We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.
Ed. Notes: Oil companies not only get to waste our natural resources but also get to pollute the air by burning. Meanwhile, government does nothing. Actually, government does do something. It grants oil companies and polluters in general limited liability. That means, the actual individuals in the companies who make the decisions to pollute the public and the environment won’t have to face any legal consequences for their decisions. Without any downside, why not try to maximize profit at the expense of nature, worker, and consumer?
The root of the problem is normalcy bias. We treat pollution as normal. And we treat our rights to both a healthy Earth and to a share of her worth as abnormal.
Fortunately, reversing those biases does not require those who know or care to get the permission of anyone in power in business or government. Progress only requires that those who know or care speak out. So, lend your voice!
This 2014 excerpt of the Los Angeles Times, Feb 2, is by their Editors.
This page has long opposed the death penalty, yet we also found ourselves caught up in the emotions surrounding Timothy McVeigh’s 1995 bombing of the federal building in Oklahoma City, and supported his death sentence — a stance we have since regretted.
That tumbling to the emotion of the moment, though, points up one of the primary roles of the judicial system: to act as a buffer between victims’ justifiable thirst for vengeance and the greater good of society. In our view, it is not the rightful responsibility of the state to act as executioner of its own citizens, no matter how heinous the crime, no matter how infamous the criminal, and no matter how loudly people may call for it.
Cases like this test our strength as a mature democracy, and as a people who believe in justice. Life without parole is the correct response in these extreme cases. It punishes the criminal while protecting society from future acts of violence.
Ed. Notes: While killers do deserve to die according to “an eye for an eye”, should innocents descend to the killer’s level? Do you really want to hire people to kill others? Do you want your hired killers to mix with the rest of society? And if you make a mistake and sentence an innocent to death, then do you hire someone else to kill your original hired killer? Must the judge and jury who erred be killed, too?
Imprisoning a killer for life need not mean that society care for the killer. Killers could be put on an otherwise deserted island where they’d have to fend for themselves. Maybe another killer would kill them. Maybe they’d commit suicide, an act some killers do attempt, an act that society should not deny a killer. Or maybe they’d rehabilitate. But whatever the outcome, it would not affect the rest of society beyond the task of patrolling the island to prevent anyone from escaping.
Bigger picture, still, society should not ignore what its killers often are saying. Usually, people reach the point where they are willing to kill when they’re unbearably frustrated and have absolutely no one listening to them. In this Boston case, if we Americans were to listen to the killer, we’d stop killing innocents in Muslim countries — something we should not have started doing in the first place.
The worst intervention by governments, aside from aggressive war, is excessive litigation. Taxes are burdensome, but they are predictable. The reason that enterprises are not entirely crushed by taxation is that much of the tax burden is at the expense of land rent, so it ends up destroying the economy’s surplus, but not totally wreaking the economy. Regulations act as a tax to impose costs on enterprise, and much of the cost is passed on to workers and the public, so they make us poorer but don’t totally stifle the economy. Subsidies create distortions that generate inequality and the boom-bust cycle, but subsidies is what politics is all about. The worst intervention, that does the most to crush enterprise and employment, is vicious litigation.
A prime example of litigative intervention is the California Environmental Quality Act. CEQA is codified at the Public Resources Code Section 21000 et seq. As California’s web site for CEQA states, “Most proposals for physical development in California are subject to the provisions of CEQA.” The “frequently asked questions” web section explains that “CEQA is a self-executing statute.” That means that “its provisions are enforced, as necessary, by the public through litigation and the threat thereof”. Past court cases can be seen on the web site of the California Natural Resources Agency at <http://ceres.ca.gov/ceqa/cases/>.
As described by a “Schumpeter” blog article in the 25 January 2014 Economist, “The not so Golden State,” this law “has mutated into a monster”. Anybody in California may file a CEQA lawsuit against any project using environmental protection as an excuse. The plaintiffs win half the cases. If someone sues a company and loses, the defendant still has to cover his legal expenses. Many of the lawsuits under CEQA are also against governmental development projects and against permits by local governments to enable private development.
Suppose a developer seeks to build an industrial park. If he hires non-union workers, the union attacks with a CEQA lawsuit. So the builder hires expensive union labor. Suppose someone owns a gasoline station, and a competitor wants to set up a station nearby. The station owner stops the potential competitor by filing a CEQA case. In 2011, there were 254 “California disinvestment events,” in which companies employing more than one hundred workers either left the state or expanded in another state rather than in California. This is estimated to have gotten worse in 2012 and 2013.
