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 Conversation, Apr 17, is by David Spencer, Professor at University of Leeds, and it also appeared at MacroBusiness.
Why we are still working so hard? The past century saw huge technological advances and yet there hasn’t been a corresponding increase in leisure time: people are working as hard as ever.
The Netherlands shows how shorter work time can be achieved without a reduction in productivity and in living standards. Longer work hours are also associated with poor health and higher mortality rates – we may be risking our lives by working longer.
The case for working less is ultimately about promoting a higher quality of life including a higher quality of work. It is about giving us more time to realise our creative potential in all kinds of activities; it is about achieving a life that uplifts us, rather than leaves us exhausted and frustrated.
The build-up of household debt, especially in the US and the UK, has put added pressure on workers to work longer.
Employers won’t voluntarily reduce work time, and workers remain unable or unwilling to opt for shorter work time themselves. We must gain the collective will to curb the time we spend at work. A four or three day working week is within our grasp.
Ed. Notes: The author thinks a law saying people may not work too much should do the trick. It hasn’t worked yet. What’s really needed is for everybody to get an extra income.
From where would come the money? It could be all the money we spend for the nature we use. Government could use taxes, fees, dues, leases, etc, to redirect our spending for land (in mortgages mostly) and for resources (in leases mostly), collecting it into the public treasury. Then disburse that revenue — several trillion dollars each year in the US — as equal shares to the citizenry.
Receiving their Citizen’s Dividend — about $1k/mnth — people could choose to work less and play more at the same standard of living. They’d not only have more fun but they’d live longer and incidentally shrink the income gap. Greater economic parity would also impart a whole world of benefits.
This 2014 excerpt of The Associated Press, Apr 22, is by Stephen Ohlemacher.
The Internal Revenue Service has paid more than $2.8 million in bonuses to employees with recent disciplinary problems, including $1 million to workers who owed back taxes.
More than 2,800 workers got bonuses despite facing a disciplinary action in the previous year, including 1,150 who owed back taxes.
Other examples of misconduct by workers getting bonuses included misusing government credit cards for travel, drug use, violent threats, and fraudulently claiming unemployment benefits.
The IRS had about 100,000 workers during the period under review. In the 2011 budget year, more than 70,000 IRS workers got cash bonuses totaling $92 million. In the 2012 budget year, nearly 68,000 workers got cash bonuses totaling $86 million.
Tax compliance at the IRS is generally better than at other federal agencies. In 2011, 3.2 percent of federal workers owed back taxes. The delinquency rate for the general public was 8.2 percent.
Ed. Notes: Such irony is delicious! I wonder if corruption could be cut out if the system itself were not corrupt? What if government did not take people’s earnings but instead recovered our common wealth for our common benefit?
I mean, don’t charge people for the wealth they create but for the nature and privileges they take. Don’t levy their wages, their purchases, and their buildings, but charge them for their pollution, their extraction of natural resources, and their occupying locations in settled areas. Then people would pay only for what they take, not what they make.
Further, citizens could be paid a fair share of the raised revenue. In such an equitable system, the model for justice would be clear to all, and the bar would be set so high, it seems it’d be hard for employees to cheat but rather would feel inspired to strive for the highest ideals.
This 2014 excerpt of Business Insider, Apr 21, is by Rob Wile, interviewing Mac Robertson, an independent portfolio manager and macro strategist who critiqued Thomas Piketty’s new book, Capitalism in the 21st Century.
BI: You say Piketty erred in trying to compare nations’ outcomes. What did you mean?
MR: Nation states, as far as macro economics, are really a fiction. The real aggregations are among hegemonic powers which set economic policy for their group or are a constantly morphing alliances of regions that transcend national borders.
And currently there is only one true hegemon which is the USA, but regional hegemons have defining capability if the USA has benign indifference in a certain region. For example Brazil has much clout in South America now. This is always a fact of life now and the usefulness of examining many nations hasn’t really been useful since Metternich.
What this means is there is little relevancy or usefulness in comparing Italy in the 20th century to the USA, for example.
BI: You said you preferred Henry George’s analysis of income distributions. Who was he and what did he say?
MR: Henry George was akin to Keynes and also Locke. The common denominator is one class of folks are “rentiers” who only seek a low risk return on their assets — usually inherited. That income is “rent.” In George’s time that was, for the most part, real rent on land leases.
