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This 2014 excerpt of Grist, Mar 13, is by Holly Richmond.
Ordos is an epic ghost town. Ghost city, to be precise — the largest in the world. Sitting in the middle of a desert in northern China, Ordos was intended to be the Vegas of Inner Mongolia.
The Kangbashi district, planned to accommodate a population in excess of one million, is home to 20,000 people — leaving 98% of this 355-square kilometre site either under construction or abandoned altogether … a glamorous and nearly empty airport, the rickety corpse of a sports stadium, an unused mosque, and a ghostly downtown. The hotel minibar has peanuts, booze, and gas masks.
Deadlines weren’t met, loans went unpaid, and investors pulled out before projects could be completed — leaving entire streets of unfinished buildings. The ridiculous cost of accommodation put off many would-be inhabitants, so that even fully completed apartments became difficult to sell.
Ed. Notes: Build it and they will come? Well, not exactly. This is a good example of what value is. Things don’t have value, even big things like cities. Rather, people value things. Value is a verb, not a noun, essentially.
Therefore, because value comes from people, and land comes from none of us, then who should get its value? If those who get it are those who create it, and if they get it from those who own the land, then owners would be compensating those whom they exclude from a part of earth, earth being our common birth right. (Of course, each owner as a resident would likewise be compensated by “hers” neighbors.)
How much would owners pay as land dues to their community? Depends on how much demand there is for their site, how much those excluded value the site. In a ghost town, not much if anything at all. Another nice feature of this geonomic arrangement of dues-in-dividends-out is that it could replace taxes and subsidies. Becoming a tax-free jurisdiction might change any place from being a ghost town to a booming city!
This 2014 excerpt of Oxfam, Mar 13, is by Ian Gary.
Rachel Boynton’s documentary “Big Men” goes inside board rooms and presidential living rooms, onto oil rigs and the floor of the New York Stock Exchange, after the discovery of a huge oil find in Ghana in 2007.
Who gets a license to explore oil and how? Who’s behind these companies (the “beneficial owners”) and what are their connections to political elites? Who bears the risk and who gets the rewards?
Jim Musselman is the CEO of Kosmos Energy at the start of the film – an affable (and quotable) Texan who had previous success in the oil-rich dictatorship of Equatorial Guinea.
George Owusu founded an obscure company called the E.O. Group and gained a license to explore in Ghana and who, by his telling, “cold-called” Musselman in the Dallas phone book and lured Kosmos to Ghana.
When Erik Solheim, Norway’s environment minister at the time, tells the audience that Ghana should tax oil companies to the hilt, Musselman is stone faced. When Musselman tells the chairman of the Ghana’s state oil company that he didn’t taxes, the chairman assures him, “Oh, we won’t do it.”
The American Petroleum Institute argued against implementation of a US law requiring oil company transparency.
Will Ghana’s citizens benefit from the more than $20 billion the government is expected to receive from oil in the next decade?
Ed. Notes: Oil should benefit everyone. The value of oil in the ground should be paid into a nearby regional treasury. Companies should profit from extracting, processing, and transporting, but should pay over the value of oil in situ to the surrounding populace.
Government could disburse the “royalties” as dividends to citizens, a la Alaska.
At least, that’s what should happen until the oil runs out or people quit burning it to save their world and to save money by switching to solar energy.
Oil is not so different from other resources or lands or locations in general. The rental value of all nature — the money one is willing to pay to own or use them — is what should be our common wealth to share. Meanwhile, taxes on wages, sales, and buildings should be forgotten.
It’s the geonomic recipe and people who care about Africans would do well to help raise awareness of our right to a fair share of Earth’s worth.
The US Food and Drug Administration (FDA) is now imposing restrictions that will devastate many small farms that provide healthy food. The bad news was published by the Health Impact News Daily issue of 16 March 2014 in an article by the Alliance for Natural Health, “FDA Starts to Take Control of American Organic Farms.”
According to the article, an inspector of the FDA visited the New Morning Farm in Maryland and threatened to impose fines unless the owner switched to government-dictated farming, even though there has been no health problem from food grown on that farm.
