We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.
This 2014 excerpt of the New York Times, Jun 5, is by Carl Zimmer.
Billion-dollar levees aren’t the only things that protect coasts from storm damage. Nature offers protection, too. Coastal marshes absorb the wind energy and waves of storms, weakening their impact farther inland, and rebuild themselves.
Protection from storms is one of many services that ecosystems provide us — services that we’d otherwise have to pay for. In 1997, a team of scientists estimated they are worth, worldwide, $33 trillion — equivalent to $48.7 trillion in today’s dollars. Put another way, the services ecosystems provide us were twice as valuable as the gross national product of every country on Earth in 1997.
Robert Costanza, a professor at Australian National University who led the study, has concluded that ecosystems do more for us than researchers could appreciate in 1997.
Coral reefs, for instance, have proved to be much more important for storm protection than previously recognized. They also protect against soil erosion by weakening waves before they reach land. Each acre of reef provides $995,000 in services each year for a total of $11 trillion worldwide.
The global figure for all services is $142.7 trillion a year (in 2014 dollars).
Deforestation and other damage we’ve inflicted on the natural world has wiped out $23 trillion a year in ecosystem services. The gross domestic product of the United States is “only” $16.2 trillion.
Yet ecosystems don’t simply provide us with good things. Ecosystems can also harbor diseases and harm us in other ways.
Ed. Notes: We can’t pay Nature so whom would we pay? And who would do the paying? And who would determine exactly how much? For the last question, if we reformed limited liability, then businesses would buy insurance, and insurance companies, not just armchair academics, would also calculate ecosystem values.
We could look at our species’ damage of ecosystems totally differently. Instead of play brain dead and accept it as the price of progress, we could make polluters and depleters pay. We could auction off emission permits and extraction leases. We could require those who own land to set aside an Ecology Security Deposit, like tenants do when moving into an apartment. We could require those who use the environment to buy Restoration Insurance, like drivers must have insurance. And we’d fine those who exceed emission standards.
Something else to do is to charge owners land dues. Having to pay, they won’t want their precious land to get ruined and will provide better care. And with all these collected revenues we could pay dividends to the citizenry. Where land is healthier, its value is higher, so the dividend would be fatter, and everyone would have a financial reason, too, to go with love, to conserve resources and be better stewards.
This 2014 excerpt of Forbes, Jun 5, is by Contributor Michael F. Cannon of the Cato Institute.
Lobbyists pursue rents on behalf of their clients. In economics, “rents” are income above and beyond the value you provide to your customers; they are income in excess of production.
When lobbyists for labor unions demand mandatory unemployment minimum-wage laws, it is in part because adding to the labor costs of non-union shops makes union shops more competitive. When lobbyists for physicians demand laws preventing nurse practitioners from signing death certificates or performing other tasks within the NPs’ training, it is in part because physicians earn more income if they are the only ones permitted to perform those services. Union members and doctors receive more income, but not because they are more productive than they were before. The added income they receive are rents.
When lobbyists use government to extract rents for their clients, that additional income comes at the expense of vibrant and thriving parts of the economy: from the clients’ competitors and customers.
Ed. Notes: Want to know how to put lobbyists out of business? Quit letting politicians spend our public dollars. No more subsidies and tax breaks.
Instead of politicians deciding how much to fund programs like schools and medical care and welfare, pay the citizenry a hefty dividend. Instead of politicians deciding how much to fund infrastructure, force them to sell bonds to be paid off from any rise in land value near the project — no rise, no sale. Instead of exempting certain people from unfair taxes, exempt everyone from those but no one from fair charges, such as pollution fees and land dues and resource royalties.
Let politicians spend our money on one thing only: war. So if we don’t want to pay the war tax (on our incomes), we’ll have to learn how to wage peace.
This 2014 excerpt of Robert Reich’s Blog, Jun 5, is of course by Robert Reich.
Corporations don’t break laws. People do. In the cases of GM and Credit Suisse, the evidence points to executives at or near the top.
Credit Suisse pleaded guilty to criminal conduct. GM may also face a criminal indictment. Yet the government imposes corporate fines.
Such fines are often treated by corporations as costs of doing business. GM was fined $35 million. That’s peanuts to a hundred-billion-dollar corporation.
Credit Suisse was fined considerably more — $2.8 billion. But even this amount was shrugged off by financial markets. In fact, the bank’s shares rose the day the plea was announced – the only big financial institution to show gains that day. Its CEO even sounded upbeat: “Our discussions with clients have been very reassuring and we haven’t seen very many issues at all.” (Credit Suisse wasn’t even required to turn over its list of tax-avoiding clients.)
Fines have no deterrent value unless the amount of the penalty multiplied by the risk of being caught is greater than the profits earned by the illegal behavior.
The people hurt aren’t the shareholders who profited years before when the crimes were committed. Most current shareholders weren’t even around then.
To be sure, corporations can effectively be executed. In 2002, the giant accounting firm Arthur Andersen was found guilty of obstructing justice when certain partners destroyed records of the auditing work they did for Enron. As a result, Andersen’s clients abandoned it and the firm collapsed. (Andersen’s conviction was later overturned on appeal).
But here again, the wrong people are harmed. The vast majority of Andersen’s 28,000 employees had nothing to do with the wrongdoing yet they lost their jobs, while most of its senior partners slid easily into other accounting or consulting work.