George proposed that all funding of the public purse would be a tax on rent. Keynes went further and proposed that not only would rentiers be disproportionately taxed, but their ” euthanasia” should be sought. George would propose that inequality between rentiers’ capital accumulation and income of consumers and entrepreneurs is the only inequality to seek reducing or eliminating. Keynes agrees, so do I.
To not differentiate this income type invites disaster. Why would you tax a Bill Gates midstride? It would be very destructive. Yet Bill Gates’ income explains much of the income inequality. But would taxing late-stage Buffett be good? Perhaps. Certainly to tax third-generation rentiers and forcing the money back into the hands of future Bill Gateses, perhaps by funding universal education to promote future Bill Gateses, is good.
This 2014 excerpt of The Law School Tuition Bubble, Apr 21, is by Matt Leichter.
Anthropologist David Graeber is probably best known for writing the 2011 book Debt: The First 5,000 Years. Last summer he penned “On the Phenomenon of Bullshit Jobs,” which posited as a general rule that “the more obviously one’s work benefits other people, the less one is likely to be paid for it.” Jobs like nurses, cooks, and fight-clubbers-who-guard-you-while-you-sleep-so-do-not-fuck-with-us are good, bond traders, not so much. “Bullshit Jobs” was attacked by every neoclassically trained economist for rejecting marginal product theory.
The problem isn’t marginal product theory but what John Bates Clark did to it: tear land out because he was a shill for robber barons who hated Henry George and his land-taxing followers.
Graeber told PBS why he favored giving everyone a basic income instead of government welfare benefits of various types, a proposal favored by a handful of conservatives, most notably Charles Murray. Yet basic income, instead of government services, has a few problems. One, landowners will suck the benefits up, so without taxes on land rents, poverty won’t vanish. Two, paying for a basic income out of the current tax system will distort incentives for higher-income taxpayers. Three, some people need more government services than the basic income check will provide.
Ed. Notes: As more people acknowledge the need for a basic income, hopefully they will consider the soundest way to fund an extra income for everyone. If they win legislation to recover all “rents”, and share that revenue among the citizenry, then the payment won’t be conventional welfare but will be a Citizen’s Dividend, a fair share of our common wealth. Presently society’s surplus goes to just a few on top but it belongs to all of us and should go to all of us.
Ed. Notes: How do corporations get away with it? Because government was not set up to defend your rights to a healthy environment. Government was set up to limit the liability of businessmen when something goes wrong after they tried to make a buck by putting nature, worker, and consumer at risk. Look at the history of politics. The laws that limit liability are centuries older than the laws that “protect” the environment.
How can we get government to befriend citizens instead of lobbyists? One key reform is restrict the power to tax. Don’t let politicians tax anything they want. Limit them to taxing infringements such as pollution. Let them use taxes and fees, etc, to recover common wealth — such as the worth of Earth — and to leave our private wealth alone.
Worried about no longer taxing the rich? Don’t. First, we don’t really accomplish much of that anyway. Second, if we recover our common wealth upstream, then there won’t be any undue fortunes downstream to long to tax.
Once government can’t tax anything, and as long as politicians want to raise revenue, then they’d have to capture the same natural values that are now being captured by the oil companies. Once oil companies are no longer filthy and unduly enormously wealthy, they won’t be able to pay government to do their bidding — and limited liability could be severely curtailed.
Then, when businessmen have their own incomes on the line, they won’t be so cavalier about putting everyone else at risk. Industrial “accidents” would become as rare as a misplayed note at a symphonic concert. Industry should not be sloppy; it could become a thing of beauty — once deprived of free and easy limited liability.
The debates on raising the minimum wage have ignored one important consequence: the effect on land rent. I illustrate the relationship between a raise in wages and land rent with a quantitative model.
Suppose there is a factory that produces dried papayas. The firm pays all workers the market wage of $10 per hour. There are 10 workers, and the “marginal product” of the 10th worker, i.e. the extra output added by that worker, is 10 units. The marginal product of the 11th worker is only 4 units. The 9th worker added 12 units The 8th worker added 14 units. If we add up the value added per hour by each worker, we get 10 + 12 + 14 + 16 + 18 + 20 + 22 + 24 + 26 + 28 = 190 units. The dried papayas sell for $1 each, so the sales per hour equal $190. The total wage per hour is 10 times $10 = $100.
