Our editor published The Geonomist which won a Californian GreenLight Award, has appeared in both the popular press (e.g., TruthOut) and academic journals (e.g., USC’s Planning and Markets), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland’s mass transit agency), and recruited activists and academics to the Forum on Geonomics. A member of the International Society for Ecological Economics and of Mensa, he lives in America’s Pacific Northwest.
7 Immense Transfers by Tax-Collectors that Create the Super Rich
January 19 this year (2015) is the government holiday honoring Dr. Martin Luther King, Jr. While a day of shutdown government is nice, celebrations and official pronouncements never include one of King’s most crucial proposals — an extra income to all citizens apart from their labor.
Presently, everyone gets some income without working for it. The poor get crumbs — conventional welfare — and the rich get most of the feast on the table — corporate welfare– while the middle class probably break even, paying as much in as taxes as they get back as Medicare, Social Security, public schools, maintained roads, jails, etc.
The secret of great fortune, as economists say, is to take society’s benefits for yourself while imposing your personal costs upon society. The feast festooned upon those who least need it is not only a lot in the absolute — trillions annually — it’s also a lot per capita of recipient. See how government bankrolls the rich insiders, in several ways.
(1) It pays the rich outright subsidies. There are tax “refunds” even when the rich person or corporation paid no income tax, and subsidies for pharmaceutical research, etc. (2) Governments also grossly overpay military contractors and others doing business with the state (the state’s purchase of desktop computers and software bankrolled the early stages of that revolution).
(3) Government also serves big business for free, such as attacking oil-laden countries, building logging roads on public land, putting in infrastructure for sprawl, etc, saving beneficiary corporations trillions of dollars.
Besides such expenditures from public treasuries (moving public dollars to private coffers), (4) governments also fail to charge big business for the benefits they take (moving money the opposite way). States look the other way when corporations harm worker, consumer, or nature, while occasionally imposing a fine whose amount is tantamount to a slap on the wrist. The UN figures that if industry had to pay for this favor alone, no dirty one could profit.
(5) Governments also stack the deck in favor of entrenched businesses, as when granting utility franchises that make life difficult for alternative energy sources, or taxing imports that let domestic companies inflate their prices, or letting the consortium of big banks — the Federal Reserve — be the only ones to issue legal tender (actually, the US Constitution directs Congress to do that), which effectively prohibits local, consensual currencies from becoming widely used.
(6) Government fails to charge full market value for the privileges it grants to any applicant but exaggeratedly benefiting those who disproportionately need the law on their side: tiny set fees for corporate charters that limit liability (insurance companies should handle that), for patents and copyrights that create monopolies, for professional licenses that curb competition and stifle innovation, etc.
Along with the biases for business, the biggest state favor is (7), its failure to recover the socially generated value of land and resources. This failure goes far beyond the US not collecting royalties from miners and oil drillers (who thereby become the richest corporations on the planet) extracting from public land. Governments also neglect to recover the rental value of locations, and such spending is the biggest single stream in the GDP.
This classic largesse — the oldest and the one responsible for class — is also the most traumatic for the rest of society. It was the hoarding by a few of the spending by the many for a place on earth to live or work that created hierarchy, privilege, the mass’s self-image of inadequacy, and the damaging behaviors that go with it, in the first place. Conversely, it is the recovery and sharing of this social surplus (a surplus since nobody’s labor or capital needs to be compensated for creating Earth since nobody did) that will transform life on Earth into the miracle it was meant to be.
That’s what King had in mind – a happy, healthy society – when he proposed this extra income. He also cited Henry George, the old American reformer who became famous for his advocacy of the public recovery of this natural common wealth. Today, remember King, and remind others what he economically stood for.
The three excerpts below about economic inequality are from: (1) the website of Thom Hartmann, Dec 30, by himself; (2) Bloomberg, Jan 1, ny Julie Bykowicz and Annie Linskey; and (3) Oxfam, Jan 19, by Jon Slater.
The True Welfare Queen Exposed!
In 2012, a married person with one child making $50,000 per year paid just over $36 in taxes for “food and nutrition assistance” programs like food stamps and WIC or 10 cents per day. The average American family pays $6,000 each year in subsidies to big business: big banks, fossil fuel giants, and massive transnational corporations raking in billions and billions of dollars.
Because the fast food industry pays its workers such low wages, and gives them such poor benefits, We The People foot the bill for their healthcare, food and, in some cases, their housing and transportation: $243 billion each year.
WalMart, America’s largest retailer, in 2013 brought in $476 billion in revenue, netting some $16 billion in profit, just over $34,000 in profit every minute. Its employees receive $2.66 billion in government help each year, about $5,815 per worker. And about $420,000 per store.
For the Wealthiest Political Donors, It Was a Very Good Year
Three of the country’s wealthiest political contributors each saw their net worth grow in 2014 by more than $3.7 billion, the entire cost of the midterm elections: Warren Buffett, Larry Ellison, and Laurene Powell Jobs. James Simons and George Soros would have come pretty close.
The Bloomberg Billionaires Index tracks the daily gains and losses in the net worth of the financial elite. In total, 11 of the donors that Bloomberg tracks added a combined $33 billion to their wealth in a single year.
Richest 1% will Own More than All the Rest by 2016
The combined wealth of the richest 1 per cent will overtake that of the other 99 per cent of people next year unless the current trend of rising inequality is checked.
Already 1 in 9 people do not have enough to eat. Extreme inequality isn’t just a moral wrong. It undermines economic growth and it threatens the private sector’s bottom line.
Last year the 85 richest people on the planet had the same wealth as the poorest 50 per cent (3.5 billion people). That figure is now 80 – a dramatic fall from 388 people in 2010. The wealth of the richest 80 doubled in cash terms between 2009-14.
Ed. Notes: As you might expect, the wannabe do-gooders above want to take from the rich, give to poor, instead of stop creating the rich in the first place, something we’re all responsible for, but the truth remains hidden beyond shallow analyses.
The Basic Income Earth Network (BIEN)’s Series of AMA (Ask Me Anything)s for International Basic Income Week, September 15-21, 2014, Presents…
I am Jeffery Smith, editor of The Progress Report, former contributor at TruthOut, who testified before the Russian Duma. I coined both “Citizen’s Dividend” and “Geonomics” and made a model of a “geonomy”. I think we can lock the hood on the economy once we make it serve us instead of us serving it, just by de-taxing our efforts and disbursing our social surplus, like Alaska’s dividend … Ask me anything (at Reddit).