Conservatives talk about personal responsibility. But when it comes to white-collar crime, I haven’t heard them demand that individuals be prosecuted. Yet the only way to deter giant corporations from harming the public is to go after people who cause the harm.
Ed. Notes: When a big name talks tough about powerful people, that’s great. An even deeper reform, one that might discourage criminal behavior by executives in the first place, would be to get government to end its practice of limiting the liability of all business people automatically (for a mere filing fee). Without that blanket license to do harm to others, business people would buy insurance and sign contracts with investors. Insurance companies and stockholders would pressure managers to clean up their act.
This 2014 excerpt of the Philippines’ Inquirer, Jun 2, is by Tonette Orejas.
The agrarian reform process for Luisita lands had been “hijacked by financiers who reconsolidated the [distributed agrarian] lands through the arriendo (land rent) system. Big sugar planters have leased agrarian lands in Hacienda Luisita owned by farm workers. The contracts bind the agrarian reform beneficiaries to continue farming sugar exclusively and prevent them from planting other crops, not even food for their tables.
The arriendo contracts would last until 2016, which is the end of the six-year term of President Aquino, whose relatives lost a 6,000-plus hectare estate in Tarlac province to agrarian reform.
A legislator, a retired police general, a former Land Transportation Office chief, and a relative of President Aquino are among the arriendo contractors.
Ed. Notes: Some land reforms work, some don’t. One that has always worked wherever tried, whenever tried, is for government to tax land or charge owners a land use fee or institute land dues. Having to pay such a periodic charge constantly makes it too expensive to own too much land; there is no profit for absentee owners who’re nothing more than useless middlemen. So the hoarders and speculators get out of the way of those who actually work the land.
Since working the land does not actually pay very much, country people could be greatly aided by getting back shares of all the ground rents collected in their region by their regional government. With land dues in and rent dividends back out, land would be distributed automatically and family farming would be a comfortable way of life.
Another benefit is the toppling of class and hierarchy and the creation of an egalitarin society.
These two 2014 excerpts on taxing land are from (1) The Guardian, Jun 2, by Hilary Osborne which was not so precise, and (2) Sightline, Jun 10, by Jerrell Whitehead and Clark Williams-Derry which was very precise.
Britain Told to Rein in Property Boom by European Commission
Britain needs to reform its council tax system, build more houses and make changes to the Help to Buy scheme to stop the property boom getting out of control, the European commission has warned.
The EU’s executive body urged the government to reform the “regressive” council tax system as taxes are relatively higher on low-value homes than high-value ones.
“Reforms to the taxation of land and property should be considered to alleviate distortions in the housing market. At the moment, increasing property values are not translated into higher property taxes as the property value roll has not been updated since 1991 and taxes on higher-value property are lower than on lower-value property in relative terms.”
Is an underused (at midday), 63-spot parking lot the new normal for downtown Seattle? It shouldn’t be. Proximity to jobs, people, retail, and transportation should have made parcels like these ideal targets for new homes or office buildings.
The Eitel Building is a historic building that is a stone’s throw from Pike Place Market, Seattle’s number one tourist attraction, and has been unoccupied above the ground floor since the 1970s.
There are plenty of other badly underutilized properties dotting the landscape of downtown Seattle, and there are undoubtedly similar cases in other major cities throughout the Northwest and beyond.
Under today’s tax rules, leaving a lot empty, or letting a building slowly rot, gives the property owner a light tax bill. Land speculators detract from the value of their neighborhood by leaving productive land derelict or by allowing buildings to disintegrate.
One of the best solutions is a land-value tax. In its purest form, the LVT taxes only the value of land itself, while leaving buildings and other improvements tax-free. Shifting taxes from buildings to land would make downtown land speculators’ tax bills soar, creating powerful incentives to put high-value land to more productive uses. A more built-up, vibrant downtown diverts growth from lower-value properties in the suburbs.
The greatest advocate for the tax was 19th century economist Henry George, whose seminal work Poverty and Progress (1879) argued for a “single tax” on land. Arden, Delaware (1900) and Fairhope, Alabama (1894) are small Georgist single tax “colonies.” Altoona, Pennsylvania in 2013 adopted a pure land-value tax.
When you tax something, you get less of it. Taxing sales reduces sales, taxing income reduces income, taxing buildings reduces building. Such taxes subtly distort the decisions of consumers, households, and businesses. But a land-value tax mostly discourages land speculation, particularly on the highest-value land.
Land-value taxation is fairer than many other taxes. Location, location, location —- that’s what gives land its value. The LVT puts a tax on benefits that a landowner didn’t earn either through their own labor or their own investments.
The LVT could replace other regressive taxes, including the sales tax.
What’s required to get the LVT moving are legal and political daring from determined champions that are willing to make the case for a fairer, more effective tax system.
Ed. Notes: It need not be a tax to recover the socially-generated value of land; a fee or dues or lease would work as well. And the revenue need not go to legislators to spend; it could come back to residents as a dividend. Incorporating the dividend is what gets carbon taxes passed; money in the pocket should work for asking people to pay land rent to their community, too.
This 2014 excerpt of Web of Debt, Jun 1, by Ellen Brown.