Another article, in the 22 February 2014 Los Angeles Times, announced, “Planned food safety rules rile organic farmers.” It stated that the FDA regulations will stop common organic farming techniques such as the use of locally-made fertilizers and irrigation from creeks.” Draft animals used for plowing may become illegal.
The FDA gets its new powers over farms from the Food Safety Modernization Act (FSMA), signed into law in January 2011. You can go to the FDA web site and read the “FSMA Rules & Guidance for Industry.”
If you run a farm, what would you think of having to read through a dozen complicated rules you will have to obey? After a hard day of farming work, the tired farmer has to read publications such as:
“What Information is Required in the Records You Must Establish and Maintain to Identify the Nontransporter and Transporter Immediate Previous Source and Immediate Subsequent Recipients? (Sections 1.337 and 1.345).”
“Who is Required to Establish and Maintain Records for Tracing the Transportation of All Food? (Section 1.351).”
“What Are the Consequences of Failing to Establish and Maintain Required Records or Make Them Available to FDA? (Section 1.363).”
The new FDA farming rules require periodic audits that will cost several thousand dollars for each one. Farms are already closing down their produce production to avoid costs that can be over $100,000 per year.
The FDA is now choking organic farming with huge amounts of such details. As with many other regulatory proceedures, the FDA rules promote the concentration of industries into large companies that can handle the regulation costs, while small companies shut down because of the compliance costs.
The “market failure” doctrine that prevails in economics claims that in a free market, monopolies will arise to dominate industries with higher prices than in competitive industries. But in actuality, it is big government’s regulations that drive out the small producers and promote the concentration of firms in an oligopoly, an industry dominated by a few firms. Despite the presence of large banks, there are still small banks and credit unions that serve local communities. But regulations are too costly, all that will remain are large banks.
Many regulations exempt very small enterprises, but these also stifle business by preventing small firms from getting bigger. The result is less cultivation of fruits and vegetables in the USA and more imported food. Perhaps one good aspect of the FSMA is that in response to safety concerns about imported food, foreign exporters will be subjected to new safety rules. To facilitate foreign compliance, the FDA has translated documents about the FDA Food Safety Modernization Act into 11 languages.
The FDA is implementing a mandate authorized by Congress. The U.S. government claims this authority from the “commerce clause” of the US Constitution (Article I, Section 8, Clause 3), which states that Congress has the power “To regulate Commerce … among the several States.” Many constitutional scholars think that the founders intended this clause to prevent trade barriers among the states, and not to give the US government a blank check to enact any legislation it pleases, which is the current situation, even though this contradicts the original intention of the founders to limit the power of the federal government to strictly listed functions.
There is indeed a global food safety problem, with frightening cases of food contamination and poisoning. But the optimal way to deal with this problem is with a liability rule that enables victims to obtain quick compensation for any damage, and indeed, inspections, ideally by state government agencies rather than the federal government. As a service to the public, the inspections should be paid for from government funds, rather than imposing arbitrary and burdensome costs on farmers. It should be the responsibility of governmental officials to know the rules and apply them, and allow any farm method to be used so long as the inspectors do not judge them to be dangerous.
A demand by the public for food safety, combined with liability for damage, will be met by the market supply of safety measures and assurances. Insurance companies would inspect the farms in order to avoid the adverse selection of bad farms getting the most insurance. There are in fact private food inspectors operating, but since government preempts food safety, the demand and supply for private inspections diminishes.
The US government is responding to a real problem, but as typically happens, the government’s response fails a cost-benefit analysis. Congress ignores the cost of its regulations, and the voters are too busy and too ignorant to insist that Congress adhere to economic logic.
Meanwhile, we can expect a greater concentration of farming into large corporate agriculture, more expensive food, and fewer opportunities for progressive food entrepreneurs.
This 2014 excerpt of In These Times, Feb 20, is by Julia Wong.
More than 400 San Francisco city workers, many dressed as Cupid, marched in protest of Twitter’s ‘sweetheart’ tax break to Twitter headquarters.
