We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.
This 2014 excerpt of the Drug Policy Alliance Blog, Jan 17, is by Avinash Tharoor. It also appeared on AlterNet.
The illegal drug trade accounts for around eight percent of all international trade.
Legal marijuana business in Colorado has proven to be highly lucrative, with $5 million made in the first week of 2014. Several Colorado legislators have made a bipartisan appeal to the federal government, requesting clear guidelines for marijuana businesses’ regulation within the banking sector.
Despite liberalization of marijuana laws in Colorado and elsewhere, the plant remains illegal at the federal level; this means that banks won’t open accounts for marijuana businesses, so the majority of their transactions are cash-only. The movement of such large amounts of cash can be highly dangerous for business owners, and troublesome for both customers and tax collectors.
Banks have avoided allowing these new companies to open accounts, ironically, for the fear of being penalized, or implicated as launderers.
Hypocrisy? Bank of America, Western Union, and JP Morgan, are among the institutions allegedly involved in the drug trade. HSBC has admitted its laundering role, and evaded criminal prosecution by paying a fine of almost $2 billion.
The lack of imprisonment of any bankers involved is indicative of the hypocritical nature of the drug war; an individual selling a few grams of drugs can face decades in prison, while a group of people that profit from the trade of tons escape incarceration.
This 2014 excerpt of Naked Capitalism (by Yves Smith), Jan 16, is by Bob Goodwin, an investor and medical device entrepreneur, was posted in Dubious statistics, Guest Post, Health care, and Regulations and regulators.
The US Center for Disease Control is on record taking the position of the Infectious Disease Society of America on treatment of Lyme disease. But it seems odd for the CDC to be taking a position to kill a new test, especially considering that two different university hospitals are currently doing independent reviews of the same test.
I wrote here last week that I was getting blocked on Wikipedia from providing details about the Lyme Wars because Wikipedia only wanted to present the mainstream view.
The two camps in the war have only one scientific disagreement that I can detect. The mainstream medicine’s view is that the Lyme bacteria is non-persistent if treated with a few weeks of antibiotics, and even if untreated, the infection should be considered cleared when the immune system is no longer fighting the bacteria. People can still be sick later, but this sickness is likely due an auto-immune reaction. The minority position is that the bacteria hides and burrows, changes forms and builds biofilm colonies that both make the bacteria resistant to antibiotics, but also invisible to the immune system.
For 20 years there has been no meaningful change in the treatment For Lyme disease or the scientific consensus due to the war. Contrast that with the HIV epidemic, and the pace of innovation by the exact same set of researchers and doctors, and yet the CDC estimates that 4 million people in the US may have been infected, and only 10% of those diagnosed.
A good Lyme test would go a large way to ending the wars, because at some point in the debate one side is right and the other is wrong.
There are microscopes now that can see the details of bacteria and microbiology is flourishing with new insights. And testing a test is very easy. Unless there is a war.
With 2 universities already testing the culture, and the ability to independently test so simple, why is the CDC wading into research wars? In the words of Professor Durland Fish of Yale University, “This battle cannot be won on a scientific front. We need to mount a socio-political offensive; but we are out-numbered and out-gunned. We need reinforcements.” (here)
Ed. Notes: Bureaucrats and scientists put opinion and bias above fair analysis, as do most people, us being a political species. Left unsaid above is that insurance companies don’t want to deal with the cost of another chronic disease, and the new test would show that Lyme disease could be chronic.
How do we de-politicize big businesses like insurance and big bureaucracies like the CDC? We make them responsible to, and beholden to, the patient. Researchers and officials should not get their paychecks from a central, powerful source but from many clients. That would introduce the discipline of the market.
To introduce the discipline of the government, politicians and bureaucrats need to be free of corporate influence. Corporations should not be so big as to wield so much influence. That calls for reforming limited liability of business and empowering consumers with shares of society’s surplus.
This 2014 excerpt of the Housing Assoc.’s Charitable Trust blog, Jan 15, is by Matt Leach, HACT’s Chief Executive.
The idea is simple – rather than imposing ever more complex (and sometimes punitive) welfare benefits on the poor, it would be more straightforward and practical to guarantee every citizen a flat basic allowance, which would be unaffected by any earnings they gained on top of it.
