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.
During the three-week voyage, Gandhi was too unsure of his English to speak to the other passengers and shunned the dining room because he did not know how to use a knife and fork. He survived on fruits and sweets he had brought with him from home.
When he finally arrived in London, some Indian friends took charge of him and found him a place to stay. But he was homesick, and at night he wept, not for his wife, but for his mother.
Since he had vowed he would not touch meat, he tried living on bread and spinach, but this diet did not satisfy him. When Indian friends advised him to eat meat as they did, he replied simply, “A vow is a vow. It cannot be broken.” Instead, he set about hunting for a vegetarian restaurant, walking ten or twelve miles each day until he was finally hungry enough to enter the cheapest restaurant in sight and stuff himself on bread.
One day he finally found a vegetarian restaurant and enjoyed his first hearty meal since he had left home. “God had come to my aid,” he wrote.
Freed from fear of starvation, young Gandhi next set about becoming an English dandy. He bought costly new clothes and spent ten minutes in front of a huge mirror each morning brushing back his thick black hair, though there was nothing he could do about his ears, which thrust out from the sides of his head like jug handles. For further refinement he arranged for dancing and elocution lessons, bought a violin, and hired a music teacher.
After about three months of this Gandhi decided that “If my character made a gentleman of me, so much the better. Otherwise I should forego the ambition.” He cancelled his lessons, sold the violin, and got down to the serious business of studying law.
Gandhi was an earnest student, taking on more work than was required, and the more he studied, the more austere he became. He trimmed his expenses by walking ten miles to school each day to save carfare, moving into a cheaper room, and preparing his own breakfasts of oatmeal and cocoa and dinners of bread and cocoa. He continued to eat lunch in vegetarian restaurants.
All of his life, experiments with food were to be part of Gandhi’s experiments with truth. While in England, where food is sometimes tasteless anyway, he decided he could do without condiments, for “the real seat of taste [is] not the tongue but the mind.” He was an aggressive vegetarian and was elected to the executive committee of the local vegetarian society, which he founded. But he was so shy that he froze when he attempted to speak at meetings, and others had to read his speeches for him.
During Gandhi’s second year in England, two English brothers asked him to study the Bhagavad Gita, a part of the sacred Hindu scriptures, with them. A long poem of some seven hundred stanzas, written several hundred years before Christ was born, the Gita is a dialogue between the Hindu god Krishna and Arjuna, a warrior about to go into battle.
Gandhi had never before studied the Gita, either in English, or in its original Sanskrit, or in Gujarati, his own dialect. It glorifies action, renunciation, and worldly detachment, and its message seared Gandhi’s soul. He later called the Gita his “dictionary of conduct” and turned to it for “a ready solution of all my troubles and trials.”
At about the same time he was searching through the Gita, a Christian friend persuaded Gandhi to read the Bible. The Old Testament set him dozing, but the New Testament, particularly Christ’s Sermon on the Mount, evoked a spiritual recognition. “‘”Whosoever shall smite thee on thy right cheek, turn to him the other also. And if any man take away thy coat let him have thy cloak too.” The seeds of Gandhi’s philosophy of renunciation and nonviolence were thus planted almost simultaneously by sacred Hindu and Christian texts.
Gandhi easily passed his law examinations, was called to the bar on June 10, 1891, enrolled to practice in the High Court on the 11th, and sailed for home on the 12th. He did not spend a day more in England than he had to.
On the choppy passage back to India, twenty-one-year-old Gandhi was sick with doubt. He had learned some laws, but he had not learned how to be a lawyer. Besides, the laws he had learned were English; he still knew nothing of the Hindu or Moslem law of his own country. The despair he felt was doubled when his brother met him at the dock with the news that his adored mother had died while he was away. Gandhi returned to his family at Rajkot. He quarreled with his wife and played with his son, but he was unable to earn money to support them. Friends advised him to go to Bombay to study Indian law, but when he finally got his first case there he was too shy to cross-examine the opposing witnesses. He returned the fee and told his client to find another lawyer.
Desperate, he tried to get a job teaching English in a high school, but he was rejected as unqualified. Defeated, he left Bombay and returned to Rajkot. Gandhi’s brother, who was also a lawyer, routed enough paperwork to him to pay for his keep, but Gandhi hated the petty tasks, the local political intrigues, and the arrogance of the ruling British. Bitter and bewildered, he longed to escape from India. His opportunity unexpectedly came when a large Indian firm in Porbandar asked him to go to South Africa to assist in a long and complex legal case in the courts there. It would take about a year and he would be paid all his expenses plus a salary. Gandhi accepted with joy.
A second son had been born to Kasturbai since Gandhi’s return from England almost two years earlier. Gandhi bade his growing family farewell and in April, 1893, not yet twenty-four years old, he set sail “to try my luck in South Africa.” He found more than luck; he found himself, his philosophy, and his following.
This biography was written by Roberta Strauss Feuerlicht and is reprinted here with the permission of the copyright holder.
All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system.
What’s your opinion? Tell your views to The Progress Report!
The Kyoto Treaty on atmospheric pollution came into effect on February 16, 2005. The signatories have committed themselves to reduce carbon emissions below the 1990 level by 2012. Air pollution is believed to create a greater greenhouse effect, resulting in global warming, the rise of ocean levels, and possibly catastrophic changes in ocean currents, climates, ecologies and economies.
The U.S. Senate refused to ratify the treaty during the Clinton administration, and President Bush has rejected the treaty. Australia has also rejected the Kyoto Protocol, but Russia has joined it. One of the problems with the 1997 Kyoto Protocol is that it does not apply to developing economies, such as India and China. With these countries rapidly growing and creating a significant amount of the global pollution, a reduction in pollution in the USA will have little effect unless India and China and other developing countries get on board.
The governing chiefs of India and China argue that reducing pollution would stifle their economic development. They say that the U.S., Europe, and Russia had few pollution controls when their economies were industrializing, and so the developing economies today should not be handicapped with pollution reduction. Once these economies catch up with North America, Europe, and Japan in development, then they would join the treaty.
By that argument, India and China could adopt slavery to promote economic development, since the U.S. exploited slaves during its initial development. Nobody today argues that slavery would be justified in India and China just because the U.S. had it earlier. An evil committed in the past does not justify an evil in the present.
The most efficient way to reduce pollution has been well known in economics for 80 years. The economist Arthur Pigou showed how when there is a negative external effect such as pollution, the buyer is not paying the full social cost of the good. In effect, the user is subsidized. To eliminate the subsidy and make him pay the social cost, there needs to be a pollution charge on the sale of the good, ideally equal to the social cost of the pollution contributed by that item.
These charges or pollution taxes are called “Pigovian,” after Pigou. Every economics textbook discusses negative externalities such as pollution, and the Pigovian taxes that internalize the cost, illustrated with graphs showing the supply curves of the buyer’s cost and the social cost. With a Pigovian tax, the buyer’s cost equals the social cost. The polluter either avoids the charge by reducing pollution, or else pays the charge and passes on the cost to the buyer. At the higher price, less is bought, less is produced, so there is less pollution, and society is compensated for the damage.
