would encourage the productive use of land, reduce speculation, and help make housing more affordable. The revenue generated from LVT could be used to fund public services, reduce other taxes, and invest in the kind of infrastructure that improves living standards for everyone.

Conclusion: Reclaiming Prosperity for All Scots

The erosion of living standards in Scotland is not inevitable. It’s the result of policies that have allowed wealth—particularly from land and natural resources—to concentrate in the hands of a few, at the expense of the many. But by revisiting the ideas of Henry George and considering reforms like a Land Value Tax, we can start to reverse this trend.

By ensuring that the wealth generated from Scotland’s land and natural resources benefits all Scots—not just a privileged few—we can build a fairer, more prosperous society where everyone has the opportunity to thrive.

Call to Action:

This is just the beginning of a conversation about how we can rebuild prosperity in Scotland. In the next article, we’ll explore Henry George’s ideas further and discuss practical solutions for tackling wealth inequality in our country. Follow this series to learn more about how we can create a fairer economy for all.

This article was written with the assistance of ChatGPT.