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Veteran lawmaker Tengku Razaleigh Hamzah said the country has fallen victim to the machinations of politicians habitually lining their own pockets and colluding with businessmen who were uncompetitive without preferential treatment.
Profits are made through outright corruption, poor regulation, and the transfer of public assets through privatisation at bargain prices.
The former finance minister, or Ku Li as he is popularly known, cited cases such as the RM2.5 billion bailout of Bank Bumiputera in 1985 plus an additional RM1 billion aid payout to the bank six years later, and also the RM2 billion rescue of Konsortium Perkapalan Berhad in 1997.
Tengku Razaleigh, author of “Rich Malaysia, Poor Malaysians”, said, “In all, more than a half trillion ringgit has been spent rent-seeking and patronage system. This amount could have been used more productively to fund a national pension programme for Malaysians.”
The outspoken Gua Musang MP added that this change must be supported by a revamped education system that puts a premium on logical and critical thinking over rote memorisation.
Ed. Notes: The title of his book is very similar to a refrain in America’s Appalachia, the nation’s poorest region, where people in one state say, “Why are we poor and West Virginia so rich?” The answer, as usual, is that the masses don’t get their fair share of the common wealth — the worth of Earth and of government-granted privileges — but the insiders capture that wealth for themselves. Nothing will change until people recognize that all the spending for land and resources is our common wealth and should be directed into our public treasuries to be disbursed as dividends — and a critical mass demands that this happen! Meanwhile, the corruption in places like Malaysia acts like a ravenous parasite that prevents the nation from growing a sizable middle class.
This 2014 excerpt of the American Heart Association, Apr 3, is by Bridgette McNeill.
The risk of stroke may be much higher in people with insomnia compared to those who don’t have trouble sleeping.
The risk also seems to be far greater when insomnia occurs as a young adult compared to those who are older.
Diabetes also appeared to increase the risk of stroke in insomniacs.
The mechanism linking insomnia to stroke is not fully understood, but evidence shows that insomnia may alter cardiovascular health via systematic inflammation, impaired glucose tolerance, increased blood pressure or sympathetic hyperactivity. Some behavioral factors (e.g., physical activity, diet, alcohol use and smoking) and psychological factors like stress might affect the observed relationship.
It’s unclear if the findings also apply to people in other nations [beyond Taiwan], but studies in other countries have also pointed to a relationship between insomnia and stroke.
Ed. Notes: What makes it hard to sleep on a regular basis? Worry. Usually financial worry. Without enough money, it’s hard to take care of oneself, never mind those one loves. So even health issues get back to economics. Economic injustice worsens our other problems. Economic justice — or geonomics — can make it easier to solve them. Imagine how different your life would be if getting a fair share of the common wealth while not having to pay taxes!
The Unnatural End of American Social Reproduction
This 2014 excerpt of Law School Tuition Bubble, Apr 03, is by Matt Leichter.
The cog in the generational lifecycle is the Georgist land cycle. Because the supply of land (especially urban locations) is fixed, its value is inevitably whipsawed by speculation. The more people buy land at the peak of the land cycle and lose out, the more land ends up in the hands of the wealthy (banks), who can afford to wait to sell the land when prices rise again. Everyone else must suffer.
If after several of these cycles, people lack the purchasing power to buy out the previous generation, they cease to reproduce and existing landowners hoard land for longer, exacerbating the disruption of the generational lifecycle.
Without reform it could take many years for the negative feedback from the land cycle to stop disrupting social reproduction.
Ed. Notes: Actually, we should not fear high land prices but welcome and share them; as they go up, so would our share. With a heftier share, we could wean ourselves from government “services”. With a slimmer government, we could repeal taxes, especially the counterproductive ones that shrink their base (which we could do any time, anyway).
Elections are supposed to achieve social peace by providing a government that represents the people. But voting has not brought peace to Ukraine. Many people distrust the honesty of the elections, and many in Ukraine have disagreed with the policies of the government, both when policy favored association with Europe and when it favored association with Russia. The fact that many voters in the Crimea and eastern Ukraine favor union with Russia, or else independence, shows that many there do not feel well represented.
