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.
Asset taxation is proposed as a unifying position for Georgists, Libertarians, Objectivists, Greens, and Natural Law groups. A proposal that can be supported by all and employed to move the current government towards a more rational and illuminating position.
We all want to change things for the better, and we all have certain beliefs as to how to do so. Georgists/geoists tend to focus on the rights to employ land in the pursuit of one’s fulfillment. Libertarians tend to focus on the rights of the individual, and Greens focus on the environment. In each case we see policies formulated to directly address the issue(s) as perceived by the particular group. There is much to be said for conceiving a proposal in tax reform that can be supported by all of the 3rd parties and which can create a clearer picture of our economy and the issues which surround it. In this way it is possible to bring the power of the current manipulators to heel, and allow logic, reason, and justice to have a chance to persuade the public at large. The current and continuing debate over taxation and economics offers the inroad for public awareness.
The formulation of a cohesive policy in regard to federal taxation reform is probably the best means available for a concerted attack on suppressed individual rights, unearned privilege, and license to destroy the environment. The current proposal at www.geocities.com/CapitolHill/Congress/2578/ is a starting point for a reform that most 3rd parties can support and should support to clarify the economic picture and force the politicians to deal with issues instead of finessing them. It is politically feasible and can be enacted without destroying the economy or bringing undue hardship on any particular group.
Asset taxation is proposed to replace the current federal income tax and federal inheritance taxes with a 2% tax on the market value of all assets, including but not limited to land, improvements, licenses to use natural resources, and any and all properties that can be disposed of or rented to generate income to the owner.
The proceeds of this tax are absolutely limited to supporting federal government efforts in defense, law enforcement, and infrastructure (i.e. those government operations that make ownership possible). Other forms of taxation are relegated to financing social programs and any revenue generated therefrom cannot be used in support of defense, law enforcement, or infrastructure. But whether taxes other than those on land or assets are equitable or whether the federal government should have any social role at all can be debated outside the context of that which is generally agreed to be the primary role of government as supported by asset taxation.
This tax proposal is a beginning, and a means to clarify; it is not an end in itself. Whether the Single tax on land, or the removal of government from social programs, or the focus of government control on protecting the environment is at issue, the clarity imparted to government finances by this proposal is still “a step in the right direction”.
Given the backwards reform proposals being debated by Congress, it is difficult to see why all of the 3rd parties would not support an asset tax proposal along these lines as an alternative. And, if this is true, then together we would have enough foot soldiers to bypass the media and bring some real pressure to bear on our congresscritters.
Michael L. Coburn
What’s your opinion on asset taxation as a unifying issue for third parties? Tell us what you think!
There will be a big celebration of freedom in Las Vegas, May 13-15, 2004. Sponsored by Young America’s Foundation, FreedomFest will gather freedom lovers of many stripes. Some are more interested in financial freedom, others more concerned with civil liberties or issues such as immigration. Some are libertarians, others are small-government conservatists.
The theme is “Great Ideas, Great Books, and Great Thinkers.” It is promoted as an ‘intellectual feast’ where the world’s best and brightest libertarian and conservative authors, students, business people, and think tanks will meet, learn, create, and network.
Why are ‘libertarian’ and ‘conservative’ linked together here? Because American conservatism comes in two brands. There is authoritarian conservatism where big government is advocated to enforce traditional values and power relationships. This big-G conservatism is nationalist. Big-G conservatism values the flag, the military, traditional religious creeds, and strict order.
Then there is small-government conservatism, where the emphasis is on reducing government intervention in economic affairs. Small-G conservatives want lower taxes, less regulation, and less government intrusion. They may value tradition in their personal lives, but if government is involved in upholding tradition, they want it to be decentralized and not imposed at the federal level. The conservative element in FreedomFest is the small-government brand. Small-G conservatives are big on liberty, freedom, and individualism.
Last year’s FreedomFest had nearly 900 attendees and 60 exhibitors, and C-SPAN covered much of the event. This year’s speakers are awesome. John Stossel, of ABC news magazine and ’20/20″ news anchor, will speak to the general session. Ben Stein and Charles Murray will keynote the Liberty Dinner Banquets. Other major speakers include Texas Congressman Ron Paul, economist Art Laffer, technology guru George Gilder, Steve Moore of Cato and the Club for Growth, and FreedomFest organizer Mark Skousen, who teaches at the Columbia Business School and writes a financial newsletter as well as economics books.
Also speaking are David Boaz of Cato, psychologist Nathaniel Branden, economist Gordon Tullock, Reason magazine founder Bob Poole, Jason Sorens (head of the Free State Project to get libertarians to move to New Hampshire), professor and author Ken Schoolland, Libertarian Party past presidential candidate Harry Browne, and myself, Fred Foldvary on ‘Why We Don’t Need Any Stinkin’ Taxes.’
Freedom touches all areas of life and so attracts many people who have particular concerns but also support the liberty issues of others. But one group which is remarkably absent from FreedomFest is the movement founded by Henry George, the Georgists or geoists. Why is there no geoist booth or panel at FreedomFest? Why am I perhaps the only geolibertarian speaker?
The geoist movement has focused on justice rather than liberty. It emphasizes equality more than freedom. Geoists talk more about sharing earth’s bounty than about free trade. Most geoists do not identify with libertarianism and the freedom movements. Some who call themselves ‘Georgist’ are even anti-libertarian, opposed to free trade, and hostile to free markets, contrary to George’s own policy prescriptions.
This separation and even alienation of geoists from libertarians is tragic. Henry George himself praised liberty in Progress and Poverty, and indeed said we need complete liberty, not half liberty. George called for liberty in substance, in contrast to those who sing praises to liberty but do not support full liberty in all its particulars. Using rent for public revenue is inherently decentralist and freedom-promoting.
Most libertarians remain ignorant of rent. A few geolibertarians have promoted geoism within the Libertarian Party, but there is a gaping geoist absence in the freedom movement generally, which is much bigger than the libertarian movement. Geoists have missed the freedom train.
The freedomites will be influential in policy long-term because they have truth on their side. Liberty works, and long-term the logic of liberty has to win, because slavery is a loser. But freedomites need geoism to be complete. Libertarians have to go through contortions to figure out how to finance public goods, because they have no clue about rent. I’ll do my part, but we need more geoist troops in the freedom movement.
But unfortunately many geoist scholars as well as activists don’t fully trust liberty. They know land, but don’t truly know liberty. This goes back to Henry George himself, who misunderstood the new Austrian economic school of thought and did not himself fully believe in freedom for goods such as money. So the Austrian school rather than the Georgist came to dominate the freedom movement, even though, ironically, it was Henry George who sparked the anti-tax and anti-statist viewpoint of modern libertarianism via followers such as Albert Jay Nock and Frank Chodorov.
Today, too many geoists let George do their thinking on issues such as money, instead of following the prime Henry George directive, Think for Yourself!
So there I will be at FreedomFest, telling freedom lovers why they do not need to compromise with liberty when it comes to funding government. Many freedomites dislike taxes, but see a need for some governance, so they say, well, just keep taxes low and flat, and maybe switch from taxing income to taxing goods. I will tell them that we don’t need any stinkin’ taxes at all. We can get all the public revenue we need from land rent, and unlike sales and income taxes, rent does not stink. If you call it a tax, the land-value tax is sweet. LVT is not a stinking tax.
I prefer to call the use of rent a tap, like tapping water. Rent is a surplus flow that we can tap without any economic loss. Freedomites need to learn that tapping rent frees them from taxes that stink up the economy and makes folks slaves of the state. It’s an easy lesson to teach.
But teaching some geoists to value liberty seems to be a difficult sell. It’s curious, because geoism should be inherently liberating. If geoists do not get on board, the freedom train will eventually derail and there will be a tragic wreck. Maybe somebody here can explain to me why geoists have not gotten aboard the freedom train, because, frankly, I’m puzzled.
Copyright 2004 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.
We are pleased to bring you excerpts from an in-depth analysis of the crisis in Nigeria. The full article is made available through the news service of Foreign Policy in Focus. Foreign Policy in Focus has kindly granted us permission to share top articles with the readers of the Progress Report.
by Oronto Douglas, Von Kemedi, Ike Okonta, and Michael Watts July, 2003
Oil Corruption High; Living Standards Low
The mythos of oil wealth has been central to the history of modern industrial capitalism. But in Nigeria, as elsewhere, the discovery of oil, and annual oil revenues of $40 billion currently, has ushered in a miserable, undisciplined, decrepit, and corrupt form of “petro-capitalism.” After a half century of oil production, almost $300 billion in oil revenues has flowed directly into the federal exchequer (and perhaps $50 billion promptly flowed out, only to disappear overseas). Yet Nigerian per capita income stands at $290 per year. For the majority of Nigerians, living standards are no better now than at independence in 1960. A repugnant culture of excessive venality and profiteering among the political class–the Department of State has an entire website devoted to fraud cases–has won for Nigeria the dubious honor of #1 in Transparency International’s ranking of most corrupt states.