Governing chiefs have economic advisors, and they are aware of the possibility of pollution charges to reduce gaseous emissions. But the chiefs of India, China, and the USA have rejected pollution charges. The argument that pollution reduction would damage their economies is false. The government revenue from pollution charges can be offset by a reduction of taxes on wages, capital, value added, and sales. These taxes burden the economy, so an increase in pollution charges accompanied by a reduction of punitive taxes would leave the overall tax burden the same, while reducing pollution.
The economic reality is that in the long run, there need not be any economic cost to reducing pollution. The political reality is that the governing chiefs do not want to enact pollution-reducing charges because the chiefs of the polluting industries have huge political clout.
For example, in China, there is growing air pollution from burning coal. The Chinese chiefs seek to decrease their dependence on oil by using more coal for energy. They regard the heavy pollution as an acceptable price for rapid economic growth. But they could grow just as rapidly by eliminating all their taxes on wages, capital, and sales and shifting public revenue to pollution charges and the tapping of land rent. They could also eliminate the corruption taxes with high penalties on governing officials who demand bribes. Production would be shifted to less polluting industries and methods. The chiefs of China have rejected this solution, because the coal-mining interests have great political clout.
Similarly, the USA could implement the Kyoto goals by shifting public revenue to pollution and land rent. But the US chiefs have rejected this. The coal and oil industry chiefs in the US have great political clout, and will not allow a tax shift that will reduce their economic dominance. The public is too ignorant and apathetic to demand the efficient solution to pollution.
Most environmentalists can also be blamed for the pollution problem. They cry “Kyoto! Kyoto!” but reject the efficient tax shift. They want to reduce pollution with regulations, by command and control. If you try to explain the economics to them, they refuse to listen. They present the public with the false choice between the environment and the economy. It seems that they prefer command and control to the reduction in pollution. It has been said that such stubbornly ignorant environmentalists are green on the outside and red on the inside.
Most “liberals” and “progressives” can also be blamed for air pollution. They say that the Social Security problem is not urgent, so why reform the system? Well, global warming is also important but not urgent, so why not postpone a solution? This is a false argument. If there is a long-term problem which gets more costly every year, we should solve it sooner rather than later.
Is air pollution causing global warming? Nobody knows for sure. Possibly we are in a natural cycle of warming. When the ice age ended, that global warming was not caused by industrial pollution. But an important rule of life is that it is best not to fool with mother nature. It is quite possible that pollution is contributing to an increase in global warming. The economic cost of catastrophic warming far exceeds the transition to efficient public revenues.
Most of the countries that have adopted the Kyoto Treaty are in fact not making progress towards reducing pollution. But there is no economic excuse for excessive pollution. Greedy special interests are exploiting public ignorance, and the typical human is apathetic, too busy making a living, dealing with oppression, and being entertained, to get aroused about global warming.
If you care, if you want to do something, and you think this reasoning make sense, then email this article to your liberal, progressive, conservative, radical, or libertarian friends. We need to educate the public, and you at least could have the satisfaction of helping if only just a little bit.
Copyright 2005 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
ACLU Lauds Introduction of Cornyn-Leahy ‘OPEN Government Act,’ Much-Needed Measure Would Increase Transparency, Access to Records
The U.S. Senate will consider S.394, the “Openness Promotes Effectiveness in our National Government Act of 2005.” The bill won’t get anywhere without resistance from politicians who favor secrecy instead of accountability. If you support the bill, please ask your Senators to support it as well.
Here is a news report from the American Civil Liberties Union.
The American Civil Liberties Union applauded the introduction of a measure, sponsored by Senators John Cornyn (R-TX) and Patrick Leahy (D-VT), designed to increase the transparency of the government by strengthening the Freedom of Information Act.
“Senator Cornyn and the ACLU do not often agree, but, as his bill shows, a commitment to open government transcends political ideologies,” said Laura W. Murphy, director of the ACLU Washington Office. “This much-needed bill will help buck the growing trend of hiding the actions of the government from public scrutiny. Secrecy, not openness, all too often seems to be the dominant trend of agencies in recent times.”
The bill, called the Openness Promotes Effectiveness in our National Government Act of 2005, or the “OPEN Government Act of 2005,” includes a series of much-needed corrections to policies that have eroded FOIA.
Specifically, the act would ensure that requesters have timely information on the status of their requests, set enforceable time limits for agencies to respond to requests, implement news media status rules that recognize the reality of freelance journalists and the Internet, and provide strong incentives — including both carrots and sticks — for agency employees to improve FOIA compliance. The act also includes a review of the new exemption in the Homeland Security Act for so-called critical infrastructure information.
The ACLU pointed to a growing secrecy trend as a need for reforms to increase transparency. As J. William Leonard, director of the National Archives’ Information Security Oversight Office told a House panel last year, “It is no secret that government classifies too much information,” and the amount of materials that should not be classified at all “is disturbingly increasing.”
The 9/11 Commission last year recommended that Congress declassify the top line of the intelligence budget to better “foster accountability” — a move that was ultimately was rejected. The ACLU also noted that it was through FOIA that it obtained documents detailing the abuses of detainees in Afghanistan and Abu Ghraib. Making targeted corrections to improve the operation of FOIA would make it a more effective accountability tool, the ACLU added.
Said Timothy H. Edgar, the ACLU counsel for national security policy, “Let us heed the call of James Madison and allow the people to arm themselves with the power knowledge gives. We strongly urge Congress to pass the OPEN Government Act of 2005 to restore some of that power.”
Congress Continues With Corruption and Failure — Handouts to Large Agribusiness Corporations
In the midst of a record-breaking budget deficit, how vital do you think it is to hand taxpayer money out to large agribusiness corporations, some of which are not even American?
Here is a news update from Taxpayers for Common Sense. TCS is the best organization that monitors excessive government spending, corruption and corporate welfare.
A Litmus Test on Spending
When it comes to congressional pork barrel spending, there has been no holier sacred cow than welfare for agribusiness corporations. So when President Bush announced a modest proposal to reduce individual farm payments to $250,000 per farm, he put his administration on a collision course with one of Congress’s fastest moving corruption trains.
Time and again, no matter how much lip service is paid to reining in these outdated farm programs, Congress buckles under the pressure and continues its blank check farm policy. The 1996 farm bill was supposed to reduce this spending and return the farm sector to the free market. Instead, total agribusiness handouts more than doubled. In 2002, turrning budget surpluses into huge deficits, Congress grew even worse, re-wrote the farm bill, and threw in everything but the kitchen sink. Instead of fixing the failures of the previous bill, Congress ended up passing the most expensive farm legislation in history. And guess who signed it into law?
Since 1998, average annual farm payments have gone from $7 billion to $18 billion. The FY 2006 budget estimates 2005 farm subsidy spending will top $24 billion. Worse, farm payments have become increasingly concentrated, flowing to fewer and fewer individual farmers. According to the USDA, only 8 percent of producers receive 78 percent of subsidies. At the top of the subsidy food chain, huge corporate operations receive payments in the millions, while the average for 80 percent of farmers is under $1,000.
