Re: The diference between English and Scotish Barons?

"Guy Stair Sainty" <guy@xxxxxxxxxx> wrote in message
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In article <c0NKf.3405$Nr5.2482@clgrps13>, George Lucki says...

"Guy Stair Sainty" <guy@xxxxxxxxxx> wrote in message
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In article <1140553045.348416.108540@xxxxxxxxxxxxxxxxxxxxxxxxxxxx>,
Joseph
McMillan says...


Guy Stair Sainty wrote:

Joseph makes a reasonable point. Nothing was confiscated in this case. The
land that was the barony continues to exist and may be sold. The land
(formerly barony) may have lost some of its previously unreasonably
inflated
value but this was really a bubble.

Let me give you an example of how the law actually sees this. You are the
owner
of a work of art that your father bought on the open market. You seek to
sell it
for its market price, but are required to request an export license
because it
exceeds a certain value, was produced before a certain date, and has been
in
your country for a certain number of years. The license is refused and the
work
declared part of the national heritage. Its value instantly plummets. Do
you
have any recourse?

The answer is that it depends where the work of art is situated. In the UK
the
government must either find the money at the market price, or let it be
exported
- over the years there have been "heritage" advocates who have attempted
to
argue that there should be blanket bans on the export of historic works,
or that
a list should be drawn up of works that will be prohibited from export.
Fortunately wiser heads have prevailed and the suggestion rejected, not
least
because the Treasury pointed out that vast sums would be claimed in
compensation. In France the government used to try and stop works in
these
circumstances and then not buy them. Thanks to someone who sued and won,
the
government can now delay an export, but after 30 months must either buy it
or
let it out. In those circumstances where it is declared a national
treasure by
the government but not exported, the government will have to pay you the
difference between the international market value and the now reduced
market
value. This happened in the case of a Van Gogh painting where the owner
was
prevented from exporting it, & put it into a French auction where it
fetched $
8 million. He then sued the French government for the loss of value
resulting
from their decision and was awarded damages of $27 million. You might say
the
prices of Van Gogh paintings are the result of a "bubble" in the values of
post-impressionist art and the works of Van Gogh in particular, but
fortunately
the French court saw this as a simple infringement of property rights.
[Unfortunately some other European countries, most notably Italy, have
legislated to prevent an owner from entitlement to such claims, and
managed to
get these exemptions into special regulations when it acceded to the EU
policy
on art export. Italian art owners therefore have no incentive to
co-operate with
the cultural authorities and those works whose value has been destroyed by
notification are allowed to deteriorate].

Does it matter if the international market value is caused by a bubble? No
more
than the sudden rise in house prices in an area for some external reason
can
affect the obligation of the purchasing authority to pay the market price.

Bubbles reflect markets, and merely because an investment was made in a
baronial
title does not in any way diminish the right of the owner to receive the
market
value. Why should it, except in a society where the rights of private
ownership
are constrained in some way - these are usually autocratic, socialist
states. If
the value is partially diminished by some arbitrary government action,
particularly one that had not been contemplated or announced when the
original
purchase was made, why should the owner be penalised?

The real change was that feudal responsibilities and relationships were
abolished but no one claims that these really had intrinsic value. The
dignity of baron such as remains (in the absence of a feudal relationship)
is retained with the then current owners of the land. Nothing was formally
lost. The dignity of a feudal baron was once transferred only with the
land
and the rights and obligations of a feudal baron and there was no real
market in dignities (only baronies). The dignity was never seperately
saleable even when it was meaningful. If the final decision is that they
are
seperately saleable then so be it, but if not, why would any compensation
be
owed? Baronies (now land) can still be bought and sold. Their market price
under such circumstances is likely greatly reduced and more realistically
like that of other similar properties but that is a consequence of the
repeal of feudalism and the unwise prior speculation in baronies.

The only question is whether their value has been diminished as a
consequence of
this act. I would suggest that this is in fact the case, whether you want
to
call the rise in value a bubble is irrelevant. The fact that the rise in
value
in internet stocks in the late 1990s was not justified by any reasonable
consideration of their p/e ratio did not prevent people from buying or
selling
at these inflated values which, at the time, reflected the market.

It seems that there is a somewhat romantciised view of these titles,
precisely
because they are titles which confer certain heraldic and nobiliary
privleges
(or did so). But this is entirely irrelevant to the financial issues and
property rights.


I think that the analogy is not an apt one. Let me try a different one. An
archaic tax provision providing financial advantages to the purchasers of
marginal farmland over time conveys greater incentive to speculate in such
land than any agricultural benefits. The government sensibly after some
discussion and prior warning repeals this provision but in a spirit of
fair-mindedness allows the current owner to retain some of the former tax
advantage (but not transfer it) to any new purchaser of the land. By analogy
a legal provision relating to the ownership of some land that carries
reciprocal responsibilities between crown and vassal over time becomes over
time archaic (the crown has no further use for vassals and their delegated
role in civil administration is no longer of any value) leads only to
greater speculation in such land. Government sensibly repeals the archaic
provisions but in a spirit of fair mindedness allows the current owner to
retain (but maybe not sell) the residual dignity that was formerly conveyed
with the sale of the land.
In neither case was there prior to the implementation of the law any free
market - it was an artificial market based on speculation created by the
unintended effect in the one case of archaic tax provisions or in the other
types of land ownership that any responsible governemnt should have moved to
alter.
It really is of no consequence to me if it turns out that these baronial
dignities are marketable as new commodities or not (They were not marketable
in the past as their separate existence is of new creation. These feudal
superiorities were merely an ancient government 'preference' for certain
reciprocal obligations that went with a form of land ownership and these
were marketable with the sale of certain parcels of land.) and if they are
fully marketable - it becomes a really an indication of the greater
generosity of government to this group of land-owners. The analogy to the
art market would be if government tax credits encouraged the private
acquisition of some works of art and its donation to cultural institutions.
Such provisions might create a greater market in that art which may or may
not remain if the tax preference for this sort of behavior (art acquisition
and donation) were to end at some point in the distant future. Similarly the
analogy to technology start ups would be one where poorly considered
government schemes to create tax incentives for investment in technology
start-ups or special incentives for R&D expenditures might raise the price
investors (or speculators) are willing to pay for stock and the later
discontinuation of such provisions might tend to dampen the market for
technology stocks.
Kind regards, George Lucki


.

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