With jobs increasingly being squeezed out of economies by technology, and real wages in developed economies largely stagnant as income levels amongst the richest continue to grow, increasingly we can make more goods and services than we can afford to buy with the wages most of us are getting paid.
Some 10,000 UK citizens signed a recent cross-continent initiative to get the Basic Income on the agenda at an EU level. Is it time housing providers became part of that debate?
Ed. Notes: The author, who is an affordable housing leader, mentioned the question of funding an extra income but did not mention the solution of using the value of land, the stuff that housing sits on and that swells and swallows so much of most family budgets. Already places like Aspen CO and Singapore do capture a slice of that “ground rent”, via taxation, and use some of it to help make housing affordable for residents.
It’s a huge font of funds for government to tap, since people spend so much for natural assets like locations and resources and EM spectrum and ecosystem services. Of course, if society as a whole were to receive that spending, then lenders, speculators, and absentee owners would no longer be able to capture it. A small price to pay for economic justice!
If government were to recover the socially-generated value of nature, and of the privileges it grants such as corporate charters, there’d be no need or excuse for counterproductive taxes. Taxes on earnings, sales, and buildings could all be repealed. And if the citizenry were to receive a share of surplus public revenue, there’d be no need or excuse for wasteful and addictive subsidies. Corporate welfare and white-elephant infrastructure projects and such could all be eliminated.
With Land Dues instead of the whole array of taxes, and with Citizen’s Dividends in lieu of bureaucratic subsidies, everyone could delight in the disappearance of mindless work to automation. Universal material security would become a norm, letting the worries of econo-man slip thankfully into the past. Ah, blessed geonomics!
Is this the world’s worst oil spill? Is it an accident? This 2014 excerpt of Daily Kos, Jan 21, is by Ashley Allison, SierraRise Senior Campaigner.
For three decades, Texaco, now part of Chevron, dumped 18 billion gallons of toxic oil waste into the Ecuadorian Amazon. In 1994, when Texaco was done pillaging Ecuador, it left behind a toxic wasteland. More than 900 open and unlined waste pits dot the landscape, overflowing toxic chemicals into the waterways that Ecuadorians rely on for cooking and bathing. Thousands were left suffering cancers and devastating birth defects.
In an unprecedented move, the oil giant is using a U.S. law intended to rein in mobsters to sue Ecuadorian activists and supporters — branding them as criminals just for speaking out.
The Sierra Club and thirty other organizations have joined forces to call out Chevron for their dirty tactics.
Ed. Notes: The law is on the polluter’s side. The best example of this bias is limited liability, AKA, the corporate charter. For a mere filing fee, anyone can get one, no matter if you intend to do business without harming nature, worker, or consumer, or if you conduct your enterprise with reckless disregard of others. While activists must react to every violation of rights as they come up, activists must also become proactive and repeal the government’s interference in business on the side of the polluter. Let those dirty companies try to get insurance from private insurers. And let stockholders sign contracts with firms to settle the liability issue. Business could become responsible if government would quit looking the other way when business is liable.
But to shift government from being a servant of business to being a servant of the people, it may be necessary to shift “rents” (the spending for land and resources) from lining the pockets of owners, lenders, and speculators to filling up the treasuries of the public. That is, use dues, fees, leases, and taxes to redirect society’s spending for nature to the government and have government use the revenue to pay the citizenry a dividend, a la Alaska. Such sharing of natural rents makes it possible to eliminate counterproductive taxes and wasteful subsidies.
Further, as beneficiaries of the earth’s worth, citizens become de facto owners of earth herself, better positioned to demand sustainable treatment of ecosystems by extractors, acknowledging some amount of harvesting is necessary for human civilization.
This 2014 excerpt of USA Today, Jan 20, is by Kim Hjelmgaard.
Almost half of the world’s wealth is owned by just 1% of the world’s population, according to a report published just days before the start of the World Economic Forum’s annual meeting, where the topic of rapidly increasing income disparities will be a major focus.
In its study titled Working for the Few, the British-founded development charity Oxfam concludes that the $110 trillion wealth of the 1% richest people on the planet is some 65 times the total wealth of those floundering at the “bottom half” of the world’s population.
Further, this poorer “bottom half” now has about the same amount of money as the richest 85 people in the world, and the wealthiest grew their share of bounty in 24 out of 26 countries surveyed between 1980 and 2012, the study says.