Paradoxically, the oil-producing regions within federated Nigeria have benefited the least from oil wealth. Devastated by the ecological costs of oil spillage and the highest gas flaring rates in the world, the Niger Delta is a political tinderbox. A generation of militant restive youth, deep political frustrations among oil-producing communities, and pre-electoral thuggery all prosper in the rich soil of political marginalization. Massive election rigging across the Niger Delta in the April 2003 elections simply confirmed the worst for the millions of Nigerians who have suffered from decades of neglect. It was the great Polish journalist, Kapucinski, who noted in his meditation on oil-rich Iran: “Oil creates the illusion of a completely changed life, life without work, life for free…. The concept of oil expresses perfectly the eternal human dream of wealth achieved through lucky accident…In this sense oil is a fairy tale and, like every fairy tale, a bit of a lie.” It is this lie that currently confronts West African oil producers and the Niger Delta in particular.
Since March 12, 2003, mounting communal violence has resulted in at least 50 deaths and the leveling of eight communities in and around the Warri petroleum complex. Seven oil company employees have also been killed, prompting all the major oil companies to withdraw staff, to close down operations, and to reduce output by over 750,000 barrels per day (almost half of national output). President Obasanjo has dispatched large troop deployments to the oil-producing creeks. Ijaw militants, incensed over illegal oil bunkering (in which the security forces were implicated) and indiscriminate military action, have threatened to detonate 11 captured oil installations. The strikes on the offshore oil platforms — a long-festering sore that is rarely mentioned in the media — were quickly resolved. Nobody seriously expects, however, that the deeper problems within the oil sector will go away. Relatively new to delta politics, however, is a series of assassinations, most notably that of Chief Marshall Harry, a senior member of the main opposition party and a leading campaigner for greater resource allocation to the oil-producing Niger Delta. Fallout from the Harry assassination has already become a source of tension in his native oil-producing state of Rivers. Supporters of the main opposition party, the ANPP, and another opposition grouping of activists and politicians, the Rivers Democratic Movement, have linked the ruling party to the assassination.
The Niger Delta stands at the crossroads of contemporary Nigerian politics. Despite the 13% growth of oil revenues to the delta states, the region remains desperately poor. The resultant deepening material and political grievances place the Niger Delta at the confluence of four pressing national issues in the wake of the April 2003 elections: 1) the efforts led by a number of delta states for resource control, which in effect means expanded local access to oil revenues, 2) the struggle for self-determination of minority people and the clamor for a sovereign national conference to rewrite the federal Constitution, 3) a crisis of rule in the region, as a number of state and local governments are rendered helpless by militant youth movements, growing insecurity, and intracommunity, interethnic, and state violence, and 4) the emergence of what is called a South-South Alliance linking Nigeria’s hitherto-excluded oil-producing states in a bulwark against the ethnic majorities.
Oil Companies Getting a Free Pass
What is most strikingly missing from current discussions of the security problems in the Niger Delta is the role of Shell and other powerful corporate international actors in deepening and sustaining the crisis. Several independent human rights organizations, most notably Human Rights Watch, have linked the oil company to the spate of killings, rapes, and intercommunal feuds that have crippled social and economic life in the Niger Delta since 1993. These human rights groups have also detailed the company’s links to powerful and corrupt Nigerian state officials. Moreover, environmental groups have documented the company’s unrelenting attack on the human ecosystem on which the local communities rely for sustenance. The fact that a case against Chevron was recently heard in San Francisco Federal Court speaks powerfully to these issues of corporate practice. Indeed, detailed local community studies in Nembe, Peremabiri, and Ke/Bille have documented the need for new forms of corporate accountability. Yet, not a single industrialized country consuming Shell’s oil has called for sanctions to be imposed on the oil companies operating in the Niger Delta. Any serious attempt to address the problem of alienation and militancy in Nigeria must focus globally, not just on the Niger Delta.
In a just world, all natural resource revenue belongs to all citizens. To see how this can be achieved for Nigeria, visit the Niger Delta Fund Initiative
In a just world, who would be first in line to benefit from the natural resources of Nigeria? Tell your views to The Progress Report!
The election mess in Florida and elsewhere has brought forth calls to reform the voting process. Some advocate eliminating the Electoral College, the current voting system, and replacing this with a direct election of the president by popular vote. That would be an unwise idea. Here’s why.
The founders of the U.S. Constitution were opposed to mass democracy for the presidency. Much of the public is ignorant, swayed by misleading campaign propaganda, and greedy for special favors. The popular vote also benefits those areas having larger voting populations, which creates an incentive to maximize the voter numbers. A state can get more voters by lowering the standards for voting, including loose standards which allow for voter fraud.
With the electoral college, each State (and the District of Columbia) selects a number of electors equal to the sum of its representation in Congress, the representatives in the House and the Senate. This gives a bit more weight to the small States, each of which have two Senators, just like the big States.
The system has degenerated to a winner-take-all method, where whoever wins in a state gets all its electoral votes. It would better represent the voters if each state split its electoral votes in proportion to the popular vote. That way, Florida today would have split its electors 50/50, and there would not be this mess of court challenges and revotes. Alternatively, each Congressional district could vote for an elector, and the State legislature would elect the two State-wide electors.
Many US voters don’t realize that in many counties, with paper ballots, their votes are not counted precisely. The counting is often statistical, since the machinery does not accurately count each ballot. If the election is not close, it does not matter. But if the election is very close, say within one percent, then the numbers reported are meaningless. It is statistically possible that the winner could have gone the other way.
Voting machines may not be the best solution, since they could be programmed to miscount the votes. That’s also the problem with voting via the internet. It’s difficult to test a computer program for fraud. With paper ballots, fraud is possible if ballots are invalidated or “lost,” but it is easier to witness the process.
The solution with paper ballots in close elections is to run the ballots by machine several times, and then take an average. Hand counting is absurd, being both time consuming and subject to bias.
The election in Florida needs statisticians, not lawyers, to decide the outcome. But in our Brave New America, the lawyers prevail. Judges will determine the outcome rather than statistical analysis.
The ultimate remedy for the problems of mass democracy is nested small- group democracy, as I have written about before. That would be another reason to keep the Electoral College. When democracy gets decentralize to the county level, or better yet, the neighborhood level, then the problems of mass ballot counting will disappear, since each voter will only vote for his neighborhood council. So the best direction of reform is not towards mass popular voting, but towards the other direction, to make the multi-level method even more extensive, all the way down to the neighborhood.
As it stands today, neither candidate has won the presidency, and any outcome will be arbitrary. We will have in effect elected a president by tossing a coin.
What is your opinion? Share it with The Progress Report! Copyright 2000 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.
Special Privileges and Favoritism Undermine Economic Freedom
NAFTA: A Cautionary Tale
We are pleased to bring you this article, made available through the news service of Foreign Policy in Focus. Foreign Policy in Focus has kindly granted us permission to share top articles with the readers of the Progress Report.
by Kevin Gallagher and Timothy Wise
At the end of this month, trade ministers from throughout the Western Hemisphere will gather in Quito, Ecuador for negotiations on the proposed Free Trade Area of the Americas (FTAA). Many FTAA proponents, including the Bush administration, herald the FTAA as a NAFTA for the Americas. Indeed, early drafts suggest that the proposed treaty is modeled closely on NAFTA, which took effect in 1994. Less clear is why the Bush administration believes NAFTA’s spotty track record will help sell the FTAA to wary Latin American governments.
The NAFTA debates of the early 1990s featured many rounds of dueling studies on the agreement’s anticipated impacts. Far less time, energy, or attention has been spent assessing those early promises and warnings, and even less evaluating whether Mexico in particular has benefited from the agreement.
Three years ago, we set out to study the social and environmental impacts of NAFTA and the broader economic integration process of which it is a part. We looked at data not just from the NAFTA period, but from the mid-1980s, when Mexico first began to open its economy. One of our goals was to inform future trade policies and treaties, such as the FTAA, so that developing countries could better assess the promise and the perils of entering into agreements modeled on NAFTA.
Consistent with the public record, our research suggests that Latin American and Caribbean governments should think twice about signing on to the FTAA in its proposed form.
Trade Without Development
It is widely accepted that the goal of economic integration should be to raise living standards. According to our review of the public record, NAFTA has yet to fulfill that promise.
