Reader's Letter Of The Day (2)

From the FT:

Sir, In “Learn from the Moguls: rent-seeking will destroy your empire” (November 21) John Kay did not need to refer to a foreign ruler such as the Mogul, Shah Jahan, for an example of rent-seeking activities when our own history is littered with monarchs who also indulged in it. William the Conqueror and Henry VIII come to mind.

Turning to his reference to the primary locus of modern rent-seeking and the overblown financial sector’s involvement in the burgeoning trade in existing assets, has not government policy for generations encouraged investment and speculation in land to the detriment of productive enterprise, the former being virtually tax-free while the latter has usually not been able to take place without the burden of a multiplicity of taxes?

This has been marvellous for those families that have owned land through the industrial revolution, selling from time to time at hugely increased prices as planning permission has been given while the increasing millions of wage and salary earners are lent money by us, thus enabling them to pay even higher prices, not for the roofs over their heads but for the land on which their houses are built.

Now we have the situation which includes a relatively small number of us on the one side with either very wealthy land holdings, comprising the bulk of our country, and, or very large amounts of cash and investments from previous land sales and, on the other hand, millions of our fellow citizens up to their neck in debt, a major part of which has probably been incurred directly or indirectly to pay for the inflated price of the land on which their homes stand.

Is it any wonder the economy struggles while politicians, trapped by their political and financial inheritance, initiate policies that tend to exacerbate rather than alleviate the problems? Are we really determined to continue our support for rent-seeking at the expense of all those of us who try to create the wealth on which we all depend?

John Read, London.