The protesters were members of Service Employees International Union Local 1021, which is currently negotiating with the city over contracts covering more than 13,000 workers.
The Twitter tax break — a six-year payroll tax exclusion area around Twitter’s offices in the Central Market/Tenderloin neighborhood — has drawn numerous tech companies to the area.
Add to that the $6 million tax break the nearby Zynga received in 2011 and the $500 million in fines San Francisco chose not to levy against Silicon Valley companies whose private shuttles illegally use public bus stops.
City workers, in recent contracts, accepted furloughs, increased contributions to pensions, wage freezes, and layoffs. Hundreds of workers were also temporarily reassigned to classifications with lower rates of pay.
SEIU 1021 plans to support an anti-speculation tax aimed at those buying real estate for reselling soon thereafter at a higher price.
Another idea local officials are discussing with SEIU International leaders is investing the 1021′s reserves in community land trusts to create affordable housing in San Francisco or Oakland.
Ed. Notes: All the ingredients are there to make San Franciso a geotopia. People are savvy about tax breaks, land speculation, rent inflation, and land trusts. All they need to do is to quit opposing tax breaks for wages, demand a tax hike on locations, and thereby use the sky-high site values of the City on the Bay for resident’s dividends, a la Singapore.
I say, “All they need to do” as if it’s a simple political matter. It’s not. But they do have a movement already started with the unions. They might be able to expand it to include students, homeowners, small businesses, and environmentalists.
Greens tend to like the shift of taxes off buildings and other goods, onto sites, since the higher “land dues” (land tax, land use fee, deed fee, whatever) spurs owners to use their land efficiently. As metro land gets used more intensely, suburban and rural land need not be used at all.
This geonomic policy has worked before, wherever tried, to the degree tried.
What’s needed is something that’d captivate the imagination and inspire a critical mass, and that could be the call to transform high land values into dividends for all San Franciscans. The dividend could actually make a furlough fun!
Ed. Notes: Why should anyone fund Ukraine? Its government is deep in debt because it’s corrupt. Why does the US always choose corrupt rulers to give Americans’ money to? Better than all this macho posturing would be to shut down US bases in Europe and admit Russia into NATO — then shut down NATO, too.
The main reason that power-grabbing individuals want their own country is so that they can rip off their own people. The reason that vast numbers want their own country is so they can be ruled by individuals who belong to the same ethnic group that the people identify with. Both are shallow reasons and make the notion of country appear shallow, too.
If the world went geonomic, these disagreements would become non issue. Who cares who’s in power if they have no power to tax your labor or capital or subsidize their cronies? Who cares where the border is drawn if there’s free trade, free travel, and global Earthling dividends? It’s hard for most people to see beyond the imposed framing on current conflicts but once you do, you see the solutions that work right for everybody.
These two 2014 excerpts are from (1) Future Cities, Mar 3, by Walter Fieuw, and (2) Policy Scotland, Mar 4, by Ken Gibb of University of Glasgow.
How to Fund City Growth? Value Capture
Land value tax dates back to the early roots of modern cities, and it could end up financing our future.
Land value tax is leveraged against unimproved land value. “Land” is the unimproved site, not counting infrastructure or buildings; “Value” refers to the increased market value after public investment; and “Tax” is the payment due for exclusive occupation of the site.
The idea to capture value was first popularized by economist and social reformer Henry George (1839–1897) who was convinced that revenue generated from nature and land belonged to society. In his seminal work, Progress and Poverty, George argued that taxing land value deters speculative land holding.
Paul Romer, director of NYU Stern Urbanization Project, shares the view that strong, principled city charters based on value capture will change power relations in cities:
Building great cities requires brave leadership. Value capture can be a cornerstone of a new system for land taxation and progressive development financing. For, as Henry George taught us, the economic return of land should be shared equally, and not held in the grips of private owners.
Going back to Tom Payne’s use of John Locke’s property rights arguments to justify taxing land, through Ricardo’s attack on unproductive economic rent from monopoly land owners and on to Henry George and the ‘crank’ idea to have a single tax through taxing land. Lloyd George, supported by Churchill, twice proposed an LVT for the UK prior to the First World War. After the Second World War, legislation was supposed to combine the granting of planning permission with some form of land development or betterment tax – four successive attempts subsequently to introduce and make work such taxation abjectly failed.
