Editorial
String Theory and Land Rent
by Fred E. Foldvary, Senior EditorMarch 2005 marks the 100th anniversary of the publication of Einstein's theory of relativity. Einstein and other physicists spent much of the 20th century attempting to discover a grand unified theory of physics which would encompass relativity and the quantum mechanics of sub-atomic particles.
Now, in the early 21st century, physicists are converging on "string theory" to unify physics. The concept is that the tiniest particles such as those in protons and electrons are strings of energy whose vibrations create the various particles. It is not possible to test this with data or experiments, but the mathematics of strings is consistent for all phenomena, unlike the previously clashing separate equations for quantum physics and general relativity.
Biology is also based on strings. The building block of life is DNA, and the chromosomes that create the features of life are programmed strings of genes.
What about social science? Is there a grand unified theory of society? Does it too have strings? Yes, the string in the human sciences is evolution over time. Every society is a set of people who evolve in time. Each moment in time is a consequence of a previous time interval. The human world consists of many overlapping societies whose evolutions are intertwining strings.
Consider money, for example. What determines the value of the U.S. dollar at present? The dollar has value now because it had value yesterday. The value of a dollar is an evolving string that goes back thousands of years to the exchange of commodities.
Society is a tapestry of interwoven strings. Physicists theorize that strings have ten dimensions rather than the four dimensions (including time) that human beings perceive. Social strings also have ten dimensions: the biological-medical, the linguistic, the psychological, the ethical, the cultural, the technological, the sociological-relational, the military, the political, and the economic. Each of these dimensions has a history and evolution. The vibrations of each dimension affect the others.
Economics has two rotating substrings, the real and the financial. The financial string is a flow of funds that circulates in one direction, while the real string is a flow of goods and resources that circulates in the opposite direction. You pay money for food, money going from consumer to producer, and meanwhile goods go from producer to consumer. For every financial string node there is an equal and opposite real node.
These rotating circular strings have two phases, the factor phase and the goods phase. "Factors" are input resources, with three substrings: land, labor, and capital goods. They get twined together and move as a real sting from households to firms, while the financial strings move from firms to households as payment for the factors. In the goods phase, the households use the funds they obtained from supplying inputs and buy the outputs produced by firms.
Now, the labor string operates naturally by flowing from household to firm, with wages flowing oppositely from firms to households. Society gets into trouble when this equal and opposite string flow gets broken. Government wreaks the wage string by forcibly extracting some of the wage flow. The string movements are no longer equal and opposite! The flow of labor to firms gets distorted, shrinks. It gets diverted or stops altogether. Government further breaks the labor string with minimum-wage laws, dismissal laws, and other interventions. We get loose strings cut off from the natural circular flow, rogue strings that invade other strings like a social cancer, causing economic disease!
Government also perverts the land string. Vibrations of rent are generated by demands for space and natural materials, but unlike labor, the supply does not come from human sources. The supply comes from geological and geographical strings. Unlike labor strings, the strings of land services do not come from any individuals, but from society generally. It is the vibration of the community, not any individual, which generates land rent vibrations. Human strings are created equal; there are no master and slave strings in nature, so the financial flows of rent should go equally to all the human strings of the community. But governments typically intervene to shift the rent only to those having privileged legal title. Community members are not getting back their share of value generated. Their income strings become broken.
The money string has an evolution originating in commodities, but governments have destroyed this string, replacing it with an imaginary string that folks continue to use as money as though it were real. The government keeps stretching out the string of money, which further distorts the real strings. The remedy is to recreate the real string, to move back from money as a mental construct to money as a concrete reality.
So we have a grand unified theory of social disorder. Social strings have gotten broken! If we wreak DNA strings, we get sick or monstrous living beings. The economic strings are broken, and we get economic diseases: inflation, unemployment, congestion, poverty, instability, war!
Most people see the broken strings, but do not understand the causes. They just want to patch up the strands, but since the cause is untreated, the strings continue to break. The remedy is, as Henry George stated, association in equality, where all the strings of the social tapestry are equally self-owners. Those who see the cat of economic reality can help teach the world about how to prevent social strings from breaking.
After all, every cat likes to play with strings.
Copyright 2005 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
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