The litigations and regulations of California fall hardest on manufacturing. California’s high sales tax and low property tax also induces cities to favor retail stores over manufacturing. Hostile policies in California are largely responsible for the flight of manufacturing to other states and to foreign countries. As noted by the Economist article, electronic devices are designed in “Silicon Valley”, the region from San Francisco to San Jose, but manufactured in Asia. Some environmentalists realize that CEQA does little to protect the environment, but attempts to reform the law have stalled. The frivolous lawsuits reward lawyers, unions, companies seeking to stifle competition, and “not in my backyard” opponents of development.
Litigation is the worst way to handle social problems. Lawsuits impose unpredictable and expensive costs on enterprise. Such laws let opportunists exploit legitimate job-creating industries. Excessive litigation is further rewarded by making the winning defendants of lawsuits have to pay their legal costs. We then get excessive malpractice suits that force doctors to buy expensive insurance. Federal and state laws that enable litigation for job and housing discrimination and environmental protection end up enriching lawyers who get much of the gains.
The best ways to handle environmental destruction is with covenants and easements, along with a liability rule for damages. If some development harms the natural environment, then the government assesses the damage, and the polluter pays for the damage, either as a one-time charge or as periodic payments for on-going pollution. Developers know in advance that they are liable for damage, and so they would have the incentive to prevent the payment by doing their own environmental assessment. The issue would be between the developer and the state, without involving attorneys and court costs.
Economic theory has recognized for the past hundred years that the optimal policy for pollution is a charge paid by the polluters, passed on to the customers, fully compensating society for the damage. That can be done by a pollution tax.
English common law traditionally provided law-suit protection against potential negative effects and damages to one’s property. Litigation can be a useful enforcement and restitution tool, but it has to be within a sensible legal system. In the English tort system, if a plaintiff loses a law suit, the loser has to pay the legal costs of the winner. So if a company sues another firm just to stifle competition, using the environment as an excuse, and that company loses the lawsuit, then that company has to pay the legal costs of the winning competitor. That would stop frivolous or phony law suits. And that is why the lawyer lobby will stop such a legal reform in the USA.
This 2014 excerpt of Dollars & Sense magazine, the January/February issue, is from an article by Polly Cleveland of Columbia University.
Scandinavian nations already come much closer than the United States to providing a healthy, sustainable lifestyle, with far lower per capita natural resource consumption.
We already have — or can easily develop — the necessary technology.
An Iowa State University study compared the Midwestern standard alternation of corn and soy, with a corn-soy-oat cycle and a corn-soy-oat-alfalfa cycle with livestock. Without lowering profits, the longer cycles increased yields while dramatically reducing the need for fertilizer, herbicides, and pesticides. However, the experimental strategies did require more labor.
In Ohio, corn and soy farmer David Brandt, instead of plowing, plants with a seed drill. He keeps down weeds with a diverse mixture of cover crops, which he then mows to mulch the soil for the winter. The approach takes more labor, especially intelligent supervision, as it requires Brandt to carefully monitor conditions on every part of his fields. His fields, however, yield harvests as good as or better than conventional fields, require far less fertilizer and herbicide, absorb rain better, resist droughts, and—best of all—build up carbon-rich humus.
What about farms in impoverished developing countries? Farms in densely-populated Bangladesh produced three times as much per acre as farms in the United States! In general, small farms produce more per acre than large farms, even though they usually occupy inferior land. According to a new UN report, small peasant farmers could easily feed the entire populations of developing countries with existing labor-intensive, environmentally friendly agricultural technologies — were it not for corruption, extreme inequality, and misguided attempts to impose inappropriate “modern” crops and techniques.
From country to city … Some of the richest parts of New York, like my Upper West Side neighborhood, rise to densities of over 200,000 people per square mile, with a mixture of high-rises and five-story, three-to-ten-unit townhouses. (I can zip, through a hole in the ground, the two miles to work, walk four blocks to concerts or shopping, and step into Central Park next door — who needs a car!) Yes, members of the One Percent like high density!