Saturday, September 20 (the day before the fall equinox), at 10 AM, US East Coast time (early here on the other coast).
This is a 2013 excerpt. We ran it over a year ago but our site lost it (and other gems) during the transition to our new look. It’s so important, we’re running it again. It’s from Grist, Apr 17, by David Roberts.
A United Nations Environmental Program called the Economics of Ecosystems and Biodiversity (TEEB) sponsored research by Trucost. They tallied up the total “unpriced natural capital” consumed by the world’s top industrial sectors. (“Natural capital” refers to ecological materials and services like, say, clean water or a stable atmosphere; “unpriced” means that businesses don’t pay to consume them.)
The majority of unpriced natural capital costs are from greenhouse gas emissions (38%), followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%), and waste (1%).
The total unpriced natural capital consumed by the more than 1,000 “global primary production and primary processing region-sectors” amounts to $7.3 trillion a year — 13 percent of 2009 global GDP.
(A “region-sector” is a particular industry in a particular region — say, wheat farming in East Asia.)
The biggest single environmental cost? Greenhouse gases from coal burning in China. The fifth biggest? Greenhouse gases from coal burning in North America.
Of the top 20 region-sectors ranked by environmental impacts, none of them would be profitable if they were paying their full freight. Zero.
The distance between today’s industrial systems and truly sustainable industrial systems — systems that do not spend down stored natural capital but instead integrate into current energy and material flows — is not one of degree, but one of kind. What’s needed is not just better accounting but a new global industrial system.
Ed. Notes: We do have sitting on shelves alternative, clean technologies. Why don’t we use them? Prices tell us not to. Prices tell us to keep doing things the dirty, entrenched way.
How do we get prices to tell us the truth? First, we stop making limited liability (the corporation in essence) a freebie but require industries and everyone to buy as much Restoration Insurance, and put down as big an Ecology Security Deposit, as needed to balance the risk they impose.
Next we redirect all rents from the private pockets of the 1%, into the public treasury of all society. This reverses 180 degrees current policy. Industry loses its unearned profit and picks up its imposed costs.
These two steps would level the playing field so that the sustainable ways would prevail: solar power, organic farming, selective logging, recycling worn goods, mass transit, etc.
While we’re at it, we could reform the rest of revenue policy, too, and lose the counterproductive taxes on actual earnings, purchases, and buildings. Plus, we could disburse surplus public revenue as a dividend to citizens. Tying citizens and governments to the worth of Earth ties them to the health of Earth so not just the industry but these geonomic policies become winnable and sustainable, too.
America’s Most Famous Forgotten Man
Henry George (1839-1897) Social Reformer
Pre-script: Even establishment entities, such as the Federal Reserve, occasionally feel compelled to tell the story of his life …
The man who created the first official Labor Day — there were already unofficial ones — was Louis Post, Assistant Secretary of Labor under President Woodrow Wilson. Post was an adamant follower of Henry George and even Wilson had decent things to say about America’s best economist and most famous forgotten man. Did Post intentionally make Labor Day fall on and around George’s birthday? We may never know for sure.
In 1886 in a hot union hall crowded with workingmen, the evening’s master of ceremonies called for quiet in order to introduce the Labor Party’s nominee for mayor of New York City. Having won the crowd’s attention, the mc proceeded to give the usual complimentary introduction.
As the party’s standard-bearer approached the podium, a strong voice hollered from the audience, “Hail Henry George, friend of the workingman!” The partisans applauded in enthusiastic accord. The candidate stopped in his tracks and turned to the assembly. As the din quieted down, he bellowed back, “I do not stand for the privileges of workingmen.”
Astonished, the unionists stood dumb struck, worried they’d been tricked. Tension filled the air. Henry George, a short but determined man, looked the surly faces over and hollered, “I stand for the rights of all men!” Instantly the rally broke into loud cheers and clapping. George went on to deliver one of the most memorable political speeches of the day.
While the issues of 1886 were similar to today’s – jobs, wages, benefits, work conditions – the voters were different. A successful writer, Henry George, became a working class hero. Altho’ a life-long member of the printers’ union and a friend of Samuel Gompers, founder of the AFL-CIO, George’s position was that laborer and capitalists were natural allies; their common enemy was the monopolizer of land. The factory worker of the last century, often less than a generation removed from the farm, understood the connection between available land and available jobs.
Lacking personal ambition, Henry George had not initiated his mayoral campaign but was drafted by the unions. Even then he tried to avoid the pressures of a campaign by challenging the unions to collect 30,000 signatures in the few weeks before the filing deadline. The challenge seemed insurmountable; George felt safe. However, for his birthday, September 2, the workingmen broke all records in rising to the occasion. Henry George was their man.
Also running in the election was a Democrat, a puppet of Boss Crocker. Crocker, an acquitted murderer, headed the crooked Tammany Hall political machine. The Republican candidate was Teddy Roosevelt (whose face now is on Mt. Rushmore). Later as president, TR borrowed a page from HG. Where George proposed sharing Earth, Roosevelt made Yosemite a park and signed the National Park Service into law. Where HG proposed shifting taxes from labor and capital to land, TR proposed a reform of the property tax so it’d fall less on improvement, more on location.
Henry George defeated both opponents, thereby in the words of Boss Crocker, “upsetting all the plans of the powers that be.” Tho’ winning more votes, George lost the election. The morning after, ballots for Henry George could be seen floating down the Hudson River. Tammany Hall had fixed another election, letting the Democrat become mayor, a crime Boss Crocker confessed to on his deathbed 30 years later.
Besides the temporal powers opposing George, so did secular ones. The Roman Catholic Church, the largest private landowner in the world, joined the fray. Among the many grassroots activists working on George’s campaign was a Catholic priest, devoted to the Old Testament idea of the earth belonging to all humankind. First the Vatican warned Father Ed McGlynn, then, when he continued campaigning, defrocked him. In an attempt to steal George’s thunder, Pope Leo XIII in 1891 released his own version of land reform in Rerum Novarum.
Why was Henry George so popular with voters and such anathema to the ruling elite? He stood for justice. He reasoned from logic. And he drove himself with tireless energy. He was a self-made American, not in business but in science, the field of political economy.
