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This 2014 excerpt of MacroBusiness, Feb 27, is by Catherine Cashmore
The correct way to fund local schools would be via broad based and effectively administered land value taxation, which in its purest form – as advocated by the Classical Economist, Henry George – would result in a single tax on the unimproved value of land to replace all other taxes, which hamper productivity – significantly income tax.
The Henry Tax Review commissioned by the Government under Kevin Rudd in 2008 concluded that “economic growth would be higher if governments raised more revenue from land and less revenue from other tax bases” proposing that stamp duty (which is an inconsistent and inequitable source of revenue) be replaced by a broad based land tax, levied on a per-square-metre and per land holding basis, rather than retaining present land tax arrangements.
Therefore – when times comes that the ‘chatter’ around affordability, finally evolves into ‘real’ action – a broad based LVT should form an important part of both the debate, and solution.
This 2014 excerpt of USA Today, Feb 26, is by Hannah Hetzer.
It is a mistake to believe that the capture of drug lord, Joaquín “El Chapo” Guzmán Loera, will lead to a decrease in violence. Guzmán’s arrest will not dismantle the criminal networks involved in drug trafficking.
40 years of the war on drugs has not led to a decrease in drug consumption or supply on a global scale, yet it has led to the proliferation of drug cartels and crime associated with the underground market.
As long as there is an illicit market for drugs, there will be violent cartels to supply it. Ultimately, we need to depart from the repressive, militarized, and punitive methods of the past and get to the heart of tackling organized crime, with initiatives such as legal regulation, being spearheaded by Uruguay, Washington, and Colorado.
This 2014 excerpt of The Independent, Feb 25, is by Ben Chu.
Best of all would be a land value tax, requiring property owners to pay an annual levy based on the market value of the plot of earth beneath their home. This could potentially replace stamp duty, council tax, and even business rates. It would encourage more housebuilding by discouraging land hoarding, penalize those who leave properties empty, and ensure people paid for windfalls to their home values from new transport links etc. Sensible politicians should be all over it.
Ed. Notes: If you have to pay a tax, it’d be hard to pay a better one than the one on locations. It’s fair, because the value of locations is created by the surrounding society, and because we each owe compensation to our neighbors for excluding them from a part of Earth — to which we all have an equal right — just as our neighbors owe compensation to us. We should all pay land dues in and get rent dividends back.
Happily, paying land dues makes it possible to get rid of the counterproductive taxes on labor land capital, and getting rent dividends makes it possible to get rid of the wasteful and addictive subsidies to special interests.
So it’s great that the British press promotes this vital part of geonomics. May the press of other nations catch up!
A class of insecticides known as pyrethroids is increasingly found in the human body.
Children in particular are still widely exposed to an insecticide that was banned for household use over a decade ago—chlorpyrifos.
Pyrethroids are sprinkled over lawns, soaped onto pets, sprayed on offending vermin, and applied to our own persons in the form of lice-killing shampoos or mosquito repellents. They’re also used in fumigating drives against mosquitoes and in agricultural crops and nurseries.
Over 60 percent of people examined in the study tested positive for having pyrethroids in their system.
A possible health effect is endocrine disruption and autism; mothers of autistic children had shampooed their pets with antiflea and antitick shampoos during pregnancy.
Ed. Notes: Of course manufacturers should have to prove their products are safe, not toxic chemicals, before selling them, something they now don’t have to do adequately. In fact, the entire cozy relationship between business and government should be broken up. All society should raise the bar for moral behavior.
We should consense on paying land dues, rather than mortgages, and pay our neighbors or community, rather than sellers or banks. With such dues in place along with fees for social services, we should then abolish taxes. Taxes make us feel like serfs, like people who do not deserve justice, including the justice of safe, healthy products. And businesses will be in no position to complain, since they won’t have to pay taxes on their fair earnings, their employees, or their material goods.
Let’s replace this selfish outlook of profit at any cost with a fair return for honest effort.
This 2014 excerpt of Dirt Diggers Digest, Feb 25, is by Phil Mattera.
At least 75 percent of cumulative disclosed subsidy dollars for “economic development” have gone to just 965 large corporations, even though these companies account for only about 10 percent of the number of announced awards.