The core idea is taxing unproductive economic rent derived from land ownership. Taxing the economic rent in land values but leaving the structures untaxed should allow ‘society’ to capture a proportion of the gains landowners receive in uplift in values as a result of planning permission and the benefits of public infrastructure support. Thus, landowners with planning permission have an incentive to build and there is no tax disincentive to make the land productive.
It would be good to get a discussion going about how to make progress on rational tax reform.
Ed. Notes: If you’re going to tax people, it’s makes good sense to put location values into your tax base and boot other values out. Ethically, nobody made land and everybody (the presence of the populace) makes land valuable. Economically, the levy drives efficient land use and raises wages. What’s not to like? Plenty. People just are not interested. How to interest them? Probably downplay the tax. Instead, convert the recovered ground rent revenue into a resident’s dividend and up-play that — money in the pocket!
Ed. Notes: The author calls for the usual higher minimum wage, stronger unions, restricting international exchange, etc. Yet in the past when we had those policies and more, we still had widespread poverty. Shouldn’t we be trying something else?
How about if we try what works? Any place that has used any aspect of geonomimcs has benefitted: de-tax wages, de-fund corporate welfare, enforce environmental standards, recover the socially-generated value of sites and resources, and pay people a dividend from the resultant surplus public revenue, a la the dividend of Alaska or Singapore, for example.
Of those, the most potent and maybe the hardest to implement is the public recovery of publicly-generated land values. It works because it spurs owners to use prime locations most efficiently, which creates jobs and attracts investments. It’s fair because we didn’t create land, we all need land, and paying land dues is a way of compensating our neighbors, those whom we exclude (as long as the government pays a dividend or provides universally desired social services). Land dues run up against land speculation but they are what make geonomics tick.
This 2014 excerpt of The Guardian, Mar 3 is by George Monbiot.
The biggest 174 landowners in England take £120m between them. A €300,000 cap would have saved about £70m. If farmers were subject to the benefits cap that applies to everyone else (£26,000), the saving would amount to about £1bn.
First we give rich landowners our money – vast amounts of it, uncapped and almost unconditional. Then we pay for the costs they kindly dump on us: the floods, the extra water purification necessitated by the pollution they cause, the loss of so many precious and beautiful places, the decline of wildlife that enchants and enraptures. Expensive, irrational, destructive, counter-productive: this scarcely begins to describe our farming policies.
But it need not be this way. Change the rules, change the incentives, support impoverished farmers to do the right thing, stop support for the rich farmers altogether, and everything else can follow.
Turn the rivers flowing into the lowlands into “blue belts” or “wild ways”. For 50 metres on either side, the land would be left unfarmed, allowing trees and bogs to return and creating continuous wildlife corridors. Bogs and forests trap the floodwaters, helping to protect the towns downstream. They catch the soil washing off the fields and filter out some of the chemicals which would otherwise find their way into the rivers. A few of us are now in the process of setting up a rewilding group in Britain, which would seek to catalyse some of these changes.
We must insert a political crowbar to prise the government away from the industry it is supposed to regulate.
Ed. Notes: We humans could do a much better job of extracting our livelihood from the earth sustainably. We humans might feel a stronger motive to do a better job if we practiced geonomics. If we all paid land dues and got back rent dividends, we would be connected to Mother Earth financially. She’d become our commons. If she lost value, making our dividend shrink, we’d sit up and take notice and if for no other reason than the bottom line, we’d make the necessary corrections so that none of us could get away with doing environmental harm, since that also lowers land value. After doing the right thing for maybe not the right reason for a while, probably we’d internalize the values of stewardship and treat the natural world sustainably because we’d see ourselves as part of it.