“This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems. Instead of moving forward together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown,” the report says.
The World Economic Forum has identified income inequality as one of the greatest risks facing the world in 2014, and it will be a big topic of discussion during the organization’s annual meeting in Davos, Switzerland.
Ed. Notes: People own less than they need. To deal with that, Oxfam calls for redistribution, minimum wage, and more bureaucratic programs. But are those policies — which are already in place — actual solutions? Instead of “take from the rich to give to the poor” — a downstream strategy — maybe don’t create the undeserved rich in the first place. Humanity would be wiser to predistribute society’s surplus, thus precluding the amassing of undue fortunes — an upstream strategy.
What makes the rich rich and the poor poor is society’s spending for nature, for land and resources, for the very valuable goodies that nobody’s labor or capital brought into existence. Now, thanks to deeds and loans and other social contracts, we direct all that spending into the pockets of the very few. Using different social contracts, such as fees, dues, leases, even taxes, we could direct all that spending into the public treasury then pay it back out as monthly dividend checks to the citizenry.
It’s fair, since nobody made land, everybody needs land, and all of us — society in general — make land valuable, just by generating population density. And it’s efficient, because Earth’s worth is a social surplus. Since nobody had to be rewarded to create land (unlike producing goods and services), the receipt of “rent” is a bonus to lenders and absentee owners.
Along with “god-given” land, resources, EM spectrum, and ecosystem services, there are also government granted privileges, such as corporate charters and utility franchises. Together, nature and privilege are worth many trillions each in the US alone. It’s the stuff of vast inequality, presently, but it could become the extra income for everyone.
To cut to the root of the problem, we need to share Earth by sharing her worth. It’s a huge solution that fits a huge problem. It’s called geonomics and it’s something the Oxfams of the world need to look into.
These three excerpts are from: (1) P2P Foundation, 2014 Jan 14, on history by Pat Conaty; (2) Next City, 2013 Aug 5, on cities by Bill Bradley; and (3) Toronto Star letters, 2014 Jan 19, on jobs by Frank de Jong, President, Earthsharing Canada.
Land as a Commons in the Cooperative Tradition
Land became a growing political issue in the 16th and 17th centuries in the face of the first major wave of enclosures. Gerard Winstanley and the Diggers were early prophets of democratic land ownership in the mid 17th century. Their efforts were defeated and the loss of the commons intensified in the late 18th century as thousands of parliamentary acts of enclosure gathered pace.
In 1775 Thomas Spence, the son of a shoemaker from Newcastle-upon-Tyne, proposed a practical solution in a pamphlet: ‘Property in Land, Every One’s Right’. Spence argued that local parishes should own all land democratically and that rents collected should be used first to provide support for those unable to work and second to be shared to meet the needs of children and local residents equally. Spence called his solution the Parish Land Trust and this reform became known in the nineteenth century as Spence’s Plan. Both advocacy and pioneering spread and inspired other land reform thinkers like Thomas Paine.
American land reformer Henry George was active in the co-operative movement and he had a huge following in Great Britain and Ireland. His proposal for land taxation through a Single Tax was aimed at encouraging the steady and peaceful transfer of private land ownership for securing the substantial economic benefit and social security of the vast majority of households and businesses.
All these precedents gave Ebenezer Howard the confidence to develop the Garden City model and with important support from those active in the co-operative movement to develop Letchworth and Welwyn Garden Cities.
Six years after the founding of Letchworth Garden City, Lloyd George as Chancellor with the active backing of Winston Churchill as trade minister introduced the famous People’s Budget of 1909 that included a land value tax inspired by Henry George and set at 20% on any increases in value when land changed hands. This attempt by a Government to distribute “rents” to the people led to a twelve-month battle in Parliament. In April 1910 the land tax was dropped after the first House of Lords veto of a Government budget in two hundred years.
Why Don’t More Cities Tax Based on Value of Land Rather Than What You Put On It?
The Center for an Urban Future and NYU’s Wagner Innovation Lab released a report last month for the next mayor of New York City, “Innovation and the City”. Its Part II look at the split-rate property tax.
The majority of U.S. cities apply a singular property tax rate to both the land and the buildings. In several Pennsylvania cities, including Harrisburg, the land is taxed higher than improvements on the actual buildings. So developers can’t simply sit on land, unless they want to foot the bill for the taxes. The lower tax rate on improvements has incentivized more density.