The coming election in Ukraine will not solve the governance problem, because it is just a continuation of the same system that some are rebelling against. Ukraine needs a new structure of government and democracy. The solution is to shift political power from the central government to the people as individuals. When a citizen of Ukraine holds power equal to that of all others, he will have nothing to rebel against.
Individual sovereignty can best be represented by a neighborhood council. The neighborhood should have a small population, such as a thousand residents. That is small enough for the people to personally know the candidates and for someone to be elected with little cost. The government of Ukraine can begin the decentralization by establishing neighborhood or village election districts. If the neighborhood population is a mixture of ethnic Ukrainians and Russians, and the people wish to have a council that is aligned with one of these groups, or other interests, then the residents may regroup their districts and have councils that best represent their individual interests. This is the level-one level of governance.
In the Russian language, “Soviet” means “council”. The Soviet Union was supposed to be a union of elected councils, and there was indeed a structure of bottom-up multi-level soviets, but in practice, the Communist Party ruled top-down. Ukraine should resurrect the old Soviet system, which actually derives from the 19th-century anarchist concept of associations of voluntary communities. The Bolshevik slogan was, “All power to the soviets!”, but instead they perpetuated the dictatorship of the proletariat, usurped by the party oligarchs.
The power of the neighborhoods has to be constrained by a constitution that recognizes and enforces natural rights. In most countries, constitutions that proclaimed liberty have failed to be implemented, mainly because the structure of mass voting facilitates plutocracy, with policies that transfer wealth from workers to the moneyed and landed interests, resulting in poverty that gets remedied by trickle-down government welfare.
But with the bottom-up system of genuine soviets, the government would much better represent the people, and constitutional rights would be more strongly protected. As the level-one councils elect level-two regional councils, and these elect the supreme soviet or national parliament, the structure would prevent the usurpation of power from the top. The president would be elected by the parliament and easily dismissed if the people are dissatisfied. Any council member could be recalled by the council that elected him.
Decentralized government gets hampered by centralized tax collection, such as an income tax or value-added tax imposed from the central government. Decentralized governance is suitable to decentralized public finance, and the source of public revenue best suited to local power is the tapping of the area’s land rent or land value. Taxing wealth and investment invites capital to flee, hide, or else it shrinks from the burden. But land cannot hide, and it does not run away, nor does land shrink when taxed. Revenue from land-value taxation can be applied by the level-two councils, with revenues sent to both the level-one and level-three governments.
Ukraine needs two things: better governance and strong economic growth. The replacement of the current complex of market-hampering taxes by taxes on land value and pollution would give the economy such a comparative advantage that investment would pour in, wages would rise, the government would be able to pay off its debts, and the economic misery that fuels much of the unrest would be replaced by an economic joy that would eliminate the economic motivation to join Russia.
With small-group voting, the residents of eastern Ukraine would have their own local Russian-speaking councils, and probably ethnic Russian level-two councils representing some 25 thousand persons. The constitution of Ukraine should devolve most government services to the level-two councils, including local security, education, and public works. The ethnic Russians would no longer feel alienated from the government, and the government of Russia would find it difficult to control the local governments, because the council members would come from the people.
As to the situation of takeovers of government buildings in eastern Ukraine, the national government should surround them with walls of troops while establishing new centers of administration in other guarded buildings. But a lasting solution needs to replace the current government with councils that people feel represents them. The one good thing about the old Soviet Union, the bottom-up multi-level system of soviets, was the element that was most discarded without any debate. Ukraine: bring back the soviets, only this time, make it “all power to the people” as individuals and their chosen councils.
This 2014 excerpt of ThinkProgress, Mar 31, is by Alan Pyke.
Almost half a million college graduates are working minimum-wage jobs.
There were 260,000 Americans with bachelor’s degrees earning the federal minimum wage of $7.25 an hour or less in 2013. Another 200,000 associate’s degree holders also worked for that wage.
These figures are sure to understate the total number of people with higher education degrees who are working minimum wage jobs because data does not factor in state minimum wage laws that are higher than the federal floor. That means that likely thousands of workers in the 21 states with higher minimum pay rates are likely also degree-holders.