Official figures from both the World Bank and the Mexican government show that trade liberalization has succeeded in stimulating both trade and investment, and it has brought inflation under control. Mexico’s exports have grown at a rapid annual rate of 10.6% in real terms since 1985, and foreign direct investment (FDI) has nearly tripled, posting a real 21% annual growth rate. Inflation has significantly been tamed.
Unfortunately, this growth has not translated into benefits for the Mexican population as a whole. The same official sources show that:
Economic growth has been slow in Mexico–less than one percent per capita per year from 1985-99–compared with 3.4% from 1960-80.
The increase in exports has been far outstripped by rising imports, leaving Mexico with a serious balance of payments deficit.
There has been little job creation, falling far short of the demand in Mexico from new entrants into the labor force.
The manufacturing sector, one of the few sectors to show significant economic growth, has seen a net loss in jobs since NAFTA took effect.
Wages have declined nationally, with real wages down significantly. The real minimum wage is down 60% since 1982, 23% under NAFTA. Contractual wages are down 55% since 1987. Manufacturing wages are down 12% under NAFTA.
Sixty percent of the employed do not receive any of the benefits mandated by Mexican law. One-third of the economically active population is in the informal sector.
The number of households living in poverty has grown 80% since 1984, with some 75% of Mexico’s people now below the poverty line.
Inequality has worsened, with Mexico’s Gini coefficient–the standard international measure of inequality–rising from .43 to .48 since 1984, putting Mexico among the most unequal nations in the hemisphere.
The rural sector is in crisis, beset by grain imports from the U.S., falling commodity prices, and reduced government support. Four-fifths of rural Mexico lives in poverty, and over half are in extreme poverty.
These figures make clear that economic integration in Mexico has come at the expense of development. Our own empirical research on the social and environmental impacts of integration contributes to this gloomy report card.
Environment: Accelerated Degradation
Our research runs contrary to the pre-NAFTA predictions that economic integration with Mexico would eventually lead to an upward harmonization of environmental standards and performance. Between 1985 and 1999, rural soil erosion in Mexico grew by 89%, municipal solid waste by 108%, and air pollution by 97%. The Mexican government estimates that the economic costs of environmental degradation have amounted to 10% of annual GDP, or $36 billion per year. These costs dwarf economic growth, which amounted to only 2.6% on an annual basis.
The surge in foreign direct investment (FDI) has largely failed to bring cleaner technologies to Mexican industry. Although the Mexican cement and steel sectors are now cleaner as a result of overseas investment, they are the exception not the rule. Industrial pollution as a whole has nearly doubled since 1988. Unless economic integration is coupled with strong environmental regulations and enforcement, pollution will only continue to worsen. Since NAFTA took effect, however, real spending on the environment has declined 45%, and plant-level environmental inspections have shown a similar drop.
Corn and NAFTA: The U.S. as “Pollution Haven”
Our research has also demonstrated that some of the most significant trade shifts under NAFTA have net impacts that are very destructive for the environment. In conjunction with Mexican researchers, we have studied the environmental impacts of the growth in U.S. corn exports to Mexico following the rapid elimination of tariffs. The surge in U.S. exports has put added pressure on poor corn farmers in Mexico. This has caused not only increased poverty and out-migration, but also threatens the rich stock of plant biodiversity cultivated by Mexico’s traditional farmers and relied on as a public good by the world’s crop breeders.
In environmental terms, Mexico’s loss is not the United States’ gain. The rise in U.S. corn production has provided a stimulus to some of the most environmentally destructive agricultural practices in the United States. Corn is very chemical-intensive, both in terms of fertilizers and pesticides. Recent expansions of corn production have taken place in some of the drier states, necessitating irrigation at unsustainable levels. It has also encouraged the recent rise in the cultivation of genetically modified corn, as the product is particularly designed to resist pests that are more prevalent in dry conditions. In effect, the U.S. is serving as a “pollution haven” for corn, with more environmentally destructive U.S. practices supplanting more sustainable practices in Mexico.
NAFTA: No Blueprint for the Americas
We have also carried out case study research regarding the manner in which Mexican civil society organizations in Mexico’s most vulnerable communities are responding to the challenges of economic integration. This research highlights how many Mexicans are being left behind by the economic integration process–maquiladora workers seeking health and safety protection, coffee farmers fighting falling international prices, basic grains farmers struggling against the flood of imports, community-based forestry cooperatives facing both economic and human rights issues, and poor communities trying to protect health and environmental standards challenged under NAFTA’s Chapter 11 investment provisions.
The conventional wisdom on economic integration is changing. In response to the hard facts, a wide range of Latin American governments, prominent economists, and civil society organizations are questioning the U.S. approach to economic integration. A vibrant debate among these actors will be occurring both inside and parallel to the official meetings in Quito. These critics do not deny that trade and investment are essential tools for development–the question is what kind of trade and investment, by what rules, and to what end. NAFTA’s track record in Mexico certainly does not bode well for Latin American and Caribbean nations desperate for change after over a decade of slow growth and worsening poverty.
Kevin Gallagher and Timothy Wise are researchers at the Global Development and Environment Institute of Tufts University.
The facts are in, and it is clear that NAFTA and similar special-privilege accords are destructive and harmful to community economies and individual freedom. What would a smarter, sounder trade agreement look like? Tell your views to The Progress Report!
Below is a response to Federal Reserve chair Alan Greenspan’s recent remarks, in which he said that Bush’s deficit was so big that drastic action needed to be taken. Greenspan got that part right, but then he recommended, instead of less war or less corporate welfare, a cut in old age pensions.
by Sam Smith
Alan Greenspan has given the effort to scare Americans out of Social Security another boost, aided as always by a non-critical press. NPR even reported falsely this morning that the Social Security trust fund would go broke in 2018 when in fact that date is only when it is estimated that expenses will exceed revenues. Here, once again, are a few facts to keep in mind as the robber barons try to steal your old age pension:
1. The trustees make three long-term estimates. The one that politicians and the media invariably use is the most pessimistic which assumes economic growth so low that you certainly wouldn’t want your Social Security invested in the stock market because it wouldn’t be going anywhere.
Using the more reasonable intermediate projection, the trust fund will not run out until after 2040.
2. The trust fund is an artificial accounting creation. If it runs out, then Social Security can be funded from other sources including the incredibly bloated military budget. To understand this game, imagine the defense budget came out of a trust fund. Would we stop defending ourselves when this fund was drained thanks to typical defense cost overruns?
3. While it is true that there will be an increase in older Americans in coming decades, there will also be a smaller percentage of younger Americans to educate and take care of. In considering public costs, it is the combination of these two — the so-called dependent population — that matters. Here is what you are not being told: the dependent population was larger during the Kennedy administration than it will be in 2020 during the Great Social Security Crisis. Here are the actual percentages of total population:
Children: 36% Seniors: 9% Total dependent population: 45%
Children: 24% Seniors: 16% Total dependent population: 40%
Incidentally, as of 2000, the total dependent population was 39%, so we’re talking about a one point increase.
In short, you are being conned on Social Security and the media is doing nothing to defend you.
Americans, except members of Congress, are forced to pay into the Social Security system. It is not voluntary. Is it fair then to change the terms of their payouts from the system? What’s your opinion? Tell your views to The Progress Report!
The psychological nature and the history of each individual are crucial in determining the difference in feelings of injustice from one individual to another. On the other hand, these feelings are not arbitrary or wholly random, and there are some configurations in the outside world which are more likely to be perceived as unjust than others. (We perceive injustice much more readily than we perceive justice, just as we perceive the absence of breathable air much more readily than we perceive its presence, which we take for granted.)
It is very important to inquire into the variables that are regarded as relevant to the perceptions of the level of justice in a society. There is a place here for empirical research. John Rawls argued at great length and with considerable persuasiveness that a sense of fairness may be the major value in the justice function, though I am not sure this does very much more than rename the concept. (John Rawls, A Theory of Justice (Cambridge, Mass.: Belknap Press, 1971).)
Rawls does suggest a very ingenious intellectual experiment as an aid to evaluating subjectively the justice of different societies. He asks us to imagine which society we would prefer to be born into if we did not know whom we were going to be. In the United States we might find ourselves being a sharecropper or a Rockefeller; in the Soviet Union we might find ourselves a prisoner in a slave labor camp or a member of the Politburo. The trouble with ferreting out this sort of information is that most people would probably vote for their own societies because they are more familiar. We tend to prefer the devil we know to the devil we do not.