A study in Atlanta found that average households in multifamily units used only 60% as much energy as in single family detached houses. Average residents of New York City produce less than a third as much greenhouse gases as average Americans. And while New York apartments seem cramped by United States standards, a 500 square foot New York one-bedroom would seem palatial to a Japanese family! (How do the Japanese manage? Simple. Every morning they roll up their futons and stuff them in a closet!)
Successful innovators are disappearing, due both to growing patent monopolization and the unavailability of finance. Back in the days of It’s a Wonderful Life (1946), and in fact until Congress repealed restrictions on interstate banking in 1994, small businesses could rely on small banks. Bank officers served the community (at least the white community), making loans based on personal histories and an intimate knowledge of the local economy. No more. Today’s giant banks lend — if they lend at all — according to formulas dictated by headquarters, formulas that do not favor a Turkish immigrant with a new recipe for yogurt, let alone Madge’s storefront bakery. Retail banking jobs have become mindless paper-pushing.
We already have the technology to produce and live and work in ways that vastly reduce stress on natural resources. The obstacles are political.
Ed. Notes: The author extols jobs (not that she or any economist would ever have to do any of them), not leisure. It seems that as long as people have jobs (and the bosses that come with them), then life need not have meaning. Which is such a common point of view that the political obstacles should be overcomeable.
Or, perhaps humanity will wake up to their need for meaning and joy and leisure and replace the demand for jobs with a demand for justice. Since the whole point of economies is to do more with less, it’s true that the technology for this version of a better world is already here, too. Likewise, the obstacle is purely political.
Part of the political solution is for society to recover the socially-generated value of land, resources, and ecosystem services. One way for society to do that is to have its government tax the annual rental value of locations. That can be achieved by shifting the property tax off buildings, onto parcels. In the US, it’s a policy already in place in some Pennsylvania towns, since Pennsylvania’s constitution, unlike those of other states, allows cities great leeway in tax policy. Two political websites in Pennsylvania frequently blog in favor of the Land Value Tax: one is Keystone Politics, the other is Next City, which just had another article in favor. Check it out to understand the policy side of sustainable economics better.
Ed. Notes: Eventho’ reality is offering a plot for a work of mystery fiction, probably one big banker dying after another is just coincidence. Banking is one of the professions with a high rate of depression and shorter lifespans. And stories like this come to everyone’s attention in this modern era of instant and ubiquitous news coverage. One wonders if conscience plays a role.
This 2014 excerpt of Huffington Post, Jan 30, is by Adam Grant, author of Give and Take, a New York Times and Wall Street Journal bestseller.
What makes a job meaningless? People struggle to find meaning when they lack autonomy, variety, challenge, performance feedback, and the chance to work on a whole product or service from start to finish. As important as these factors are, though, there’s another that matters more: making an important difference in the lives of others one on one or making society a better place for all.
There are steps we can take to make jobs more meaningful — for ourselves and others.
In many cases, our jobs do have an impact, but we’re too distant from the end users of our products and services. So when we see the beneficiaries of our jobs, we find greater meaning. The greatest untapped source of motivation is a sense of service to others.
Of course, some jobs are simply not designed to have a major impact on others. In these situations, people can take initiative to alter their own roles. This is job crafting — adding, emphasizing, revising, delegating, or minimizing tasks and interactions in pursuit of greater meaning. For example, hospital cleaners who lack patient contact stepped up to provide emotional support to patients and their families, and technology associates began volunteering for mentoring, teaching, and training roles. When people craft their jobs, they become happier and more effective.
Being human always points, and is directed, to something or someone, other than oneself — be it a meaning to fulfill or another human being to encounter. The more one forgets himself — by giving himself to a cause to serve or another person to love — the more human he is.
Ed. Notes: Is this a bandaid to a deeper problem with jobs? And whatever may be wrong with jobs, would all those issues go away if people were in a position to do what they love, with whomever they want, for as long as they like? And if people got an extra income apart from their labor — a Citizen’s Dividend from the socially-generated value of land and resources and government-granted privileges — would that give everyone the leverage they need to negotiate the ideal job for them? Probably. Don’t you think?
If you don’t have money you end up spending more to survive.
This 2014 excerpt of Alternet, Jan 29, by Dave Johnson.
It takes money to make money, they say, but if you don’t have money you lose money. Half of us Americans are poor or almost poor now. It’s actually more expensive not having enough money to get by.