Ed. Notes: You hear that education will solve poverty. While it is true that the right education, as in engineering, will qualify you for a decently paying job, watch out; once a horde of people qualify for that job, how long do you think it’d still pay a decent wage? Besides, you must have noticed that people are better educated now than in the past — the literacy rate is quite high — yet has poverty disappeared? Nope. You need a more basic solution than just higher skills if you want to rid society of humbling poverty.
What solution is more basic? Concretely, it’s efficient land use. Why? Well, look in your city — where you have the most poverty there you will see the most vacant lots. Look at where commerce thrives; there you will see the most intense use of land.
So, how do you get landowners to use their locations efficiently? You don’t let them keep the rent, you make them pay it by charging them the annual rental value of their site while de-taxing their buildings. To pay these land dues, owners put and keep their parcels at highest and best use. Developing land and staffing new stores and offices all require not just capital (investment) but also, obviously, labor (employees).
Not only do workers get a slice of the pie, but the demand for labor also raises wages, so that slice grows.
Of course, the better educated will earn more than others when the employment rate hovers near 100%, but education itself can not create full employment; it takes public recovery of rents, driving efficient land use, to do that.
These five excerpts of endorsements of the public recovery of socially-generated location values are from: (1) Toronto Star, Mar 31 by Frank de Jong; (2) Huffington Post, Apr 20 by Joseph Finlay; (3) Demos, Apr 21, by Matt Bruenig; (4) Australian Property, Apr 23, by David Collyer; and (5) The Guardian, Apr 23, by Jonathan Portes.
Frank de Jong’s Big Idea
Frank de Jong has a great idea about housing: Taxing land alone without buildings will transform Toronto by encouraging landowners to put vacant and underused land to more productive use.
5. More taxes on wealth, less on income. We should refocus our taxation away from the taxation of economically useful activity and onto the holding of wealth, discouraging the hoarding of valuable cash, land or possessions. This would be much more sensible for the overall economy whilst raising as much revenue or more.
6. Tax land ownership. The greatest source of wealth is the ownership of land and yet it is only lightly taxed in the UK. Better would be a land value tax, an annual tax on the underlying value of land owned (rather than the value of buildings that occupy it). This is a policy that has been recommended by economists from across the political spectrum, and could wholly replace current taxes like council tax and stamp duty. Done right, it would mean lower bills or equal bills for the vast majority of the population, and substantially increased taxation on the top 10%.
LVT could capture all of the rents that flow from the land to the owner, but the owner could still make money by doing productive things on the land (like providing housing services or running a business).
In our discourse about “housing wealth,” we often conflate land value and building value. Home values (i.e. the value of the physical structure) should hardly ever increase in price. When we are talking about “housing wealth” increasing, what we are talking about is land value increasing.
LVT could blow up this source of racial wealth disparity. The dollar value of rents would never be accessible to the owner of the land. It would not cause racial wealth divergence.
Yesterday REIWA president David Airey issued a call in the West Australian newspaper for the WA government to abandon Stamp Duty and fund this by removing the many wheezes from the tattered State Land Tax.
To Make Housing Affordable Requires More Than Tinkering Around the Edges
Danny Dorling argues for a land tax and an increased, much more progressive council tax, to encourage housing to be used more equitably and efficiently.
Building more houses would reduce the price of existing ones, and hence in itself would make the UK a less unequal society. So would higher taxes on land and property. And both would make it less attractive to leave properties empty as an investment rather than using them productively by letting them out.
Ed. Notes: If you’re going to tax, do tax the values that society generates, rather than the values individuals generate. But note: you don’t need to levy a tax, you could institute dues, and you don’t have to hand over all the rents to politicians and bureaucrats, you could disburse the revenue to residents as dividends. That should please both policy wonks and real people.
This 2014 excerpt is of Ellen Brown’s blog, Mar 29.
On March 20, 2014, European Union officials reached an historic agreement that authorizes both bailouts and “bail-ins” – the confiscation of depositor funds.
Under the deal, after 2018 bank shareholders will be first in line for assuming the losses of a failed bank before bondholders and certain large depositors. Insured deposits under £85,000 (€100,000) are exempt.