In dollar terms, the biggest recipient by far is Boeing, with a total of more than $13 billion, reflecting the giant deals it has gotten in Washington and South Carolina as well as more than 130 smaller deals around the country. The others at the top of the cumulative subsidy dollar list are: Alcoa ($5.6 billion), Intel ($3.9 billion), General Motors ($3.5 billion), and Ford Motor ($2.5 billion). A total of 17 companies have received cumulative subsidy awards worth more than $1 billion; 182 have received awards of $100 million or more.
The company with the largest number of awards is Dow Chemical, with 416. Following it are Berkshire Hathaway (310), General Motors (307), Wal-Mart Stores (261), General Electric (255), Walgreen (225), and FedEx (222). Forty-eight companies have received more than 100 individual awards.
The parent companies on the Fortune 500 alone account for more than 16,000 subsidy awards worth $63 billion.
Foreign-based corporations are three in the top ten (Fiat, Royal Dutch Shell, and Nissan) and another five in the next 15.
Ed. Notes: Is it wrong for politicians to give your money to people who don’t need it? Or is it wrong for us to give away the power to spend public money to politicians? Perhaps we should put the budget on the ballot. Or better yet, pay ourselves a citizen’s dividend from surplus common wealth. Then we could get rid of not just subsidies but taxes, too, and just levy fees and dues — the geonomic solution.
This 2014 excerpt of OpEdNews, Feb 25, is by Jim Turnage.
Religious organizations have always been given tax exempt status. They are prohibited from being involved in the government or politics.
Today one of the most frequently voiced groups is the religious right. They are a powerful lobby within the Republican Party. And if that is the case, they should pay taxes in the same manner as any other corporation.
The United States of America was founded to create a nation that was free to practice any religion they chose, or none at all. Nothing was more important to our founding fathers than separation of church and state. They would be appalled to see how closely they are tied today.
I don’t believe in religions. I consider them a crutch; a force to remove independent thought. What I do believe in is right vs. wrong, and universal equality.
Our government could pay a lot of bills from [land] taxes paid by the Catholic Church alone. The Church is among the wealthiest organizations in the country.
Ed. Notes: Believers already make their religions rich. In a just economy, they’d probably have even more money to give away to priests and rabbis and shamans if they wish. Plus, their churches, temples, and synagogues take up lots of prime land. If they had to pay land dues, those buildings might not be vacant for so much of the time. OTOH, if people are feeling secure and worthy of happiness, they might move beyond religion to spiritual science or scientific mysticism. And who needs a building for that? A hike into pristine nature with a telescope might be more conducive to an epiphany.
The rich world needs to cut red tape to encourage business
In the list of nations by burden of government regulation, Singapore is the least burdensome for the past eight years. Singapore has a low tax rate [except for a relatively high tax on land], a light regulatory regime, and an enviable location at the heart of Asia.
Many EU countries are bumping along near the bottom. Of the 148 countries surveyed in 2013, Spain was ranked 125th, France 130th, Portugal 132nd, Greece 144th, and Italy 146th.
Over the past seven years, the US has slipped from 23rd to 80th. The proportion of America’s independent businesses who thought regulation was their biggest problem rose from under 10% in 2009 to 20% late last year.
In recent years, emerging markets have been cutting their red tape whereas the rich world has been strengthening its regulatory regime.
Regulation holds back competition so that inefficient companies survive for longer than they deserve.
The administrative burden on business in Europe amounts to 3.5% of GDP. Around half of this is due to EU regulations, known as gold-plating.
For business, the worry is that the rules may change and a big investment may not be profitable in 10-15 years’ time.
Few would argue against laws on pollution, workplace safety, or child labour. But they can backfire. Regulations designed to protect existing workers from unfair dismissal often make employers reluctant to take on new ones. Workers with tenure will hold on to their jobs at all costs, whereas young people will be able to get only precarious jobs or none at all.
The social “wedge” (labour taxes and other social-security contributions) makes up more than 40% of total labour costs in nine EU countries and more than 50% in Belgium. In America and Japan, reckons BusinessEurope, the wedge amounts to only 27%. Angela Merkel, Germany’s chancellor, is fond of saying that Europe has 7% of the world’s population, 25% of its GDP and 50% of its social costs.