Here are nine examples of why it is expensive to be poor.
1. Getting around. When you don’t have the money to get a reliable car you are stuck with time-consuming and not-inexpensive public transportation or an old beater. Old cars break down and this costs money. It costs time. It can cost you a job. Lower-priced older cars will often be the ones that use a lot of gas, sometimes getting less than 20mpg. At today’s gas prices and today’s wages you’re eating up an hour or more’s pay every day just to get back and forth.
2. A place to live. You might be in a week-to-week situation in a budget motel, requiring you to pay with a money order. Money orders cost money so you’re even paying a fee to pay for your place to sleep.
3. Eating. If you don’t have fridge or a stove you might depend on cheap fast food. You depend on what is nearby and local stores in bad neighborhoods are expensive.
4. Banking. 28.3% of Americans conduct at least some of their financial transactions “outside of the mainstream banking system,” meaning they have to rely on expensive alternatives like money orders, check-cashing services, prepaid debit cards, and payday loans. Payday loans cost an average of more than 138 percent in interest and fees.
If you have a bank account that means high fees. You don’t have enough to meet the minimum balance requirements so you pay a monthly fee that eats away at any money you have. You will pay a fee averaging $6 to cash your paycheck. You will be hit by terrible fees if the money runs out before the month does. Overdraft fees are incredible. A Pew graphic illustrates how the median overdraft for a $36 transaction racks up a median $35 in fees. “If an overdraft was treated like a short-term loan with a repayment period of seven days, then the annual percentage rate for a typical incidence would be over 5,000 percent.”
5. Getting scammed. The poor are vulnerable to, and frequent targets of financial scams: high-interest credit cards, mortgage-fraud, insurance scams, supposed-savings scams, etc.
More Illegality: Not getting paid. Wage theft is restaurants stealing tips, employers demanding free time or not even paying the minimum wage, refusing to pay overtime pay when it is due, calling an employee a contractor or a temp, making various deductions from wages, and other ways that workers end up not getting paid for their work. Poor people are vulnerable, and have to take what they can get.
More than 60 percent of low-wage workers have some pay illegally withheld by their employer each week. Low-paid workers lose $2,634 per year, on average, in unpaid wages, or 15 percent of their income.
Meanwhile, the average McDonald’s employee takes seven months to earn what McDonald’s CEO makes in an hour. Ninety percent of Americans are continuing to go further into debt.
Being poor is a trap. It becomes one thing after another that keeps you poor. Plus you pay a high price of guilt and blame.
Ed. Notes: Money is prestige. People with money feel good about themselves, no matter how the money came about. People without money feel bad about themselves, no matter if they struggle against their poverty or not. True, money from work can make one feel proud. But the work part is not essential. Most rich don’t work for the money they get (“thank you very much.”) CEO salaries tell only a small part of the story. There’s still passive income from merely owning stocks, bonds, and real estate.
The money that corporations get is not from selling their goods and services so much as it is from lobbying government: sweetheart deals, lenient enforcement, and tax loopholes. The money that landlords and flippers and lenders get is not for their building — something they might have created — so much as it is for the location, and the value of a location is due to the advantages around it. Good views, nearness to downtown, low crime rates, etc give a site its price (or rent), and such features are created by nature and society, not by owners.
The author wants to raise the minimum wage, but what if you can’t work? Worse, that call reinforces the false view that all income must come from jobs (never mind starting one’s own business) and that the poor are incapable, must stay stuck in lousy work their entire lives, so at least pay them more. A far greater justice than paying one enough to stay stuck in dumb jobs is to pay everyone an income apart from their labor (or capital), an income from the value of land and resources and privileges such as corporate charters in one’s region. Call it a Citizen’s Dividend. It’s a more honest way to enable people to feel good about themselves.
Why The Land of Opportunity is in Danger and What We Can Do About It
This 2014 excerpt of the Libertarian Party of Orange County (California), Jan 29, is by Ryan Hinds.
The only tax that does not have negative economic consequences is the land value tax, as land cannot disappear when taxed. This free lunch of sorts will also lower real estate prices, reducing the money required to start a business. In order to truly have equal opportunity, we must all have equal access to land and natural resources; land value taxes push us towards that goal.