Instead of keeping farmers on the land, these huge government payments to only the largest, most productive farms are forcing many small farmers out of business. Farm payments are based on production levels, so the bigger the farm, the bigger the government check. Large corporate operations are able to plant more crops, so they get the biggest slice of the subsidy pie. These large farms then turn around and use their outsized government checks to buy up even more farm land. Unable to compete, small farmers are left with no choice but to sell their land to the very operations that are putting them out of business.
Despite these inequities, members of Congress are defending the current status quo. Members of the House Agriculture Committee members already sent a letter to Budget Chairman Nussle demanding that he leave the last farm bill alone until its provisions expire in 2007.
President Bush’s willingness to take on these lawmakers and other entrenched interests that keep these subsidies flowing will prove a litmus test of his willingness to step up the plate, stick to his fiscal guns, and back his own budget. Otherwise this will be another case of empty sword-rattling and false starts that leave taxpayers holding the tab and America’s family farmers out in the cold.
For more information, contact Keith Ashdown at (202)-546-8500 ext. 110 or by email at email@example.com TCS is at www.taxpayer.net
The old currency of Iraq is defunct. It has become a collectible rather than a medium of exchange. The U.S. military administration is paying workers in U.S. dollars.
The interim government of Iraq will need to deal with money and banking. Here is a great opportunity to start fresh rather than copy the failing fiat-money policies now practiced throughout the world. Currency after currency in Latin America, Africa, Asia, and previously in Europe, has been inflated to a worthless nothing. The reason is very simple.
All countries today issue fiat money. That means the money is created by government command. Essentially, fiat money has no cost of production. If something can be created at no cost, its value can drop to just that, zero. As the central bank issues ever more fiat currency, the price level rises and the value of the currency falls.
Probably the ultimate best policy for the new government would be to do nothing about money, and just let people use whatever currency they wish. Various foreign currencies would circulate, and entrepreneurs would see an opportunity to issue private local money, and the best moneys would become widely circulated and become the media of exchange.
But the new government will most likely wish to issue a new Iraqi currency as a symbol of the new era and as a nationalist device. In that case, what kind of money would be best for the economy? It would be a great error to copy central banking and fiat money just because that is the current monetary fad. Aside from political pressures, central bankers just don’t have the knowledge to know how much money to issue for stability. This is unknowable.
Iraqis would not want to base their new currency on the dollar or the euro, but would want to have their own independent domestic money. To anchor the value, the Iraqi money should be convertible to some commodity at a fixed exchange rate. It should be a commodity that folks regularly use. I propose a currency based on postage.
The government of Iraq would issue “forever” postage stamps valid for domestic use indefinitely. These would be a good store of value, since a stamp could always be used to pay for postage. Then the government would issue a currency called the “post.” It would have a picture of the “forever stamp,” and a one-post bank note could always be exchanged for a “forever” stamp. The unit of account of the money would thus be the post.
Now the currency would have a stable anchor. The government would not want to over-issue, since the posts would be obligations to provide postage service. Inflation would be possible if the government subsidizes the postal service, but then this would create a real cost for the government. In contrast, with fiat money, inflation benefits the government chiefs as a tax on money holdings, easier to impose than taxes on income or sales. The incentive for the government would be to avoid inflation.
The post should be a voluntary currency. Banks should be free to use any currency and issue their own private currency, as would be any person or organization. There should be no deposit insurance, required reserves, or other restrictions on banking other than being honest. So long as the bank policy is fully disclosed, it would do business with willing customers as it pleases.
Besides stable money, Iraq needs free trade and a sound system of public revenue. The U.S. government has called on the United Nations to drop trade barriers with Iraq. Unfortunately, some European countries are resisting this, first wanting to settle how the oil will be handled. This is wrong. Let’s have immediate free trade for Iraq!
The U.S. government is also calling for the elimination of the national debt of Iraq. Again, some European countries, having loaned billions to the Iraqi dictatorship, now resist canceling the debt. If they want to impose conditions, they should just be ignored. The Iraqi debt should be declared wiped clean. It was the dictator’s debt, not the people’s.
The public revenue for the new Iraq should come only from the rent of natural resources. Oil profits, which is really the economic rent of that resource, should finance reconstruction. Local governance should be financed from the rental value of land. There is no need to impose any tax on wage income, sales, or business profits. Investment will rush to Iraq if it is not punished with taxes. If we are serious about freedom for Iraq, it should include economic freedom.
So that’s the formula for success in Iraq. Establish sound money based on a real commodity. Cancel the debt. Have free trade. Get public revenue from rent. The economics is easy. It’s the politics that’s hard.
Copyright 2003 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
As the U.S. continues to oppose cleaner energy and independence from foreign oil, the rest of the world moves ahead with new technologies and new jobs.
Here is a summary of the situation as of February 16, 2005, when the Kyoto Protocol became international law. The author writes from the perspective of Maryland, U.S., but his remarks apply generally.
by Mike Tidwell February 16, 2005
As of this day, 140 nations from around the world, including Japan and all of Europe, will begin helping Maryland stave off potential economic and environmental disaster.
All 140 want to protect Maryland’s fishing industry and farms and its many tourism assets. All 140 nations want to slow the spread of Lyme disease and West Nile virus while giving the world’s children cleaner air to breathe.
Today, the Kyoto treaty on global warming assumes the force of law in a majority of the world’s nations. By mandating a significant and precise reduction in greenhouse gas emissions through the adoption of clean energy and efficiency standards, the treaty will begin to protect Maryland — and every other state and country — from the negative impacts of global climate disruption.
The bad news is that our own country is not among the 140. Our own government, heavily dominated by a fossil-fuel lobby with close ties to the Bush administration, stands in near total diplomatic isolation. President Bush has rejected the Kyoto process, saying it would harm the U.S. economy. He’s committing our nation instead — unthinkably — to a policy of burning substantially more, not less, oil and coal and natural gas.
Some American so-called conservatives continue to ridicule the very idea of global warming. To these critics, Kyoto signatories such as Canada and Britain simply have it all wrong. Japan and New Zealand have swallowed “junk science.” Russia and South Africa are just plain suckers. So what are Americans to believe?
The Bush administration firmly settled this issue. Mr. Bush asked the National Academy of Sciences in 2001 to examine human-induced climate change. The NAS reply: The basic science of global warming is solid. Human activity will warm the planet 3 to 10 degrees Fahrenheit by 2100, and the consequences could be alarming.
The Bush administration reported to the United Nations in 2002, using data from 10 federal agencies to conclude that serious warming was guaranteed in the next few decades because so much carbon dioxide — which can linger in the atmosphere for a century — had already been released from fossil-fuel combustion. As a result, Southeastern forests and snow-dependent Western rivers could be severely degraded. Assateague Island National Seashore could disappear because of a rise in sea level.