The owners invested the equivalent of $400 per hour in the business, and seek a return of ten percent, or $40 per hour, which they withdraw from revenue. $190 – $100 – $40 leaves a surplus of $50. Where does it go? It is the rent charged by the landlord per hour for the work space.
Now impose a minimum wage which raises the wage rate to $12. The last worker hired produces only $10 worth, so he is fired. That last worker had the same skill as all the others, but one worker has to be fired so that the marginal product of labor is raised to $12. Total wages now equal 9 times $12 = $108. The total value sold is now 180 units, for sales of $180. After subtracting $108 for labor and $50 for rent, there remains $22 for the hourly return on investment, a return of only 5.5 percent.
Now there are four possible alternatives. First, the owners can get a return of 10 percent elsewhere, so they shut down the business. Second, the owners can offer to renegotiate the rent paid to the landlord. Third, the owners can raise the price of the product. Fourth, the owners can reduce their labor costs by substituting more machines, if possible.
If the firm competes in a global market, the third option is not possible; the owners cannot raise the price. So they negotiate with the landowner. If the owners kept their return at $40, the surplus becomes $180 – $108 – $40 = $32. The landlord replies that their assets are less productive, generating sales of $180 rather than $190, so a new firm would have capital goods of 18/19 of $400, for $379. A ten percent return is $38. Therefore the rent surplus is $180 – $108 – $38 = $34. The owners accept this as the new hourly rent. Much of the increase in the hourly wage has been at the expense of less commercial land rent. That is how the firm can stay in business while paying the higher wage.
The total purchasing power is now $108 in wages, $38 in capital yields, and $34 in land rent, for a total of $180. So the income is sufficient to buy back the product.
Now let us go back to the workers. The worker who is fired is now on government welfare, and the nine working at $12 per hour get taxed $1 per hour to generate $9 for food and housing subsidies for the former worker. The housing landlords realize that they can raise the rents by $1 per hour of labor, since the workers could afford to live their prior to the increase in the minimum wage. The higher taxes and rent eat up all the wage increase.
Thus the housing landlords gain $10 per hour of rent paid by the nine workers plus the laid-off former worker. This raises their total rent to $44, offsetting some of the loss of the commercial rent paid by the firm.
If the firms implement option 3 and raise the prices of their products, the workers are now worse off than before, after paying more for goods plus higher taxes and higher rent.
In effect, a minimum wage is a tax on the employers of low-wage workers. It is economic folly to concentrate the minimum-wage tax on employers. If the people wish to raise the lowest wages, a better tool is to widen and raise the earned income tax credit. The reduction of taxes on low-income workers would be paid for by raising taxes on everyone else.
But the best solution of all to the problem of poverty is to do what the American economist Henry George proposed: to abolish all taxes on earned income, and shift to public revenues from land rent. That shift would increase both employment and wages.
When the minimum wage is raised, people only see the superficial appearance of some workers getting a bigger paycheck. What is not so visible is the reduction of land rent in commercial real estate, and the increase in the rent of residential real estate, especially as it occurs over time. The reduction of rent is often relative rather than absolute, as rents rise but not by as much as they would if enterprises were more profitable. And people do not connect the rise in residential rent to the general increase in low-income wages.
The original problem is in not allowing the market to work. Wages are artificially reduced by taxation, while land values are raised by subsidies. If higher minimum wages are mostly at the expense of commercial rent, and end up being eaten by higher residential rent, it is simpler and more effective to directly tap the land rent for public revenue while eliminating taxes on wages.
This 2014 excerpt of Weekly Wastebasket, Apr 18, is by Taxpayers for Common Sense.
The public helps the “cowboy” live high on the hog with sweetheart deals including water, mining, crop insurance, grazing, livestock disaster, and other subsidies from Uncle Sam.
Recently federal Bureau of Land Management (BLM) agents seized Nevada rancher Cliven Bundy’s cattle to settle the more than $1 million in fines he has racked up since 1993. The fines are a result of Bundy grazing his cattle on BLM lands where grazing is prohibited, land for which he didn’t have one of the 18,000 federal permits in the west.