The Small Business Administration (SBA) has estimated that small businesses face a regulatory burden 36% higher than larger firms. State and local governments make it even worse. For example, it took a businessman in Ventura County, CA seven permits just to remove a wooden deck at his campsite, as requested by a county official! Needless to say, he closed up shop. In Florida, Louisiana, Nevada, and Washington DC, interior designers must be licensed.
Economic inequality is one of the most pressing issues of our time. Though my libertarian views are pretty apparent in this article, I have spoken to self-described socialists who support many of the same reforms that I do. Opening the lines of communication is only the first step, but will go a long way towards bringing economic opportunity back to America.
Ed. Notes: A libertarian could go even further and note that taxes are not needed to recover the socially-generated value of land and resources and ecosystem. Instead, government could use fees, dues, leases, and even fines for violators of standards. The big difference between taxes and dues is that taxes come from above and not paying them is a crime while dues come from community consensus and not paying them means no longer being a member of the community with all the benefits that entails, such as voting, proving title, getting a share of surplus site value (as in Singapore), etc. Most people would choose to pay their fair dues, altho’ it may take a while for society to evolve to that point; meanwhile, taxes would have to be relied upon.
This 2014 excerpt of the AP, Jan 30, is by Mark Stevenson.
The stunning and little-understood annual migration of millions of Monarch butterflies over thousands of miles to spend the winter in Mexico is in danger of disappearing, after numbers dropped to their lowest level since record-keeping began in 1993.
The annual trek to Mexico is the world’s biggest migration of Monarch butterflies and the second-largest insect migration, after a species of dragonfly in Africa.
Experts blamed the displacement of the milkweed that the species feeds on by genetically modified crops and urban sprawl in America, extreme weather trends, and the dramatic reduction of the butterflies’ habitat in Mexico due to illegal logging of the trees they depend on for shelter.
Twenty years ago in the North American Free Trade Agreement, the United States, Mexico, and Canada signed environmental accords to protect migratory species such as the Monarch.
There has been a movement in the United States among gardeners and home owners to plant milkweed to replace some of the lost habitat. But activists say large stands of milkweed are needed along the migratory route, comparable to what once grew there. They also want local authorities in the U.S. and Canada to alter mowing schedules in parks and public spaces, to avoid cutting down milkweed during breeding seasons.
Ed. Notes: It’s sad that our species has such a hard time living on Earth with other species, like a rowdy child in kindergarten. Hopefully the sadness will prod enough of us to take the necessary steps to harmonize our use of Earth with that of other peaceful species. The responsibility is all of ours, eventho’ one guy wreaked more havoc on butterflies than have most of us; he ate them to survive being stranded in the Outback!
These two 2014 excerpts on US GDP are from Jan 30 by the BEA and by Shadow Stats.
Gross Domestic Product, 4th quarter and annual 2013 (advance estimate)
The U.S. Bureau of Economic Analysis (BEA) says real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.2 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter). In the third quarter, real GDP increased 4.1 percent.
The SGS-Alternate GDP reflects the inflation-adjusted, or real, year-to-year GDP change, adjusted for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias to official reporting.
The official GDP headline number refers to the most-recent quarter’s annualized quarter-to-quarter rate of change (what that quarter’s percent quarter-to-quarter change would translate into if compounded for four consecutive quarters).
This can mean that the latest quarter can be reported with a positive annualized growth rate, while the actual annual rate of change is negative.
Ed. Notes: Their accompanying chart is an eye-opener. It seems official stats do not reflect reality so much as they do reflect the interests of officials. Which makes it hard to do the accounting that is a central part of economics. It’s another reason why economics is not a science. But no other discipline deals with controversies such as property and confronts the ruling elite directly, so it’s easy to see why economists wilt under the pressure. Oscar Wilde said number crunchers know the price of everything and the value of nothing. Maybe so, but they also know which side of the bread is buttered. It’s why they turn a blind eye to researchers such as Shadow Stats.
This 2014 excerpt of the AP, Jan 29, is by Mark Lewis.
Two Norwegian politicians have jointly nominated former National Security Agency contractor Edward Snowden for the 2014 Nobel Peace Prize, saying his disclosures of secret U.S. documents have contributed to making the world more peaceful.
Anyone can be nominated for the prestigious award, so the submission Wednesday by Socialist lawmakers Baard Vegard Solhjell, a former environment minister, and Snorre Valen just means Snowden will be one of scores of names that the Nobel committee will consider.