A general rule for government bonds is that they double the cost of projects, once interest has been paid. The San Francisco Bay Bridge earthquake retrofit was originally slated to cost $6.3 billion, but that was just for salaries and physical materials. With interest and fees, the cost to taxpayers and toll-payers will be over $12 billion.
And those heavy charges pale in comparison to the financing of “capital appreciation bonds.” The borrower pays only the principal for the first few years. But interest continues to compound; and after several decades, it can amount to ten times principal or more. Folsom Cordova used capital appreciation bonds to finance $514,000. The sticker price after interest and fees will be $9.1 million.
California needs $700 billion in infrastructure over the next decade, and the state doesn’t have that sort of money in its general fund. Where will the money come from?
North Dakota uses its Bank of North Dakota to generate credit. The BND partners with local banks rather than competing with them. North Dakota has the most local banks per capita of any state. Every year since the 2008 banking crisis, it has reported a return on investment of between 17 percent and 26 percent. North Dakota is the only state to escape the credit crisis, boasting a budget surplus every year since 2008.
California’s population is more than 50 times that of North Dakota. California has over $200 billion stashed in a variety of funds identified in its 2012 Comprehensive Annual Financial Report (CAFR), including $58 billion managed by the Treasurer in a Pooled Money Investment Account earning a meager 0.264% annually. California also has over $400 billion in its pension funds (CalPERS and CalSTRS).
This money is earmarked for specific purposes and cannot be spent on the state budget, but it can be invested. It could be invested in a state-owned bank, and deposited in the bank as interest-bearing certificates of deposit, which the bank could lend. The interest would return to the state.
By doing its own financing in-house, the state can massively expand its infrastructure without imposing massive debts on future generations.
Ed. Notes: While public bankers might charge a lower interest, that rate could also be lowered by law, as old laws against usury used to. And however much the rate, the interest could be returned to the state not just by owning the bank that does the lending but also by taxing interest rather than exempting it as is now the case.
Bigger picture, some of that interest paid by governments goes to seniors, retired government workers, and others who own the bonds and need the income. If they lose that income, from where will they get replacement income?
Bonds could play a vital role in eliminating wasteful public spending. What if bonds had to be paid back only from any resultant rise in land value near the new infrastructure? If the proposed project looked like a bad idea, nobody would buy its geo-bonds, and white elephants like bridges to nowhere would not get built; only truly useful infrastructure would get built.
Often one of the biggest costs in new infrastructure is buying up the land. However, if the local government is recovering land value, then land price is nil. The project would only have to pay for any buildings on the land.
Establishing a public bank, or empowering the public treasury with banking functions, is not a bad idea but it might not be a necessary idea either, once the public recovers its own location value that its presence creates.
This 2014 excerpt of Salon, Jun 1, is an interview of David Graeber, author of “Debt: The First Five Thousand Years” and co- launcher of Occupy Wall Street, by Thomas, author of “What’s The Matter With Kansas” and “Pity the Billionaire” and “One Market Under God” and is the founding editor of The Baffler magazine.
By the ‘60s, most people thought that robot factories, and ultimately, the elimination of all manual labor, was probably just a generation or two away.
Today productivity continues to increase, but Americans work more hours per week than they used to, not fewer. More than workers in other countries.
Administrative and managerial positions jumped in manufacturing. The same thing happened in universities, the same endless accretion of layer on layer of administrative jobs. Has the process of teaching become three times more complicated than it was in the 1930s?
The total number of people involved in industrial production has declined. Service, administrative, and clerical jobs have gone from roughly a quarter of all jobs in the ‘30s to maybe as much as three quarters today.
Most work is stupid, degrading, unnecessary, and best avoided whenever possible. Some industries don’t need to exist, like most of the corporate lawyers, or telemarketers, or lobbyists. In a hospital, half the employees never seem to do anything for sick people, but are just filling out insurance forms and sending information to each other. Some of that needs to be done, but for the most part, 90 percent of what they do is bullshit.
Ancillary workers support people doing the bullshit jobs: an office where people translate German formatted paperwork into British formatted paperwork, and there has to be a whole infrastructure of receptionists, janitors, security guards, computer maintenance people. They’re actually doing something, but they’re doing it to support people who are doing nothing.
The financial crisis, the Wall Street bailouts, reveal that people who do almost nothing that’s productive reap so much of our society’s rewards. A lot of this stuff was not just scams, but pretty simple-minded scams, like taking bets you couldn’t possibly pay if you lost and getting the government to bail you out if you did. These guys weren’t creating value of any kind. They were making the world worse and getting paid insane amounts of money for it.
If there’s a rule, it’s that the more your work benefits others, the less you’re paid for it. CEOs and financial consultants that are making other people’s lives worse were paid millions, useless paper-pushers got handsomely compensated, people fulfilling useful functions like taking care of the sick or teaching children or repairing broken heating systems or picking vegetables were the least rewarded.
If you’re a fork-lift operator or even a florist, you know your kid is unlikely to ever become a CEO, but you also know there’s no way they’ll ever become drama critic for the New Yorker or an international human rights lawyer.
The only way they could get paid a decent salary to do something noble, something that’s not just for the money, is to join the army. So saying “support the troops” is a way of saying “fuck you” to the cultural elite who think you’re a bunch of knuckle-dragging cavemen.