The rising sea level is accelerating the profound shoreline erosion all along the Chesapeake Bay. The Eastern Shore’s Blackwater Wildlife Refuge lost a third of its marshes in the 20th century largely because of a warming-induced rise in water. Maryland farmers report unprecedented floods and droughts in recent years, while the U.S. Environmental Protection Agency says agricultural yields could drop a shocking 42 percent in the state with more warming.
Marylanders may be grateful to the rest of the world for acting on global warming despite U.S. intransigence. But a problem remains: the U.S. generates 25 percent of the world’s greenhouse gases. So the 140 Kyoto nations cannot, by themselves, make the 80 percent cut in global greenhouse gases many scientists say is needed. The United States must join Kyoto immediately.
American and Australian industries are in danger of being left behind as Europe and Japan reap the financial and societal benefits of being first in the race to develop climate friendly technologies.
– Greenpeace International
Thankfully, America is blessed with great clean energy potential. Texas and the Dakotas have enough wind power that can be harnessed to provide America with all of its electricity. And 100 miles square of sunny Nevada desert covered with solar panels could do the same. Hybrid cars, meanwhile, are already here, and hydrogen cars may be on the way. And studies show that clean energy creates more jobs and more wealth than fossil-fuel use. In Pennsylvania, former coal miners are operating commercial wind farms.
Given all this, Mr. Bush’s assertion that the Kyoto process would harm our economy starts to sound merely like the whine of a doomed fossil-fuel industry — which it is. What could be a bigger threat to our economy and national security than global warming combined with our overdependence on foreign sources of oil that are quickly running out anyway?
Clearly there’s another way: a clean energy future. Today, 140 nations have opened the door. All we have to do is walk through it.
Mike Tidwell, director of the Chesapeake Climate Action Network based in Takoma Park, Maryland, U.S., is the author of Bayou Farewell: The Rich Life and Tragic Death of Louisiana’s Cajun Coast.
Does someone other than you own the email messages that you send or receive? How about your private bank account information? How about your borrowing habits at your local library? Should others be allowed to sell or snoop that information without your approval?
Here are portions of a recent guest essay appearing in eWeek magazine.
For at least seven months last year, a hacker had access to T-Mobile’s customer network. He is known to have accessed information belonging to at least 400 customers — names, Social Security numbers, voice mail messages, SMS messages, photos — and probably had the ability to access data belonging to any of T-Mobile’s 16.3 million U.S. customers. But in its fervor to report on the security of cell phones, and T-Mobile in particular, the media missed the most important point of the story. The security of much of our data is not under our control.
This is new. A dozen years ago, if someone wanted to look through your mail, they would have had to break into your house. Now they can just break into your ISP remotely and download millions of messages. Ten years ago, your voice mail was on an answering machine in your house; now it’s on a computer owned by a telephone company. Your financial data is on Web sites protected only by passwords. The list of books you browse, and the books you buy, is stored in the computers of some online bookseller. Your affinity card allows your supermarket to know what food you like. Data that used to be under your direct control is now controlled by others.
We have no choice but to trust these companies with our privacy, even though the companies have littleincentive to protect that privacy. T-Mobile suffered some bad press for its lousy security, nothing more. It’ll spend some money improving its security, but it’ll be security designed to protect its reputation from bad PR, not security designed to protect the privacy of its customers.
This loss of control over our data has other effects, too. Our protections against police abuse have severely eroded. The courts have ruled that the police can search all your data without a warrant, as long as that data is held by others. The police need a warrant to read the e-mail on your computer, but they don’ t need one to read it off the backup tapes at your ISP. The courts have affirmed many times that there’s no reasonable expectation of privacy with regard to data held by third parties.
This isn’t a technology problem; it’s a legal problem. The courts need to recognize that in the information age, virtual privacy and physical privacy don’t have the same boundaries. We should be able to control our own data, regardless of where it is stored. We should be able to make decisions about the security and privacy of that data and have legal recourse should companies fail to honor those decisions. And just as the Supreme Court eventually ruled that tapping a telephone was a Fourth Amendment search, requiring a warrant — even though it occurred at the phone company switching office — the Supreme Court must recognize that reading e-mail at an ISP is no different.
Bruce Schneier is chief technology officer of Counterpane Internet Security Inc.
What’s your opinion? Tell your views to The Progress Report!
If you like reading appalling stories about welfare queens who abuse the system and get money that they don’t really need from the taxpayers, well, here is a gem for you.
by Jim Hightower
Charles Schwab is one lucky duck. Not only is he a billionaire stockbroker, heading the Wall Street firm that bears his family name, but he also has his own private duck-hunting club on 1,500 acres of wetlands in picturesque Northern California.
He calls his place Casa de Patos, which is Spanish for House of Ducks. However, ducks don’t read, so they’re unaware that Charlie named his place for the birds and that they’re supposed to swoop down from their migratory path to get a close enough for Schwab and his duck-loving friends to shoot at them. Also, while you and I know from his ubiquitous ads that Charles is a hot-shot Wall Street stockbroker, your average duck doesn’t watch a lot of TV and wouldn’t know Charles Schwab from a cotton swab.
But Schwab knows that his feathered friends are attracted to rice fields, so, to lure more of the game birds within gunshot range, Charles has had much of Casa de Patos planted in rice. Charles Schwab, billionaire duck man, discovered the federal farm program. Specifically, his legal eagles determined that, as a rice grower, Schwab was eligible for rice subsidies from us taxpayers. Lots of subsidies.
The bottom line here is that you and I, Mr. and Ms. Joe Schmoe Taxpayer, fork over some $500,000 a year in federal crop-support funds so Schwab can be sure that guests at his exclusive hunting club have plenty of ducks to kill. The farm program was originally meant to help struggling small farmers — not a pleasure-seeking Wall Streeter with a net worth of some $4 billion. With program perverters like Schwab, we taxpayers are sitting ducks.
Jim Hightower’s latest book is If the Gods Had Meant Us to Vote, They Would Have Given Us Candidates. This article appeared in the Texas Observer.
What’s your opinion? Tell your views to The Progress Report!
We are witnessing the return of monarchy throughout the world, where the position of chief of government is hereditary. In North Korea, Kim Jong Il inherited leadership from his father, Kim Il Sung. In Syria, Bashar Assad inherited the presidency from his father Hafez Assad. In the Congo (former Zaire), Joseph Kabila took charge after the death of his father, Laurent Kabila. Their leadership was affirmed by the ruling parties of both countries, but clearly the filial relationship gave them the power.
In the United States of America, we now have George W. Bush as president, son of former president George Herbert Walker Bush. His ascent to the presidency was no doubt a consequence of being the son of the former president, although this does not detract from his own talents and efforts. In these cases, the sons may well become good leaders. Nevertheless, we should note the pattern that may be developing: the monarchy is back!
In the case of the USA, the people still need to vote in order for the sons and daughters of government chiefs to achieve power. But their candidacies are given a vital boost by their name and filiation. The Kennedies are a prime example, as is indeed former Vice President and presidential candidate Al Gore. The US had a previous father-son presidency in the 1800s, with John Adams and John Quincy Adams.