“We do not necessarily condone or support all of his disclosures,” the two lawmakers said in their nomination letter. “We are, however, convinced that the public debate and changes in policy that have followed in the wake of Snowden’s whistleblowing has contributed to a more stable and peaceful world order.”
“But to have the debate, you have to be aware of what is going on,” he told The Associated Press.
The Organization for the Prohibition of Chemical Weapons won last year’s Nobel Peace Prize.
Ed. Notes: Ironically, the prize was also given to US President Obama (2009) who, if he could, would have Snowden’s head. Obama is commander-in-chief of the world’s biggest war machine now waging at least two wars. Another hyphenated American war-monger who received the prize is Henry Kissinger (1973). While the image of the prize is tarnished, it was once given to Nicholas Murray Butler (1931). He, at least, was an advocate of Georgism, an economic system that has brought about land reform without one drop of bloodshed. If more widely used, who knows? perhaps the modern version of geonomics could deliver world peace.
This 2014 excerpt of EUROPP (European Politics and Policy of the London School of Economics), Jan 29, is by Jonathan Hopkin, Victor Lapuente, and Lovisa Moller.
The less unequal a country is, the more likely it is to be innovative. While the US combines high levels of inequality and innovation, other countries with much lower inequality levels are also high performers in innovation.
The United States – the most unequal of the advanced economies – has outperformed the Scandinavian countries in patent filings in the last two decades. However, if we expand the period of study with a few more decades, Sweden has had more patent filings per resident than the US for most of the last half-century. Further, the other Anglo-Saxon countries are nowhere near the United States’ patent filings levels.
‘Patent trolling’ – whereby patents are used as a means of generating returns by threatening legal actions, rather than a source of productive innovation – suggests patents filed may be measuring rent-seeking strategies as well as genuine inventions.
High regulatory quality and R&D expenditure are common denominators for countries that are ranked as highly innovative – inequality is not one of these uniting factors. Innovation is not just about a narrow view of incentives based on spectacular rewards for a small number of high achievers; it also rests on high levels of investment in research, not just by the private sector but also, and often decisively, by the state.
The US combines high inequality with excellent universities financed by both public and private funds, and a regulatory environment that encourages innovation. ‘Cuddly capitalist’ countries that invest in research, have good universities and quality regulation can also innovate, without having to offer successful entrepreneurs outsized rewards. There seems little evidence for the thesis that egalitarian societies need to freeload off the innovations of the American super-rich in order to prosper.
Ed. Notes: Sure, inventors and innovators need support but that support need not come from concentrations of wealth. Indeed, the phenomenon of concentrating wealth into government or university or venture capitalist could be skipped altogether. How?
Just pay citizens a dividend from society’s spending for things not created by labor or capital, things like land, natural resources, corporate charters, and patents and copyrights. Those government-granted privileges and natural assets capture a torrential flow within the GDP. You could redirect that flow, using fees, dues, taxes, etc, into public treasuries then back out again as dividends, a la Alaska’s oil share.
Further, you could shift taxes off labor and capital, onto pollution and depletion. That way, you’d redirect investment from industries like oil and into cutting-edge technology. Thus you could enjoy progress, economic parity, and do so without any paternalism from the state.
This 2014 excerpt of Cityscope, Jan 27, is by Sulev Vedler.
Last January, Tallinn, the capital city of Estonia of 430,000 people, made all public transit in the city free for residents.
One year later, Mayor Savisaar says traffic on the biggest crossroads had decreased by 14 percent compared to a week shortly before the policy started.
But researchers at the Royal Institute of Technology in Sweden found that traffic speeds in Tallinn had not changed and if any modal shift is happening, it’s that some people are walking less and riding transit more.
Free transit is less effective than increasing the price of parking, gasoline, or using the roads.
Tallinn isn’t the first city to experiment with free transit. Across Europe, a number of smaller towns have done it, dating back to the late 1990s. Templin, Germany was one. In France, there was the city of Châteauroux and Aubagne and some surrounding municipalities. Ridership in all of those places increased substantially when fares went away.
What sets Tallinn’s experiment apart is its size and Tallinn’s status as a European capital. As the birthplace of Skype and online voting, Tallinn also has a reputation for innovation. So there’s a feeling, at least among advocates of the idea, that if free transit can work here, maybe it can work in other large cities.