In education, almost all the problems aren’t created by the teachers or teachers’ unions but by school administrators —- the ones who are paid much more, and mostly have classic bullshit jobs that seem to multiply endlessly even as the teachers themselves are squeezed and downsized. A lot of people resent the teachers. And the logic seems to be: shouldn’t teaching be enough? They want that, and middle-class salaries, job security, vacations, and benefits, too? You even see that with auto workers. “But you get to make cars! That’s a real job! And you also want $30 an hour?”
People were saying, “I realize my job is pointless, but how can I support a family doing something that’s actually worthwhile?” Young Wall Street types would say, “I know you’re right, we’re not doing the world any good doing. But I don’t know how to live on less than a six figure income.”
But I don’t think we can solve the problem by mass individual defection. Let’s ditch all traces of the ideology that says that work is a value in itself; redefine labor as caring for other people, classic “women’s work”, nurturing children, looking after things.
Ed. Notes: As usual, the critics are pretty strong on the problem and not so strong on the solution. And their focus is on what people believe and value, not on fundamental change of public policy. But logically, if people are to work less, but not sacrifice their modern standard of living (which constantly improves), then people must receive an income apart from their wages for labor or interests for saving and investing.
The only source for such an extra income is the one thing of value that’s not created by anyone’s labor or capital and that is land, including resources and the EM spectrum and ecosystem services, etc. Members of society spend the biggest part of their household budget on natural goods like the land beneath their home and indirectly for the oil in their fuel, the iron in their car, the tree in their paper and wood, etc. Our spending on the rental value of land — not on building or harvesting or extracting — is an immense flow, the biggest in the GDP.
Government could redirect our spending, by using taxes or fees or leases or dues, into the public treasury then back out again as a dividend to the citizenry. Getting a share of the worth of earth, people could choose to work less. And as techno-progress drives up location values — as it has in Silicon Valley and many other places — our Citizen’s Dividends will fatten, and drudge jobs will become a thing of the past.
This 2014 excerpt of the Weekly Wastebasket, May 30, is by Taxpayers for Common Sense.
The Senate Armed Services Committee authorized $514 billion for the Pentagon and for building bombs at the Department of Energy. The Pentagon requested an additional $79.4 billion for undescribed expenditures in so-called “Overseas Contingency Operations ” (OCO) in Afghanistan. Yet the committee didn’t include any authority to spend money for this account.
The Pentagon could not provide Congress with a single detail in support of this enormous request. Is the OCO account really just a gimmicky “slush fund” that is technically off-budget so it does not count against the caps on spending? Historically the OCO account has been far smaller than in the last several years, typically in the range of $2-3 billion.
Given the ever increasing portion of the Pentagon budget that is eaten up by personnel costs, the funds available to actually develop and buy weapon systems are being squeezed. The Senate committee did go along with the Pentagon’s request to cap the pay raise for military service members at 1 percent and freeze the pay of generals and admirals. It also reinstated a previous cap on the retired pay of generals and admirals, but “grandfathered” in some of those officers.
Ed. Notes: Wasn’t too many wars ago when the entire US military budget was the size of the current OCO portion. And note the Pentagon budget does not include the spending for past wars — such as on veterans — and on future wars — such as some NASA research. There is so much money to be made by waging war that waging peace does not stand a chance. The US would probably be the most peaceful nation on earth if bureaucrats, officers, and weaponeers could not rake in such easy money.
Probably the only way to make Americans pro-peace is to tie every single income tax dollar to military spending. People complain about the taxes imposed upon them. If Yanks want to lighten their tax burden, they will have to become less belligerent and more tolerant of foreign ways.
The US could even try to make the world a better place instead of a global war zone by doing what works: free trade, no foreign aid (especially to dictators), de-tax labor to make US exports less costly to manufacture, and pay citizens a dividend to set a lofty example of economic justice. As other nations adopt the geonomic model and prosper, they won’t want to go to war either. Then we can totally eradicate the military/industrial complex.
These 2014 excerpt of IPS, May 29, is by Stephen Leahy.
The world is increasingly hungry because small farmers are losing access to farmland. Small farmers produce most of the world’s food but are now squeezed onto less than 25 percent of the world’s farmland. Corporate and commercial farms, big biofuel operations, and land speculators are pushing millions off their land.
If all farms in Central America matched the output of small farms, the region would produce three times as much food.
Zimbabwe was harshly criticised by the international community for redistributing farmland to smallholders, including women, in 2000. They now produce over 90 percent of the nation’s food crops, compared to 60 to70 percent before 2000.
Small farmers practicing agroecological farming produce more food, protect soil and water, have far lower CO2 emissions and provide better livelihoods.
Big investors see farmland as a safe and secure investment, especially in the US, with its multi-billion dollar farm subsidies. In many areas the price of land has shot upwards pushing many farmers off their land. US farms are increasingly run by corporate farm managers who hire farm workers not farmers.
Ed. Notes: If investors could not keep the rental value of land, would they still want to own it? Is the profit from harvests enough to attract investors? Or is it the subsidies not just to big farms but also to big shippers and big truckers? And factory farms do not have to pay for the damage they do to the environment, such as the dead zones in the ocean from fertilizer runoff. If they had to buy insurance and pay compensation, how eager would outside investors be? Is agri-business another of those industries that’s unable to profit unless it can pollute, free of charge?