George may have been history’s only populist economist. (While alive, Marx was not well-known outside of intellectual circles.) George authored Progress and Poverty (1879), the all-time best-selling work on economics in the English language and popular in other languages, too. He proposed that society quit taxing human effort and start sharing the advantages of nature.
George explained the consequences of the closing of the frontier. Without free land to absorb “surplus” labor, wages would drop. And they did. He explained the nature of wages. It’s not, as was then thought, an advance from capital. It’s an earned current in the income stream. George warned that economic injustice must brew up demagogues, such as Adolf Hitler, and an underclass of “new barbarians”, as in today’s U.S. cities.
For his critique of economics, George was offered a professorship at the University of California – Berkeley, despite being a high school dropout. Later, for his criticism of economists, the offer was rescinded.
The life of Henry George reads like a Hollywood script. Born in Philadelphia in 1839, he ran away to sea at 14, saw Australia before it was colonized, saw the degradation of India where corpses rotted in streets and floated in the rivers, and prospected for gold in British Columbia.
Back in post-Gold Rush San Francisco, he worked as a printer then as a newspaperman. He married his first love, a young Australian of better means with whom he lived the rest of his life. On the brink of starvation while supporting a wife and kids, George was desperate enough to swallow his pride and go begging. If the one richly dressed man he stopped had not donated, George had been ready to mug him.
George first found fame for a eulogy he wrote upon the assassination of Abraham Lincoln. Lincoln shared George’s views on the danger of over-concentration of landholding. When land-reformer Benito Juarez led the Mexican people against the French-imposed ruler, Maximilian, Henry George rallied a troop of militants to set sail for Mexico. Outside the port of San Francisco, they were turned back by the U.S. Coast Guard.
George was dubbed “The Prophet of San Francisco”, the city where he lived while writing Progress and Poverty and other articles that enshrined his name. George co-founded the San Francisco Public Library.
Representing his newspaper, George visited New York to negotiate a deal with one of the major corporations of his day. The telegraph monopoly, Associated Press, refused to grant his paper a fair price. In the city, the wealthiest in the world, he was moved by the squalor amid the opulence. Why the worsening poverty amid advancing technical competence? He turned the full powers of his intellect to solving the riddle. His remedy was the Single Tax on land values to end monopoly.
George was a fiery orator, immensely important in an era before radio and television. He lectured to packed houses all over the world. In Ireland, where absentee English lords owned the country, George was arrested on trumped up charges and barely escaped with his life.
At the peak of his fame, George was the third most popular public figure in America after Tom Edison and Mark Twain who wrote an article for George’s newspaper. He corresponded with and debated the famous figures of his era.
Eventho’ an important public figure, George was a devoted family man. While a mature man away from home on the lecture circuit, he wrote passionate love letters to wife of 30 years.
In 1897, George ran again for mayor of New York. His doctor warned him that the strain would kill him. Tho’ in poor health, George continued to chain-smoke cigars. Four days before the final election, George collapsed on stage. The next day he died.
Eulogies began to pour in from all around the world, straight from the gallery of the greats. His funeral was the biggest ever accorded a private American citizen, surpassed only by those of Presidents Lincoln and Kennedy. To glimpse his coffin, 100,000 people lined the streets of New York City. The over-loaded transit system kept another 100,000 from entering Manhattan. It took all day for the procession to get to Brooklyn, where George’s remains lie today.
Next generation, some of his supporters succeeded in politics. His son was elected to Congress. His granddaughter, Agnes de Mille, the choreographer, helped preserve his ideas. But times were changing. Society’s focus was shifting urbanward, losing sight of the role of land in economies. Land became a blind spot for the public, while remaining the prime investment of the rich.
Even more so than in George’s day, de-taxing labor would benefit workers. Today in the U.S., the average American works from January 1 to mid May to pay off all the obvious and hidden taxes. While no longer a working class hero, unions could do worse than to remember kindly Henry George and his remedy – de-tax effort, de-tax earnings, and collect Earth’s worth for social advancement.
Ed. Notes: When companies are forced by politicians to pay a higher minimum wage, many of them do. That probably means they could have afforded to pay a higher minimum all along, so no harm done. As those better paid workers spend their higher wages, they create more demand for goods and services and so more jobs in supplying those goods and services. So far, so good. However …
Some companies can not afford to pay more, such as those hiring fewer than five people to do marginal work. Those tiny firms have no choice but to downsize. Sorry, ex-employee.
Other companies will raise their prices to pass on the fatter paychecks and get away with it. However, their customers in their own businesses could decide to raise their prices, too. Cities and states with the highest wages do also have the highest prices and likely the fastest inflation (the government website is down as I write this).
The places with high or rising employment rates tend to be popular places, destination states, where economies are growing any way. In those places, government collects more taxes and can hire more bureaucrats. Public employment can account for a hunk of the job growth, too.
Finally, while many of us are happy to use the club of government to impose our will on business, business is just as happy to use that same club to get its way, too. It’s a win/lose battle, with business winning most of the time — look at corporate welfare — and the public losing most of the time — the minimum wage is not even livable!
Even if the minimum wage were livable, it would still only apply to entry level workers (who should be working their way up rather than trying to live off doing menial tasks). A minimum would not, obviously, pay the unemployed or the sick or the aged. To get money to them, it can’t be in the form of a wage at any level.
Actually, it’s not only the jobless who need an income apart from their labor; the hired need one, too. Everyone needs one. When people get such a cushion, then they can negotiate higher wages, and laws for minimum wages become absolutely obsolete.
More important for human health and happiness, an income apart from labor is the only way to shrink the workweek, expand leisure, and free people to find the purpose in existence.
And it’s not like the money for sharing does not exist. Indeed, the common wealth is huge. Huge and invisible. It’s the worth of Earth, Earth being something all of us need and none of us made, and land value being something an owner does not create but community at large does. Our spending for locations and resources is a huge spending stream just awaiting our sharing, a task ideally suited to a combination of land dues (or taxes) and rent dividends, a combination that would obviate minimum wages and the arguing over them.
Rising stock markets and home prices helped lift U.S. household wealth to a record in the first three months of the year.
The Federal Reserve says household net worth increased $1.5 trillion in the first quarter to $81.8 trillion. The gain was driven by higher home prices, which boosted Americans’ home values $758 billion. A rising, if choppy, stock market pushed up stock and mutual fund holdings $361 billion.