Milton Friedman, free-market proponent, conceded that “the least bad tax is the property tax on the unimproved value of land.” I’d like to see other municipalities, especially the depopulated urban cores of cities (looking at you, Detroit), take a long, hard look at this tax rate. Dan Gilbert is sitting on so many properties in downtown Detroit right now it’s hard to keep track.
The best way for finance minister Jim Flaherty to reverse Canada’s disastrous de-industrialization is to stop taxing jobs, businesses, and sales. We tax cigarettes and alcohol to discourages their use, so it follows that income taxes are a tax on employment while sales taxes make products less affordable for many, translating into fewer local manufacturing jobs.
To address this job-killing double whammy, the federal government should shift taxation off of the productive economy and on to the non-productive economy. Most taxes should be on the use and abuse of nature, which would result in a double bonus of creating jobs plus conserving resources for future generations.
For example, Canada should collect the economic rent of oil, a policy that has effectively made all the citizens of Norway into millionaires, without discouraging their oil industry. Contrast this with Canada, where oil companies are allowed to pocket most oil super profits, putting Canadians, collectively, deeply in debt and out of work.
Every so often, the media reports on the smog made in China, blowing across the Pacific Ocean, into the lungs of Americans living on the West Coast.
These excerpts are from 2014, the Weather Channel, Jan 21; from 2011, Discover magazine, Mar 18 by David Kirby; and from the late 1990s in The Oregonian of (perhaps 1999, Mar 5 and 1997, Dec 12, but unclear)
Pollution from China Reaches U.S.
Air pollution from China is blowing across the Pacific Ocean to the U.S. West Coast and causing at least one extra day of smog each year.
The pollution that reaches the West Coast is largely a by-product of production of consumer goods for the U.S. and Europe.
It’s the first study to measure exactly how much of the Chinese pollution reaching the U.S. West Coast is from the production of items for the U.S., like cell phones, televisions, and electronics.
Even as America tightens emission standards, the fast-growing economies of Asia are filling the air with hazardous components that circumnavigate the globe.
None of the contamination we pump into the air just disappears. It might get diluted, blended, or chemically transformed, but it has to go somewhere. And when it comes to pollutants produced by the booming economies of East Asia, that somewhere often means right here, the mainland of the United States.
Carbon dioxide, the predominant driver of global warming, is not the only industrial by-product whose effects can be felt around the world. Prevailing winds across the Pacific are pushing thousands of tons of other contaminants —- including mercury, sulfates, ozone, black carbon, and desert dust —- over the ocean each year. Some of this atmospheric junk settles into the cold waters of the North Pacific, but much of it eventually merges with the global air pollution pool that circumnavigates the planet.
China now emits more mercury than the United States, India, and Europe combined. “What’s different about China is the scale and speed of pollution and environmental degradation. It’s like nothing the world has ever seen.”
Pollution Violating a New Ozone Limit Crossed Pacific
Even as America tries to slow down its emission, other nations are speeding up. People on the West Coast breathe a pollution a portion of which — 11% — that comes from China, found a University of Washington researcher.
To see the source, one must pay the newspaper.
Ed. Notes: The media is short on memory, long on news hooks. Unlike a modern journalist, if you were a student in college and wrote a paper on air pollution crossing the Pacific without doing any research on previous reports, your professor would not be pleased. So to get a bigger picture, both across time and into the facts, you have to rely on sites like this.
Whether or not reporting can be improved, can industry be cleaned up? Is it too late for the West to set a better example of industrial development? To use the cutting-edge technology sitting on shelves, awaiting use — clean fuels, efficient motors, solar powers, better batteries, lightweight vehicles, efficient mass transit, and settlement patterns that are compact (common destinations within walking and pedaling distance — that would generate heat and light cleanly? Is there still time to export what works (even if we’re not using it yet)?
No matter what lies over the time-horizon, it’s never too late to start doing the right thing. In this case, policy-wise, that means every jurisdiction should:
extend full liability to knowing polluters
quit subsidizing the old ways of burning fossil fuels
make polluters pay; i.e., shift taxes from goods to bads, and
level the playing field; i.e., shift subsidies from bads to goods, to everyone, paying the citizenry an extra income.