In the case of the more authoritarian regimes, the accession to power by the sons of the chief of government has created de facto monarchies. The age of monarchies ended after World War I, when the great empires of Germany, Austria-Hungary, Russia, and Turkey collapsed and became republics. The Chinese empire had already fallen. Their monarchies were already crumbling, but the kings and emperors were under the delusion of great power and foolishly sought to extend their holdings, only to crack under defeat.
So now it is no longer in fashion to anoint oneself a king or emperor, as Napoleon did. Going around wearing a crown would look silly. But when the sons of autocrats inherit the position, there is a de facto monarchy in place, an actual hereditary rule even though not de jure, in law. So far we have second- generation monarchical rule; we will see if these regimes last long enough for the third generation to take over.
Given that a country has a dictator, rule by the offspring is not the worst option. A favorable feature of monarchy is that it provides for an orderly succession, avoiding a war among conflicting claims to power. There is some continuity of policy, and often hope for more enlightened rule, as we are seeing indeed in North Korea, where both Koreas are taking steps towards peace. There is a greater chance of progressive change when a young dictator takes control than when the same old oligarchy chooses a new chief of state to continue the same old decrepit policies.
Still, having power remain with the family is ultimately unhealthy for governance and liberty. We get an aristocracy with privileges, power, and wealth, and the mass of people perhaps propagandized into king-worship but still left with high costs of government tyrants, a poorer standard of living, and loss of liberty.
The root of the problem is political power concentrated in a central government. This is a treasure that becomes the possession of the ruler, who then naturally wishes to pass on to his children. The remedy is a decentralization of power, down to villages, towns, cities, counties, and other localities. When power rests mainly in neighborhood districts and other small local groups and is then delegated upwards by choice, the head of state is no longer such as glittering prize. And if the child of the chief should become the new chief, it is not so important.
Centralized power is what we have inherited from conquest. The continuous enforcement of centralized power itself creates a type of monarchy that all countries today are afflicted with.
Eventually the people must take charge and undo the structures from conquest and recognize the sovereignty of each human individual. Then we can delegate power by choice to small local councils, who would by choice delegate some powers to higher-level authorities. Until we have decentralized power based on individual choice, we will continue to see elite families enjoy power as an inherited privilege.
What is your opinion? Share it with The Progress Report! Copyright 2001 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
The government of the United States of America is supposed to be by the people and of the people, as Lincoln said, but to an ever greater degree the USA is being ruled by the diktat of presidential executive orders.
Presidential rule began with Lincoln during the Civil War and then was vastly expanded by Theodore Roosevelt. The trend of expanding presidential rule has accelerated under president Clinton. Rather than prevent this transfer of authority to the executive branch, Congress has facilitated it by delegating power to the presidency, and the courts have usually failed to stop it.
Just because the president is elected by the people does not imply that his decrees are of the people. Under the USA Constitution, the president is to execute the laws passed by Congress, not make law by executive decrees.
The courts did stop one executive order. In 1995 Clinton issued Executive Order 12954 to prohibit some federal contractors from hiring replacement workers during a strike, despite a 1938 Supreme Court decision that an employer may do so. Congress had rejected legislation that would have enacted such a prohibition. This executive order thus overruled both the Supreme Court and Congress. The U.S. Court of Appeals found that this executive order amounted to legislation, and struck it down.
In 1998 Clinton issued EO 13083 to redefine “federalism,” the relationship between the federal and state governments. The order justified federal action to solve “national” problems. Facing resistance from state governors, Clinton suspended the order.
Typically, however, executive orders have been used to assert and expand federal power, including military power. The war in Yugoslavia was waged by executive order, without the declaration of war required by the Constitution. In June 1998, EO 13088 declared a national emergency and prohibited trade with Yugoslavia. The bombing of Yugoslavia took place without Congressional authority. In April, EO 13119 designated Yugoslavia and Albania as a war zone, and EO 13120 ordered reserve units to active duty.
The precedent for such presidential war making goes back to Abraham Lincoln, who initially fought the Civil War without Congressional approval, let alone a Congressional declaration of war, as well as violating the authority given to Congress to raise and support armies. In August 1861 Congress ratified the orders of Lincoln. Unfortunately, as noted by a report by the Cato Institute, “the Supreme Court has upheld the legality of presidential actions ratified by Congress after the fact” (Policy Analysis no. 538).
Thus the Civil War actions set the stage for the later expansion of presidential power by executive order decrees, just as Lincoln and Congress also established the income tax, the military draft, and the nationalization of the currency due to the war.
President Wilson greatly expanded presidential rule, being the first president to declare a national emergency, which activated laws previously passed. He declared an emergency on February 5, 1917, two months before Congress declared war. Wilson then created federal agencies with presidential directives.
Presidential power expanded again under Franklin Roosevelt. On March 6, 1933, Roosevelt issued a proclamation declaring a state of national emergency. The United States officially remained in a state of emergency until 1978. But President Carter declared a new national emergency in 1979 during the Iranian hostage crisis, and the USA has been in an official state of emergency ever since! In fact, there are 13 concurrent states of emergency today.
There are two proposals in Congress to limit executive orders, HCR 30 and HR 2655 by Representatives Paul and Metcalf. HR 2655 would terminate emergency declarations and vest emergency declarations in Congress. The bill also requires presidential directives to specify their legal basis.
Passing this bill would go a long way to restoring the separation of powers intended by the US Constitution. But a more permanent reform is needed to prevent such usurpation of power. A radical decentralization of power and voting is needed in order to create a structure where the power truly rests with the people, not with the head of state.
(For more information, see the Cato Institute’s Policy Analysis No. 358 (October 28, 1999), “Executive Orders and National Emergencies: How Presidents Have Come to ‘Run the Country’ by Usurping Legislative Power,” by William J. Olson and Alan Woll.)
What is your opinion? Share it with The Progress Report! Copyright 1999 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
Social Security reform is now hot. The president is proposing shifting some of the Social Security taxes to private accounts. But there is much confusion about the two aspects to reforming Social Security.
The first problem with social security is that it is out of balance. There is at present a surplus because of the large baby-boom population still working. They will be retiring and getting social security payments in ten years. The projections depend on the growth of wages and on expected retirement ages, but around 2020, Social Security will start paying out more than it takes in, depleting its treasury-bond trust fund. Around 2040, the trust fund will be depleted, and Social Security will have a deficit.
The deficit can be dealt with in several ways. 1) The federal government can finance it. 2) SS benefits can be cut. 3) SS taxes can be increased. 4) Massive immigration of young workers can increase the revenues. 5) The entire SS system is privatized, the transition financed by a national tax on land values.
Politically, the most likely way the system is put in balance will be a combination of the first three, the rate of increase in future benefits reduced by using the increase in consumer prices instead of wages as the index. A bad way to decrease benefits would be to tax social security income even more than it is now. Workers’ wages are already taxed, and SS is supposed to be wages returned to workers at retirement, so taxing SS income is deeply unjust.