Government data pegs private grazing fees at roughly $18 per Animal Unit Month (AUM represents the amount of forage (e.g. grass) a cow and her calf need for a month) throughout the west over the past two years. In Nevada the average private grazing fee was $15 per AUM. Yet this year the BLM fee is set at $1.35 per AUM.
The fees charged for grazing permits fall far short of the cost taxpayers incur for opening these lands to ranchers, covering a little more than 13 percent of overall program funding in fiscal year 2004.
Certainly there are differences between private land and public land in quality, but there are also a variety of federal programs such as Wildlife Services (killing wolves and other predators) that also benefit ranchers.
If ranchers owned that land, they would have to maintain it and pay taxes on it. Having taxpayers subsidize your grazing fees is a much cheaper way to go.
Federal grazing rules are outdated, too generous, and don’t even come close to covering the costs taxpayers bear in maintaining federal grazing lands.
Ed. Notes: Not just Westerners but many people assume that owning land means keeping its rental value rather than paying its rental value. However, owners do owe. Owners do not create land and they do not create its value. The society they belong to might not create the land, either, but they do create its value. They create the demand for the land which creates its value and price and rent.
People need to evolve to this understanding. Not long ago, people thought that if they had a kid, they owned that kid’s labor. If a daughter, they could sell the kid (charge a dowry). Times have changed about children. Now public awareness must change about land.
Another problem is government spending. It’s not just ranchers who should not get subsidies; it’s anybody. Letting politicians decide who to bestow public money upon is the problem. Much better is to simply, automatically divvy up common wealth among the citizenry equitably.
With people getting this extra income, they would not need much in the way of government programs. They could happily shrink public budgets. With government not needing so much revenue, they could repeal most taxes, especially those that raise costs and restrict output. So people would pay less tax at the same time they’d receive more income.
That should make even cowboys happy, shouldn’t it?
This 2014 excerpt of the New York Times, Apr 18, is of a book review by Howard W. French.
“The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor” is by William Easterly who describes himself as a recovering expert, referring to his career at the World Bank.
“The technocratic approach ignores what this book will establish as the real cause of poverty — the unchecked power of the state against poor people without rights,” he writes. He cites African land grabs.
Easterly’s other major claim is that technocratic advisers attach little importance to the historical background of the countries they work on. He offers the example of the World Bank, in 1949, whipping up a 950-page development plan for Colombia in less than a year, in which recommendations weren’t specific to that country.
He claims paternalism and a belief in the incapacity of others is an unexamined foundation of development ideology.
He touts Adam Smith who understood that not all problems could be solved by the Invisible Hand of the market and describes Hayek as a fierce proponent of individual liberty who favored a minimum income guaranteed by the state and attacked British Conservatives as “paternalistic.”
The greatest benefits to a society come from the spontaneous, uncoordinated actions of mostly small actors whose talents are allowed to flourish, as opposed to top-down initiatives involving the state or outside donors.
This 2014 excerpt of Common Dreams, Apr 16, is by Jon Queally.
The AFL-CIO’s latest ‘Executive Paywatch’ report shows the astronomical disparity between the annual pay of the nation’s top executives —- which continue to rise year after year —- and the stagnant wages that middle class and the working poor continue to suffer.
U.S. CEOs averaged $11.7 million in 2013 while the U.S. worker earned $35,293. That means CEOs were paid 331 times that of the average worker.
In 2013, CEOs made 774 times more than those who work for minimum wage.
While many of these companies argue that they can’t afford to raise wages, in 2013 the S&P 500 companies earned $41,249 in profits per employee.
Workers continue to scrape by in an economy that has left them out of the so-called recovery.
Ed. Notes: While CEO pay is way too high, why don’t critics ask why? Since they don’t ask, they can’t answer. Let me give it a shot. It’s because Big Business gets:
sweetheart deals on contracts,
leeway to violate laws, even fail to pay what they owe (such as royalties) and not get punished,
shift taxes and other costs onto employees and consumers, and they get to
capture what should be our common wealth (the economic worth of government-granted privilege like limited liability and the worth of Earth).
All this tilts the playing field, giving them the competitive edge over both small business and people needing jobs. And, as noted above, companies don’t have to negotiate with employees who’re enjoying material security.