These policies would “internalize the externalities” (to use the jargon) and support the garage startups that are more creative than the cautious corporations. In such an open economy, great ideas would take over market share in record time. It’s the policy of geonomics, based on earth’s natural patterns of feedback and able to harmonize human desires with ecosystem constraints. So what’s the world waiting for?
This 2014 excerpt of MacroBusiness, Jan 21, is by Leith van Onselen.
In Australia as of 2013 Q4, personal loans enquiries have stabilised at a much higher level after a period of strong growth. This suggests ongoing challenging conditions for retailers of big ticket items and reflects a slowdown of car sales, which have shown no growth year on year, and a reduced demand for larger purchases among consumers in the mining states.
The December quarter is typically a strong period for credit demand, reflecting the seasonal peak in spending associated with the Christmas period. The relatively weak outcome in loans and credit cards suggests low interest rates are not leading to a significant lift in consumer borrowing as households remain cautious about rising unemployment.
It’s worth also pointing out that the latest credit aggregates data from the Reserve Bank of Australia revealed that the share of credit flowing to mortgages hit the highest level on record (60.2%), with the share of loans flowing to business (33.4%) hitting a record low.
Ed. Notes: Aussie debt is not a thing of beauty, as debt isn’t anywhere. There, personal borrowing has topped out, business borrowing has bottomed out, hopefully, while borrowing to buy housing with, especially, the land beneath it keeps expanding. So, Aussies spend more for something nobody made — land — and less for the goods and services that their neighbors make. That’s a recipe for a recession. So where in the business cycle is the Aussie economy? Perhaps they’re lagging seven or so years behind America’s.
This 2014 excerpt of IPS, Jan 20, is by Dennis Engbarth.
The Taiwan farmers victory in a landmark court case in a years-long battle has delivered a shock to government officials and given a morale boost to citizen campaigns.
The win followed a bitter resistance campaign against expropriation of farmland that has already cost two lives.
The dispute in Dapu in Miaoli county has been the most high-profile case in Taiwan of resistance to ‘zone expropriations’ in which large zones are subject to compulsory sale to government for projects which use part of the land for infrastructure and sell other portions to raise funds for construction or local government finance.
“Many large-scale zone expropriations of excellent farmland have taken place all over Taiwan usually under the pretext of creating new towns or industrial zones without consideration of actual need, and the land is often sold for speculation,” said Taiwan Rural Front (TRF) chairman Hsu Shih-jung.
The case in Dapu made international news in June 2010 after a Taiwan citizen reporter filmed Miaoli county government excavators, protected by hundreds of police, destroying hectares of green rice paddies ready for harvesting.
A protest sit-in was joined by more than 10,000 citizens.
Professor of land economics Tai Hsiu-hsiung of Taipei’s National Chengchi University told IPS that Taiwan’s excessively low tax rates had pushed local governments to use this method to first finance public infrastructure and then use zone expropriations get land for sale to improve their overall fiscal balance sheets.
Ed. Notes: So if government were collecting the annual rental value of land in Taiwan all along it would not need to sell off land that did not belong to them or the public. Government could also charge fees to the users of infrastructure, the utility bills everyone is familiar with. And government could cut its expenses by eliminating waste and graft. Like other governments in Southeast Asia, Taiwan could recover more site rent, as does Hong Kong, and pay citizens a dividend, as does Singapore — and get completely out of the insider land-trading racket.
This 2014 excerpt of Pacific Standard, Jan 17, is by Jim Russell.
When you look at the zoning regulations in Palo Alto, you learn that the tech companies have basically run out of room to build parking lots on their campuses — they can’t grow any further using the model of one parking spot per worker. So it’s logical that the tech companies would need to use shuttles to bring their workers to campus.
And where’s the densest place in the Bay Area, the place where the largest numbers of people can use the smallest numbers of buses? By this logic it’s not the youngsters that have chosen San Francisco to gentrify, but the Facebooks and the Googles who are incidentally causing this kind of development through the simple calculus of where they can house the most workers.
Cater to the wants and needs of talent and win the war for talent. Great, save that isn’t what the private bus map reveals. Cramming employees into San Francisco neighborhoods is a cost effective way to house talent while sparing dearer real estate for production.