The second problem with Social Security is that it reduces savings and provides less retirement income than private accounts. To compare Social Security with a fully private account, consider a 20 year old man born in 1950 who will work for 45 years at $40,000 per year, with a real net return on investments of 4 percent. (The numbers assume zero inflation; with inflation, the numbers would just be higher, but the relative amounts would be the same.) The Social Security calculator says he would get $13,500 per year starting at age 65. (Enter 1/1/1950 for the date of birth, $40,000 for income, 1/2015 for the retirement date, and use today’s dollars.) The monthly benefit is $1149, for an annual income of $13,788.
Now let’s calculate putting 12 percent of the wage into a private account (I am taking out the portion of SS that pays for medicare). This includes the employee and employer portion of social security. With an income of $40,000 per year, the monthly investment is $400. Assume a modest tax-free real rate of return on investment of 4% (with inflation subtracted out). On retirement, the investment would have grown to $605,800, which would be put into an immediate annuity. (To calculate the amount, go to savings calculator and enter zero for the initial amount, 400 for monthly savings, 4 for interest rate, and 45 for term of investment.)
Now go to the annuity calculator. Use California for the state, 65 for the age, male for the gender, and ignore the spouse settings. Enter $605,800 for the dollar amount. The result is a single lifetime income (with no beneficiaries) of $3870 per month, or $46,440 per year. The ratio of private to SS income is 46440/13788, or 3.4 times higher! The annuity income is a bit less for women, since they live longer, but still much greater than social security.
The numbers are clear. Private accounts would be much better for a worker just starting his career. Private accounts are also better for the economy, since they increase the amount of savings and investment, and therefore increase the growth of the economy.
The problem is the transition, since folks already in the system would still be drawing out money, with no new money coming in. The president’s proposal for a partial privatization would borrow the money, adding to the federal deficit.
But the transition could be financed by a national tax on land value, paid by the states in proportion to their population. This constitutional method of public finance was used several times by the federal government in the first decades after independence. The War of 1812 was financed by such a direct tax. The SS spends about $500 billion per year. The total amount of land value in the U.S. is at least $10 trillion (not counting the rental value of oil, minerals, the radio spectrum, and other natural resources).
A national land value tax of $500 billion would be economically feasible. The first effect would be a dramatic reduction of real estate prices, as taxing most of the rent would greatly deflate land prices. But unlike taxes on wages and capital, the effect of a land-value tax on the economy would be positive, since it would put idle land to full use. A taxed investor will invest less, and a taxed worker will work less, but taxed land will produce more, not less, because the idle land pays the same tax as a plot put to its best productive use. A more productive economy will then raise land rents, while the money that formerly went into SS and land purchases would now be invested in more capital goods, better worker skills, and improved technology. The US economy would surpass China in growth, further raising wages and rent.
Those who recently bought land would rightly point out that they how have to pay a tax on their deflated land value while also having to pay their old mortgage. Those who recently sold land would gain at the expense of current owners. The economic hardship by some landowners and the associated political opposition could be overcome by having the federal government sell special land-tax bonds. The bond revenue would be used to compensate landowners for the loss of land value. The bonds would be perpetual, without a maturity date, and the interest income would be tax-free. Their face value would be adjusted annually for price inflation, but the interest rate on the face value would gradually diminish to zero over 40 years. There would be a market for the bonds, and bondholders could sell the bonds at any time.
After the transition to private accounts is complete and social security is abolished, its insurance aspects either privatized or shifted to other programs, the land-value tax would be used to buy back the bonds. With a rapidly growing economy, increasing rent, and diminishing interest payment, the bonds would gradually have a reduced market price and would eventually all be redeemed by the government, and then the land-value tax would replace the federal income tax.
President Bush stated that he is open to all ideas for reforming Social Security. So I hereby propose the use of a national land-value tax to finance shifting to private accounts. But I don’t expect the President or Congress to support this plan, or even discuss it. No major newspaper will even bring it up. They will refuse to discuss it because it is politically infeasible, and it is politically infeasible because there is no public support, because the major media will refuse to mention it. Nevertheless, let the record should show that it was proposed, and could have solved the problem while boosting the economy.
There is hope, though. If you think this is a good idea, write a letter to your local newspaper. Discuss it with your friends. The Social Security problem would be just the right opportunity for a shift not only to private retirement accounts but also to eventually shift federal taxation from income to land value. Social Security is a lemon. Let’s make lemonade!
Copyright 2005 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
Children Punished for Refusing to Watch TV Commercials
Local school officials are punishing children who refuse to watch TV commercials. This is a true story.
Commercial Alert and Obligation Inc. sent a letter today to Ohio Governor Bob Taft asking him not to allow local school systems to punish children who won’t watch Primedia’s Channel One in the public schools. According to the Toledo Blade, two Ohio children were held in a juvenile detention center on October 6th for refusing to watch Channel One and TV in public school. Primedia’s Channel One is a controversial televised in-school marketing program. The letter follows.
Dear Governor Taft:
Local school officials are using Ohio’s compulsory education laws to force children to watch commercial television and advertising in school, including the controversial marketing program Channel One. We urge you to take a stand for children and stop this abuse of the authority of the state.
According to the Toledo Blade, two Ohio children, D.J. and Carlotta Maurer, spent October 6th in the Wood County Juvenile Detention Center because they refused to watch Channel One and other televised programming at Perrysburg Junior High School. They refused because they choose not to take in the degraded commercial culture that Channel One and media corporations deliver to children each day.
Channel One does not exist to help or teach kids. It exists to help corporations that want to market to kids. As a Channel One executive once said, “The biggest selling point to advertisers [is] . . . we are forcing kids to watch two minutes of commercials” each day.
Ohio’s compulsory education laws exist for the nurture of children, not their exploitation. But Primedia’s Channel One has been able to harness the coercive arm of the State of Ohio to force schoolchildren to watch its daily fare. This includes “lite” news and advertisements for violent entertainment such as “Supernova,” “The Mummy,” and James Bond “The World is Not Enough,” as well as junk food, video games and low-grade sensuality. That is a blatant misuse of state power. It is not the proper role of the schools or the state to promote such products and values to innocent and vulnerable schoolchildren. Certainly, the laws of the state should never be used to compel children to subject themselves to such promotion. When the government sends children to a juvenile detention center because they don’t want to watch advertising, that is both Orwellian and more than a little sick.
The public schools ought to be a sanctuary from the noxious aspects of the commercial culture. Many parents are rightly worried about the way the commercial culture saturates their kids lives with degraded values and nonstop seductions.
We strongly urge you to take a stand for parents and remove Channel One from Ohio’s public schools. This would be a clarion call for those parents who wish their children to grow up free from the depredations and enticements of the media corporations and their advertisers.
Gary Ruskin, Director, Commercial Alert Jim Metrock, President, Obligation, Inc.
WHAT YOU CAN DO TO HELP: Please ask Ohio Governor Bob Taft to 1) Get Channel One out of Ohio’s public schools; and, 2) Make sure that local school systems stop punishing children who won’t watch TV or Primedia’s Channel One in the public schools.
Governor Taft’s email address is Governor.Taft@das.state.oh.us his fax is (614) 466-9354 and phone is 614-466-3555.