Rules either miss the problem or make things worse. Civil servants are poorly equipped to assess the business climate. People who go into government are risk-averse; they are intelligent but want to keep the status quo.
Ed. Notes: We might be able to get rid of most regulations if at the same time we got rid of the liability limits provided for (nearly) free by the government. Let businesses buy insurance and sign contracts with investors. And most importantly, clean up their acts.
This 2014 excerpt of the Washington Monthly, January/ February, is by Siddhartha Mahanta.
When you buy a Big Mac or a T-bone, a portion of the cost is a tax on beef, the proceeds from which the government hands over to a private trade group called the National Cattlemen’s Beef Association.
Nearly 99 percent of all the beef tax dollars collected by the government, some $45 million a year, winds up in the hands of just one group, the NCBA, which relies overwhelmingly on this public money to support itself. Fewer and fewer actual “cattlemen” belong to the organization, while more and more note the rancher’s own money is being used to put him out of business, with government complicity.
Meanwhile, the consumer’s tax dollars are going to a trade group that’s in court trying to keep me from knowing what I’m eating.
NCBA state affiliates support what’s known as “ag gag” laws. These measures make it a felony in a growing number of states to gather information on inhumane and unsafe practices on farms and processing plants, even prohibiting taking photographs of the facilities from nearby roads or other public property.
Ranchers who treat their animals well want the public to know their story, and don’t want to be forced to subsidize a trade group that vilifies their potential customers as animal rights “radicals.”
Ed. Notes: Not only does Big Beef collect subsidies, they also benefit most from the absence of a tax on land. They’re absentee landowners who, whenever they have to pay for all the land that they get to charge others to use, tend to sell their excess to their tenants at prices tenants could afford. That would bring back family ranchers … to a degree.
Ranchers (and farmers) might also need a repeal of taxes on wages, so they can more easily afford to hire helpers. Plus, they may need a Citizen’s Dividend which would benefit most the people in the country. That’s where the differential between rent dividend received and land dues paid is greatest.
Happily, with more economic equality, there’s less of an urban/rural divide, so people from everywhere can get to see the other’s POV.
The field of “law and economics” applies economic theory to the consequences of law. This branch of economic theory examines the laws that would maximize efficiency and equity. The theory compares, for example, the incentives created by criminal versus tort law to determine the mix of laws that minimize the social cost of wrong-doing. Law and economics studies contract law to determine when a contract is proper, what is the most effective way to enforce contracts, and how best to deal with breach of contract.
The pure market has voluntary exchanges that involve contracts, and so the structure of contract law becomes important. Deficient law and enforcement breeds uncertainty, corruption, and less prosperity. Since contracts are part of the market, contract law is also within the market, and the enforcement and governance that forms the legal infrastructure is part of the market.
Law and economics also deals with external effects, acts that affect others without compensation. The theory examines taxes, regulations, bargaining, and lawsuits as ways to deal with bad effects such as pollution. Another contrast is between property rights and liability rules. A liability rule does not prohibit a trespass, but requires compensation when it happens. And so law and economics contrasts prohibiting an action in advance, versus dealing with the consequences after the act is done.
People think of the market economy as having buying and selling, supply and demand, production and consumption. But there is much more to the market than a customer buying a product. The product may be defective, or the seller might not get paid. There are many legal doctrines that deal with such problems. These are part of the market and part of economics.
A pure free market economy would include the body of law that has evolved over hundreds of years. There are several origins of law: constitutional law, legislated statute law, the common law from decisions by judges, the law merchant of commerce, and natural moral law.
An anarchist society would need much of the law that now applies to marriages and families, lawsuits, crimes, contracts, and uncompensated effects on others. The difference would be that the anarchist society would have voluntary governance, by individual consent, rather than an imposed government. But a network or federation of voluntary communities would need much of the same law that we have today.
One controversial area of law and economics is whether there should be legal monopolies on “intellectual property,” i.e. copyrights on expressions and patents on inventions. Today’s law is mostly utilitarian, providing protection from copying for a limited time in order to provide incentives to creations, although political influence has extended copyright protection for long durations.