Nonetheless, tech firms are moving to downtown San Francisco. The shift to urban headquarters favors cities such as Chicago, San Francisco, and Boston, destinations of choice for recent college graduates, while aging cities like Cleveland and Detroit struggle with corporate flight and economic decline.
IBM is interested only in recent college grads who are willing to work cheap in exchange for some tech experience. Dump the older and more expensive suburban-based employee. Plug in the millennial intern dazzled by the streetcar. Chicago is so cool I would work there for nothing.
Ed. Notes: Eventho’ downtown sites are the spendiest, for the trendiest workers and employers, it’s worth it, given the lower wages. Maybe the workers will see that they can make up for lower wages by getting a resident’s dividend, sort of like what they do in Aspen CO and in Singapore. There, they use a land tax to recover the socially-generated value of locations and an annual disbursement of the raised revenue to the local citizenry. It’s a reform even more transformative than the hi-tech they work on.
This 2014 excerpt of coastal South Carolina’s Chronicle, Jan 20, is by Joel Schlosberg.
An antipoverty program that empowers ordinary people to run their own lives would be both more respectful and more effective than the top-down approach. Martin Luther King approvingly quotes laissez-faire populist Henry George’s view that creative activity “is not the work of slaves, driven to their task either by the lash of a master or by animal necessities” and thus would be “enormously increased” in a post-poverty society.
A society-wide economic floor could, and should, be sustained by means consistent with free markets. Henry George’s single tax was the culmination of a line of classical liberal proposals to provide all members of society with a share of common natural resources.
This 2014 excerpt of The Atlantic, Jan 13, is by Barbara Ehrenreich.
Low-wage jobs are a trap: They pay so little that you cannot accumulate even a couple of hundred dollars to help you make the transition to a better-paying job. They often give you no control over your work schedule, making it impossible to arrange for child care or take a second job. And in many of these jobs, even young women soon begin to experience the physical deterioration —- especially knee and back problems —- that can bring a painful end to their work life.
It is actually more expensive to be poor than not poor. If you can’t afford the first month’s rent and security deposit you need in order to rent an apartment, you may get stuck in an overpriced residential motel. If you don’t have a kitchen or even a refrigerator and microwave, you will find yourself falling back on convenience store food, which —- in addition to its nutritional deficits —- is also overpriced. If you need a loan, as most poor people eventually do, you will end up paying an interest rate many times more than what a more affluent borrower would be charged.
A nonfunctioning car can mean lost pay and sudden expenses. A broken headlight invites a ticket, plus a fine greater than the cost of a new headlight, and possible court costs. If a creditor gets nasty, a court summons may be issued, often leading to an arrest warrant. No amount of training in financial literacy can prepare someone for such exigencies.
The criminalization of poverty has accelerated since the recession, with growing numbers of states drug testing applicants for temporary assistance, imposing steep fines for school truancy, and imprisoning people for debt.
We need to wake up to the fact that the underpaid women who clean our homes and offices, prepare and serve our meals, and care for our elderly—earning wages that do not provide enough to live on—are the true philanthropists of our society.
Ed. Notes: You may agree with the author that raising the minimum wage solves poverty, but does it? Actually, the whole notion that income must be tied to employment is damaging and must be jettisoned. The very rich are not employed and are the very richest. If they are worthy of welfare — the subsidies to big agri-business, the over-priced contracts with weaponeers, the tax breaks for oil companies, the lenient enforcement of polluters — then the all classes are worthy of fair welfare, a simple monthly check to the citizenry.
Indeed, the US Constitution was written and passed to “promote the general welfare”. The best way to do that is share common wealth. Our common wealth is all the money we spend for the nature we use, all our payments for land and resources that now go to the 1%. Instead, it should go to us all. Each of us should be getting a dividend from the worth of Earth. At the same time, we should not be paying taxes on wages, sales, or buildings. Government should just use fees, dues, licenses, auctions, etc, to redirect our spending for nature — our social surplus — into the public treasury then back out again as dividends to all.
Doing that will make life amazingly better for us all, especially the people who’d no longer be poor.
This 2014 excerpt of the New York Times, Jan 11, is by Thomas L. Friedman, reviewing a “fascinating new book, The Second Machine Age,” by Erik Brynjolfsson and Andrew McAfee.