Not only should government quit its subsidies and charge our polluters but it should also quit taxing wages. Gardening and small farming is labor intensive while factory farming is capital intensive. Hence taxes on labor and deductions for capital shift profit from small farms to big.
Government should also charge land dues and pay rent dividends. Since land value is low in the country and high in the city, and the dividend would be equal for all citizens, farmers would come out ahead while wealthy investors, who typically live on locations of sky-high site value, would pay more. These two shifts — of profit and of location value — are all the help farmers need. But it’s is up to us to declare that all land — not just farmland — is not a usual source of profit but also our common heritage, to be shared and conserved. Land dues and Citizen’s Dividends make that claim loud and clear.
This 2014 excerpt of the Financial Times, May 23, is by Dr Hugh Goodacre, University of Westminster and University College London, UK.
The current debates over the teaching of economics demonstrate how far university departments have fallen behind their own students in their response to the requirements of the times, just as they have been falling behind the economic and financial press and other opinion formers.
Departments aim to justify to first-year students that their further curriculum will centre overwhelmingly on mathematical models.
To suggest that the orthodox approach is amenable is not the same thing as “rethinking economics”, which is what is being called for by students and others. Indeed, giving the impression of change but not actually providing any change will hold back other attempts at breaking the orthodox stranglehold over the curriculum.
Ed. Notes: Economists are too conformists to think outside the box and come up with any good ideas for making the economy serve us instead of us serve the economy. That task is left to true scientists. As astrology gave rise to astronomy and alchemy did chemistry, some day economics must give way to geonomics, the discipline that puts the immutable laws of nature first.
Before the list gets any longer, here are a half dozen more references to an ideal reform in the rest of the media. These 2014 excerpts are of: (1) Albany’s Metroland, May 22, on MONOPOLY by Miriam Axel-Lute; (2) Ireland’s Independent, May 25, on planners by Ronan Lyons; (3) Mondaq, Jun 2, on owning Scotland by Gillian Campbell and Ainsley MacLaren; (4) The Economist, Jun 9, on fast trains by E.H.; (5) The Guardian, Jun 10, by George Monbiot; and (6) Sightline Daily, Jun 10, on urban renewal by Jerrell Whitehead and Clark Williams-Derry.
Who Owns the Land?
Monopoly was first invented under the name The Landlord Game to illustrate the problematic effects of private land ownership and the system of rents. Elizabeth Magie, who created the game in 1902, was a follower of Henry George, the economist who proposed a single tax on land value, and was in his own time a wildly popular author and public figure.
Thomas Paine, author of The Rights of Man: “Man did not make the earth, and though he had a natural right to occupy it, he had no right to locate his property in perpetuity in any part of it . . . It is the value of the improvement only, and not the earth itself, that is individual property” (Agrarian Justice, 1797)
And Abraham Lincoln: “The land, the earth God gave 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.”
Sometimes I think those of us who want to question some very fundamental things about how our culture does things fall into the trap of thinking we’re the first ones to be considering questioning them, or at least the first in anything like our context and culture. It can make any radical change feel rather more impossible than it necessarily is.
Our Planners Want to Land Us In Trouble Again by Not Listening
We could scrap all the various developer contributions, levies and charges, we could also scrap industrial and commercial rates, stamp duty on properties and, of course, the local property tax and replace them all with a single unified land value tax that raised the same revenue and stimulated building where it is viable.
The Land Reform Review Group is an independent review group set up in 2012. Their full report sets out 62 recommendations focused on the public interest and making the most of land in Scotland
give local authorities the right to force the sale of vacant or derelict land; and
tax land value taxation as an alternative to council tax, but this appears to have been quickly ruled out by the Scottish Government.
Reaction to the report has generally been positive. However, large landowners and their supporters have seen it is a fundamental attack on their property rights.
JR East, the largest by passenger numbers, does not require any direct public subsidy from the Japanese government, unlike the heavily-subsidised TGV in France. JR East owns all the infrastructure on the route: the stations, the rolling stock and the tracks.
JR East owns the land around the railways and lets it out; nearly a third of its revenue comes from shopping malls, blocks of offices, flats and the like.
Even so, 71% of the revenue from passenger tickets at JR East comes from the conventional, slower railway. Countries looking to lay down speedy new tracks might want to consider investing in their existing railway lines as well.
Ed. Notes: It’s not necessary for the railway to own the land. A public transit authority could tax it and dedicate the raised revenue to building and maintaining the mass transit system. Fares could still cover the cost of operation.
Unchallenged by Craven Labour, Britain Slides towards ever more Selfishness
Research across 70 countries suggests that intrinsic values are strongly associated with an understanding of others, tolerance, appreciation, cooperation and empathy. Those with strong extrinsic values tend to have lower empathy, a stronger attraction towards power, hierarchy and inequality, greater prejudice towards outsiders, and less concern for global justice and the natural world. These clusters exist in opposition to each other: as one set of values strengthens, the other weakens.
They tend to report higher levels of stress, anxiety, anger, envy, dissatisfaction and depression than those at the intrinsic end. Societies in which extrinsic goals are widely adopted are more unequal and uncooperative than those with deep intrinsic values. In one experiment, people with strong extrinsic values who were given a resource to share soon exhausted it (unlike a group with strong intrinsic values), as they all sought to take more than their due.