NBC News, Feb. 17, 2014: ‘Bizarre’ Cluster of Severe Birth Defects Haunts Health Experts
A mysterious cluster of severe birth defects in rural Washington state [and] reports of new cases continue to climb. Federal and state officials won’t say how many women in a three-county area near Yakima, Wash., have had babies with anencephaly — born missing parts of the brain or skull. And they admit they haven’t interviewed any of the women in question, or told the mothers there’s a potentially widespread problem.
[...] nearly two dozen cases in three years, a rate four times the national average
[...] CDC and state officials refused to tell NBC News how many new cases they’d received in 2013
[...] Allison Ashley-Koch, professor at the Duke University Medical Center for Human Genetics: “Any time you see a geographic cluster of a pretty severe birth defect, it does make you wonder if there is a common exposure
[...] If you could find a way to stop this from happening, why wouldn’t you want to do that? Why would you not want to tell people?”
NBC’s report failed to mention the cluster’s proximity to Hanford, the most contaminated area in Western Hemisphere.
Ed. Notes: Polluters are both businesses and governments. Presently, we can hold business people accountable, especially if we quit letting them hide behind limited liability. But how can we hold elected officials and bureaucrats accountable?
Maybe we can’t and so we should not let government wield so much power in the first place. How? Rather than let politicians spend public money to fund their grandiose ideas such as dump sites, force them to raise the money by selling bonds. Bond buyers are more cautious, since they don’t want to lose their investment or become liable for hazardous projects. Governments would not be able to sell enough bonds to fund something as hazardous as a nuclear dump.
This is an economic solution, not a political solution such as trying to persuade government to clean up this one site while leaving the power of spending in the hands of government. Since money matters, this economic solution should work.
These three 2014 excerpts are of: (1) The View from Cullingworth, Mar 2, by Simon Cooke (the village’s Conservative Councillor); (2) The Age, Mar 3, by Ross Gittins (Sydney Morning Herald’s Economics Editor; and (3) Macrobusiness, Mar 3, by Houses and Holes in Australian Economy.
Rent-seeking at Work
New York held an auction for individual yellow-cab medallions that give drivers the right to operate a taxi and pick up street hails. Winning bidders paid as much as $965,000 for the latest batch of medallions. You pay nearly a million dollars for the right to drive a cab in New York. This suggests that not only are there not enough taxis but that, as a result, the price of a taxi fare is higher.
What gets me is how blatantly self-seeking our lobby groups have become.
These days far more people make their living lobbying for interest groups than did so in the 1980s.
Too many politicians, private office advisers and bureaucrats retire as gamekeepers to become poachers. The fact that ex-Coalition lobbyists do better under Coalition governments, while ex-Labor people do better under Labor governments is a sign that this is not an innocent, arms-length, information-gathering exercise.
The big miners, the financial services sector, the hotels and the registered clubs have the most money to invest (and I do mean invest) in rent-seeking.
Giving in to rent-seekers doesn’t make you any friends, it just makes things worse. Yielding to my pressure for a concession never satisfies me, it just shows me you’re an easy touch and prompts me to think of something else I want. Meanwhile, giving me a lolly just makes my rivals envious and prompts them to demand theirs. Bad inevitably leads to worse.
I very much agree with Mr Gittins about the problem he describes. Trouble is, I see him as one of the worst rent-seekers of all.
If rent-seeking prevents the most efficient flow of capital for productive purposes, and thus the rise of national wealth and with it the common good, then why does Mr Gittins spend so much of his time defending an economic model in which [financial] “services” and mining are seen as the natural evolution of the economy?
As more and more capital is sucked into the unproductive venture of mortgages, productivity starts to fall. That is where the Australian economy is today, with our banks pouring far larger proportions of the nation’s capital into mortgages than at time since records were kept. A considerable slice of Australia’s declining multi-factor productivity has resulted directly from escalating land prices.
“Holding gains and losses accrue to the owners of assets and liabilities purely as a result of holding the assets or liabilities over time, without transforming them in any way”. In economic terms, they are pure rents.
As Fairfax Media [Gittins employer] dies its slow death, it is being eaten by its own real estate businesses, which now constitute almost half the firm’s value.