Any attempt to identify the variables of the justice function will conclude that equity is one of the components. This in itself is a complex concept with a number of definitions. Perhaps the most important definition would be equal treatment for equal cases. In terms of the law this means that the same crimes should get the same sentences, that people having the same responsibilities should pay the same taxes, that there should be no arbitrary discrimination in jobs or promotion because of characteristics which are irrelevant to the situation. Just what is irrelevant of course may be a tricky question. The movement against racial, sexual, and religious discrimination is clearly motivated by a widespread feeling that the arbitrary exclusion of certain groups from some of the benefits of society cannot be justified. Discrimination oddly enough represents the failure to discriminate, the failure to treat like cases alike and unlike cases unlike, which is a violation of the fundamental principle of equity.
A further pursuit of the principle of equity suggests the further principle of equality of opportunity. This is a very intricate problem, simply because it raises the whole question of inheritance and the right of the family as against the larger community and the rights of property owners in general. Inequality of opportunity arises simply because people are born into different families. A baby born into a rich family, with well-educated and well-financed parents, is likely to have a better chance to develop her or his full potential than a baby born into a family on the edge of a shantytown.
Most of the wealthier societies seem to attempt to offset the impact of family inheritance by providing a social inheritance in the shape of free public education, headstart programs, aid to dependent children, and so on, but in no country do these public programs more than offset to a small degree the enormous inequality of opportunity that arises from the differences in the status of each family. This is just as true in socialist countries as it is in the free market world. Children born into well-placed families will have much better chances of rising to a prominent place in all societies than children born of peasants, dissidents and sectarians.
On the other hand, virtually all societies are reluctant to abandon the family as an instrument of transmission both of nutritional and genetic structure and of social knowledge and skill. We have here a clear example of the conflict of equity with other values, and there has to be some kind of a tradeoff. One of the principles of normative science is that no particular values are absolute, and the tradeoff problem is universal.
Another principle, not to be confused with the principle of equality of opportunity, might be called the principle of full realization of potential. Every baby is born into the world with a certain genetic potential for growth, knowledge, skill, love, happiness, and so on. For the vast majority of babies, perhaps indeed for all, this potential is never fully realized because of the limitations of poverty, lack of skill of the parents, unfriendly environments, poor education, restriction of information, and so on. Where there is a strong sense of the nonrealization of human potential because of the environment of the person, there is a sense of injustice or at least dissatisfaction.
The realization of human potential, however, may be much more a function of the average wealth and status of the society than it is of any internal distribution. A society may be egalitarian in the sense that every baby born into it has about the same set of opportunities, and yet these opportunities might be highly restricted by the general poverty or cultural pathologies of the society. The overall level of riches, competence, skill, and productivity of the society is an important element in the justice function. This is something beyond equity, which is concerned primarily with distribution.
We must be careful, however, of the conventional measures of the overall level of development in society, such as the per capita GNP. The human being has great potential for evil and pathology as well as for goodness and health. There has to be a critique of the kind of potential which is realized. The society with a high GNP per capita may be full of alienated, strife-ridden, miserable people, and the society that is much poorer as measured by income may produce healthier, more interesting, more fulfilled persons. Yet there is at least a rough relationship between riches and the capacity to fulfill the potential, even though the potential may be misused.
Attempts have been made to define equity in terms of envy. (H. R. Varian, “Distributive Justice, Welfare Economics, and the Theory of Fairness,” Philosophy and Public Affairs 4 (1975): 223237.) This, again, is very tricky. Envy, like all the deadly sins, tends to have a nonlinear, somewhat parabolic relation with goodness. A little envy may be a spur to achievement, but envy can also become a corrosive and utterly destructive emotion, producing neurosis and internal decay. The demand for equality which is made solely on envy does not strike me as very satisfactory as the foundation for a good society. The radicalism which arises from hatred and envy of the rich has very different results from that which arises from compassion for the poor.
Another source of frustration in the demand for justice is what I have called the illusion of the pie. This is a metaphor beloved by economiststhat there is a static pie of goodies which is divided among the members of the society, presumably by a rather skillful wielding of knives. In this case the only way to help the poor would be to take away from the rich.
Reality is much more complex. There is no single pie, but there is a vast pattern of little tarts, each growing or declining at its own rate. The growing ones get richer; the declining and stationary ones get poorer. Some may stabilize at a good level; others may stabilize at a level of misery. This is not to say that greater equality cannot be achieved by redistributionthere is some spooning from one tart to anotherbut it is difficult, and it is easy to destroy more than we distribute.
Equality in an absolute sense would be advocated by nobody. On the other hand, it is very clear that there are degrees of inequality in a society which threaten its legitimacy and stability. Again, we can use the Rawis experiment to ask, Would you rather live in a society in which everyone was equally poor or a society in which some people were as poor as in the first one but others were rich? Most people would opt for the latter. They prefer some chance of being rich to no chance of being rich.
But, on the other hand, suppose we had to choose between a society in which some people were desperately and miserably poor and others were excessively rich and a society in which there was a floor of poverty, so nobody was allowed to fall into destitution even though others might be rich. Then we would almost certainly vote for the second. We would rather have a society where there was no chance of being desperately poor than one in which there was a chance of being desperately poor even though there was also a chance of being filthy rich. What seems to emerge from this discussion is that a moderately unequal society, where there is a floor below which nobody falls, seems to get high marks and should be able to establish a substantial legitimacy and internal stability.
This essay is extracted from Kenneth Boulding’s book, Stable Peace.
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The USA is in the thick of the primary voting season. The party elections have been effective in narrowing the field of candidates. The parties will choose their candidates, and the voters will elect a president. But the important outcome is not government officials, but policy. How effective is our voting system in producing effective social, economic, and foreign policy? There, in my judgment, the system fails. That it is better than a dictatorship is small consolation.
When the world moved from the paradigm of kings to that of democracy, the electorate was small. Only free men with property voted. But confining voting to a few contradicted the premise of democracy, rule by the people, so voting was extended to most adults. Meanwhile, the population grew. So the unintended consequence of shifting sovereignty from kings to the people was mass voting.
One problem with mass voting is mass balloting. In the US, card ballots have been problematical, as errors are made in punching and counting the ballots, and there can be fraudulent ballot stuffing, or ballots which mysteriously disappear. Many states used mechanical voting machines, which are also subject to fraud. The states have been moving to electronic voting. But touchscreen voting can also be rigged, especially when there is no paper record. Hackers can break into the systems and change the results, with no way to trace it.
Even when there is no fraud, mass voting creates a demand for mass media messages. Candidates do raise funds from individuals, but the more money, the better, so this opens the field to special interests to help finance campaigns. The elected officials then have to pamper these interests in order to get financed again next time. This leads to agricultural subsidies, tax loopholes, and other privileges and favors. The main problem is not specific subsidies, but that the entire structure of public finance is destructive. The landed interests prevent rent from serving its natural function to pay for civic goods, and so we get a zoo of taxes too complex for any single mind to comprehend.
Humanity went down the wrong path when parliaments shifted from advisory councils to the king to representing the people as the ruling body. Government became centralized because the logic of mass democracy leads to centralized power. When the people cry for bread, a strong centralized monopoly government is most effective in extracting the tax revenue.
Consider mass farming. When millions of farmers produce the same type of wheat, small local markets are not effective. Mass farm production requires central commodity exchanges, where bids to buy are matched with offers to sell, setting a price for that moment, which becomes the world price. Mass commodity production requires central commodity exchanges.
The logic of mass voting leads to centralized markets for legislation, where big special interests bid for political favors. We not only get political conflict, but mass propaganda. The masses are ignorant and vulnerable to slogans and image making. Voters are swayed by candidates who seem to sympathize with their concerns, such as jobs. Candidates who utter goals get votes. Voters don’t seem to notice that the candidates don’t tell them how they will reach that goal.
Cellular democracy — small-group bottom-up multi-level voting — overcomes these problems. Anciently human beings lived in small clans and villages, and this is our natural political scale. Neighborhood councils do not need touchscreen voting, since the number of votes is only a few hundred at most. There is no need to spend much money. The voters can know the candidates personally and feel that their vote really counts. The rest of the government is elected from lower to higher level councils. This gives the bottom voter more power, through leverage.
To achieve this will require that one of the small political parties adopt cellular democracy. Some have been interested in proportional representation, which has its merits, but this is still mass democracy. We need political power to the people, not power to the political parties.
Will the Green Party or the Libertarian Party take up small-group voting? Activists in these and other small parties should bring the idea to their conventions. If one party adopts this in their platform, it will start the dialog on fundamental political reform. Start locally, getting your county committee to adopt it, then bring it to the state level, and finally to the national level. Once a political party adopts this, then voters will have a choice of not just candidates and policy positions but on whether to fundamentally reform the whole structure of government. The party which first adopts cellular democracy will be the vanguard. Which party will it be?
Copyright 2004 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 Property Tax is Messy — Simply Tax Land Value Instead
Why on earth not put a tax on land?