The difference between a libertarian society and today’s world is that there would be no laws prohibiting peaceful and honest acts, even if they are offensive. Drugs, prostitution, and gambling would be legal. There would be no restrictions on trade such as with Cuba or on the production, importation, and use of hemp.
Whether in today’s world or a libertarian world, there should be a basic “law of the market” which prescribes that products are presumed to be safe and effective unless stated otherwise. But a pure free market would avoid laws that restrict one’s own use, or consensual use, of property. Lawsuits would mostly adhere to the British system in which the loser of a case would have to pay the legal costs of the winner, which would greatly reduce frivolous law suits, thereby reducing overall litigation costs.
Today’s complex tax laws would be abolished in free-market law and economics, because honest and peaceful transactions would not be hampered by imposed costs. The public finance consistent with a free market would include voluntary user fees, penalties for damage such as pollution, and the land rent that comes from nature or is generated by population and government’s public works. The full employment of a pure free market would provide the job security that comes from employers needing to fill positions, with few idle workers from which to choose.
The complexity of today’s division of labor makes the law that governs relationships necessarily complex, but the clout of lawyers, special interests, and bureaucrats make the law excessively restrictive and needful of attorneys. A truly free society would make the law the servant of the economy and not its master.
What economic theory needs to take into account is that the field of law and economics is not just one of many applications of economics but rather an inherent part of the market economy, and so law has to become more integrated into economic theory. Also, equity is a goal of law and economics, along with efficiency, and an objective application of equity cannot exist without its foundation, natural moral law. “Natural law and economics” needs to become a prominent part of law and economics.
This 2014 excerpt of Alternet, Feb 24, is by Lynn Stuart Parramore.
The typical mainstream economist is about as good at making predictions as a monkey reading tea leaves.
Take the financial crisis — only a few economists outside the mainstream saw it coming.
The profession of economics projects their pathologies onto the rest of us.
Economists are in love with mathematical models, despite the fact that they often don’t work.
When asked by Congress why he was unable to warn Americans about the coming sh*tstorm, Alan Greenspan offered an uncharacteristic admission: the model he had used to assess the economy for decades was not worth a hill of beans.
Like most other fields, economics is dominated by elites who get to decide what’s acceptable. You can introduce a new idea to these elites, that’s fine — but if you start questioning their methodologies, you will run into trouble. You’re not going to get published, get tenure, or be invited back to next year’s conference.
People in power tend to think and behave in ways that consciously, or unconsciously, legitimize, underscore, and perpetuate their power.
Ed. Notes: Things go in cycles. Decades ago Hazel Henderson noted economics is a form of brain disease. Yet is the explanation psychology or politics?
People can’t do economies without ownership, and property is rife with illegitimate claims. Economists, if they expect to be paid, have to overlook how gains are made, and must focus squarely on just counting the gains. You can’t really do a science that way.
For economics ever to become a science, it’d have to get serious about noting the difference between earnings and non-earnings, between our spending that rewards another person’s labor or capital and our spending that rewards another person’s privilege, such as a claim on land. Economist would have to admit there is private wealth and common wealth. But before they’re psychologically able to do that, probably geonomics will take over.
The global economic cost of violence in 2012 was US$9.46 trillion, which represents 11% of Gross World Product.
Violence containment spending is understood as any economic activity that is related to the prevention or consequences of violence; it includes direct costs such the medical cost of a victim, and indirect costs such as the loss of human capital when someone is displaced as a result of violence.
The findings outlined in the report show that violence containment costs US$1,300 per person per year. It is almost double the size of the world’s agriculture industry and over 2.4 times the size of the total GDP of Africa.
While some spending on violence containment is necessary, overspending on violence containment reduces funds for productive programs. Some of the countries that have the highest violence containment expenditure, are also among the poorest.
The three countries with the highest level of violence containment spending as a percentage of GDP are North Korea, Syria, and Liberia. The military accounts for 70% of North Korea’s violence containment expenditure, which is equivalent to 20% of the country’s total GDP.
