Earth Day Speech
GEONOMICS: Economics as if Earth really mattered
| The Progress Report has received permission to reprint Jeffery J. Smith's Earth Day address, delivered on April 22 in Portland, Oregon. You will find a lot of food for thought here. |
by Jeffery J. Smith
President, The Geonomy Society
MONEY FOR LAND TO WHOM?
Even though this is Earth Day, I must bring up something that, even though it is green, may make you uncomfortable money. If you've seen it in operation, you know how useful it can be; you can buy clothing, shelter, musical instruments and land. Just like things somebody did make, you can buy sites and resources, things that people did not make.
Everyone pays for land unless the house you rent or buy hovers in the air. Most pay a lot. If you wanted to purchase America the country, it'd cost you, well, unless your name rhymes with Gil Bates, you probably could not afford the down payment. Altogether, people buying and renting sites and resources spend trillions of dollars each year.
To owners. What do owners do with these trillions? How do they deserve trillions? The reason your home costs more each year is not because the building is getting newer; it's wearing out. It's the location good old land that grows in value. Not because of anything the owner has done, but because of what society has done flocked together in one particular area.
MONEY FOR LAND TO US.
In the past, you could say, wow, nice land, shoot somebody, and claim it. Now, you have to be a government to get away with that. Individuals in civilized society do things properly; they acquire property. Which is an improvement over shooting the previous occupant. But the question rarely asked is, pay whom? We assume we're supposed to pay the owner, which was civilization's biggest mistake, worse than daytime television. Instead, we should pay each other.
Why? Because none of us made Earth, and all of us need her. When I occupy some place, I displace everyone else, as you and everyone displace me from your place. If Earth were a giant ball of mud with nowhere better than anywhere else (which we're doing our best to make sure happens), there'd be no problem. If all places were the same, nobody could charge for any place. But for living and working human beings, some places are better than others. When claiming places others want, you do owe them compensation, or in economist speak, rent.
We used to pay rent. We didn't walk around, dishing out cash to our neighbors, but we did pay. The words own and owe used to be one word; owners owed rent. Then it was up to their lord, the guy above them. Now, in the age of equality, we still owe rent but out to our neighbors, the people around us. But, by mistake, society evolved away from compensation; own and owe split apart. Now owners no longer owe us, we pay them.
GET RENT, LOSE TAX
What do owners do with these trillions in rent? What anybody getting something for nothing would do get more. They buy politicians (actually, rent them) who pass the laws on taxes and subsidies. Thru time, taxes on land and resources go down, while taxes on products and wages go up. Subsidies head the other direction; they benefit landowners and resource extractors to the detriment of everyone else.
You say you're against trashing the environment, yet you pay for it. You pay taxes that get turned into subsidies that make exploitation more profitable than sustainable enterprise. That's why: sprawl is cheaper than walkable villages, sprayed food cheaper than organic, virgin timber cheaper than recycled wood, etc. You're against war, but soldiers are not unpaid volunteers and bombs don't come in Easter baskets. They come from taxes.
Taxes and subsidies are not easy to live with. They distort prices; taxes exaggerate costs, subsidies hide them. They make the state the master and the citizen the servant. And it costs more to take money from you, give it to politicians, to give to bureaucrats, to give it back to you in the form of a service like, say, policing a peace demonstration, than just to give the money to you directly, and let you hire your own, not thugs, security guards.
LOSE TAX, GET RENT
We could replace taxes with land dues (remember, owners owe) and replace subsidies with a Citizens Dividend. Kuwait used to levy no taxes yet pay citizens a dividend, and Alaska still does. The state pays every resident a share from the oil revenue. Last year for a family of four it came to $6,000. That's just from oil. Untouched were the values of surface land; in cities, a lot typically costs 2000 times more than a lot out in the boonies.
Getting and sharing rent would let the economy operate like the eco-system; it'd use a self-regulating feedback loop to keep balance: (1) People get a share of rent for land and resources, so they work less (at least the rational ones do). (2) Working less, there'd be less commerce and lower earnings; so site values fall. (3) Lower valued locations lead to smaller rent dividends, so people work more. (4) More output more business pumps up site values, so the dividend grows again; round and round.
Instead of working five days and taking the weekend off, you could work two days and take the week off. We could work flextime. No more rush hour, perhaps the single most destructive thing we do to the eco-system. Automatically, this cycle harmonizes work with play, and taking what we need from nature with giving Mother Nature a rest. Employing nature's cycles is geonomics.
At the other end, having to pay land dues at full market value, people will quit speculating in oil fields and prime downtown locations. Without that gratis profit, people won't take any more than they can use, and they'll use that wisely. Yet no longer having to pay taxes on honest work and useful goods like buildings, people may accept land dues as fair and feasible.
WHAT YOU CAN DO
While total geonomics is a total paradigm shift, it's also something that you can implement step by step, starting now. If you like to work locally, we have a bill in the legislature this session, HJR 30, to shift the property tax off buildings, onto locations. You could help get that passed. If you like to work globally, we have a campaign to pressure the US to establish a trust fund for the Iraqi people from their oil revenue. You could help publicize that. Whichever, join us.
Thanks for your time. Help yourself to our literature. And come up to me with any questions.
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Jeffery J. SMITH is president of the Forum on Geonomics, publishes The Geonomist, and organizes events in and tours to places considering reform of taxes and subsidies. 3508 SE Madison St, Portland OR 97214 USA; Ph 503/234-0809 geonomist@juno.com; www.progress.org/geonomy
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