The US, UK, Canada, Australia, New Zealand, and other G20 nations also have bail-in plans for their troubled too-big-to-fail banks.
Bankers win both ways: they can tap up the taxpayers’ money and the depositors’ money.
But at least, you may say, it’s only the uninsured deposits that are at risk (those over €100,000—about $137,000). Right?
Not necessarily. All deposits could be at risk in another meltdown.
Only after the taxpayers – and the depositors – are stuck with the tab will the curtain be lifted and the crippling insolvency of the banks be revealed. Predictably, panic will then set in, credit will freeze, and the banks will collapse, leaving the unsuspecting public to foot the bill.
In Sweden or Finland in the early 1990’s, government did not bail out but nationalized troubled banks [and] took over their management and assets. In the Swedish case the end cost to taxpayers was estimated to have been almost nil.
In the U.S. today, finance charges on credit-money amount to between 30 and 40% of the economy, depending on whose numbers you believe.
Ed. Notes: The above scenario is not far-fetched. Recently in Cyprus depositors lost money. In the US, banks have failed before without returning a penny to depositors (which was why federal insurance was created). Bankers feel no embarrassment demanding bailouts; why not bail-ins, too?
Presently, US banks help themselves to depositor’s money via nit-picking fees and closing one’s account to end a dispute (while keeping the money). Banks also charge usurious amounts for their credit cards, which profit the banks handsomely. Plus, banks play a big role in creating inflation, and do not pay depositors enough interest to keep up with the constant rise in prices.
Further, banks promulgate the modern custom of borrowing to buy land (rather than renting from one’s community). Banks profit enormously from mortgages (both principle and interest). It must be society’s servicing of its mortgage debts that gets included in the figure above — 30%-40% of the price of everything you buy going to lending banks — otherwise that percentage seems way too high.
While bighearted reformers want government to take over banking, that does not reduce our demand for loans. Our need for debt is artificially high; it gets exaggerated by our purchases of land and resources. If we rented locations from our community — as residents and businesses do in Hong Kong, Israel, US port districts, and elsewhere — then the demand for borrowing funds would drop dramatically and bankers would be cut down to size.
That said, letting the public treasury perform some banking functions might not be a bad idea, even if it does not get to the root of the money problem.
This 2014 excerpt of FT Advisor, Mar 27, is by Sarah Davidson.
Oxfam’s director of campaigns and policy, Ben Philips, called for a focus on the greater taxation of wealth by exploring a land value tax, and set out a long-term strategy to raise the minimum wage to a living wage.
His comments came as Oxfam published a four-page report revealing just five UK households have more money than the poorest 12.6 million Britons put together, the bottom 20 per cent of the entire population.
Another key stat: 85 people on the planet own the same amount as half the world’s population.
This 2014 excerpt of Thom’s Blog, Mar 28, is by Thom Hartmann.
Regardless of whether you want to fight poverty, stimulate the economy, shrink the size of government, or simply ensure everyone has a sense of human dignity – you should be calling for a no-strings-attached basic income for all.
Rather than administering a huge patchwork of overlapping social programs, our nation could save time and money by simply issuing every citizen a monthly check.
More Americans would have the opportunity to raise families or complete their education when they’re not working three jobs just to get by.
A minimum income would ensure that no one would be denied their basic human dignity by being forced to live in squalor in the richest nation of the face of the Earth.
Since it’s inception, Social Security has been incredibly successful at fighting poverty. So rather than slashing it, or means-testing it, we should expand it to every American.
Ed. Notes: We have a common wealth that if we shared it, each of us getting a share would be equivalent to getting a basic income. What’s our common wealth? The worth of Earth. It’s our spending for land, resources, EM spectrum, and other very valuable aspects of nature. We could use taxes or fees or dues or leases to redirect our spending for things none of us made into our public treasury and use dividends to disburse the revenue to all registered voters. In most economies, the spending for nature and privilege is likely to be half of all spending (roughly the GDP), so there is plenty of money to share, as a Citizen’s Dividen or a Basic Income.