Put all advances together, and you can see that our generation will have more power to improve (or destroy) the world than any before, relying on fewer people and more technology. But it also means that we need to rethink deeply our social contracts, because labor is so important to a person’s identity and dignity and to societal stability. Consider:
lowering taxes on human labor to make it cheaper relative to digital labor,
reinventing education so more people can “race with machines” not against them,
fostering the entrepreneurship that invents new industries and jobs, and
even guaranteeing every American a basic income.
We’ve got a lot of rethinking to do, they argue, because we’re not only in a recession-induced employment slump. We’re in a technological hurricane reshaping the workplace — and it just keeps doubling.
Ed. Notes: Better than lowering taxes on labor is to eliminate them. Get rid of them on capital, too. Heck, you could lose taxes altogether; just use fees, dues, leases, etc, to redirect all our spending for nature into the public treasury. That is, as your Land Dues were to go up, then the land prices you pay would go down. So people would not pay banks (in mortgages) or pay absentee owners (ground rent) for land but people would pay their community. Those funds, that revenue stream, is what could fund the extra income to everyone, called “basic income” or here “Citizen’s Dividend”.
This 2014 excerpt of the New York Times, Jan 9, is by Eric Lipton.
For the first time in history, at least 268 of the 534 current members of Congress had an average net worth of $1 million or more in 2012. The median net worth for lawmakers in the House and Senate was $1,008,767 — up 4.4 percent.
The wealthiest member of Congress, as has previously been the case, was Representative Darrell Issa, Republican of California, who had a net worth of between $330 million and $598 million, a significant chunk of which from the Viper car antitheft system sold by a company he owned.
The poorest was Representative David Valadao, Republican of California, who listed debts of about $12.1 million, mostly from loans on a family dairy farm.
Democrats and Republicans in Congress were about equally wealthy, with Democrats boasting a median net worth of $1.04 million, compared to $1 million for congressional Republicans. The averages in both cases were up compared with the previous year, when the numbers were $990,000 and $907,000.
Ed. Notes: So most in Congress are millionaires now. Stepping back for a big picture look, you see that government and the elite are returning to being the same institution in society, just as they were one a couple centuries ago: the aristocracy. So if you prefer democracy, then you better get serious about recognizing, popularizing, and sharing society’s surplus. What’s that? It’s the worth of Earth. It’s the money that society spends for the nature it uses, our mortgages for land, our payments for natural resources. Nobody made the planet, everybody needs this natural heritage, and all of us make it valuable. Hence, we should make this flow of revenue our common wealth (and not taxes on individual wealth) — and the sooner the better.
We have proceeded from a premise that poverty is a consequence of multiple evils: lack of education restricting job opportunities; poor housing which stultified home life and suppressed initiative; fragile family relationships which distorted personality development. The logic of this approach suggested that each of these causes be attacked one by one. Hence a housing program to transform living conditions, improved educational facilities to furnish tools for better job opportunities, and family counseling to create better personal adjustments were designed. In combination these measures were intended to remove the causes of poverty.
In addition to the absence of coordination and sufficiency, these programs have another common failing — they are indirect. Each seeks to solve poverty by first solving something else.
I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by the guaranteed income.
We have so energetically mastered production that we now must give attention to distribution. Those at the lowest economic level, the poor white and Negro, the aged and chronically ill, are traditionally unorganized and therefore have little ability to force the necessary growth in their income. They stagnate or become even poorer in relation to the larger society.
In 1879 Henry George anticipated this state of affairs when he wrote, in Progress and Poverty:
“The fact is that the work which improves the condition of mankind, the work which extends knowledge and increases power and enriches literature, and elevates thought, is not done to secure a living. It is not the work of slaves, driven to their task either by the lash of a master or by animal necessities. It is the work of men who perform it for their own sake, and not that they may get more to eat or drink, or wear, or display. In a state of society where want is abolished, work of this sort could be enormously increased.”
The poor transformed into purchasers will do a great deal on their own to alter housing decay. Negroes, who have a double disability, will have a greater effect on discrimination when they have the additional weapon of cash to use in their struggle.
Beyond these advantages, a host of positive psychological changes inevitably will result from widespread economic security. The dignity of the individual will flourish when the decisions concerning his life and in his own hands, when he has the assurance that his income is stable and certain, and when he know that he has the means to seek self-improvement. Personal conflicts between husband, wife and children will diminish when the unjust measurement of human worth on a scale of dollars is eliminated.