Ed. Notes: The third critic makes a good point. Rent-seeking is not only the newer versions performed by taxicab owners and big businesses. Those extractions pale beside the classic seeking — and winning — of rents spent for land.
To halt the classic rent-winners, it’s not a matter of government quitting subsidizing insiders and leniently enforcing rights. It’s a matter of government being proactive and using its power of charging fees or levying taxes, or even of instituting dues, to redirect our spending for land from sellers and lenders into the public treasury then out again as dividends to everyone. That’d stymy the classic rent-seekers, whittle them down to size, making it much easier to halt the neo-rent-seekers and repeal corporate welfare and regulatory favoritism.
It’d also help greatly if people could see government as steward rather than as Santa Claus.
The emergence of electronic currencies such as bitcoin has caught the imagination of economists, speculators, and fans of non-governmental financial alternatives. Electronic currencies are created by software and held in computer files. These are also called “cryptocurrencies,” since they apply cryptography for security.
Most of the electronic “coin” currencies are generated by computer programs that require much time and resources, in order to limit the supply. When new units of the currency are created, this has the same effect as mining new metal for commodity money, and so the electronic currency creation is also called “mining.”
The creation and expansion of an electronic currency is similar to that of other alternative currencies. In some cities, people have established local currencies, some based on labor hours. Some merchants accept these, and the notes circulate as a medium of exchange. The effect of these local and alternative currencies is to expand the overall money supply.
Suppose in some U.S. city with a population of one million persons, there is $100 million in money held by the public. Then a financial entrepreneur enters the picture. He introduces labor-bucks as a local currency, which exchanges at one labor-buck per $1. He gives each person in the city 100 labor bucks, for a total of 100 million labor bucks. On the average, each person now has $100 plus 100 labor bucks. If the labor bucks stay within the city, each person has twice as much purchasing power, and that drives prices up. If the city were an isolated economy, and the total amount of goods for sale is unchanged, the labor bucks distribution will, after some time, double prices, including a doubling of wages and rent.
But since the city is in an open economy, any increase in prices would make people buy at nearby cities. So the prices do not rise by much. Instead, the local people buy twice as many goods. Is this a free lunch? Has the new currency created value out of nothing?
There are free lunches, contrary to the usual slogan, but this is not one of them. The increase in the local money supply will increase the demand to buy goods beyond the city, and unless this stimulates new production, the effect will be a small increase in the general price level of the country, and to a lesser extent, an increase in the price levels throughout the world. In today’s open economies, the creation of new money is at the expense of the value of all the other money.
The same thing happens when the Federal Reserve or other central banks expand the national money supply. The purchasing power of those first getting the new money is offset by the reduction of purchasing power of everybody else. New money is at the expense of old money.
Since it takes time for money to circulate and increase demand and raise prices, those who first obtain the new currency at no cost or at a discount will profit at the expense of everybody else.
It is not surprising, therefore, that many new electronic currencies have sprung up. Besides the well known bitcoins, a new electronic currency, the auroracoin, is being introduced in Iceland. Half of its mined coins will be distributed to the entire population of Iceland, starting on 25th of March 2014. After its banking crisis, the government of Iceland imposed restrictions on the use of foreign currency. The hope is that auroracoin will enable the people of Iceland to engage in international transactions in the alternative currency.
By better enabling transactions, and by providing an alternative to loans, electronic currencies don’t just add to the global money supply but may also stimulate more production and trade. Recovery from recessions is typically held back by credit constraints, and if people can instead obtain cryptocurrencies, this reduces the need for credit, and also reduces the transaction costs of international financial exchanges.
A confederation of tribes in the Oglala Lakota native-American nation in the U.S. is also creating an electronic currency, the MazaCoin. A leader of the Lakota Nation, Payu Harris, hopes that crypto-currencies will be the “new buffalo.” The Lakota nation will hold some of the coin in a Tribal Trust for loans and support to local businesses.
Electronic currencies will serve to facilitate trade, investment, production, and employment if they are used for buying and selling goods rather than mainly for speculation. Bitcoins have been a medium of speculation, and there was a reported hacker attack on the bitcoin exchange Mt. Gox that stole the funds. The US government is also involved in seeking to prevent the use of cryptocurrencies for money laundering and illegal goods.