Here are portions of a remarkable article that first appeared in the Financial Times.
by Martin Wolf
“Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains – and all the while the landlord sits still . . . To not one of those improvements does the land monopolist, as a land monopolist, contribute . . . He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.”
Thus did Winston Churchill explain, in 1909, the morality and the efficiency of taxing land (or pure location), rather than development. It is moral because owners, as owners (rather than managers or developers), contribute nothing to land’s value. It is efficient, because taxing land distorts nobody’s choices. On the contrary, a tax on site values encourages owners to use what they own more efficiently.
Always desirable, a land value tax is now an idea whose time has come. As John Muellbauer of the University of Oxford notes, a tax on site values has the following hugely desirable features in contemporary Britain: it offers a tax base that cannot run away, unlike capital or labour; it encourages desired development; it imposes the greatest cost of holding undeveloped land where prices, and so values in alternative uses, are highest; it captures for the public purse a part of the benefits accruing to landowners from those investments in infrastructure and other amenities made by the public sector; and it makes the cost of speculation higher, improving the country’s allocation of resources.
Uniform site-value or land-value taxation is a “no-brainer”. But what makes it particularly attractive today is its superiority to other taxes now imposed on property.
The council tax and the uniform business rate are imposed on land that is both occupied and developed. These taxes encourage dereliction and discourage development. Council tax has the additional disadvantage of being imposed at higher rates on the cheaper properties in poorer places, thereby reinforcing the perverse regional effects of differential user costs of housing. Again, stamp duty, now at the steep level of 4 per cent on properties worth more than £500,000, is a tax on transactions. But why would anyone wish to lower mobility and reduce liquidity in this way?
What the UK needs, then, is a national tax on the value of land holdings. As is pointed out in the interim report on housing supply by Kate Barker of the Bank of England’s monetary policy committee, discussed here a fortnight ago, Denmark does already imposes just such a tax.
If, as seems plausible, the country should move in this direction only cautiously, the obvious place to start is with the uniform business rate. Prof Muellbauer suggests we could reform the business rate by halving the rate and replacing the lost part with a land value element. A floor value might be set at, say, £10,000 a hectare, which would exempt most farmland. He also suggests that a tax below 1 per cent a year would be sufficient.
What are the objections to such a modest reform? One would be that it is hard to value the land component in property values. But insurance valuations might be used to place a value on structures, in which case land value is simply total value less the value of the structures on it. Another objection is that such a tax would impose cash costs on people with no incomes. A possibility here, also applicable to current discussions of reform of council tax, is to roll up tax and recoup it when the asset is sold, developed or bequeathed.
In the long run, a national land value tax, at a uniform rate, seems at least a partial substitute for council tax as well. For the moment, however, the big point is that the taxation of property is a mess. This is one reason the housing market and regional policy work so poorly. National land-value taxation is a part of the solution. It is both fair and efficient. It should be adopted.
It’s Yours, But You Have to Pay a Private Company to Access It
Of course one needs to pay to maintain forests and keep them in good condition. But should one have to pay simply for access to one’s own forest? How about the parking lot at the edge of the forest? Should that be a monopoly?
These questions can get complicated. However, the extreme government practice of charging individual taxpayers for a walk through a forest, while paying millions of dollars to private corporations to log in those forests, is clearly ridiculous.
From the Times-News of Twin Falls, Idaho:
Time to make a stand against stiff forest fees
Our view: Congress can start now in dismantling the excessive taxation of forest access fees. Members of a U.S. Senate committee have an opportunity to make a statement about the future of the fee demonstration program.
It’s time Congress recognized the pay-for-play program on most of our national public lands is a failure — and un-American to boot.
S. 1107, sponsored by Sen. Craig Thomas, R-Wyo., is called the Recreational Fee Authority Act. The bill calls for access fees to be made permanent in lands operated by the National Park Service. The bill mentions nothing about permanent access fees for lands managed by the Forest Service, Bureau of Land Management and U.S. Fish and Wildlife Service.
Not yet, that is. Officials from the Departments of Agriculture and Interior are lobbying hard to make access fees permanent in all four agencies, as well as the Bureau of Reclamation.
Congress’ best route would be to end fee demo once and for all.
Thomas makes a reasonable pitch at permanent fees in national parks. Tourists and park users have become accustomed to park fees, which go toward trails, roads, signs, maps and other services.
But permanent fees for a walk in the forest, or common use of a trail, are different. There are fewer services with those lands, which are already subsidized by federal taxes. Paying those taxes, along with additional access fees, is nothing less than double taxation.
Under new rules which go into effect April 6, BLM land users without valid access passes may be subject to a maximum $5,000 fine and six months in jail for noncompliance (as opposed to the current $100 penalty). All for not paying a $5 parking fee on a BLM trailhead.
What’s apparent with this tougher law is that more of the public is refusing to pay the fee. So the government is growing longer fangs.
At a minimum, the committee should refuse any effort to make the fees permanent outside of national parks. Idaho Sen. Larry Craig was leaning that way recently. “We aren’t going to attach other fees to this bill,” said Dan Whiting, a spokesman for Craig. Whiting added that as chairman of the Subcommittee on Public Lands and Forests, Craig wants to have hearings on the impact of forest fees.
“He isn’t interested in giving the Forest Service blanket authority to deny people access to public lands,” Whiting said.
The Senate may be able to shoot down any effort to get that blanket authority this week. But those agencies will be back looking for it before long. The best way to stop them is to end the fee demo program — and end it for good.
Some reasons to oppose forest access fees, according to freeourforests.org
1. Our public lands are our heritage and our birthright. We own these lands. They are not a recreational commodity.
2. We already support the public lands agencies and our public lands through our federal taxes. Furthermore, hunters, fishermen and others pay liscensing fees on top of access fees and taxes. This new fee amounts to nothing more than double – or even triple – taxation.
3. The act of paying fundamentally alters the way one relates to the outdoors. People won’t feel the reponsibility of being on their own land. Rather, they will feel like they are visiting Disneyland where someone else is being paid to clean up after them.
4. Fee Demo has nothing to do with the stewardship of public lands. It is, in fact, the beginning of an attempt by corporate America to privatize and commercialize our public lands.
5. Businesses that sell passes are selling-off our freedoms. These vendors make a profit from the loss of one of our basic rights as American citizens: our right to access our public lands.
6. Making the public pay a fee to use its own public lands, while at the same time providing federal subsidies for timber, cattle, and mining interests on public lands, is not only illogical, but immoral.
7. The American people should not have to pay again for wilderness areas where there are no man-made improvements, where they don’t want any improvements, and where there shouldn’t be any improvements.
8. People need a place to go – relatively free and un-fettered from society’s pressures. Our public lands are the last of these places, and Fee Demo destroys this ideal.
9. Requiring a fee to use wilderness while cities are free is the same as saying that we are not a part of the natural world – we don’t belong out there.
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Even while Gandhi was with the ambulance corps he began to receive pleas to return to Johannesburg where an ordinance had been proposed requiring Indians to be fingerprinted, regis- tered, and to carry identification cards at all times. Failure to do so was to be punishable by prison, heavy fines, or deportation.
The purpose of the ordinance was to prevent more Indians from entering the country by having the present residents clearly identified. But Gandhi’s reaction was, “Better die than submit.” Back in Johannesburg, he summoned the Indian leaders and explained that the proposed ordinance was degrading and only a first step toward driving all Indians out of the Transvaal. The Indians had to fight back, Gandhi said, but as yet he did not know how.
A mass meeting was held in an old theater on September 11, 1906. By then Gandhi had helped frame several resolutions containing the essence of his resistance movement. The critical proposal stated the Indians would not submit to the ordinance if it became law, and would suffer all the penalties.
Gandhi warned the Indians they would be jailed, beaten, fined, deported. “But. ..so long as there is even a handful of men true to their pledge, there can be only one end to the struggle, and that is victory,” he said. Every man at the meeting pledged before God he would never submit.
In this photo, Gandhi is seated (center) in front of his law office in Johannesburg, South Africa, about 1902.
Having spawned a movement, Gandhi now sought a name for it. He disliked the term “passive resistance.” To him it signified a weak and defenseless minority which would use arms if they were available. At the suggestion of a cousin he finally called his campaign satyagraha, a combination of two words meaning truth and force. Gandhi’s battle was to be fought with force born of truth and love. His soldiers were to be known as satyagrahis.
The ordinance, which the Indians called the Black Act, was passed and went into effect in July, 1907. Indians picketed the offices at which they were supposed to register, and when only about five hundred of the thirteen thousand Indians in the Transvaal complied with the new law, the authorities decided to act. They arrested one Indian as an example to the others. To their amazement he instantly became a hero and others clamored to join him in jail.