Checking account balances, pensions plan assets and retirement savings, such as 401(k)s, also rose.
The Fed’s figures aren’t adjusted for population growth or inflation. And the wealth is flowing mainly to affluent Americans: Roughly 10% of households own about 80% of stocks.
Since the first quarter ended, stock and home prices have risen further, boosting household wealth even higher.
Ed. Notes: They admit that just because total wealth is up doesn’t mean distribution is any better. Otherwise, fundamental errors are grave — paper wealth is real wealth; a higher price for your home doesn’t mean you have more home or appliances or cars or computers. You would have to sell your home, and somebody would have to pay you that higher number, to buy more wealth … but then you would not have a home. If you want one, and with homes being more pricey, how can you come out ahead? You could borrow against your higher-assessed home, but then you’d be in debt … which might not make you happy but sure would please the banks.
You could sell the higher-valued stocks for more than you paid for them and buy stuff. Then you’d have real wealth. Real wealth is not numbers on paper, black figures on a white background, as the Federal Reserve and economists and business press want you to believe. Real wealth is real goodies and services that you can consume.
They also leave out workweek vs. leisure. How much time does it take you to grow your paper wealth? And which makes you healthier? Wealth or free time?
The main thing they leave out is: none of this “increase in wealth” is earned by any individual. If you can sell your house-plus-land for more, it’s because other people can pay more or newcomers are moving in and driving up the price. Those are things the buyer has done, not the seller. If you can sell your stocks for more, that’s because of the Fed pumping trillions into the economy, inflating the price of assets. It might also be due to corporate welfare, depending on the stock.
You know what economic news would be truly uplifting? Headlines blaring that the workweek is shrinking while the standard of living is rising. That the impact on the environment is shrinking, along with the cost and size of government, too. Once the economy works right for everybody, automatically, then we can lock the hood on the economy and forget about it. But to get there, first we have to adopt geonomics.
These four excerpts of 2014 articles about smog are from: (1) Bloomberg News, Mar 19; (2) Common Dreams, Mar 25, by Andrea Germanos; (3) Pacific Standard, Apr 11, by John Upton; and (4) The Guardian, Apr 15, by Jonathan Kaiman.
Air Pollution May Cause Genetic Harm in Kids
Air pollution led to genetic changes that may have sapped learning skills in children whose mothers were exposed to a Chinese coal-fired power plant before it was shuttered a decade ago.
Babies born in the southwestern Tongliang county just before the plant was shut in 2004 had significantly lower levels of a protein crucial to brain development in their cord blood than those conceived later. They also had poorer learning and memory skills when tested at age two.
Four years ago, Asian researchers reported links between air pollution and suicide rates in South Korea; and between air pollution, asthma, and suicides in Taiwan. Now, University of Utah scientists say they have uncovered similar links in pollution-prone Salt Lake County.
Suicide can be difficult to talk about, but it’s America’s 10th leading cause of death. It’s the eighth-leading cause in Utah, home to some of the nation’s smoggiest cities. Earlier this year, the pollution problem prompted a 5,000-person protest outside the state’s capitol building.
Bakian and her colleagues found that the odds of committing suicide in the county spiked 20 percent following three days of high nitrogen dioxide pollution—which is produced when fossil fuels are burned and after fertilizer is applied to fields.
China’s Air Pollution Leading to More Erratic Climate for US
China’s air pollution could be intensifying storms over the Pacific Ocean and altering weather patterns in North America leading to more warm air in the mid-Pacific moving towards the north pole. Mid-latitude storms develop off Asia and they track across the Pacific, coming in to the west coast of the US. Their particles are affecting how strong those storms are, how dense the clouds are, and how much rainfall comes out of those storms.
Fossil fuel burning and petrochemical processing in Asia’s rapidly developing economies lead to a build-up of aerosols, fine particles suspended in the air. Typically, aerosol formation is thought of as the antithesis to global warming: it cools our Earth’s climate. But aerosols provide seeds for cloud formation. If you provide too many seeds, then you fundamentally change cloud patterns and storm patterns.
China’s leaders will soon revise China’s environmental protection law for the first time since 1989 and require key polluters to disclose real-time pollution data.
Ed. Notes: The reason you breathe deadly air is not because clean technology has not yet been invented. The reason is fair policies have not yet been implemented. Polluters usually are important people with money and so enjoy leniency from governments, much more so than anyone who might get caught littering in public.
What governments should do instead is, of course, stop subsidizing polluters and, conversely, charge them for their pollution. Plus, not offer them free or low-cost limited liability but make them pay private insurance companies the full market rate for shielding their CEOs and management from deciding to pollute others.
Government could also facilitate the development and conversion to clean alternative engines and power plants by not taxing wages and investments. Without having to pay such taxes, companies could more easily hire workers to do the conversion work and savers could more profitably invest in new technologies.
Government could also recover the socially-generated value of land and resources. Doing that would make fossil fuels like oil less remunerative. And it cities, owners would use sites more efficiently resulting in compact cities with buildings side-by-side and taller and shorter trip distances, resulting in less energy consumption and pollution.
Finally, government should pay the “rents” from owners of locations and resources out as dividends to citizens. The extra income would liberate basement inventors and the pace of change would take off. Hopefully, the dire straights of our atmosphere will impel people to adopt these geonomic policies.
US Presidents, like presidents and prime ministers everywhere, are thought of as leaders. However, in one crucial arena, not one US President has yet been able to lead the nation, despite having the right idea.
It used to be that many people, including presidents and reformers, could see the role that land plays in creating prosperity and in fostering social justice. Back when, you had leaders like Abe Lincoln (1809-1865), 16th US President, say, “The land, the earth God gave to man for his home, sustenance and support, should never be the possession of any man, corporation, society or unfriendly government, any more than the air or water if as much… an individual or company or enterprise requiring land should hold no more than is required for their home and sustenance, and never more than they have in actual use in the prudent management of their legitimate business, and this much should not be permitted when it creates an exclusive monopoly.”
An efficient way to inhibit wannabe monopolizers is to make the value of land benefit society in general, and not just landlords, lenders, and speculators. Government could tax the value of locations. (It need not tax; it could charge a deed fee or lease public land at full market rental value or institute land dues, etc.) Then use the raised revenue in ways that’d benefit society at large.