While workers might not receive fair pay, it’s because they receive zero, no, portion of the common wealth. Imagine if everyone got a share of the worth of Earth — sort of like what’s done in Alaska with oil value and in Aspen CO with land value. If you got an extra income without working, for just being a decent member of society with an equal right to Earth, then you’d have a bit of financial cushion which you could use as leverage to negotiate a higher wage.
So the solution to low wages is not to legislate higher wages but to demand a fair share of society’s surplus. Not only would workers benefit, but so would people who’re not working — children, the elderly, the infirm, and the misfits who do not belong in conventional society but in a world that no longer exists or has not yet been born.
If we shared the immense stream of spending for nature — for land, resources, EM spectrum, ecosystem services, etc — automatically, if everyone got a share, even the rich, automatically, then we could shrink government bureaucracy and bureaucratic programs to an absolute bare minimum. When government is not too active, then it does not need so much money; its budget could be shrunk and its taxes along with it. Despite the critics’ demand for higher taxes, lower overall taxes would benefit workers (they’re the ones working from Jan 1 to early May to pay all the taxes levied upon them) more than the rich, as long corporate welfare and the rest of the favors (above) for business are repealed.
So, do be concerned about inequality and unfair pay but do demand a solution that truly works: geonomics.
This 2014 excerpt of Strong Towns, Apr 16, is by Andrew Price.
Relying on sales tax means everything other than retail becomes a burden. Shops generate revenue for the city, while houses, businesses, and factories that do not make any direct sales do not generate any direct tax revenue – yet consume infrastructure and services.
In sales tax based cities, building more retail does not automatically mean more tax revenue. There are only so many toothbrushes, televisions, and cars a person will want to buy in a year. A new store opening up will not always mean we will buy more toothbrushes, televisions, or cars.
If a city invests downtown and that attracts more shoppers downtown, tax revenue won’t necessarily increase as people are not necessarily spending more – they are just spending their money downtown instead of in the suburbs.
Building a new restaurant does not mean I will eat out more, only that I will have more choices of where to eat when I decide to eat out.
There is also the threat of online retail where people can bypass paying sales tax completely. Wealthier residents that travel frequently may do most of their spending out of state, or even in a foreign country. The city has access to none of this.
The largest problem with sales tax based cities is that they have no way of capturing or measuring the performance of their investments. Building a neighborhood park or cleaning up a residential street will not lead to people spending more. We end up with a delusion that cities are like charities – to provide services and infrastructure for the people no matter the cost, because there’s no way to capture or measure it.
In order for a city to make a return on their investments, as well as to judge if an investment was productive, cities need a way to capture the increases in the value of their areas they invest in. Typically, cities capture the value of their communities through property taxes or land value taxes.
This 2014 excerpt of Slashdot, Apr 16, is by Soulskill.
“According to a recent survey of 1,000 U.S.-based software developers, 56 percent expect to become millionaires in their lifetime. 66 percent also said they expect to get raises in the next year, despite the current state of the economy. Note that some of the other findings of the study (scroll to bulleted list) seem overly positive: 84 percent said they believe they are paid what they’re worth, 95 percent report they feel they are ‘one of the most valued employees at their organization,’ and 80 percent said that ‘outsourcing has been a positive factor in the quality of work at their organization.’”
Ed. Notes: If people in IT had to pay full value for the patents and copyrights that the government gives them, could it be such a lucrative field? New fields that are popular with consumers are, naturally, a gold mine. But cheap monopolies exaggerate the value of new programs.
Also, a lot of money and time and talent could be saved if there were some standardization. Another industry that changed everyone’s lives at the time — railroads — eventually standardized the width of train tracks, which really ratcheted up efficiency, so railroads could not profit off mere bottlenecks. Some day certain consensed upon protocols could save everyone big bucks in software, too.
Meanwhile, whenever software developers do strike it rich and buy housing, there they drive up the price of land. That makes housing unaffordable for those who have not struck it rich … at least until society wakes up and recovers and shares the socially-generated value of land.
This 2014 excerpt of Global Witness, Apr 15, is by Oliver Courtney and Alice Harrison.
Killings of people protecting the environment and rights to land increased sharply between 2002 and 2013 as competition for natural resources intensifies, a new report from Global Witness reveals. In the most comprehensive global analysis of the problem on record, the campaign group has found that at least 908 people are known to have died in this time. Disputes over industrial logging, mining, and land rights are the key drivers, and Latin America and Asia-Pacific particularly hard hit.
