Libertarians — the US variety — have a lot of stellar points. They point out the government probably is not the best arbiter of what people should freely put in their bodies, of what kind of relationships they get into, or where different goods should or should not be produced. They have a more or less coherent theory of how things should operate, which is based around property and the respect for it. They even have a reasonable explanation of why — property is accrued by labor, which is the application of one’s body. Thus, the right to accrue property is an extension of the right to self ownership. Every good produced by human labor belongs to the human who labors for it, unless that human enters into contracts to hand it over for some benefit. That benefit may be another good in return, the use of capital owned by another, etc. So far, so good. They also place great emphasis on non-violence, and one of their most important points is that any government action entails actual or threatened violence.

The problem comes with the incredibly valuable property that’s not produced by human labor: land. Libertarians can’t explain how land gets to be the rightful property of one individual, and not another — after all, no one produced it, and thus no one could have entered any kind of contract to transfer its ownership. It’s quite a conundrum — but Libertarians (and far more odious Anarcho-Capitalists) think they’ve solved it: Improvements!

Improvements on land, so the story goes, are valuable, and cannot be excluded from the land itself; thus, they argue, the ownership of the land transfers to the person who makes those improvements. They can then legitimately buy or sell it to others — conundrum solved!

Critical thinkers will of course point out myriad flaws in this argument. In the US, land ownership was largely dictated by skin color and political connections, with massive land grants allowed to railroads, and only much more modest ones being given to those hardy, exclusively white settlers who improved their 160 acre homesteads. This alone is a good enough reason to rethink the idea of ‘legitimate’ land ownership. But there is another observable flaw with the story — the value of a piece of land today seems only tenuously connected to the improvements placed on it.

What do I mean by that? Well, take this beautiful 1.35 acre, mostly unimproved plot of land by Swan Lake in Montana, my home State:

Sure, some work was done clearing some trees, it looks like, but for the most part the plot is still wooded. It’s selling for $125,000, or a little under $100K per acre.

Let’s pop over to Zillow, and check out a house in Detroit, sitting on one acre:

This house sits on an acre. I’m sure the house isn’t much to look at, inside or out, but it does represent massive investment of human time and energy — clearing the acre, building the house, installing all the plumbing, electric, pouring that sidewalk, etc. The house and the acre are selling for $27,000.

The story is two-fold: First, improvements may add to the value of the land, but they are always temporary. When land is purchased, the more lasting value, even if the value is not as great as the improvements today, lies in the land itself. Moreover, much of the value lies in the location, governing structure, etc. of the area where the land is located — in other words, most of the value is generated by the community, not the owner of land.

So where does the value of land come from? Violence. In the United States, violence by the government against Native Americans. Horrific violence, repeated over the course of centuries. Elsewhere, violence by the nobility, or the government, against the commons. And it is enforce by violence — only the right to use violence, either ones own or that of the government, gives land ‘ownership’ any meaning.

It should be obvious, then, that the value of land and the value of improvements are two entirely different things. Improvements justly belong to an individual, just as Libertarians say they do. Because they are stuck to the land, it is reasonable that the individual who owns those improvements gains the right to exclude others from the land, if only to protect their improvements. However, it should be equally obvious that this exclusion represents some real value taken from the community, without any commensurate compensation. That compensation should be in the form of land taxes. Not, mind you, property taxes — Libertarians are right that the value one adds to the property should not be taxed. Why penalize hard work and careful investment? But taxes on the value of land are quite probably the most just taxes that exist, because they are merely a means of compensating all the rest of society for having excluded them from a particular plot of earth that no one of us created.