We are still in the pioneering stages of electronic money. There is room for a new currency that would be in the hands of the general public and have a stable purchasing power, and which would balance privacy and security with public information that minimizes its use for criminal purposes.
A problem with a new currency is how to set its value. One way is to anchor the value to some commodity such as coffee. Suppose coffee generally sells for US $2, and there is a new electronic currency, newcoin. For three months, people would buy newcoins for $1 each, and merchants would sell the coffee for one newcoin. Many people would want to use newcoins for the inexpensive coffee. The newcoin miners would then reimburse the merchants one newcoin per coffee sold. After three months, the special price would end, and from then on, the value of newcoins would be based on market trading.
The alternative method is to let the market establish the value of the currency prior to its use. Since the coin is not tied to any commodity, its value could fluctuate widely, as has bitcoin.
At any rate, the introduction of many electronic currencies will result in a great expansion of the global money supply. The supply of each electronic currency is limited, but the number of electronic currencies is unlimited. Economic theory, namely the quantity theory of money, the proposition that the monetary inflation causes price inflation, predicts that the increase in cryptocurrencies will increase the demand for goods and will increase global price levels.
One can therefore expect a global inflation of prices, perhaps hyperinflation. That will greatly increase the price of monetary commodities, especially gold, and also land values. I therefore expect the price of gold to erupt up during the next decade. I may be incorrect, but if there is a commodity in limited supply, and purchasing media that can increase without limit, it’s not a bad bet to believe that the quantity theory will hold up.
This 2014 excerpt of The Guardian, Mar 2 is by Dave Hill.
Some insist that the land banking problem is overstated but the GLA/Molior report argued that if work on every site for which planning permission had been obtained at that time began immediately “somewhere between 50,000 and 70,000″ homes would be completed for each of the ensuing three years.
If “use it or lose it” could help bring about even the lower of those two figures in London it would be a big boost.
Meanwhile calls from across the political spectrum and elsewhere continue for the introduction of another measure to lessen landbanking – a land value tax, something both Darren Johnson and Stephen Knight strongly endorse. Conservatives might reflect that Winston Churchill was pretty keen on the idea too.
Ed. Notes: Land banking is polite for land speculation. It results in wasteful use of metro land, making it a selfish, anti-social practice. The cure that’s always worked before is to charge owners a rent for their land, no matter how they’re using it. To pay the rent (or tax), they use their land well. To make the charge fair, it’d be good to at the same time lower or remove other taxes, especially on buildings. Going one step further, it’d be great to return the recovered rents as a dividend to residents, sort of like what Singapore does. You get better land use, you get more affordable housing, and you get economic justice, all in one (the one of geonomics).
This 2014 excerpt of Nature, Feb 24, is by Richard Van Noorden.
The publishers Springer and IEEE are removing more than 120 papers from their subscription services after a French researcher discovered that the works were computer-generated nonsense.
Labbé developed a way to automatically detect manuscripts composed by a piece of software called SCIgen, which randomly combines strings of words to produce fake computer-science papers. SCIgen was invented in 2005 by researchers at the Massachusetts Institute of Technology (MIT) in Cambridge to prove that conferences would accept meaningless papers.
SCIgen is free to download and use, and it is unclear how many people have done so. SCIgen’s output has occasionally popped up at conferences, when researchers have submitted nonsense papers and then revealed the trick.
Labbé showed how easy it was to add these fake papers to the Google Scholar database, boosting a fake scholar’s h-index, a measure of published output, to 94 — at the time, making him the world’s 21st most highly cited scientist.
There is a long history of journalists and researchers getting spoof papers accepted in conferences or by journals to reveal weaknesses in academic quality controls — from a fake paper published by physicist Alan Sokal of New York University in the journal Social Text in 1996, to a sting operation by US reporter John Bohannon published in Science in 2013, in which he got more than 150 open-access journals to accept a deliberately flawed study for publication.