Ed. Notes: While a step in the right direction, a bigger step would to de-fund not just new plants but old ones, too. And the reason would not just be for the environment. An even better reason is that subsidies in general are a bad idea. People relying on governments, and governments claiming to know what’s best, is what got coal and fossil fuels subsidized in the first place. And if any business can afford to succeed without subsidies it’s the filthy (literally) rich coal, oil, and gas industries.
Indeed, rather than get subsidies, the owners of those hunks of nature should pay rent for their claims on our common natural heritage. Government could collect the rents and use the revenue to pay citizens a dividend, a la Alaska’s oil share. Once citizens receive their share, they won’t need as much government, so government can downsize and lower its taxes.
Lower taxes on our efforts, coupled with higher charges for polluting, extracting, and exclusive ownership of locations, would both prod us and reward us for producing efficiently. We could have greater human-made abundance along with a healthier environment. Yes, geonomics is that powerful.
Some economists dislike analogies from physics in economics, because they don’t regard economics as mechanical. But since human action is physical, we can understand economics better if we understand the basics of physics.
We begin with space. For human action, space encompasses distance in three dimensions. For economics, space constitutes the sites in which activity takes place. The economics of space includes three-dimensional volume as well as a location. For human purposes, spacial land is fixed relative to the earth. Space is not altered by use, but it is consumed by using its value, as reflected by its rent, over time. There is also another type of economic space in the electromagnetic spectrum, made up of frequencies that travel through three-dimensional space.
The second rudiment of the universe is time, which has two meanings, a moment and a duration. Time is not an input into production, but a dimension of all activity. An analysis that examines a phenomenon over a duration is called “dynamic,” in contrast to the static analysis of a moment.
The third universal rudiment is mass, or its synonym, matter. Mass is what takes up space and has inertia. Economics categorizes mass as land (natural resources), human beings, capital goods, and trash.
A fundamental law of physics is that of conservation, that matter (and its sibling energy) cannot be created or destroyed, but only changed in form. But there is no conservation of value. In economics, production is the creation of economic value, processing inputs to make them more desirable. Consumption is the using up of economic value. Capital goods are items that have been produced but not yet consumed.
Linear velocity is the rate of the motion of a mass object in some direction. In economics, activity has a velocity as a mass of inputs gets processed into outputs, or objects get transported. There is also angular velocity in the speed of rotation, including the velocity of money as its turnover as measured during a year. Momentum equals mass times velocity, including a velocity of zero. Human action has momentum when activity proceeds at a constant speed and direction.
However, economic dynamics involves changes in speed or direction, which is acceleration (including negative acceleration or deceleration). A fundamental equation in physics is F=MA, force equals mass times its acceleration, Newton’s second law of motion. Newton’s first law of motion is that of inertia, that a body will retain its momentum unless an external force is applied. Force makes mass objects accelerate. On earth, mass has a weight due to the force applied by gravity.
In human action, force can mean either a physical action, as inputs are moved and combined, or else a coercive action by either criminals or governments. The initiation of coercive force alters what people would otherwise voluntarily do. Such forceful intervention imposes a net loss of value on society by accelerating the mass of human action into directions or speeds that reduce its net utility. The economy and society maximize well being with rules that prevent coercive force.
Newton’s third law of motion is that for every action there is an equal and opposite reaction. When one body exerts force on another body, the other body exerts an opposite force on the first body. This law is what propels a rocket, as the force of the ejected fuel makes the rocket go in the opposite direction. Economic action encounters resistance to motion, or friction, which is good if we want to walk (as without friction we would slide around), but is bad if the friction consists of obstacles imposed by coercive force.
In economics, energy is the generation of heat, light, and movement. There are many forms of energy. In physics, potential energy is mass that can be accelerated into motion, such as an object that can fall down, or molecules that can be combined to create heat and light. There is kinetic energy of motion, with the equation: e = ½ mv2. Einstein’s equation reflecting the convertibility of mass and energy is e = mc2, but that has no relevance in the human scale of action.
In physics, work is force times displacement. Applied to human action, work is done when a person applies force (human exertion and tools) to a mass to change its location or composition, even if the change is only of bits in a computer memory. Work can also be a change in the kinetic energy of a system.