As extrinsic values are strongly associated with conservative politics, it’s in the interests of conservative parties and conservative media to cultivate these values. When people feel threatened or insecure, they gravitate towards extrinsic goals. Perceived dangers – such as the threat of crime, terrorism, deficits, inflation or immigration – trigger a short-term survival response, in which you protect your own interests and forget other people’s.
Values and baselines keep shifting, and what seemed intolerable before becomes unremarkable today.
Labour treats the deficit as a threat that must be countered at any cost. Its report says not a word about plugging the gap with innovative measures such as a Robin Hood tax on financial transactions, a land value tax, a progressively banded council tax or a windfall tax on extreme wealth. Nor does it mention tax avoidance and evasion.
The party says it will be “radical in reforming our economy” in support of “a determinedly pro-business agenda”. They appear to believe that success depends on becoming indistinguishable from their opponents.
It evinces a near-perfect psychological illiteracy. When a party reinforces conservative values and conservative ideas, when it fails clearly to expound any countervailing values, when it refuses to reverse the direction of the values ratchet, what outcome does it expect, other than a shift towards conservatism?
Downtown Seattle holds some of the most valuable real estate west of Minneapolis and north of San Francisco. Yet a stroll through Seattle’s urban core reveals unwelcome surprises: rundown, decrepit buildings; empty land parcels; and surface parking lots on prime real estate, just blocks away from high-rises worth tens or even hundreds of millions of dollars.
Is an underused (at midday), 63-spot parking lot the new normal for downtown Seattle? It shouldn’t be. Proximity to jobs, people, retail, and transportation should have made parcels like these ideal targets for new homes or office buildings. Yet a two-decade boom in downtown real estate has passed such sites by.
For example, the Eitel Building is a a stone’s throw from Pike Place Market, Seattle’s number one tourist attraction, and has been unoccupied above the ground floor since the 1970s. This marks four full decades of neglect and decay. Its immediate neighbor is a 38-floor glass and steel structure touted as “the West Coast’s most successful condominium high-rise.” Sorry, no vacancies, and resale prices begin at the low $1,000,000s!
These present just a few examples. There are plenty of other badly underutilized properties dotting the landscape of downtown Seattle, other major cities throughout the Northwest, and beyond.
Under today’s tax rules, leaving a lot empty, or letting a building slowly rot, gives the property owner a light tax bill. These land speculators become free-riders: their properties rise in value, sometimes dramatically, because of the hard-fought efforts by neighbors and city government to create vibrant and attractive downtowns. Yet many land speculators detract from the value of their neighborhood by leaving productive land derelict or by allowing buildings to disintegrate.
So what’s the solution to all this underutilized land? A land-value tax, or LVT. Shifting taxes from buildings to land would make downtown land speculators’ tax bills soar, creating powerful incentives to put high-value land to more productive uses — and diverting growth from lower-value properties in the suburbs.
The greatest advocate for the tax was 19th century economist Henry George, whose seminal work Poverty and Progress (1879) argued for a “single tax” on land.
Arden, Delaware (1900), and Fairhope, Alabama (1894) are extant, small Georgist single tax “colonies.” On a larger scale, Altoona, Pennsylvania in 2013 became the only US city that has a pure land-value tax.
Just because something is hard doesn’t mean it isn’t worthwhile. What’s required to get the LVT moving are equal doses of legal and political daring from determined champions that are willing to make the case for a fairer, more effective tax system.
This 2014 excerpt of Zocalo Public Square, May 22, is by Andres Martinez.
A small island nation of 5 million people (it’s really just a city), Singapore is tropical sticky but impeccably clean, inhabited by Chinese, Malays, Indians, and a multiplicity of guest workers from around the world all speaking English.
On the eve of celebrating its 50th anniversary as an independent nation, it boasts the world’s second-busiest seaport, a far higher per-capita income than its former British overlord, and a raft of number-one rankings on lists ranging from least-corrupt to most-business-friendly countries.
One business leader noted that he has never had to pay a bribe in his lifetime. It’d be a difficult claim to make in neighboring Southeast Asian countries (or developing nations anywhere. You couldn’t get by in Mexico without paying bribes, constantly.)
When it split off from Malaysia a half-century ago to become a separate nation of dubious viability, Singapore had little going for it, other than a determination to become whatever it needed to be —- assembly plant, container port, trustworthy banking and logistics center, semiconductor hub, oil refinery, mall developer, you name it.
A one-party technocracy has delivered the goods across two generations including affordable, publicly built housing for a majority of the population and a system of private lifetime savings vehicles.
Society’s cohesive glue, in addition to English, is a collective form of the “Singlish/Chinese” term “kiasu”, which roughly translates into a fear of losing or being left behind.
Kiasu usually refers to the extraordinary lengths to which people —- individually and collectively —- have gone to ensure success. And the motivating anxieties are not hard to discern in a nation-state so small it must rely on other countries for the water it drinks and the space to train its armed forces (they recall the brutal Japanese occupation during World War II).
Opposition parties are gaining some ground in parliamentary elections, capitalizing on unhappiness with strained public services, soaring prices, and an influx of super-wealthy foreign investors that resulted from the government’s openness to rapid growth.