Released in the year of the 25th anniversary of the assassination of Brazilian rubber tapper and environmental activist Chico Mendes, Deadly Environment highlights a severe shortage of information or monitoring of this problem. This means the total is likely to be higher than the report documents. Just over one per cent of the perpetrators have been convicted.
Companies and governments routinely strike secretive deals for large chunks of land and forests to grow cash crops like rubber, palm oil, and soya. Often, the first the indigenous know of a deal that goes against their interests is when the bulldozers arrive in their farms and forests. At least 661 – over two-thirds – of the killings took place in the context of conflicts over the ownership, control, and use of land.
The report also underlines that rising fatalities are the most acute and measurable end of a range of threats including intimidation, violence, stigmatization, and criminalization. The number of deaths points to a much greater level of non-lethal violence and intimidation.
The death rate rose in the last four years to an average of two activists a week. Human rights only have meaning if people are able to exercise them.
This 2014 excerpt of The Nation, Apr 15, is by Zoë Carpenter.
ExxonMobil, the world’s largest oil company, hauled in a $32.6 billion profit last year. Tax day, the company got its annual boost from the Federal Government: an estimated $600 million in tax breaks. Chief executive Rex Tillerson got a 3 percent bump in his pay package, sending it above $28 million.
The US gifts as much as $4.8 billion to the oil industry each year, more than any other country. Much of that comes not as direct handouts but instead via loopholes in the tax code; deductions for depleting oil reserves, for example, and write-offs for the expense of drilling a new well.
Globally, subsidies for fossil fuel production —- amounting to $1.9 trillion in 2011, or 8 percent of government revenues —- increase emissions and put heavy burdens on public budgets.
The IMF estimates that eliminating fossil fuel subsidies could lower emissions by 13 percent.
In the last fifteen years oil and gas companies spent more than $1.4 billion on lobbying, employing nearly 800 lobbyists, many of them culled from congressional offices. That expense is actually a shrewd investment: every dollar the five largest oil companies spend on lobbying reflects $53 in tax breaks.
Another de facto subsidy comes from the Interior Department’s failure to collect royalties on domestic oil and coal. The government has lost as much as $14.7 million because royalties are not collected on offshore leases in the Gulf of Mexico. In Wyoming’s Powder River Basin, below-market sale prices and an uncompetitive bidding for coal reserves has cost taxpayers as much as $30 billion over the past two decades.
Finally, there is a more deeply hidden giveaway to the fossil fuel industry, the most critical of oversights: the fact that companies don’t pay for the damages caused by their products.
Ed. Notes: It’d be interesting to know how much lobbying the CEO does directly; I bet he’s on a first-name basis with many key players in Washington. I also bet the amount of subsidy above is too low; it leaves out paying the companies to pump some oil back into the ground (Strategic Reserve and did not mention the subsidies for “research”.
Some number crunchers figure that resource industries could not turn even a penny of profit if they had to pay for all the damages they cause to worker (even death to refinery workers), consumer (cancer), and nature (destruction of habitat by even routine pollution from oil tankers).
For a political analysis, the author left out a key fact. If oil companies had to pay the full-rental value of oil in the ground (as Norway charges them) instead of keep this socially-generated common wealth for themselves, then they would not have those funds and would not have so much political power. If those oil rents funded a dividend to citizens, a la Alaska’s oil share, then the general public would enjoy that extra income and the political clout that comes with it. People then might understand the wisdom of the entire geonomic package and move on to recovering the rents for all sites and natural resources, completely changing the economy and political scene.
This 2014 excerpt of Common Dreams, Apr 14, is by Eric Zuesse.
A study, to appear in the Fall 2014 issue of the academic journal Perspectives on Politics, answers the question: “Who governs? Who really rules?” in the US.
Americans do enjoy regular elections, freedom of speech and association, and a widespread (if still contested) franchise. But the first-ever comprehensive scientific study of the subject shows that the preferences of the average American have a minuscule, near-zero, statistically non-significant impact upon public policy.
The authors — Martin Gilens and Benjamin I. Page — in their article titled “Testing Theories of American Politics” note the data available are probably under-representing the actual extent of control of the U.S. by the super-rich.
The clear finding is that the U.S. is not a democracy at all, not part democracy / part oligarchy, but only an oligarchy.