Another physics concept that has been applied to economics is equilibrium, a state of constant momentum, including zero velocity, where there is no incentive or force for acceleration. In economics, equilibrium is the exhaustion of gains from trade. At the moment you pay for goods at a store, you are in equilibrium, as you do not wish to trade any more money for goods. But a moment later, you are in disequilibrium, as some goods now have more value than the money you exchange for them. Market prices and quantities move towards equilibrium to remove a shortage or surplus or to gain from extra production, consumption, and trade.
We can see that the application of physics to human action is not mechanistic, as people act on their subjective values and beliefs and psychological inclinations, but their physical action is necessarily subject to the laws and concepts of physics. F=MA applies to human action as it does to physical particles.
This 2014 excerpt of The Age, Mar 25, is by John Kehoe.
Australia’s richest person, mining heiress Gina Rinehart, secured a $US694 million ($764 million) loan from American taxpayers: what some see as crony capitalism.
There are 19 international lenders, including Australia’s big four banks, in the syndicate. Government export credit agencies including the Ex-Im Bank in the US, as well as Japan and Korea, were crucial in helping the massive debt-funding deal over the line.
Commercial banks and bond investors were reluctant to shoulder all the risk.
The US Ex-Im Bank says it “assumes credit and country risks that the private sector is unable or unwilling to accept”.
In return for the US government loan, Hancock Prospecting will purchase American mining and rail equipment from Caterpillar, General Electric, and Atlas Copco.
Caterpillar was being investigated by the US Senate for avoiding US taxes.
In 2008, an upstart senator named Barack Obama labelled the Ex-Im Bank “little more than a fund for corporate welfare”. The Obama administration now regards the agency as important.
Hancock Prospecting is not the only Australian company to benefit from America. QBE Insurance, the second-largest crop insurer in the US, has been a big recipient of federal crop insurance subsidies, which have tripled to about $US9 billion a year for the industry over the past decade. For every $US2 the government spends on crop insurance, $US1 goes to the insurance industry.
At the same time Republicans are voting to cut food stamps for the poor and unemployment insurance: personal welfare bad, corporate welfare good. Rinehart, the largest shareholder in Fairfax Media, which publishes The Australian Financial Review, criticized of personal welfare.
Ed. Notes: Cronies always pretend their fortunes come from succeeding in the market, not from lobbying in legislatures and fancy restaurants. Many people fall for the pretense and bundle capitalism with free markets. In reality, capitalism — that partnership of elite and state — could not survive in a freed market, a market freed from corporate welfare, taxes on wages, and — most importantly — the failure of society to recover the socially-generated values of land and resources. Those values — our spending for locations and minerals and the EM spectrum — those are the foundations of undue fortunes. Until we recover and share those values, we will continue to be plagued and depleted by the cronies called capitalists.
This 2014 excerpt of the Washington Post, Mar 26, is by Kimberly Marten.
The timing of Russian President Vladimir Putin’s decision to grab Crimea suggests that his motives may have had a diversionary twist. Putin may have been searching for something to take Russian minds off his own unfolding scandal when the Ukraine crisis fell into his lap.
Putin’s scandal was the corruption surrounding the Sochi Olympics. The construction costs associated with Sochi facilities and infrastructure exceeded $50 billion. Detailed and documented accusations about massive kickbacks and bribery have been published by Russian opposition figures Boris Nemtsov and Leonid Martynyuk and Alexei Navalny, with damning evidence about a number of Putin’s close associates (like railway baron Vladimir Yakunin and Putin’s childhood judo buddy Arkady Rotenberg and his brother).
Putin made it very clear to everyone that the Sochi games were his highest priority, so no one in a position of authority would have dared to raise the corruption issue before the Olympics were over.
Russia’s economy is stagnating and corruption is to blame.
There are deep nationalist, historical, and triumphalist reasons for Putin’s Crimean adventure. But it is striking how little Putin gained. The region was subsidized by the rest of Ukraine, and he will now have to fund those subsidies out of the Russian budget. Russian generators are now keeping the Crimean capital of Simferopol lit, as Ukraine turns off the electricity flowing in from the mainland. Crimea does have a crucial Russian naval base, but Putin already controlled that base without needing to occupy Crimea, because of a treaty that lasted through 2042.