The authorities obliged by arresting the leaders of the satyagraha movement, including Gandhi, thinking this would intimidate and disperse his followers. But Gandhi, pleading guilty in the same court where he had often appeared as counsel, asked for the maximum sentence; the others followed his example.
Gandhi’s first jail term was brief. He was soon summoned by distraught officials to a conference with the Boer leader, General Jan Christian Smuts. Since there had been no time to change his clothes, Gandhi faced Smuts in his prison uniform.
Smuts offered Gandhi a compromise. If the local Indians registered voluntarily to prevent more immigrants from “flooding” the country, Smuts would repeal the offensive Black Act. Gandhi agreed, and he and the other political prisoners were released.
At a mass meeting in Johannesburg, Gandhi was asked what would happen if Smuts betrayed him. “A satyagrahi bids good-bye to fear,” he replied. “Even if the opponent plays him false twenty times, the satyagrahi is ready to trust him for the twenty-first time, for an implicit trust in human nature is the very essence of his creed.”
To set the example, Gandhi wanted to be the first to register voluntarily, but on the way he was severely beaten by Moslems who felt he had betrayed them. But he asked that his assailants not be punished and that the blood he shed help bind the Moslems and Hindus closer together. It was a prayer he offered often and in vain.
A more painful blow awaited Gandhi, however, for Smuts went back on his word and refused to repeal the Black Act. In reply, the Indians met in the Hamidia mosque in Johannesburg on August 16, 1908, and burned over two thousand registration certificates in a giant cauldron. British reporters who were present compared the event to the Boston Tea Party. Nearly thirteen thousand unarmed Indians were boldly defying the government of the Transvaal.
The next step in Gandhi’s civil disobedience campaign was to challenge legislation barring Indian immigration. He had a group of Indians cross from Natal to the Transvaal. When they were jailed, sympathizers in both colonies tried to get arrested with them. Gandhi was imprisoned for the second time and served as cook for seventy-five prisoners, for whom it was a special hardship since he cooked without condiments. “Thanks to their love for me my companions took without a murmur the half-cooked porridge I prepared without sugar,” he wrote.
Gandhi was freed in December, 1908, and rearrested for a three-month term beginning in February, 1909. He spent most of his time in prison reading, and Smuts generously sent him two religious books.
However the volumes that greatly influenced Gandhi at this time were Henry David Thoreau’s Essay on Civil Disobedience, which Thoreau had written after being jailed for refusing to pay taxes to a government he would not support, and The Kingdom of God Is Within You by Leo Tolstoy, in which the great Russian writer demanded that men live as Christ directed. Gandhi and Tolstoy corresponded until the Russian died in 1910. In his last letter Tolstoy wrote the Indian leader, “That which is called passive resistance is nothing else than the teaching of love…”
The Boers were less lyrical about it, however, and when the jails overflowed with satyagrahis, they began to deport the Indians. At one time twenty-five hundred of the Transvaal Indians were in prison and another six thousand had fled or been expelled.
The arrests and the agitation began to attract the eye of the world, and the British Empire squirmed uncomfortably. Gandhi, out of jail again, used his newspaper, Indian Opinion, to further press his cause. When he realized that the four colonies were going to be fused into the Union of South Africa, he went directly to London to lobby for Indian rights.
He won publicity and sympathy but little else. The British who tried to mediate between him and the Boers reported that the whites felt “to maintain the racial bar is a matter of principle…” While he was in England, Gandhi found time to explore Britain’s relationship with another colony, India, and on the long voyage back to South Africa he wrote a booklet called Hind Swaraj, or Indian Home Rule, which foreshadowed the campaign that would make him immortal.
Seeing no end to his struggle in South Africa, however, he searched for a home for his disciples when they were not in prison. His movement was generously financed by wealthy Indians, but one of the most faithful of his followers was a German industrialist named Hermann Kallenbach. Kallenbach bought eleven hundred acres of land near Johannesburg and gave them to Gandhi, who founded a settlement called Tolstoy Farm.
Men, women, and children, Hindus, Moslems, Christians, and Jews, lived at the farm with equal rights and equal responsibilities. Smoking and liquor were banned, and the few meat-eaters voluntarily became vegetarians. Anyone who had to go to Johannesburg walked over twenty miles each way. This saved a fortune in train fares and provided ample exercise, which pleased Gandhi, who in his medical views was a self-confessed quack. He believed a light diet, plenty of exercise, and a mud pack would heal anything.
In 1912 Gopal Krishna Gokhale, a prominent Indian leader, came to South Africa to investigate Indian grievances. He was graciously received by the Boers, who were lavish with their promises. “Everything has been settled,” Gokhale told Gandhi. “The Black Act will be repealed. The racial bar will be removed from the emigration law.” Smuts had even promised Gokhale that the annual tax on serfs who became free laborers would be lifted.
This time it was Gandhi who said, “I doubt it very much,” and this time it was Gandhi who was right. The Boers again went back on their word. The following year insult was added to oppression when a judge ruled that only Christian marriages would be recognized as legal, thereby invalidating every Hindu or Moslem wedding ceremony.
The satyagraha campaign, which had been dormant, suddenly revived. Women had never before participated; now they insisted on challenging a ruling which dishonored almost every Indian wife. Gandhi examined his armies and his weapons carefully and then laid his plans.
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.
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Amazon Gives Up on Competition, Free Markets — Seeks Privilege Instead
Loss-making Amazon turns to bullying
For some time it has disturbed us to see some corporations turn away from providing goods and services, choosing instead to seek special privileges (economists call it “rent-seeking”). You have probably heard of amazon.com. That company applied for patents and recently received them for (a) the concept of getting someone else to offer links to products selling on your web site, and (b) the concept of clicking a link to buy something (as opposed to filling out a lot of information over and over when they already have it on file).
Yes, this is ridiculous. It is also very serious. Amazon now appears to be legally able to ban others from using these concepts, or can charge them rent for doing so.
It’s hard to find a story summarizing this situation, but here is a recent article from the Irish Times that helps a lot.
by Karlin Lillington
MAYBE it’s those continuously absent profits that have warped the company’s attitudes. Whatever the cause, book-to-kitchen-sinkseller Amazon seems to be manifesting some serious corporate personality defects. In short, Amazon is acquiring the attitude and intentions of an Internet bully.
This week, Amazon stunned and angered Web users by copyrighting its affiliate programmes technology. This programme allows website owners to earn a small commission by linking to the Amazon site, thus steering potential customers in Amazon’s direction.
Many sites, such as music seller CDNow and Pets.com, use the same basic affiliate programme technology.
This isn’t the first time Amazon has thrown its considerable weight around.
Last year, it took out a patent on its “One-Click” technology, which allows a registered customer to buy items at a single mouse-click by accessing stored purchaser details. Amazon immediately filed suit against its main book-selling competitor, BarnesandNoble.com, for patent infringement. Barnes and Noble uses a similar system.
That suit is still pending, but in the meantime, Amazon has managed to get an injunction against BarnesandNoble.com to desist from using the technology until the suit is decided. What a bully.
Amazon says it doesn’t yet know what it will do with its new patent, which could allow it to charge all other sites for using the technology, or force them to develop different programmes. Indeed, patent lawyers quoted this week believe Amazon competitors will have significantly to alter their existing affiliate programmes to avoid a clash with Amazon’s copyright. Many of these copyright specialists clearly were startled that the US patent office issued copyright protection for either of these technology systems.
Amazon’s comments, especially in light of its odious OneClick activities, are utter tosh. Why else would the company patent this process, except to benefit from it? One doesn’t need to be a five-star general to see that the copyright offers two strategic advantages to Amazon in its battle for customers.
First, the company could license its technology and beef up its non-existent profit margins by raising revenue from other companies that wish to use it. Or, the company could retain sole control of the selling advantage it gains through the use of these technologies.
Either way, the company is narrowing the scope of how online retailers can provide better service to customers. More insidiously, the company is selfishly demolishing some of the basic fabric of the Web – the founding concept that most technologies are shared and become the basis of new developments and positive gains for all.
Now, if Amazon could realistically claim that it had developed a highly unique technology – outstanding intellectual property for which it deserves recognition in the form of copyright protection – one could grant that it might have a case. But that does not, even by a long stretch of the imagination, seem to be the situation. As industry commentator and programmer Dave Winer argued in an angry column this week: “On a brilliance scale of one to 10, the Amazon affiliate idea is a zero. It’s a repurposing of multitier marketing, and has been in wide use for decades. All they did was apply that idea to the Web.” As another industry analyst said this week: “Are they going to patent air next?” He believes the patent will be challenged quickly in court.