The most famous proponents of this tax shift – tax land, not labor or capital – was the brilliant thinker Henry George, author of Progress and Poverty, which outsold every book of its era except the Bible (and the Holy Scriptures also mandated land reform). George showed how, when owners must pay a land levy, they leave more land available for others and they put their own land to good use. Both of these moves raise wages and eradicate poverty.
George’s thinking found favor with several US Presidents.
Rutherford B. Hayes, 19th president: “Henry George is strong when he portrays the rottenness of the present system. We may remove the difficulty by changes in the laws regulating corporations, descents of property, wills, trusts, taxation, and a host of other important interests, not omitting lands and other property.”
Grover Cleveland (1837-1908), 22nd and 24th president, whom George worked with on free trade: “I have always regarded Henry George as a man of honest and sincere convictions and ever held a high opinion of him.”
Teddy Roosevelt (1858-1919), 26th president and a loser against Henry George in the 1886 mayoral race for New York City: “The burden of taxation should be so shifted as to put the weight upon the unearned rise in the value of land itself, rather than improvements, the effect being to prevent the undue rise of rents.”
Woodrow Wilson (1856-1924), 28th president: “This country needs a new and sincere thought in politics, coherently, distinctly and boldly uttered by men who are sure of their ground. The power of men like Henry George seems to me to mean that.” Georgist Louis F. Post was the Assistant Secretary of Labor under Wilson.
Franklin D. Roosevelt (1882-1945), 32nd president: “I believe that Henry George was one of the really great thinkers produced by our country.” He also had Georgists high up in his administration: Chair of the Federal Reserve Lanklin Currie and economic advisor Raymond Moley.
Gen. Dwight D. Eisenhower (1890-1969), 34th president, in 1950 voted for Henry George to enter into the Hall of Fame and wondered “why the world’s resources could not be internationalized, since raw materials represented the world’s basic needs, they should belong to and serve everybody.”
A century before George, America’s Founding Fathers were totally attuned to this better way. Back then, every educated person knew of France’s physiocrats and their l’impot unique (single tax on land). A Danish ruler implemented a land tax and Argentina’s first president, Bernardino Rivadavia, tried to (the army had other ideas). In early America …
The first ambassador to France, Benjamin Franklin, was a land speculator in practice who lost big (bailed out by the US Government) and idealistically a physiocrat; the plaque at his tomb bears quotes from two famed physiocrats and one by George Washington.
First President Washington’s right-hand man, Alexander Hamilton: “A small land tax will answer the purposes of the states, and will be their most simple and fit resource.”
The US President with probably the highest IQ ever, Thomas Jefferson: “Exempt all from taxation below a certain point, and tax the higher portions or property in geometrical progression as they rise.”
His friend, Tom Paine (1737-1809), who rescued the American Revolution, expressed this geonomic idea in its fullest: “Every proprietor owes to the community a ground rent for the land which he holds… from this ground-rent … I … propose … to create a National Fund, out of which there shall be paid to every person … (a) sum.”
So what kept this proven solution from being implemented? Actually, the first US constitution, the Articles of Confederation, did have a single tax on property which was mainly land in those days. But once the rebels became rulers, their second constitution – the one we know today – deleted land and Congress turned to tariffs.
America was born of land speculation and the fever has warped the national psyche of every generation ever since. Sure, colonial America had its Commonwealth of Massachusetts and of North Carolina and the first law passed by William Penn in Philadelphia was a tax on land. But America also had speculation as the major industry. Indeed, at the time of the Revolution, the colonies’ richest citizen was its biggest landholder, speculator, and former surveyor: Commander-in-Chief Gen. George Washington.
Political opposition is nigh universal. Mexican President Francisco I. Madero (1873-1913) and Russian President Alexandr F. Kerenski (1881-1970) both proposed taxing land. Madero was assassinated (by the US ally) and Kerenski fled for his life. Jose Marti (1853-1895), the hero of Cuban independence from Spain, described Henry George as “one of the most cogent and audacious. Only Darwin, in the natural sciences, left an impression comparable to that of George in the social sciences,” but that father of that nation could not get the reform adopted. Guatemala’s President Cerezo advocated a land tax but was deposed by the (US-backed) army.
How much has changed? Nothing. Remember Barak Obama’s shady real estate deals? Remember Ronald Reagan’s real estate tax-dodging embarrassment? The link between politics and profiteering off land is not a matter of isolated examples but the very nature of the system. It’s hard to see because it’s so poorly reported and it’s so poorly reported because even journalists are blinded to the powerful role that land plays in the economy and the body politic.
So, what can you do this 2014 Presidents Day? Don’t bother looking to any president for leadership. By the time that any major political figure speaks up, geonomic reform will already have become popular. Meanwhile, leadership is going to have to come from the grassroots, from knowledgeable and committed individuals forming active groups in their neighborhoods. Those advocates will win or influence local elections, and get geonomics adopted locally. Being a president of a local group or a chairman of a county council might not be the same as being president of the US of America but it could do humanity a lot more good.
The New Yorker ran an article by Atul Gawande last summer, “Slow Ideas — Some innovations spread fast. How do you speed the ones that don’t?” (2013 July 29) Gawande, BTW, has won two National Magazine Awards, has been a finalist for the National Book Award, had a book selected as one of the ten best books of 2007 by Amazon, won a MacArthur Fellowship, and was named one of the hundred most influential thinkers. So here’s a thought: Since all of us would be much happier and better off if the great idea of geonomics were to go viral, can we apply Gawande’s insights to our geoist movement?
Here are some of his key points:
“To create new norms, you have to understand people’s existing norms and barriers to change. You have to understand what’s getting in their way.”
“Mass media can introduce a new idea to people. But people follow the lead of other people they know and trust when they decide whether to take it up. The decision to make the effort to change is a social process.”
“We yearn for frictionless, technological solutions. But people talking to people is still the way that norms and standards change.”
Does Gawande make sense to you? Do his suggestions already inform your outreach? Your activism? Do you concentrate on growing your network, even at the expense of other tactics? His points do resonate with me. Let’s considering his conclusions in order …
Upon first hearing about geonomics, what gets in people’s way? Why don’t they respond: “Yeah! Great! Let’s start sharing the worth of Earth right away! What can I do to help?” What gets in their way? In general, there are the attitudes that get in the way of any new idea: things like indifference, apathy, normalcy bias, our species’s innate conservatism, etc. Those things we can’t do much about, but we don’t need to. Once a new idea reaches a critical mass of backers, it can’t be stopped.
