The value private landlords put on their exclusive ownership of large estates often offends against classical economic theory, to the detriment of local residents, communities and the wider Scottish public.
It can “stultify enterprise” thereby limiting local job creation, while restricting access to necessary resources such as house sites.
These are amongst the arguments presented by a leading economist in an academic paper on the impacts of such land monopolies in rural Scotland.
Professor Mike Danson is Professor Emeritus of Enterprise Policy, Heriot Watt University and Fellow of the Academy of Social Sciences. He has published widely on rural, regional and island economies.
His discussion paper published today by Community Land Scotland (CLS), the membership body for community landowners, examines “the classic effects of monopolies” within concentrated patterns of rural land ownership, and how they relate to the economic and social wellbeing of their local communities.
One of Professor Danson’s key findings is that large-scale monopoly landownership is basically inefficient, which has a negative impact on local people. He writes:
“According to economic theories, landowners do not pursue the best use of land when they attach subjective values to their own ownership exclusive of others: as they argue that running deer and grouse estates actually costs them money, their ownership is for the ‘consumption of leisure’. The set of outcomes derived from such consumption is suboptimal for the economy, for society and for the long-term health of the land itself.”
In Scotland, he argues, “When there are monopoly powers over the land and its resources, the local community and natural environment are threatened with negative externalities, capacity to flourish is restricted and enforced outward migration is encouraged. When private property rights are permitted to dominate wider social and environmental needs, sustainability and inclusion, broadly defined, are constrained.”
Even where the potential advantages of monopoly powers could be applied to the greater common good, they tend to be dissipated through the pursuit of leisure, tax breaks and subsidies for the estates. Professor Danson writes:
“The capacity of landowners to undertake non-economic activities on their land and to gain satisfaction from owning land apart from any income generated from that ownership is inconsistent with the neoclassical economic assumptions of maximising profits and working the land to optimal efficiency and output. This can only happen because of private property rights; and critically, these are protected by law.
He notes that such protections, however, are not absolute. That it has been accepted across the UK and Europe for many decades that systems of land use planning and regulation are needed to ensure that these private interests are not at the cost of the wider interests of the economy and society.
Professor Danson contends that existing legislation and regulations are “weak ways” of controlling and overcoming the domination of private property rights. This is especially true when no changes are proposed to existing use and management of land.
“In these circumstances, under a market system, significant concentrations of land ownership can then allow disproportionate power and control over communities and local economies, which can hinder inclusive growth and wider sustainable development objectives.“
Such behaviour undermines environmental sustainability and community resilience, he says. “The negative outcomes of the practices of monopoly landowners then can become embedded into the perceived view of the community, further constraining its own capacity to regenerate.”
Professor Danson’s report is the latest in a series of discussion papers published by Community Land Scotland and follows publication last month of ‘Land for the Common Good’, CLS’s manifesto for the Scottish Parliament Election in May 2021. The manifesto calls on MSPs in the next Parliament to introduce a new Land Reform Act giving Scottish Ministers powers to stop the sale of large estates and to break up existing land monopolies, if they don’t serve the public interest.
Professor Danson’s paper informs that discourse. He argues that new laws and policies are necessary to achieve a more diverse pattern of land ownership, which can accommodate sustainable development in economic, environmental and social terms in the public interest.
Ailsa Raeburn, Community Land Scotland’s Chair, said:
“Professor Danson’s paper illustrates the urgent need for further land reform for the common good. It highlights deep-seated structural issues associated with Scotland’s large-scale and uniquely concentrated pattern of monopoly rural land ownership that can undermine the public interest by preventing the sustainable development of communities.”
Dr Calum MacLeod, Community Land Scotland’s Policy Director, said:
“Market analysis has shown that for most private buyers an estate is viewed as a luxury purchase like a superyacht or a Lamborghini. In contrast, for many communities taking ownership of their land is a lifeline that helps ensure they can thrive. It’s vital therefore that a Public Interest Test, something that the current Scottish Government has committed to in principle, is introduced within a new Land Reform Act to regulate the purchase of monopoly land holdings after the next Scottish Parliament Election.”
For further information please contact:
Dr Calum MacLeod, Policy Director, Community Land Scotland:
07974829149 & email@example.com
Professor Mike Danson: 07948276398 & Michael.firstname.lastname@example.org