The U.S., in other words, is basically similar to Russia or most other dubious “electoral” “democratic” countries.
Ed. Notes: Good to have more studies to go with the work of others such as G. William Domhoff on who owns America, which offers a deeper look into how policy gets made. But is any of this new? The US Constitution replaced the US Articles of Confederation as a favor to rich insiders. What could ever change this situation?
People must feel worthy of justice. And they must not worry so much about their political rights — we can vote, right? so? — as their economic rights. They should demand a fair share of the common wealth. That will show they have worth as individuals and help them feel real self-esteem.
Things will get better when enough people share the same vision of a better world and demand that government let — or help make — it happen. The key part is the vision, making it visible to a critical mass. That’s why it’s important for you to articulate a Citizen’s Dividend for everyone.
We, the people of this land, recognize natural moral law as the proper foundation for governance. By unanimous consent, we thereby establish this constitution to provide the structure of governance that will best implement justice, preserve our liberty, and protect our natural rights.
Article I: The structure of governance
1. The transition. Upon the designated date of the adoption of this constitution by individuals, the existing governance powers in the old territorial realm shall be transferred to those seceding individuals who join the libertarian federation (the new realm) by their written signature either on paper or in electronic form. The lands held by these individuals shall also secede into the federation. A percentage of land value held by the old realm government shall be transferred to the new realm in proportion to the seceding population. The same percentage of the government debt shall also be transferred to the governance of the new realm. As new persons secede from the old to the new realm, in stages the corresponding land value and debt shall be transferred to the new realm, with the land value and debt set to that which existed at the date of first secession.
2. Electoral districts. Prior to the date of the secession, the old realm shall establish neighborhood electoral districts, each with a population of approximately one thousand persons. In locations where there is already an established governance structure such as a homeowners’ association, that organization may serve as the neighborhood district.
3. Councils. Each neighborhood district shall elect, from their residents, a council of seven persons plus one alternate council member. The neighborhood council is designated “level one.” A local group of 20 to 30 councils shall form a level-two council, and each level-one council shall elect one of its members as its representative to the level-two council. The elected level-2 representative shall be replaced by a new representative from the level-one council. A group of 20 to 30 level-two councils shall similarly form a level-three council. This process shall continue to the broadest and highest council, level-H, which shall be designated as the parliament or congress. Each council shall elect a chair or president.
A neighborhood council member may be recalled by a petition of one tenth of the members which elected the representative, followed by a vote for recall. A member of a council of level two or higher may be recalled by a vote of the majority of the council that elected that person.
4. Secession. Any member of the federation may secede as a person and may also withdraw land that is owned by that member in fee-simple title or other title forms that are easily separable from other real estate. However, the seceding person must pay his proportional share of any debts held by all councils for which he is a member, and is also liable for any personal debts owned to others in the federation.
Article II: The public finances
1. Prohibited taxes. In accord with the equal self-ownership of all persons, no tax shall be imposed on personhood, interest income, exchanges of property, value added, capital gains, wages, produced goods, or on profits and dividends from enterprise. However, a council may charge payments using the method of demand revelation, as described in III C.
2. Land-value and rent. A board of professional real-estate appraisers shall be appointed for each level-two council. Each council level shall appoint one such assessor for each board. The assessors and their hired assistants shall estimate the land value or land rent for each plot of land within the level-two district at least annually. The assessment values shall be a public record. Any land title holder may appeal the assessment to an appeals board selected by the level-two council, and if not satisfied, to a jury randomly selected from all level-two residents.
Each level-two council shall appoint a treasurer who shall collect and account for the public finances. Each month, the treasurer shall bill each land title holder for at least 80 percent of the assessed land rent, as the community rent that properly belongs to the people. Payments more than two months late shall be subject to a penalty of ten percent annually above the price-inflation rate. Payments not received within year shall result in a lien on the property and, after two years of non-payment, the sale of the property so that the owed funds are recovered. The level-two or higher-level councils may enact rules for the postponement of the community rent payment for cash-poor elderly title holders.
3. Pollution and congestion. Each council shall, in coordination with other councils of the same or other level, levy charges on pollution and other environmental destruction. Each council shall similarly levy charges on traffic and parking congestion just high enough to prevent congestion.