What we need to focus on is what gets in the way of people embracing geonomics specifically. These are other primal reactions, thing like: it’s hard for humans to share with strangers; and, people develop an emotional attachment to a parcel of land; and, people don’t trust politicians, bureaucrats, and government in general. How do we deal with these things? While there are good rational arguments to be made, those won’t carry the day. These obstacles are emotional, and logic is not what overcomes emotion.
What does overcome emotion? Safety in numbers. When you see somebody else do something, you reckon it’s safe. You watch someone else walk on the ice, you figure the ice will support you, too. You watch someone else swim in the sea, you assume there are no hungry sharks around. You hear that there are many, many people demanding gay marriage, you’ll support it, too. (Of course, “monkey see, monkey do” can backfire, too, such as the apocryphal lemmings following one after the other over the cliff, or more realistically, most everyone eating sprayed food, breathing polluted air, sticking children in stultifying schools, ignoring the eroding purchasing power of the dollar, etc.)
People do have different acceptance rates. There are a few people who only need to hear of a good idea before proselytizing it. Most people, however, need to see a parade passing by before they hop on the bandwagon. And a few never change their minds. But what proponents of a good new idea must do is target a group who’re likely to become early adopters, figure out how to reach them, and use the feedback they get to hone the message sharper. As more and more early adopters embrace the idea, more and more mid adopters will embrace the idea, until the idea finally wins over enough people to be accepted broadly and become a new law of the land.
So, what can you do to hasten this process along? Express your geonomic belief in a way that pleases you. Seek out reform-minded people and try out your message on them. Use their feedback to refine your message so that a greater number find it compelling.
The reason that Georgism — the proto-geonomic proposal which had its heyday in the 1880s — is at best a fringe idea, why its best examples have all been repealed (Honolulu, Pittsburgh, Johannesburg, Melbourne suburbs, New Zealand, Denmark, etc) is because its advocates never changed their message — “tax land!” — while society over the last century plus has changed enormously. People don’t like taxes. People do like their land. That’s two strikes against Georgism right there. The third strike is that Georgism is pro-development. Of course, developers are all for development but they want the profit from land for themselves, while environmentalists — who’ve grown to be a powerful force in society — oppose development as a gut reaction. Three strikes and Georgism is out.
What can geoists do differently? Listen. Listen to the people whose minds we want to change. Push their buttons. Appeal to their values. Frame the proposal in terms that fit nicely into their existing worldview. To know how to do all that, go back to square one: listen. Following my own advice, I’ve come up with new terms like “geonomics” and new key ideas like “Citizen’s Dividend”. The latter phrase has already shown itself to be catchy, being used by carbon taxists among others. Whether or not these strategies make enough of a difference, only time will tell. And it will tell sooner the more that people try out these ideas on their own.
Which gets us to Gawande’s third point.
While this website and others like it are great, they are not enough. You still have to talk to people you know about what you’ve learned. So: Inform your friends, family, co-workers, neighbors. When a human being experiences another of its species actually expressing what they believe or know, then more parts of the brain of the observer or listener become engaged, and the person exposed to the new information has more to chew on.
Assume all the above is true. What did you do for your cause, face-to-face with newbies, today? However you do it, get out there and become better known in your community ASAP!
The present custom of paying an owner for land is an improvement over the old way of killing occupants of coveted land, of getting your fellow tribesmen together and driving out a different tribe. But paying owners is still unfair. As the judge said, all land titles descend from force or fraud. And this system of having to pay owners does leave a lot of people landless and homeless.
It’d be better to keep the paying part but not pay owners, rather, pay one’s neighbors. How’d that work? Each occupant would pay in Land Dues and each would get back Rent Dividends, an equal share of all the collected rents.
Land Dues would not change how much one pays – the market sets that. Land Dues would only change to whom one pays – not owners but neighbors. Justice dictates that owners are not entitled to keep rent; they’re obligated to pay rent.
Why Owners Owe
In such a geonomic system, you’d pay for the value of your land alone, excluding the value of whatever is on top of it. Some places already do this. Companies in US port districts, contractors in Hong Kong, and homeowners in Australia’s capital Canberra, all lease the land beneath their buildings because in all those place the land is owned by the public.
How much you’re willing to spend for a parcel of land (not for anything on it) is due to two things. One is nature, the other is society. You pay more for fertile soil, good views, deep harbors, rich mineral deposits, etc. And you pay more for proximity, for nearness to downtown, to metro stops, to good schools, to parks, and to be in a low-crime, high-income neighborhood. Often, it’s not objective land that we want but a relative location.
Locational benefits are not created by anyone owning but by society surrounding. Just the mere presence of a populace pushes up land value. What’s the value of land in a ghost town? Zero. What’s the value of land in an occupied town with the same buildings? Anything above zero.
The best indicator of land value is population density. The more that people choose a place, the more they have to pay to be there. No lone owner can claim to have created population density all by himself. It’s community who create value of land – something none of made and all of us need. That’s why site value makes the perfect common wealth.
Ideology: Not Left Nor Right But Organic
Is sharing the worth of Earth socialist? It could be, just as Christianity could be, since it calls for charity toward the poor and claims camels have an easier time passing thru the eye of a needle than the rich have of passing thru the Pearly Gates. Heck, critiquing the Federal Reserve could be called socialist since the Central Bank is the quintessence of capitalism.
Two places that capitalists rave about are Hong Kong and Singapore. Each year, conservative outfits like the Heritage Foundation rate these two city-states as the very best place for business and the freest, or very near the top. Ironically, however, both places are not such good examples of capitalism, but of geoism. Hong Kong owns its land, Singapore taxes its. Hong Kong funds affordable housing; Singapore does, too, and pays citizens a dividend.
Markets have no better friend than geoism, better than even capitalism, with its built-in cronyism. Land Dues and similar fees make it possible to repeal counterproductive taxes. Rent Dividends make it possible to abolish wasteful subsidies. Markets like that because both taxes and subsidies distort prices. Taxes make goods more costly, subsidies make bads more affordable. Distorted prices distort the choices of both producer and consumer and on this tilted playing field you get less competition and more exploitation of nature, worker, and consumer.