FOR MORE INFORMATION
Commercial Alert opposes corporate exploitation of children and the excesses of commercialism, advertising and marketing. Commercial Alert’s web page is at http://www.commercialalert.org/
Amazing, isn’t it? What’s your opinion? Tell your views to The Progress Report!
Fraud Costs Americans Billions While Govt Does Nothing
Taxpayers for Common Sense is the best organization that monitors excessive government spending, corruption and corporate welfare. Here is their latest news update.
PRESCRIPTION FOR FRAUD Healthcare providers are learning new and improved ways to rip off taxpayers without getting caught, according to a new government report.
A General Accounting Office (GAO) report says that while most healthcare consultants provide a legal service by helping providers navigate the complex world of Medicare and Medicaid regulations, some are holding conferences that serve as a how-to for defrauding insurance companies.
Consultants are throwing gasoline on the fire with their advice to cheat, said Sen. Chuck Grassley (R-IA), who commissioned the report.
Consultants have taught providers several new ways to rip off insurers. These practices include not reporting or refunding overpayments from insurance companies and conducting unnecessary tests so the provider could document a higher level of care than actually needed.
In one case, a consultant urged providers to not return an overpayment discovered during a self-audit because it could bring a government investigation. The consultant also mentioned that instead of refunding the overpayments many practices just correct their billing processes so the overpayments appear legitimate in their paperwork.
According to another consultant, providers order unnecessary tests to bilk money from insurers. This practice gives a physician the documentation that supports higher-level care, which brings in even more money.
Physicians are also taught to divide the tests and workup between two visits and have a nonphysician, like a nurse, do the blood work and other basic jobs. Then the provider can see the patient on the second visit and talk about test results and other pertinent information, allowing the provider to bill at a higher rate.
Improper payments in government health programs, such as Medicaid, drain valuable resources hurting taxpayers and beneficiaries. Fraud in the federal Medicare and Medicaid programs cost taxpayers more than $34 billion in 1997. In fiscal year 2000, Medicare alone paid $11.9 billion in improper payments. With national spending on healthcare expected to rise to $2.2 trillion by 2008, the GAOs report is cause for alarm.
Lawmakers must intensify oversight efforts of conferences and workshops that give advice that increases fraud and abuse to ensure that Americans get the quality healthcare they deserve and taxpayers are not defrauded by unscrupulous providers.
If you would like more information, contact Keith Ashdown at (202)-546-8500 ext. 110 or by email at firstname.lastname@example.org. TCS is at www.taxpayer.net
What’s your view on stopping fraud? Why does the government fail to arrest the sponsors of fraud conferences? Tell your opinions to The Progress Report!
Jean-Yves Calvez, a French theologian and author of books on social issues, has written a book, Changer le capitalisme, on what’s wrong with capitalism and how to fix it. He focuses on the problem of economic inequality, and says that social justice requires a more equitable distribution of income. He also says that we need some balance between individualism and social solidarity or collective spirit. There is a tradition in the Catholic Church, including the Jesuits in the Church, of examining economic systems and proposing more just reforms.
Most proposed remedies for economic inequality consist of government restrictions on enterprise, such as dictating the hours and conditions of labor and setting legal minimum wages. The usual remedies proposed by social reformers include redistribution of income from the rich to the poor, and providing economic services such as medicine, housing assistance, and welfare aid for those with children. Education is already widely funded and provided by government.
Probably the greatest obstacle to economic reform is the use of the term “capitalism.” The American social philosopher and economist Henry George wrote that action follows thought. When we criticize “capitalism,” we need clarity as exactly what that is. Every economy uses financial capital and capital goods, so as an “ism” the word itself carries no meaning.
When one speaks of the problems of capitalism or changing and fixing capitalism, the term refers to today’s economic system. What is that system? Now that there are only one or two command economies left in this world, the countries of today’s world have mixed economies, a mixture of markets and government.
What is a “market”? A pure market consists only of activity that is voluntary for the whole society. Government then can play two different roles. It can be market-helping when it helps society be voluntary, such as by prohibiting and penalizing theft. Or, government can be market-hurting, as when government interventions restrict voluntary action or make it more costly.
When we propose remedies for social problems, there are two types of reforms we can have. One is to only treat the effects, the symptoms. The other approach is to determine the basic cause of the problem, and eliminate it, curing the problem so further treatment is not needed.
Remedies for inequality such as minimum wages, welfare aid, and income redistribution, only treat the effects. Since they do not confront the causes, the problems persist, and are made even worse by the interventions. We have massive intervention in almost all countries today, and poverty, gross inequality, unemployment, and pollution are still with us.
Redistribution penalizes production, consumption, labor, and investment, leaving workers and the poor worse off, requiring more redistribution in a vicious circle of welfare statism. How could we cure these problems? The effective remedy was discovered over 200 years ago by the French economists who called their discoveries “physiocracy,” meaning the rule of natural law. They showed that government interventions such as the taxation of trade hurt the market and thereby hurt workers and increase poverty. The natural economic law they discovered, and termed laissez faire, was that we get the greatest prosperity when we let the natural economy work freely, with no restrictions or imposed costs on peaceful and honest trade.
Another natural law they discovered was that the natural economy provides society with a “net product,” which economists now call a “social surplus.” This benefit from natural resources is reflected in the market rent of land. Use this rent for government revenue, said the physiocrats.
The founder of classical economics, Adam Smith, visited France and met the physiocrats and he too wrote that free trade provides for the maximum Wealth of Nations. Smith too said that land rent provides the best source of government revenue, as landlords reap where they don’t sow. The classical economist David Ricardo came up with a more precise theory of the “law of rent,” explaining how rent comes from the differences among the qualities in plots of land.
Karl Marx and his followers then came along and mucked up the language and thinking. Marx wanted to distinguish the workers from all those who owned assets, and so he lumped land into capital. From then on, most economists followed Marx in focusing only on labor and capital, and the physiocratic and classical emphasis on land was set aside. The neoclassical economic thought that followed the classical was encouraged to forget land, since this benefited the landed interests who financed them, and it also made the mathematical models easier if there are two rather than three factors. From now on, the system would be called “capitalism.”
But is capital a problem? Capital provides investment, and investment and better technology is what has raised living standards world-wide. “Capitalism” makes entrepreneurs and owners of capital the villains, whereas Ricardo’s law of rent shows that much of the gain from trade and technology go to the owners of land as rent, since wages equalize at the least productive margin.
Henry George sought to bring back the land factor. He recognized that the gross inequalities of wealth and income have always come from the unequal ownership of land. This was not a new discovery, but long recognized everywhere. In Progress and Poverty (1879) George cites the ancient Indian Brahmins: “To whomsoever the soil at any time belongs, to him belong the fruits of it. White parasols and elephants mad with pride are the flowers of a grant of land.”
George went beyond the classicals and physiocrats, adding a moral dimension to economics: that workers have a natural right to their own labor and wages, whereas since no human being created land, equality requires an equal sharing of its benefits, as manifested by the rent. Moreover, as land value is enhanced by government public works, it is just for that added rent to be paid back to finance the services.