The greed of Amazon points to a larger issue. In recent months, many commentators and industry figures have expressed concern that the US patent office lacks the expertise to evaluate the uniqueness of technologies submitted to it. Companies have rushed to copyright technologies either in the hope that they’ll be able to impose licences, or out of fear that they might miss out on this potential revenue-stream competition-crushing trend of the future – especially as the Web remains a largely unprofitable place for retailers.
More broadly, there are general fears that a proliferation of copyright will stall the development of new technologies and the growth of the Web’s capabilities, as programmers and companies become enmeshed in a legal tangle of licences and obligations.
Two points seem appropriate here. First, the US courts established back in the 1980s that most technological developments build on general, unpatentable concepts widely applied, refined, reused, and integrated. This point was firmly made when the courts famously rejected Apple Computer’s claim that with the Windows operating system, Microsoft, had stolen Apple’s unique “look and feel”. If Amazon’s patents are challenged, precedent seems to dictate that it will lose. But must we really introduce an additional, unhappy element of litigation, and stifle innovation except in the case of those with large bank balances and smart lawyers?
Second, the Internet owes most, if not all, of its initial development to a community-based spirit of making things possible. Historians have noted that had early Net pioneers copyrighted their contributions to the Net’s development, they could be extraordinarily wealthy – yet they chose not to.
Alternatively, they might have made nothing because, over time, others likely would have tried to work around their patented solution. Happily, the Net’s architects seem uniformly to have agreed that certain aspects of technology cannot or should not be patented because they build on widely-understood concepts and/or because they advance general knowledge and capabilities.
In the face of this ideological tussle underlying the Amazon patents, the growing interest in “open-source” software such as the Linux operating system represents an extraordinary back-to-the-future spirit. Open-source programmes are unpatented, and their computer code is placed into the community domain for further development (see www.opensource.org for more information). As the Web grows almost grotesquely commercial, harking back to the community-mindedness that built the Web is at the very least, Quixotically admirable. But don’t underestimate the power of community. As Microsoft clearly fears in the case of Linux, the open-source movement may well shatter some of the increasingly selfish economies of the Web and help end Amazonian-style patent profiteering.
Karlin Lillington is a frequent writer on technology subjects. We think he got “copyright” confused with “patent” a couple of times, but you get the main point.
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The International Monetary Fund is lending many billions of dollars to the governments of East Asian countries, where banks and other companies have failed. The governments of the United States and other wealthy industrialized countries are pouring ever more funds into the IMF to make these loans, money that comes from the taxpayers. The question is, why should an American or British taxpayer have to bail out some investors who lost out? Even worse, why should taxpayers bail out politicians who followed foolish policies? It not only forces taxpayers to subsidize greed and corruption, but these bailouts are getting bigger and bigger. The problem with a lender of last resort, like the IMF, is that when it too fails, when all the past bailouts finally bring down the biggest bank, then the entire system, the entire global economy, will collapse in a depression far worse than that of the 1930s. To avoid such a disaster, the IMF should be terminated.
The IMF was set up in 1945 as part of the Bretton Woods international monetary agreement that established a new global money and banking system. The United States dollar was to be internationally convertible to gold at $35 per ounce, and other countries fixed the value of their currencies relative to the dollar. If a country had a temporary shortage of dollars, they would be able to borrow from the IMF.
The Bretton Woods system was unsustainable, because as the US dollar inflated, other countries traded dollars for gold, and gold was flowing out of the US treasury. In 1971, the US stopped the gold convertibility, and the world went on a floating exchange rate system, where the values of currencies are set by market supply and demand. Some developing countries, such as in East Asia, tried to keep their currencies tied to the dollar or other major currencies, a policy that provides short-run stability but eventually leads to massive distortions and the devaluations that have taken place.
With the floating system, trade imbalances can be made up for by changes in the relative values of floating currencies as well as movements of currency. IMF changed its mission to become an international bank that made short-term loans to governments. For example, during 1992-3, the Latvian government had to purchase oil from Russia for heating during the winter. Previously, the oil was provided at highly subsidized prices, but no more. Folks in Latvia could not afford the market price for oil, so the government borrowed from the IMF.
But IMF loans come with strings and stings. The IMF told the government of Latvia to increase sales taxes. These were bad for business, but the IMF had the country over a barrel. IMF conditions usually result in austerity and hardship for people as they require higher taxes on income and sales, and lower spending for social programs. Some of the aims of the IMF conditions are sensible, such as balancing the government budget and stopping high inflation. It is the way these are to be accomplished that is the problem. The IMF does not recommend or require shifting taxes to land rent, which would stimulate the economy. It makes governments tax income, sales, and profits, which hurts the recovery. IMF officials do not want to tax land rent, because they want to keep land value as collateral.
But that’s part of the problem, along with currency manipulation. Real-estate speculation in East Asia led to too much construction and high land values. Investors poured money into these fast- growing economies while the governments kept the value of their currencies fixed. Eventually, real estate bubbles crash, and take the banks down with them, as happened previously in Japan. The unrealistic currency exchange rates collapsed, as happened before also in Mexico. The IMF then came in with loans to bail out the investors and governments.
If this was a one-time event, then folks would learn their lesson, and life would go on as normal. Unfortunately, the very existence of the IMF and its policies make theses problems occur over and over again. It’s like folks who live by a river that keeps flooding. The government then gives them money to rebuild. It is kind to help folks in need, but what happens in this case is that the taxpayers subsidize living by the river, which is a waste of resources. Folks who live in an area that gets flooded all the time should buy their own insurance, or else not live there.
In the US, bank deposit insurance bailed out the banks that wasted resources in loans to failed real estate projects during the 1980s. The people who put their money into these institutions did not care how foolish or greedy the management was, since the deposits were guaranteed. Similarly, country after country – Mexico, Eastern European nations, and now the defanged East Asia “tigers” followed policies that eventually brought down their economies, knowing that the IMF would bail them out.
The IMF is already drained. After bailing out South Korea, Indonesia, Thailand, the Philippines, and other countries, the IMF now only has $30 billion left. What next, if Russia, Latin America and Africa “need” to be helped? Joint Economic Committee chairman Rep. Jim Saxon (R.-N.J.) will hold hearings on the risk to U.S. taxpayers of these constant bailouts.
It is time to abolish the IMF. Stop the bailouts now. Why should governments be borrowing money to subsidize investors and companies? If companies are no longer subsidized by governments and governments no longer subsidized by the IMF, then maybe, just maybe, they will have to turn to sound economic policies in order to compete and survive.
What’s your opinion on closing the IMF? Tell The Progress Report what you think and what you’re willing to do! Copyright 1997 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 retrieveal system, without giving full credit to Fred Foldvary and The Progress Report.
Great fusses are being made about the homosexual marriage-athon going on in San Francisco. Mayor Gavin Newsom authorized marriage licenses for same-sex couples, and so there has been a stream of gays and lesbians getting recognition from the city as a married couple. Many have come in from outside the city. But whether the State of California and the federal government will recognize these when it comes time to audit tax returns is uncertain.
Homosexual marriage involves religious, traditional, linguistic, moral, constitutional, and legal issues. There has been opposition from those who say that their religion prohibits homosexuality and mandates a marriage as a union between a man and a woman. The Constitution of the United States is clear on that aspect: there shall be no governmental establishment of religion. U.S. law may not be based merely on the prescriptions of any religion. So merely what is written in religious texts may not be the basis for U.S. law.
Some traditionalists have sought to go around this Constitutional limitation by proposing an amendment to the U.S. Constitution stating that marriage be a union only of a male and a female. One problem with this is that this intrudes into an category of law which in the USA has been in the domain of the states. If the people of a state such as Vermont desire that marriage be available to same-sex couples, the federal government would be imposing a restriction into family law and depriving that state of its constitutional sovereignty. It would be an attack on the federalism that the founders of the Constitution established.
The morality of homosexual marriage should not be based on tradition or religion, but on universal natural law and natural rights. The universal ethic prescribes that only those acts which coercively harm others are evil. Contrary to what some conservatives and religious supremacists claim, no coercive harm is done to society by homosexual marriages. The threat to heterosexual marriage comes from potential divorce, not from somebody else’s marriage.
There are social conservatives of good will who are willing to establish equal legal rights for same-sex couples with respect to inheritance, taxes, hospital visitation, and other matters, but who for traditional and linguistic reasons desire that the term ‘marriage’ be confined to man-woman mating. We can establish equal legal rights in substance by changing the symbol or form, naming homosexual unions something other than marriage.
‘Civil unions’ does not quite satisfy the desire of same-sex couples to be really married. Some have proposed calling it ‘sh-marriage,’ for ‘same-sex or homosexual marriage.’ But others think it would disparage marriage to say ‘marriage, shmarriage, what’s the difference?’