Putin’s Crimean adventure will further dampen Russian economic growth. NATO will turn its attention back to the European theater.
That Putin’s moves in Crimea do not really further Russia’s long-term interests indicates that something else is in play.
Ed. Notes: The trick that both politicians and magicians play: get people to look anywhere else but where their hands are doing their thing. Since people can be so easily misled from the deeper reality, what is it leading people away from seeing the power in the land? Seeing the difference between spending for things not made by anyone and things that others produce? The existence of society’s surplus which should be our common wealth? Once we know what is diverting people’s attention from how economies actually work, how work and wealth get divided, and how fortunes truly get made, then perhaps we can neuter that trick so it will never work again.
A 2014 excerpt of the Financial Express (of Bangladesh), Mar 23.
1.0pc of people engaged in rent-seeking, control politics, BEA’s public lecture told
President of Bangladesh Economic Association (BEA) Abul Barkat said that Bangladesh is caught in the middle of poverty, inequality, and disparity due to an unholy alliance of one per cent people who are engaged in rent-seeking.
“This one per cent people controls politics, power, and all state machineries and gather wealth by not creating assets but taking away from the existing amount of wealth through embezzlement, misappropriation, lobbying, and many other improper means,” he said while presenting a public lecture at Dhaka University.
The Vice-Chancellor of Dhaka University Prof Dr Arefin Siddique said equal partnership of male and female can help a lot to remove disparities from the society.
Ed. Notes: You could be anywhere in the world and one thing would be the same: the few who are first to amass an extra bit of money use that to influence legislation in their favor. Those state favors make them more wealthy still and with the extra money from the favors they win still more favorable laws and rulings, round and round, until they become a nigh untouchable elite. So what do the rest of us do? We acknowledge the common wealth and demand our fair share. Winning our fair share will kick the underpinnings out from under the, now former, ruling elite.
This 2014 excerpt of Guardian Liberty Voice, Apr 12, is by Michael Cantrell.
As radical as it may sound, taxes are legalized theft that violates the right of property.
After a person trades their most precious commodity, that of time, to an employer in exchange for dollars, the money belongs to that individual and unless the person decides to give or exchange that money for products or services that improve the quality of life, no one has the right to deprive them of it. Yet this is exactly what government does, even deducting taxes before an employee receives their paycheck.
The government exists to serve the people and protect their rights and freedoms. All of the powers the government possesses are supposed to be from the consent of the governed. What if people today have not consented to a particular law or power granted to the government in generations past? Should that activity continue to be legal? More importantly, what gives the state the right to forcibly take someone’s property and give it to someone else? Are regular citizens allowed to participate in such an activity? If someone were to hold a neighbor at gun point, steal their property, and give it away, would that not be frowned upon in modern society?
While many attempt to justify taxation by stating that the money goes to programs to help the poor, forced charity is not charity at all. And while people living in poverty is a horrible reality, high taxes on business owners destroy jobs.
Government uses threats of imprisonment and other harsh consequences to force their hand into the pockets of the people and take their property. Why do people put up with it?
Ed. Notes: “Taxes are the price we pay for civilization,” you hear said by those who get to live off others paying taxes. But what’s so civilized about war and corporate bailouts? Could ending taxes end such bad behavior?
Of course governments do some decent things. But could they fund, say, police protection with membership dues? And fund roads by charging user fees (attached to the price of fuel)? And must government provide parks or could groups like the Nature Conservancy?
Taxes, and their mirror opposite — subsidies — have inherent flaws that come with the territory:
1) they distort price,
2) they require expensive bureaucracy,
3) they overly empower the recipients, and
4) they demean the payor.
Fortunately, however evil they may be, taxes are not necessary. Whenever society as a whole wants to take a collective action that needs funding, it can charge a fee — like a gas “tax” (a fee for polluting the air) — or require dues — like a land “tax” (owed by owners for displacing every other member of society from the site one claims).
So, yes, do feel abused when taxed, but take it one step further and replace them with charges that adhere to the justice of quid pro quo.
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 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.
shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.
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.
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.
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 and parcel 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.
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.
as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.
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.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.