Until recently, Singapore was among the most welcoming places to outsiders, with one out of every three residents born elsewhere. But with fertility rates dropping, the country opened the floodgates to immigrants to ensure continued growth and prosperity, turning immigration into a lightning rod.
A general unease about Singapore’s identity and concerns about overcrowding (owning a Honda Accord will set you back more than $100,000, in what has to be the bluntest form of congestion pricing anywhere) have forced the government to slow down its intake of immigrants and taper its growth projections.
Ed. Notes: Most reporters leave out that Singapore, like other Asian Tigers, could keep taxes low by keeping public recovery of socially-generated land rent high. Citizens paid a good portion of the rental value of their land into the public treasury (usually as a tax but as a lease premium in Hong Kong) but the taxes they paid on their buildings, purchases, and earnings was low. This formula worked so well in Singapore that they not only could afford classy public housing but also pay their citizens a dividend from surplus public revenue. Nowhere else can make such a claim. But the business press overlooks geonomics, unfortunately.
These two 2014 excerpts are of (1) Common Progress, May 20, by Jeremiah Luttrell; and (2) Basic Income News, June 1 by Karl Widerquist.
Basic Income in America: Welfare Aid in Direct Cash
Earlier this year, news sources have reported that voters in Switzerland are considering a Basic Income of $2,750 a month, for every person, regardless if they work or not. A Basic Income is a proposed system of social security in which all citizens or residents of a country receive an unconditional sum of money.
Nobody else has the right to tell you what you can best contribute to the world. There are a few people who would be parasites, but most people actually want to feel that they have contributed something to society.
One supporter among the political-right is Charles Murray, a libertarian political scientist and fellow at the American Enterprise Institute. Murray supports the Basic Income because he believes it’ll replace the current bureaucratically administered welfare system that costs more money than the Basic Income would.
So there’s no more food stamps; there’s no more Medicaid; you just go down the whole list. None of that’s left. The government gives money; other human needs are dealt with by other human beings in the neighborhood, in the community, in the organizations.
Another supporter among the political-right is Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University. It is simple and fair because it gives a lump sum of money to everyone. The minimum income assumes that they, better than anyone else in Washington, know what they need.
Even one of the greatest thinkers in libertarian thought, Friedrich Hayak, supported a Basic Income: The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born.
The Basic Income can also replace unemployment insurance, Social Security, disability coverage, and the federal minimum wage. It can either streamline or replace the US Department of Education and National School Lunch Program.
New Political Party that Endorses BIG Takes 5 Seats in European Parliament
Podemos, a new Spanish political party that includes unconditional basic income (UBI) as one of its main economic policy objectives, has won five seats in the European Parliament. Organized barely three months before elections, the party seemed to come out of nowhere to a win nearly 8% of the vote (1.2 million votes) and finish in fourth place in the elections held on May 25, 2014.
Podemos (which means “we can”) grew out of the anti-austerity protest movement known as Indignados. It claims to be a party of ordinary citizens who desire a fundamental change in the political process toward greater democracy, freedom, and social protection.
If the citizens don’t get involved in politics, others will. And that opens the door to them robbing you of democracy, your rights, and your wallet.
Party leaders promise to accept a salary of no more than three times the Spanish minimum wage.
The party also supports reducing the working week to 35 hours and lowering the retirement age to 60.
Ed. Notes: It’s great to see people willing to help the needy but it’d be even better if people could see that society has a surplus that belongs to everyone and if we shared it fairly, there’d be no need to create a basic or minimum extra income. It’s ironic that supporters propose paying this extra income but do not explore how to fund it. If they did, then they’d have to see the surplus, our common wealth, now merely funding a few private fortunes, and of course they’d call for sharing it.
This 2014 excerpt of The Web of Debt Blog, May 19, is by Ellen Brown.
In the nineteenth century, Mississippi, Arkansas, Florida, Kentucky, and Indiana all had their own state-owned banks. Some were extremely successful (Indiana had a monopoly state-owned bank). These banks, too, withstood constitutional challenge at the US Supreme Court level.
Several decades earlier, the states had been colonies that issued their own currencies in the form of paper scrip, typically called “bills of credit”.
After the Civil War, the expanding economy needed a source of expandable currency and credit, and when local governments could not provide it, private banks filled the void. They issued their own “bank notes” equal to many times their gold holdings, effectively running their own private printing presses.
Was that constitutional? No. The Constitution nowhere gives private banks the power to create the national money supply – and today, private banks are where virtually all of our circulating money supply comes from. Congress ostensibly delegated its authority to issue money to the Federal Reserve in 1913; but it did not delegate that authority to private banks, which have only recently admitted that they do not lend their depositors’ money but actually create new money on their books when they make loans.
When enough people understand that private banks rather than governments create our money supply, imposing interest and fees that constitute an enormous unnecessary drain on the economy and the people, we might wake up to a new day in banking, finance, and the return of local economic sovereignty.
Ed. Notes: Not that those in power obey the US Constitution always, but the old document does oblige the federal government to define and enforce weights and measures in the same article that it empowers Congress to coin money. So by that language, the government could set standards by which any currency could attain the status of legal tender. After a while, the competing currencies may get down to one or two — as along national borders — but the possibility of a new competing currency arising would keep the old established currency honest.