This 2014 excerpt of Guardian LV, Feb 28, is by Grace Stephen.
Food wastage globally is at an all-time high. Americans are perhaps the most wasteful people in the planet’s history and also one of the most gluttonous. Over 35 percent of Americans can be classified as officially obese.
Within the United States one third of the 430 billion pounds of food produced annually is thrown away. The wastage was caused by spoilage, inadequate or incorrect cooking, or suffered natural shrinkage because of the loss of moisture. A large chunk of the wastage was also caused by people who did not like the food they bought and therefore simply threw it away.
Meanwhile, laws have been put into place that ban the feeding of homeless people in every city of the country.
After the drought in California, the region is unable to produce the usual amount of food; prices are set to skyrocket.
Ed. Notes: Food waste with widespread hunger must be the height of irony. It shows once again that our economic problem is not a matter of production but a matter of distribution. Get rid of subsidies and taxes and individual capture of natural values. Then everyone will have enough opportunity to prosper and avoid hunger. As for the already prosperous, maybe they need to pay more to have their wastes picked up from their curbside.
This 2014 excerpt of Global Research, Feb 28, is by Ezili Dantò.
Last May 10, Martelly-Lamothe, the US-picked Haiti president decreed the island of Ilavach to be property of the state. Konbit peyizan Ilavach (KOPI), the organization put together by the people of Ilavach to secure their interests say the taking of their lands is illegal and any development is not intended to benefit the island residents but foreigners. Residents would rather continue to eat yams, fresh fish, fruits, vegetables off his own ancestral land than have to get a wage job on the Island to service Northern tourists.
The Ilavach folks have no local representation. There has been no local elections, no parliamentary elections in Haiti since Michel Martelly took office with only 17% of the population voting. The Martelly-Lamothe government, instead of organizing required elections, has constantly postponed local and national elections.
Martelly created the local position – Ajan Egzekitif Enterimè or Interim Executive agent — and appointed the person to this position. This man points out people for intimidation, imprisonment, and even death.
Ed. Notes: Such displacement happens in many places, even close to the US. All for the profit from land. Yet land is our common heritage, and the rents it can command are our common wealth; they should not be low hanging fruits for the greedy and grasping. Never miss an opportunity to help resurrect the understanding Mother Earth is to benefit everyone equally.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?
the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.
a way to redirect all the money we spend on the nature we use – trillions of dollars annually. We can’t pay the Creator of sites and resources and are mistaken to pay their owners this biggest stream in our economy. Instead, as owners we should pay our neighbors for respecting our claims to land. Owners could pay in land dues to the public treasury, a la Sydney Australia’s land tax, and residents could get back a “rent” dividend, a la Alaska’s oil dividend. We’d pay for owning sites, resources, EM spectrum, or emitting pollutants into the ecosphere, then get a fair share of the recovered revenue. The economy would finally have a thermostat, the dividend. When it’s small, people would work more; when it’s big, they’d work less. Sharing Earth’s worth, we could jettison counterproductive taxes and addictive subsidies. Prices would become precise; things like sprawl, sprayed food, gasoline engines, coal-burning plants would no longer seem cheap; things like compact towns, organic foods, fuel cells, and solar powers would become affordable. Getting shares, people could spend their expanded leisure socializing, making art, enjoying nature, or just chilling. Economies let us produce wealth efficiently; geonomics lets us share it fairly.
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.
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.
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.
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.
an answer to a rarely asked question. If price is a reward for production, why do we pay for land, never produced by any of us? What is land price a reward for? Good behavior? How much money do we spend on the nature we use? Who gets it? What do they do with it? (If you answer all these correctly, you’re not a genius but a geoist.) The worth of Earth is enough that were we to collect and share it, we could abolish taxes on the goods we do produce. For example, San Francisco’s Redefining Progress has calculated that Cali-fornia could abolish all state and local taxes were it to collect the values of resources and of using na-ture as a dump. By exorcising the profit motive from depletion and pollution, rent collection could replace bossy regulation. Economies could self-regulate, as the rest of the eco-system does. See how big problems yield to big answers when we ask the right questions?
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.