Another taking that markets don’t like is “private taxation” or “rentention”. When owners, lenders, and speculators retain the rents for land, they bid up the price for land; they inflate demand. While speculating, awaiting higher prices for their parcels, they under-use them; they curb supply. Scarce supply with excess demand not only makes land less affordable but also blows a bubble that ends in recession. None of this is good for markets, especially if you want markets to be free of statist interference.
When people do get a Land Dividend, that benefits the market, too. The extra security helps people choose exactly what they want to do to make more money or to contribute to society or to develop themselves. It helps the basement inventor come up with a better mousetrap (altho’ you couldn’t tell, judging by what the rich do with their no-strings-attached largesse). It creates more consumers and investors willing to try novel goods and services. All that creates many unexpected ways to make money.
Progress of All Stripes: the Yield of Justice
All that activity also ratchets up the pace of technological progress. To date, new technology has not improved the quality of life for everyone. The only way that it ever could would be if everyone gets a share of the rise in land value, a value that’s pushed up by techno-progress. Check out the astronomical site values in Silicon Valley, Silicon Forest, Silicon Harbor, and silicon everywhere. As technology advances, the cost of living falls (we can’t tell now because of inflation). Rather than be a burden upon government, the Rent Dividend would cut the cost of living, thereby reducing the demands placed on government.
Note that a dividend is not a guarantee but a share. If there is no surplus in any particular year, there is no dividend. However, since society spends so much money for the nature it uses – indeed, FIRE (Finance, Insurance, & Real Estate) is the biggest sector in the GDP – it’d be a very freakish year, if ever, when there’d be no surplus of natural value to share.
In a fair economy, some people would be richer than others, because we each do provide different inputs into production: different talents, different dedication. But fortunes would be human-scale and every penny would be earned. And nobody would be poor. So far, the poor have always been with us. But have we ever tried economic justice – or geonomics – to eradicate it, so everyone could prosper?
Justice, the Basis
Owners do have a right to the value of their land but no more right than do their neighbors. And since owners are neighbors, too, they also have a right to the value of the land of their neighbors. Since rights are equal, each person has a right to a share of land value that’s no more and no less than the share of everyone else – each resident has a right to an equal share of the value of all the land in one’s region.
Equality does not mean everyone would get equal income in total but that everyone would have equal rights. And not just political rights like voting but economic rights, too. The most basic economic right is to “reap as you sow”.
You should get all your wages for your labor, untaxed. You should get all your profits for your capital (savings and investments into useful enterprises), untaxed. And, most crucially, you should also get an equal share of the surplus output that your society generates.
What is social surplus? Mostly, as David Ricardo showed almost two centuries ago, it’s the extra output due to the advantages of a location. Somebody could employ the exact same quantity and quality of labor and capital on one location and do a certain amount of business but on another location do a very different amount of business. Check out a gas station near a freeway off ramp vs. one in the middle of nowhere. The extra commerce at the off ramp is due to only one thing: location, location, location.
The Psychology of Normalcy, a Bias
The problem with sharing rent does not lie in the realm of ethics or pragmatics but in psychology. People demand jobs, not justice. People lack the self-esteem to demand a fair share, but are willing to demean themselves to do nearly anything for money. Indeed, some of the “best” jobs (in the sense of salary) are some of the worst jobs; they don’t grow the pie but destroy value: a lawyer for a polluter, a sales person for junk destined for a landfill, an engineer in nuclear power, a paper-pushing bureaucrat in a big corporation or government agency erecting hurdles for everyone else; there’s good money in bad work. People need money and can see no other way to get it than to occupy a job, never mind start their own business.
Americans in particular are allergic to sharing. But most people – since they’ve never been rich – think that all income must come from their labor or capital, from their work or savings. But they’re wrong. The very rich are not very rich because they work harder or smarter but because they operate in a mass market that’s filled with favors for insiders. The rich get a free lunch, the corporate welfare such as bailouts, agri-business subsidies, bloated military contracts, token fines for violating standards, etc. The rich do not feel the least bit of embarrassment from getting something for nothing. It’s an attitude the rest of us could stand to emulate.
To win such a just geonomy, we must accept as normal and natural getting a fair share of Earth’s worth, just as we accept the notion of getting air to breathe without having to pay for it (so far), of getting room to walk on the sidewalk without having to pay for it, of getting beefsteak instead of horsemeat when the former is on the menu without having to pay for the customary honesty.
The New Normal
We have equal rights, we’re all Earthlings, we all have an equal right to a fair share of Earth’s worth. That’s not socialism, that’s not capitalism. That’s geoism and it needs to become the new normal.
We’ve been back online about two months and total views now are over 92,000. We’ve noticed much more activity on Twitter than Facebook. So far in December, typically a slow month for us since student are not studying and people take holiday vacations, we’ve added:
eight new followers, inc: Forbes columnist Jesse Colombo; inc. Dr. Stuart Fischer, physician & author with 15,000 followers; inc. Candidate for California Secretary of State & ex-Common Cause VP Derek Cressman with over 10,000 followers; inc. Dr. Al-Daini, Huff Post blogger; inc. William Thomson Co, NYC, and inc. a radio station in New Mexico, WPNM;
were favorited eight times, inc. by Unlearning Economics with 7,000 followers;
were mentioned seven times, inc. by Parsons Brinckerhoff with 5,400 followers and by the CCPA Career Chpt with 1,500 followers;
were retweeted 18 times to at least 8,000 followers (not all list their number of followers)
That was Twitter. Now for Facebook. We were liked a couple times, putting us up to 123, and befriended four times and those new friends have 100s of their own friends but I did not look up the numbers.
At the site proper, we added 10 subscribers to 3,425. Comments are up to 114, inc. one by Tasmania city councilman Leo Foley.
I’m pleased to announce we have a new editor, Peter Meakin, of South Africa where he’s a land valuer.
If you haven’t already, here are 10 ways to advance the cause:_1) spread any articles you find fascinating,_2) befriend us on Facebook,_3) follow us on Twitter,_4) subscribe to updates,_5) leave a comment either in the Forum, to the editor, or after an article,_6) send us an article link or photo,_7) propose blogging there,_8) register for a course,_9) if so moved don’t hesitate to punch the PayPal button, even_10) take out an ad.
Now, hopefully all your friends and family, neighbors and coworkers will visit us, too, and enjoy raising public awareness of a better way for all. One by one, we’ll make a movement for economic justice that wins a fair share of Earth’s worth for everyone, via a sane public revenue policy.