In Tallinn the system was highly subsidized to begin with. That’s not the case in London, for example, where fares account for 85 percent of public transport revenues. Free fares there would leave a gaping budget hole. It is easier to waiver the ticket revenue if there’s already a large subsidy. The subsidy part used to be 70 percent in Tallinn. Now it’s 96 percent.
Ed. Notes: Free rides and free anything sound good but is there no free lunch? Possibly. One of the best and biggest transit systems in the world has no trouble funding itself without any subsidy: Hong Kong’s. That system funds itself from the steep land values around its transit stops. It’s a method any city could use, argued big-name economists William Vickrey and Joe Stiglitz, who dubbed his proof the “Henry George Theorem”. Any public works project could pay for itself from the resultant rise in nearby site values as long as it’s not a white elephant and truly desired by the public.
This 2014 excerpt of the Los Angeles Times, Jan 27, is by Claudia Luther.
Pete Seeger, folksinger, who was awarded the National Medal of Arts in 1994, died at 94 yesterday. He was born in 1919 on May 3 in New York state (at Patterson) into a musical family that was rich in dissenters.
Almost exactly six years ago, with Bruce Springsteen, Seeger performed Woody Guthrie’s “This Land Is Your Land” at the Lincoln Memorial concert marking President Obama’s 2008 inauguration.
In 1965, The Byrds had a hit with “Turn! Turn! Turn!” that Seeger co-wrote. He used a passage from the Bible for the lyrics (To Everything, There is a season, And a time to every purpose, under Heaven, A time to be born, a time to die …)
During World War II, Seeger served in the Army Special Services, entertaining troops in the U.S. and the South Pacific. After the war, Seeger formed the Weavers with Lee Hays and others.
Seeger joined Guthrie and Millard Lampell in New York City, playing the “subway circuit” — left-wing fund-raising parties. They soon formed the Almanac Singers, which also included Hays.
As a member of the Almanac Singers and the Weavers, Seeger wrote or co-wrote “We Shall Overcome,” the anthem of the civil rights movement based on an early 20th century gospel song: and Where Have All the Flowers Gone,” which became an anti-Vietnam War protest song; and “The Hammer Song” (If I had a hammer, I’d hammer in the morning, I’d hammer in the evening, All over this land …) In the 1960s his songs were popularized by Joan Baez, The Kingston Trio, and Peter, Paul, and Mary. Famed actress Marlene Dietrich covered his “Kisses Sweeter Than Wine“.
A musical historian, Seeger tried to share the credit and profits on songs he recorded. He was the first to acknowledge his source material.
Seeger was not a geoist but a leftist. While a college student at Harvard, Seeger joined the Communist Party, but spurned it in disgust by 1949. Yet he never apologized for his earlier belief.
“I’d like to see a world without millionaires,” Seeger said in 1993.
Called before the House Un-American Activities Committee in 1955, Seeger invoked the 1st Amendment and was held in contempt of Congress. Sentenced to a year in jail, he served a few hours before being released. The case was dismissed years later.
The controversy shattered Seeger’s career. He was barred from network TV for 17 years. Then in 1968 his antiwar song, “Waist Deep in the Big Muddy,” was broadcast. It was credited with helping to cement public opinion against the war.
Ed. Notes: How ironic that those concerned with justice can not follow their concern to geonomics, to an economy that works right for everyone, without invoking the heavy hand of the state. If only famous reformers could see the wisdom of sharing Earth’s worth while keeping the fruits of one’s labor inviolable (non-taxed) … Then their well-heard voices would not tend to divide society but could help transform the economy, so that no longer would the people have to serve it but at last the economy would serve us.
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.
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?
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
a 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.
an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.
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.
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.
an alternative to conventional land trusts. Just as it seems some functions should not be left to the market – private courts and cops invite corruption (while private mediation is fine) – just so some land should not be left in the market. That said, sacred sites do not make much of a model for treating the vast acreage of land that we need to use. So the usual trust model, which is anti-use and counter-market, can not apply where it’s needed most. Trust proponents worry about ownership and control – two very human ambitions – but they’re not central. Supposedly, we the people own millions acres – acres that private corporations treat as private fiefdoms – and conversely, the Nature Conservancy owns wilderness the public can some places use as parks. So, the issue is not who owns but who gets the rent – ideally, all of us.
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 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.