Two conditions are indispensable if we are to ensure that the guaranteed income operates as a consistently progressive measure. First, it must be pegged to the median income of society, not the lowest levels of income. To guarantee an income at the floor would simply perpetuate welfare standards and freeze into the society poverty conditions. Second, the guaranteed income must be dynamic; it must automatically increase as the total social income grows. Were it permitted to remain static under growth conditions, the recipients would suffer a relative decline. If periodic reviews disclose that the whole national income has risen, then the guaranteed income would hgave to be adjusted upward by the same percentage. Without these safeguards a creeping retrogression would occur, nullifying the gains of security and stability.
The program would benefit all the poor. I hope that both Negro and white will act in coalition to effect this change, because their combined strength will be necessary to overcome the fierce opposition we must realistically anticipate.
The contemporary tendency in our society is to base our distribution on scarcity, which has vanished, and to compress our abundance into the overfed mouths of the middle and upper classes until they gag with superfluity. If democracy is to have breadth of meaning, it is necessary to adjust this inequity. We are wasting and degrading human life by clinging to archaic thinking.
The curse of poverty has no justification in our age.
Ed. Notes: James Melvin Washington collected his favorite works of MLK into the book, Testament of Hope: the Essential Writings of Martin Luther King, Jr. and included the passage above, citing Henry George and noting the need to make the extra income dynamic, so it would “automatically increase as the total social income grows.” This is precisely what a Citizens Dividend does; as progress pushes up site values, one’s share of the resultant Rent rises, too.
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.
suitable for framing by Green Parties. When Greens began in Germany two decades ago, they defined themselves as neither left nor right but in front. Geonomics fits that description. The Green Parties have their Four Pillars; geonomists have four ways to apply them:
Ecological Wisdom. Want people to use the eco-system wisely? Charge them Rent and, to end corporate license, add surcharges. To minimize these costs, people will use less Earth.
Nonviolence. Want people to settle disputes nonviolently? Set a good example; don’t levy taxes, which rely on the threat of incarceration, to take people’s money. Try quid pro quo fees and dues.
Social Responsibility. Want people to be responsible for their actions? Don’t make basic choices for them by subsidizing services, addicting them to a caretaker state. Let people spend shares of social surplus.
Grassroots Democracy. Better have grassroots prosperity. Remember, political power follows economic. Pay people a Citizens Dividend; to keep it, they’ll show up at the polls, public hearings, and conventions.
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.
not a panacea, but like John Muir said, “pull on any one thing, and find it connected to everything else.” Recall last month’s earthquake in El Salvador. We felt it and its formidable after-shocks in Nicaragua. Immediately afterwards, my host nation, one of the poorest in the Western Hemisphere, sent aid to its Central American neighbor. The Nica newspapers carried photos of the devastation. They showed that the cliff sides that crumbled had had homes built on them while the cliffs left pristine withstood the shock. Could monopoly of good, safe, flat land be pushing people to build on risky, unstable cliffs? If so, that’s just one more good reason to break up land monopoly. What works to break up land monopoly, history shows, is for society to collect the annual rental value of the underlying sites and resources. That’d spur owners to use level land efficiently, so no one would be excluded, forced to resort to cliffs. To prevent another man-induced landslide is yet another reason to spread geonomics.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
not exactly Georgism, the Single Tax on land value proposed by Henry George. He did, tho’, inspire most of the real-world implementations of the land tax that some jurisdictions enjoy today, and modern thinkers to craft geonomics. While his name and our remedy both begin with “geo” since both words refer to “Earth”, the two have their differences. (a) George pegs land monopoly as the fundamental flaw while geonomics faults Rent retention. (b) To fix the flaw, George was content to use a tax, while geonomics jettisons them in favor of price-like fees. (c) George focused on the taking while geonomics headlines the sharing. George envisioned an enlightened state judiciously spending the collected Rent while geonomics would turn the lion’s share over to the citizens via a dividend. (d) And George, as was everyone in his era, was pro-growth while geonomics sees economies as alive, growing, maturing, and stabilizing. Despite these differences, George should be recognized as great an economist as Euclid was a geometrician.
close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)
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.
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.
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!