Ed. Notes: The authors want government to behave and not spend so much on killing while spending more on schools and clinics. However, subsidized schools and clinics are for poor people. Should we keep people poor? If they weren’t poor, couldn’t they choose their own teachers and doctors? The way to end poverty is NOT to let governments tax then hope they spend our public revenue fairly. The way to end poverty is to get rid of taxes and subsidies. Replace taxes with fees and dues. Replace subsidies with a dividend to the citizenry from the value of sites and resources, a value that always yields surplus public revenue. Even small applications of geonomics have worked.
This 2014 excerpt of Guardian LV, Feb 22, is by Allison Longstreet.
The African island of Madagascar is the only place where lemurs live in the wild, but possibly not for too much longer; the lemur’s extinction risk rate is at a deadly high.
One of the primary causes is the destruction of their natural habitat by farmers and developers, who illegally use slash-and-burn farming methods to harvest plants, as well as the excessive harvesting of rosewood and ebony trees, which ruins the lemur’s natural habitat.
Also, due to political strife on the African island, many citizens have become burdened with poverty and have turned to hunting these primates as a source of nutrition.
To protect the lemurs, scientists hope to raise money through eco-tourism.
From tourists some citizens earn a better living wage, thus protecting the lemurs from hunters.
Ed. Notes: It’s not that humans want to drive other species to extinction. It’s that their economies don’t provide what the humans need, so out of desperation they deplete their resources, including living ones. If economies granted people access to what they need, they’d not resort to exhausting cute parts of their ecosystem. Once again, economic justice is key, specifically, sharing Earth by sharing her worth, the central feature of geonomics.
This 2014 excerpt of the AP, Feb 23, is by Hannah Dreier.
A handful of top U.S. business tycoons are pressuring fellow entrepreneurs to pay workers more proposing to give their money back to the government to redistribute.
Members of the 0.1 percent now make at least $1.7 million a year; the median annual household income has dropped to $51,017.
Income for the top 1 percent soared 31 percent from 2009 through 2012, after adjusting for inflation. For everyone else, it inched up an average of 0.4 percent.
Ron Unz, whose fortune comes from founding Wall Street Analytics Inc, argues that by not paying a living wage, companies are forcing the government to subsidize them through massive welfare spending. An advocate for the free market, Unz opposes any kind of subsidy. Unz, 52, was trained as a theoretical physicist and has written scholarly papers on the Spartan naval empire.
Seattle venture capitalist Nick Hanauer was one of the early investors in Amazon. He started aQuantive which was acquired by Microsoft Corp. in 2007 for $6.4 billion. Hanauer said he doesn’t consider himself a “job creator.” In 2012, he advanced his ideas in a TED talk but TED organizers refused to post Hanauer’s lecture on the web, claiming it was too partisan.
Steve Silberstein made his fortune by co-founding a company that creates software for hundreds of college and university libraries. He opposes exorbitant executive salaries. He would tax companies with a large pay gap higher, and those with a narrower gap lower.
Leo Hindery Jr., raised a Jesuit and previously chief executive of AT&T Broadband and of the YES Network, the cable channel of the Yankees, is asking Congress to raise taxes on Patriotic Millionaires. Rich people like him don’t put their extra dollars back into the economy. They already own all they can use.
Ed. Notes: Wouldn’t it be cool if one of the super rich would propose to totally transform the system so that it no longer spewed forth unearned fortunes at one end and poverty at the other? Instead, people would earn their keep (add value), keep what they earn (zero taxes). And that’d go for both individuals and society as a whole.
The rich get rich not by working or investing so much as by corralling a portion of society’s surplus. They capture society’s spending for land and resources, or they enjoy patents and copyrights without paying full value for them, or they get other monopolies like broadcast licenses for free, or they pollute without paying an equivalent penalty, or they control the creation of new money, etc. Minus such privileges, fortunes would be much, much smaller.
Further, those now struggling would be much better off if government redirected the value of nature and privilege into the pockets of everyone and quit taxing goods and subsidizing bads. While it’s nice that the beneficiaries of today’s system want to give some unearned income back, it’d be even nicer if they’d lend their prominent voice to establishing a just system for everyone — a true geonomy in operation!
