[PEN-L:29999] sale and lease back of land and buildings

[Chris Burford <cburford@xxxxxxxxxx>]

Last week it was reported that Hilton hotels were selling their buildings
and land to a Scottish banking group and leasing them back.

This slightly surprising idea is similar to the thinking behind the
controversial private finance initiative in the NHS (though that involves a
separate capitalist company being responsible for the costs of building the
hospital and risks of delay and error in estimates). What they have in
common is that building and land would be held by a finance capitalist
company, while the service enterprise would be separate.

The comment last week was that the arrangment with Hilton Hotels made sense
provided rents were flexible. The detail of the contract would be important
here.

What interests me however is that this may be a step towards the greater
socialisation of land. If economic activity in an area rises and the
productive company can afford higher rent, some of that profit will go to
the finance capitalist company. If economic activitiy falls there is an
implication that rents would fall. Finance capitalism may be an more
efficient mechanism for equilibrating ground rent over an economy
geographically and over time.

 With political will it could become a mechanism for the socialisation of
land while allowing the market in material and service commodities to
continue. That would only be possible with increased social planning by
governmental authorities and monitoring of the aims of the finance
capitalist companies. Plus a little political will of course to socialise
the means of production, at least as far as rational land managment is
concerned.

It might also be countercyclical.

Sorry if this is too speculative but it might ring a bell with some people.

Chris Burford

London