4. User fees. Each council may charge user fees for services that are voluntarily agreed upon by the residents, such as for the collection of trash and garbage, but the councils may not prohibit competitive services, and the councils may not impose charges for similar services provided by private substitutes.
Article III: Legislation
1. Implementation of natural moral law. The councils may not impose any restriction or cost on any adult action that does not coercively harm others. “Harm” is defined as an invasion, and not an offense due merely to the beliefs and values of those affected. The councils shall enact or adopt legislation that prohibits acts which coercively harm others, including threats of such acts. The council may also enact liability rules for acts which are penalized after the fact.
Residents may form clubs, including territorial organizations, within which the members may enact restrictions and dues, provided that any club member may exit the organization.
2. Majority rule. The councils shall enact legislation by majority rule. A council may also submit legislation to be put to a vote of the residents.
3. Demand revelation. Decisions on the provision of collective goods may be determined by the method of demand revelation. Each member is assigned a cost to be paid if the decision is to provide the good. Each member may enter, on a web site or on paper, the most that the member is willing to pay. Those who do not state any value shall be assumed to have stated a value equal to one’s cost. If the total values exceed the total cost, the collective good is provided. Any member whose stated value changes the outcome, relative to having stated a value equal to one’s cost, shall compensate the community with a payment equal to the net loss of all the others.
4. Adults. The standard age of adulthood shall be set at 18 years of age, which includes voting and the ability to enter into contracts and buy any products. A council may set a younger age for limited purposes, such as driving vehicles. When a minor becomes an adult, he shall sign in agreement with this constitution if he seeks to be a voting resident.
5. Jurisdiction. Legislation enacted by a council shall supercede any conflicting legislation enacted by a lower-level council within its jurisdiction.
Article IV: The judiciary
1. Trial by jury. All those charged with crimes punishable by prison, or by fines of value greater than one fifth of an ounce of gold, shall have the right to a trial by randomly selected jury of at least nine persons residing within one’s level-two council. Unanimous agreement shall be required for convictions punished by prison.
2. Law suits. All law suits under common law or civil law shall be transferrable, so that a person suing may sell the law suit to another party who will prosecute it. The default practice shall be for the loser of a law suit to pay the legal costs of the winner, unless a council overrides this with legislation.
3. Courts. The level-H council (parliament or congress) shall establish a supreme court with nine members, and each council above level-one shall appoint judges and establish courts of law. Private courts and arbitration shall also be permitted. The level-one neighborhood councils may establish courts as they wish.
Article V: Amendments
This constitution may be amended by a 3/4 vote of the level-H council together with a vote in favor by 3/4 of the level H-1 (the level below H) councils by their majority votes. However, Article II paragraph 1 and Article III paragraph 1 may not be repealed or substantially altered.
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
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.
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 study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.
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.
a new field of study offered in place of economics, as astronomy replaced astrology and chemistry replaced alchemy. Conventional economics, in which GNP can do well while people suffer, is a bit too superstitious for my renaissance upbringing. If I’m to propitiate unseen forces, it won’t be inflation or “the market”; let it be theEgyptian cat goddess. At least then we’d have fewer rats. Meanwhile, believing in reason leads to a new policy, also christened geonomics. That’s the proposal to share (a kind of management, the “nomics” part) the worth of Mother Earth (the “geo” part). If our economies are to work right, people need to see prices that tell the truth. Now taxes and subsidies distort prices, tricking people into squandering the planet. Using land dues and rent dividends instead lets prices be precise, guiding people to get more from less and thereby shrink their workweek. More free time ought to make us happy enough to evolve beyond economics, except when nostalgic for superstition.
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.
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)
in part 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.
about the money we spend on the nature we use. It flows torrentially yet invisibly, often submerged in the price of housing, food, fuel, and everything else. Flowing from the many to the few, natural rent distorts prices and rewards unjust and unsustainable choices. Redirected via dues and dividends to flow from each to all, “rent” payments would level the playing field and empower neighbors to shrink their workweek and expand their horizons. Modeled on nature’s feedback loops, earlier proposals to redirect rent found favor with Paine, Tolstoy, and Einstein. Wherever tried, to the degree tried, redirecting rent worked. One of today’s versions, the green tax shift, spreads out of Europe. Another, the Property Tax Shift, activists can win at the local level, building a world that works right for everyone.