Ed. Notes: What a great attitude! Forward looking! Open-minded! Do you know of a good idea working well somewhere? Send it to them! I’d love to see them embrace and publicize geonomics, such as the sharing of community-created land values in Aspen CO and Singapore and the oil dividend in Alaska. Such sharing has benefitting people in meaningful ways, and it’s part of a total transformation of how we run our societies.
If you’re used to it, you might not notice it, but US cities are infested with cars. To really feel how much cities here are less habitat for humanity, more habitat for vehicles, spend at least a few weeks in almost any European city with its car-free center. Your senses will gradually adapt without you noticing it but when you get back to Portland or wherever, your senses will be assaulted by the noise from wave after wave of seemingly pointless traffic.
Because Old World cities grew up when people had to use their muscles and those of their animals, citizens erected buildings side by side, didn’t bother to widen streets, and left central plazas open, organically. Since New World cities grew up when all people had to do was fire up a machine, cities here sprawl. Yet the expansiveness of cities here was quickly filled by vehicles and any advantage of room to move was lost. Indeed, many disadvantages raised their ugly heads, including residents’ alienation (see Bowling Alone).
As with most human-caused problems, there are human-devised solutions. What a few cities have done, including Sydney Australia, with success is this: they recovered the value of locations for public use.
One thing cities do strikingly well is sprout not just skyscrapers but also push up land values. Downtown lots tend to be thousands of times more valuable per acre than parcels out in the boonies. It’s a value that’s generated by the population’s presence and could be the region’s common wealth or be included in its tax base.
Recall the realtors’ mantra: location, location, location. The ones who generate the value of sites are not owners so much as virtually all of us. How much one is willing to pay for the location itself is due not to what an owner has done on it but what society has done around it — infrastructure, low crime, high salaries, etc. — and what nature has done — good views, deep harbors, natural resources, etc. Those cities that do recover the value they create set in motion a cascade of welcome benefits.
What do owners do in order to afford land taxes or land dues? What they don’t do is speculate, as they now keep some lots vacant or under-used; rather they put their parcels to good use. If the locality also lowers or eliminates its tax on buildings, then owners go all out to improve their property. If the locality also quits taxing sales or business, while recovering more of its land value, then businesses, able to utilize prime sites that had been a parking lot or abandoned building, profit more and pay better wages and ROI. If the locality also quits taxing income, while recovering yet more socially-generated site value, then watch out — entrepreneurs and cultural creatives would flock to the city.
If not just a locality but an entire state or region were to recover its spending for land and resources — while not taxing labor or capital — then the jurisdiction would suffer an embarrassment of riches. What to do with so much surplus revenue? Share it. Pay members of society a dividend, similar to Alaska’s oil share, or Aspen Colorado’s housing assistance, or Singapore’s cash dividend. Most of the money for the dividend would come from urban areas, where site values are vastly higher, so countryfolk would finally be compensated for being the target (as many of them feel) of unwanted regulations.
Citizens would get to enjoy not just economic benefits but environmental ones as well. Infilling cities frees residents and workers from having to drive everywhere; instead, they can conveniently walk, pedal, or ride transit in much less time with infestation being over. Less traffic not only means less pollution and energy consumption but also the conversion to car-free downtowns, a la Old World cities, becomes much easier, making urban living far more vibrant and satisfying.
People who hope to make cities into healthy habitats for humans, not cars, have little choice. One can not leave the billions of location value up for grabs and expect results other than those we now endure. Curing cities is feasible. Once New World cities do recover their own values and quit taxing individual earnings, then it’ll be back to the future for them.
This undated abstract, tho’ likely of 2013 March, is by Ottmar Edenhofer and Linus Mattauch.
We prove that taxing the rent is welfare-enhancing since it increases capital investment. This holds for any tax level and any recycling of the tax revenues except for combinations of high taxes and strongly redistributive recycling. Specific forms of redistribution of the land rent tax — a capital subsidy or a transfer directed at fundless newborns — allow to reproduce the social optimum under parameter restrictions valid for most economies.
Ed. Notes: While academics won’t win any Pulitzers for their prose (tho’ you got to love their neologism “hyper georgism”), it is good to see people who get paid to contemplate geonomic proposals do think they are good ideas.
the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
the policy that the earth’s natural patterns suggests. Use the eco-system’s self-regulating feedback loops as a model. What then needs changing? Basically, the flow of money spent to own or use Earth (both sites and resources) must visit each of us. Our agent, government, exists to collect this natural rent via fees and to disburse the collected revenue via dividends. Doing this, we could forgo taxes on homes and earnings and subsidies of either the needy or the greedy. For more, see our web site, our pamphlet of the title above, or any of our other lit pieces; ask for our literature list.
more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.
a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heritage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a dividend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jefferson suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.
an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
a way to connect the dots. Making the cyber rounds is “The Cavernous Divide” by Scott Klinger, from AlterNet (posted March 21): “As the number of billionaires in the world expands, so does the number of those in poverty.” Duh. The yawning income gap is not news. Nearly every issue of our quarterly digest carries a similar quote. Yet the connection was worked out long ago by one of America’s greatest thinkers, Henry George, who labeled his masterpiece, Progress and Poverty. Techno- and socio-advances always enrich few and impoverish many. Yet progress also pushes up location values – the geonomic insight (is Silicon Valley cheaper now or more expensive?). Instead of taxing income, sales, or buildings, society could collect those values of sites, resources, EM spectrum, and ecosystem services via fees and dues, which would lower the income ceiling, and instead of lavishing corporate welfare, pay out the recovered revenue via dividends, which would jack up the income floor. Dots connected.
one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat — or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off — a hostile environment for economan but a cradle for a loving and creative humanity.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
I would no more teach children military training than teach them arson, robbery, or assassination.
Eugene V. Debs
Not everything that can be counted counts, and not everything that counts can be counted.
The equal right of all men and women to the use of land is as clear as their equal right to breathe the air. It is a right proclaimed by the fact of their existence. For we cannot suppose that some men and women have a right to be in this world and others do not.
So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable.
Always do right. This will gratify some people and astonish the rest.
The future ain’t what it used to be.
It gets late early out there.
You may be disappointed if you fail, but you are doomed if you don’t try.
I have come to the conclusion that politics is too serious a matter to be left to the politicians.