That means, issuers of currency — whether government, bank, or a consensual currency club — would have to constantly settle their debts and not issue too much new money. That means, inflation would not occur, and the true cost of living would show up as constantly falling prices.
Once again, it appears that allowing people to both cooperate and compete — rather than merely obey a central bank or government — solves an issue of centralization that some reformers try to address with the coercive power of the state. Let a free and fair market rule!
This 2014 excerpt of the Washington Post, May 14, is by Charles Lane, a Post editorial writer, specializing in economic policy, financial issues and trade.
The year 2014 marks the 50th anniversary of the Beatles’ arrival in the United States. The Allies liberated Paris 70 years ago. And, of course, it’s been 135 years since “Progress and Poverty,” by the American journalist Henry George, was published in 1879.
What’s that? Never heard of George or his treatise on the causes of inequality? It sold 3 million copies. Perhaps you missed “Progress and Poverty’s” anniversary while perusing this year’s equally improbable bestseller, “Capital in the Twenty-First Century” by French economist Thomas Piketty.
With its sweeping review of historical data, culminating in a warning about capitalism’s inexorable, destabilizing, tendency toward inequality — to be cured by a global wealth tax — Piketty’s book has earned comparisons with “Das Kapital,” by Karl Marx.
Yet Piketty’s project may have more in common with George’s book than Marx’s, and not only because each tome reached U.S. readers six years after a ruinous financial crisis — the Panic of 1873 for George, the 2008 collapse of Lehman Brothers for Piketty.
Analyzing the stagnant economy and rich-poor gap of his day, George blamed not free markets, which he considered efficient and fair, but their corruption by a privileged few.
Specifically, George argued, land owners commanded a high and growing share of U.S. income even though their claim to it was based on something as unproductive as mere ownership — as opposed to the laborer’s work effort or the investor’s risk-taking.
For George, the solution was to abolish all taxes except a “single tax” on the value of land. Since land could neither be created nor destroyed, taxing it would reduce neither society’s total wealth nor owners’ incentives to put property to productive use — buildings and other improvements wouldn’t be taxed.
To the contrary, taxing land, and only land, to pay the government’s bills would liberate labor and capital to seek their most productive use and thus to grow the economy. A huge source of unearned wealth would be curbed, if not eliminated. Capitalism would be redeemed and democracy saved.
“It is not enough that men and women should vote,” George wrote (including a gender that could not, at that time, cast ballots). “They must have liberty to avail themselves of the opportunities and means of life; they must stand on equal terms with reference to the bounty of nature. . . . This is the lesson of the centuries. Unless its foundations be laid in justice, the social structure of the United States or any other country cannot stand.”
To Piketty, like George an admirer of market efficiency and opponent of protectionism, the resulting accumulation of wealth in relatively few hands threatens economic fairness, economic dynamism — and democracy.
And so, updating Henry George’s single tax, Piketty proposes a global wealth tax.
For Piketty and George, the bottom line, both moral and economic, is to socialize “rent” — rent, that is, not in the colloquial sense but in the economic sense of income disconnected from productivity.
It’s an attractive vision: an egalitarian, productive society, purged of parasitical rent-seeking through the expedient of well-aimed taxes.
Ed. Notes: The author claims that the problem with taxing land — or charging land use fees or deed fees or leasing public land or instituting land dues — is not moral but practical. He thinks that assessing the value of a location — apart from any building atop it — can not be done. However, there are many jurisdictions already doing it — notably Singapore and Hong Kong — and private parties in the real estate business appraise the value of sites all the time. So determining rent for land is really not an issue and should not be an obstacle. Governments should be gathering all the rents they can, while not taxing people’s efforts, and disburse the revenues in the most equitable ways possible.
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.
suitable for framing by Green Parties. When Greens began in Germany two decades ago, they defined themselves as neither left nor right but in front. Geonomics fits that description. The Green Parties have their Four Pillars; geonomists have four ways to apply them:
Ecological Wisdom. Want people to use the eco-system wisely? Charge them Rent and, to end corporate license, add surcharges. To minimize these costs, people will use less Earth.
Nonviolence. Want people to settle disputes nonviolently? Set a good example; don’t levy taxes, which rely on the threat of incarceration, to take people’s money. Try quid pro quo fees and dues.
Social Responsibility. Want people to be responsible for their actions? Don’t make basic choices for them by subsidizing services, addicting them to a caretaker state. Let people spend shares of social surplus.
Grassroots Democracy. Better have grassroots prosperity. Remember, political power follows economic. Pay people a Citizens Dividend; to keep it, they’ll show up at the polls, public hearings, and conventions.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?
the Great Green Tax Shift maxed out”
Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net.
Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent. Better settlement patterns do reduce extraction upstream and pollution downstream.
Politically, green fees have less impact if applied locally; local is where grassroots movements have more impact. Yet getting rent usually entails shifting the property tax (or charging user fees), the province of local jurisdictions; both mayors and city voters have been known to adopt a site-value tax.
Ethically, putting into practice “tax bads, not goods” skirts the issue of sharing Mother Earth which collecting rent confronts head on. Since nothing is fixed until it’s fixed right, ultimately, greens must lead humanity into geotopia where we all share the worth of Mother Earth.
a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.
of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.
close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)
a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.
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.
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.