The remedy for poverty and inequality is therefore clear. The inequality and depression of wages can be cured by equalizing the rent: either use it for public and government revenue, or else distribute it equally to the people. The remaining inequality from unequal wages will then be much less severe and is justified as a reward for human exertion, talent, and skills.
George’s policy is now being called “geoism,” geo meaning land. Geoism fixes “capitalism” by curing the cause of poverty and inequality, eliminating any need for government redistribution, welfare states, minimum wages. Geoism equalizes while also improving economic efficiency, eliminating the market-hurting taxes on wages, profits, goods, and investment. Geoism also harmonizes the individual with society, letting individuals keep their wages while providing the social solidarity of sharing in the natural benefits provided by nature and God.
Social reformers like Calvez, from all religions, have sought an economic system that is just as well as productive. If you believe that God has created the world and its human presence, then could it be that a just God would put human beings on earth without any means for an abundant economic life for all? That is unthinkable, and therefore there must be natural economic laws that provide for universal prosperity. Moreover, these natural laws cannot be so obscure that they cannot be discovered and easily understood by humanity. The law of prosperity has been in the Bible for over 2000 years: “The profit of the earth is for all” (Ecclesiastes 5:9).
The natural-law philosopher John Locke recognized back in 1690 that God had given the earth to humanity in common, and also that each human being, if he is not to be a slave to others, has a moral right to his own person and labor. The moral law that provides justice is thus in harmony with the economic laws that provide for prosperity: share earth and keep earnings. There is no need to equalize the ownership of produced goods if we equalize the ownership of the earth.
Capitalism today has market-hurting interventions that take away the earnings of labor to finance public works that redistribute the wealth to landowners as higher rent and land value. Social justice requires fixing and eliminating the interventions rather than hampering voluntary action. Once this great truth becomes recognized, then surely right action will follow righteous thought.
Copyright 2002 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.What are your views? Share your opinion with your fellow readers at The Progress Report!
Below is an “Economics Reporting Review” commentary by Dean Baker, who regularly finds mistakes and biases in the mainstream media.
by Dean Baker
Public opinion polls regularly show that a large percentage of the population does not expect to receive their Social Security benefits. This view is especially common among younger workers. This is a clear case in which the public is badly misinformed, because there is virtually no imaginable economic scenario in which the program could not pay benefits.
The media, including the elite media, deserve much of the blame for the public’s misperception. They routinely report on the Social Security trustees’ projected shortfall in a way that completely misrepresents the nature of the problem. The latest projections show the program being able to pay all benefits through the year 2037, with absolutely no changes. This is well beyond the projected lifespan of many workers who expect not to see their Social Security. The projections also show that even in years after 2037, if no changes are ever made in the program, it could still indefinitely pay benefits that are higher in today’s dollars than what current beneficiaries receive. Furthermore, the money needed to eliminate the shortfall altogether is less than the tax increases put in place in the decade of the fifties, the sixties, or the eighties. The notion that there is some horribly calamity confronting young workers at some point in the not too distant future simply has no basis in fact.
Articles in both the Post and Times this week contributed to the sort of fear mongering practiced by those who want to cut Social Security and/or Medicare. They gave prominent play to a new set of long-term budget projections by the Congressional Budget Office (CBO) which showed the budget falling into a deficit around 2022 and the national debt beginning to grow rapidly after 2030. This projection assumes that the costs of Social Security, Medicare, and other programs grow rapidly as the baby boomers retire and life expectancies increase with improvements in medical technology and overall affluence. Yet, in spite of the fact that people are getting more in benefits and the nation as a whole is much wealthier, no one ever is willing to raise taxes. The CBO reports shows that if this scenario continues for long, the nation will face big problems.
It is not clear what the news in this report is. This budget methodology used in this report would have shown a far more dire picture in previous decades that it does now. (Life expectancies increased in the fifties, sixties, and seventies also.) If this type of methodology had been taken seriously in the sixties, surely the nation never would have adopted Medicare or Head Start, since the long-term budget projections would have precluded such ambitious new programs. Most reports from CBO do not garner much attention. The extraordinary ratio of scare to information in the coverage of this report suggests that it would have been best to ignore it.
Much of the economic news is often reported from the standpoint of the minority who own a significant amount of stock. Several stories fit this bill last week. An article on the September employment data gave readers the “good” news that wages are barely exceeding inflation. Another article told readers that the taxes on stock options are “steep,” in the context of efforts to gain special tax treatment for stock options. Since the tax rates on stock options are the same that workers pay on wage income, they are no steeper than the taxes paid by the rest of us.
An article discussing the downturn in the stock market never noted that the Congressional Budget Office projects that corporate profits will actually shrink in real terms over the next decade. Shrinking profits over a sustained period would virtually guarantee a large decline in the stock market. It is strange that the CBO projections, which are treated as the holy grail in the context of budget debates, are completely ignored in other contexts.
Dean Baker’s Economics Reporting Review used to be published at www.fair.org — nowadays it is appearing at www.tompaine.com
What’s your opinion? Tell your views to The Progress Report!
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.
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.
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.
a study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.
the policy that the earth’s natural patterns suggests. Use the eco-system’s self-regulating feedback loops as a model. What then needs changing? Basically, the flow of money spent to own or use Earth (both sites and resources) must visit each of us. Our agent, government, exists to collect this natural rent via fees and to disburse the collected revenue via dividends. Doing this, we could forgo taxes on homes and earnings and subsidies of either the needy or the greedy. For more, see our web site, our pamphlet of the title above, or any of our other lit pieces; ask for our literature list.
the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.
a manual. The world did not come without a way for people to prosper, and the planet to heal and stay well; that way is geonomics. Economies are part of the ecosystem. Both generate surpluses and follow self-regulating feedback loops. A cycle like the Law of Supply and Demand is one of the economy’s on/off loops. Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus. Those profits without production (remember, nobody produced Earth) can become our commonwealth. To share it, we could pay land dues in to the public treasury (wouldn’t oil companies love that?) and get rent dividends back, a la Alaska’s oil dividend. Doing so let’s us axe taxes and jettison subsidies. Taxes and subsidies distort price (the DNA of exchange), violate quid pro quo by benefiting the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer (you don’t really need so much bureaucracy, do you?). Conversely, land dues motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves. Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature. Then in all that free time, maybe we could figure out just what we are here for.
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
about the money we spend on the nature we use. It flows torrentially yet invisibly, often submerged in the price of housing, food, fuel, and everything else. Flowing from the many to the few, natural rent distorts prices and rewards unjust and unsustainable choices. Redirected via dues and dividends to flow from each to all, “rent” payments would level the playing field and empower neighbors to shrink their workweek and expand their horizons. Modeled on nature’s feedback loops, earlier proposals to redirect rent found favor with Paine, Tolstoy, and Einstein. Wherever tried, to the degree tried, redirecting rent worked. One of today’s versions, the green tax shift, spreads out of Europe. Another, the Property Tax Shift, activists can win at the local level, building a world that works right for everyone.