This 2014 excerpt of Truthout, Feb 22, is by Christian Exoo and Calvin F. Exoo.
Poverty is a causal factor (rather than merely correlational) in debilitating medical conditions that leave people sick, unable to work, and unable to think – all factors that then perpetuate poverty.
The Eastern Band of Cherokee paid every member of the tribe $6,000 in 2001, with children’s money going straight to a trust fund. The rate of conduct and oppositional defiant disorders in (now formerly) poor children dropped to that of children who had never experienced poverty. Those children were less likely to commit a crime and more likely to graduate high school. And by age 21, they had almost an additional year of schooling.
ADHD (which is almost twice as likely to appear in poor children as in the general population), is estimated to cost (for treatment, educational adjustments, parents missing work, and juvenile justice) $14,576 per child per year.
The human brain has a finite amount of bandwidth. If it is forced to spend that worrying about poverty, it will necessarily have less capacity to spend on other tasks. The poor often fail to take prescribed medications, fail to use preventative health care, and are less productive workers than their more-comfortable counterparts.
There are 49.7 million Americans currently living below the poverty line. We can expect each of them to gain 13 IQ points if the gap between their needs and their means to meet them were somehow bridged. What could we do with that much extra brain power? Heck, maybe we could even end poverty.
Ed. Notes: While sharing public revenue with the poor does save taxpayers money, the best way to share monies is not the usual welfare for the poor — food stamps, minimum wage, public housing, etc. It’d be much more efficient to just pay everyone an extra income, no strings attached. And it’d be much fairer to not use taxes on income and business but instead recover the socially-generated values of land and resources. Levy a land tax or charge a land use fee or raise the deed fee to the rental value of the location or institute land dues or lease public resources at full value, et al. Then parcel out that revenue to citizens as a dividend, sort of like Alaska, Aspen CO, and Singapore do.
At the same time, it’d be fair and cost-saving to abolish the corporate welfare for the rich. And if the government does quit taxing labor and capital, then people will become more productive and they’ll bid up the value of locations. That, in turn, will fatten the Citizen’s Dividend.
It’s geonomics, it works, but the left who argue for more of the same old welfare which has never gotten to the root of the problem don’t see it — yet.
This 2014 excerpt of Grok Granite, Feb 22, is by Skip Murphy.
An example of rent-seeking is when a company lobbies the government for loan subsidies, grants, or tariff protection. These activities don’t create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group. Among those industries that are most apt to seek demand tax relief for what is just ordinary business is the Entertainment business.
Dear Governor O’Malley,
I wanted you to be aware that we are required to look at other states in which to film on the off chance that the legislation does not pass, or does not cover the amount of tax credits for which we would qualify.
Senior Vice President, Television Production
Politicians may be thinking the equation of most “the giving away of our peoples’ monies will be more than compensated by the extra revenues spent by the production crew” – it hardly ever works out that way.
Ed. Notes: Now you know why they call movies “magical”. They get even the powers-that-be to swoon. If Maryland or any state wants to attract filmmakers or any industry, all it has to do is quit taxing wages and other earnings, plus recover land rents, spurring owners to put/keep all locations at best use. Then the jurisdiction will be swamped with businesses, new and old, factual and fictional. Something similar worked well for the Asian Tiger.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?
a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.
of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
a manual. The world did not come without a way for people to prosper, and the planet to heal and stay well; that way is geonomics. Economies are part of the ecosystem. Both generate surpluses and follow self-regulating feedback loops. A cycle like the Law of Supply and Demand is one of the economy’s on/off loops. Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus. Those profits without production (remember, nobody produced Earth) can become our commonwealth. To share it, we could pay land dues in to the public treasury (wouldn’t oil companies love that?) and get rent dividends back, a la Alaska’s oil dividend. Doing so let’s us axe taxes and jettison subsidies. Taxes and subsidies distort price (the DNA of exchange), violate quid pro quo by benefiting the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer (you don’t really need so much bureaucracy, do you?). Conversely, land dues motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves. Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature. Then in all that free time, maybe we could figure out just what we are here for.
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!
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.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.