It seems to me that a better term for homosexual marriage is ‘pairage.’ The couple is a pair, and their union a pairage. A pairage would be available to same-sex couples only, since a man and a woman can enter into a marriage. The law regarding pairage can state that a pairage shall have all the legal rights of a marriage, and where a pairage is not legally recognized, then the pairage shall be designated a marriage. So a pairage would be a same-sex marriage that is called a ‘pairage’ instead of ‘marriage’ but is legally a marriage. The name ‘pairage’ grants traditionalists a symbolic value while granting to homosexuals the substance they seek.
Is a pairage required by state and federal constitutions? Yes, because equality before the law is the foundation of constitutional law. This goes back to the Declaration of Independence, where Thomas Jefferson expressed the natural-law view that people are ‘created equal.’ The natural-law philosopher John Locke based natural rights on the premise that human beings are all ‘equal and independent.’ Equal human worth is at the foundation of justice and liberty.
While conservatives will resist homosexual marriage, shmarriage, or pairage, they will fail to stop it, because it is a social tide that no law or amendment will stop. In the U.S. and Europe, the tide of public opinion is for according dignity and equality to homosexuality. Not so long ago, antisemitism was acceptable in the U.S. and Europe, but now only extremist nationalist and religious supremacists will express Jew-hating in public. Not so long ago, marriage between a man and woman of different races was illegal in many states. Fortunately, the social tide in North America and Europe is towards ever greater tolerance, first for religion, then for race, and now for sexual orientation.
This tide began centuries ago when the serfs were freed from bondage to the lord’s land, and then chattel slavery was abolished, and then women won voting and economic rights, and then religious and racial discrimination ended. Now the frontier is equal rights for gays and lesbians. Once that is done, the tide will keep moving to other frontiers, such as victimless crimes and taxation. For now, San Francisco is making waves as we witness a social revolution that is irreversible. The moving finger is writing, and having writ, will move on.
Copyright 2004 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 The Progress Report!
In July, 1914 Gandhi and Kasturbai sailed for England, on their way home to India. They arrived two days after England entered World War I. Again Gandhi offered to organize an ambulance corps. Many Indians opposed this plan, arguing that a slave should not cooperate with his master, but make his master’s need his own opportunity. Now was the time to demand home rule, they said. But Gandhi had demonstrated in South Africa that he would not exploit his enemies. Cooperate with the English first, he said, and then convert them by love. The ambulance corps was formed, but Gandhi was unable to serve because of a severe attack of pleurisy. When the illness persisted, Gandhi’s doctors advised him to leave England’s chilling climate and return to the warmth of India.
Gandhi and Kasturbai arrived in Bombay on January 9, 1915. He was forty-five years old, and in some parts of the country he was already spoken of as Mahatma for the work he had done in South Africa. It was a title often bestowed on exceptional men but Gandhi disliked it. “The woes of Mahatmas are known to Mahatmas alone,” he once wrote.
When Gandhi returned to India the drive for independence had an end but no means. Tiny Britain ruled a giant two thousand miles long and seventeen hundred miles wide, with a population of 275 million that swelled another five million annually in spite of unabated disease and famine. Most Indians were Hindus, but there was a large Moslem minority, as well as Buddhists, Sikhs, Jains, Christians, and countless other religious groups.
Over the centuries the Indians had known many foreign rulers, and the British, who came in the seventeenth century to trade and stayed to conquer, were only the last in a long series of oppressors. They ruled through colonial administrators who could never accept the Indians as equals, or through local princes who were British puppets. The nation’s wealth flowed toward Britain or to a few favored Indians, and the distance between indecent poverty and indecent opulence was as high and as insurmountable as the Himalayas.
As early as 1906, India’s only political voice, the Indian National Congress, demanded self-government but the words did not carry all the way back to London. Oppressed peoples often turn to terrorism, and in 1912 an Indian tried to assassinate the Viceroy. But terrorism, wrote Indian leader Jawaharlal Nehru, “was a bankrupt’s creed.” Yet how was freedom to be gained? “History … showed us,” Nehru said, “that peoples and classes who were enslaved had won their freedom through violent rebellion … [but] unarmed people could not rebel and face armed forces…
“There seemed to be no way out of the intolerable conditions of a degrading servitude … And then Gandhi came.”
Gandhi first spent time reacquainting himself with his homeland, where he had not lived for two decades. He established his followers at Sabarmati, near the city of Ahmedabad. In India a religious retreat is called an ashram, and Gandhi’s cooperative community came to be known as the satyagraha ashram. But it was as political as it was religious. “Men say I am a saint losing myself in politics,” Gandhi once commented. “The fact is that I am a politician trying my hardest to be a saint.”
The independence campaign had thus far been waged by a small clique of upper-class intellectuals who aped the British in manners and aloofness. Gandhi saw this was a path that led nowhere. Until that time he had worn European dress; now he discarded it for the simple trousers of the peasant. Some eighty percent of his countrymen were peasants; freedom could not be won without their support. For Gandhi freedom meant not the substitution of select Hindu rulers for the Viceroy but a truly representative government. It also meant freedom from poverty, ignorance, and discrimination.
To the horror of orthodox Hindus he admitted into his ashram a family of untouchables, who by implacable Hindu tradition are condemned from birth as unclean and outcaste. “We can infer from our past experience that the privileged and powerful are more unclean at heart than the downtrodden and despised,” Gandhi observed.
Reforming India was as much a part of Gandhi’s program as was home rule. Asked to speak at ceremonies opening a Hindu university in Benares he told the elegant Indian nobles, “There is no salvation for India unless you strip yourselves of this jewelry and hold it in trust for your countrymen.” The pompous politicians were warned that “No amount of speeches will ever make us fit for self-government. It is only our conduct that will fit us for it.” The audience was outraged at the unexpected challenge to India rather than England. Gandhi was told to shut up and sit down.
His first Indian campaign of any significance was in 1917 in behalf of the sharecroppers of Champaran, a remote area at the foothills of the Himalayas. Deceived and oppressed by theit British landlords, the sharecroppers needed a champion. They found Gandhi. He went to Champaran to investigate their complaints and was advised by the British commissioner to leave. When he ignored the warning, he received an official notice ordering him out of the district. He refused to go and was summoned to court.
On the day of the trial masses of peasants appeared in town in a spontaneous demonstration of sympathy and solidarity. The officials were bewildered and a little frightened. They were even more perplexed when Gandhi pleaded guilty. Judgment was postponed, and in a few days the case was withdrawn. It was the first victory for civil disobedience in India.
Gandhi and several of his associates remained in Champaran for seven months putting together a case against the landlords. While he was there he established schools and brought in volunteer teachers. Kasturbai came to teach the women cleanliness and sanitation.
Finally the local authorities set up an investigating commission which found the sharecroppers’ claims were just. The landlords were ordered to return part of the money dishonestly gained. But Gandhi later said the most important thing about Champaran was that he had proved the British could not push him around in his own country.
From Champaran Gandhi went to Ahmedabad, where textile workers were fighting for more pay and shorter hours. Gandhi argued their case before the mill owners, some of whom were his friends and supporters. He suggested the issues be submitted to an arbitrator, but the owners refused and he advised the men to strike.
After two weeks the strikers began to weaken and talked of going back to the mills. Encouraging them to hold out longer, Gandhi spontaneously said, “Unless [you] rally and continue the strike … I will not touch any food.” To make his intentions unmistakable he added, “My fast … will be broken only after the strike is settled.”
Fasting was not new to Gandhi. During his youth, under the influence of his ascetic mother, he had sometimes fasted. At Tolstoy Farm in South Africa he continually experimented with eating and not eating and each fast meant another victory for self-restraint. When his followers at the farm failed to maintain the high standards he set for them he took their penance on himself, fasting once for seven and once for fourteen days.
This time he fasted to pressure the mill owners to agree to his terms. Unwilling to allow him to suffer, they accepted arbitration after three days. Gandhi had discovered another potent weapon which could be used against men of conscience.
His next campaign was in behalf of the peasants in the Kheda district of western India. Their crops had failed and, facing famine, the people had asked the government to suspend their taxes. Gandhi won a compromise by which the rich farmers paid taxes and the poor ones didn’t. His larger victory, however, was in awakening the peasants to their rights and in lining up liberals and intellectuals to support the peasants they had once disdained.
Throughout this period, the butchery of World War I continued indecisively. In July, 1918, Gandhi attempted to recruit Indian soldiers for the British army. “If we serve to save the Empire,” he argued unconvincingly, “we have in that very act secured home rule.” But he won few recruits and instead was stricken with a protracted case of dysentery. Certain he was dying, he had verses of the Gita read to him. Doctors recommended milk to restore his strength but it would have violated an anti-milk vow he had taken.
Then Kasturbai, his wife, shrewdly observed he had directed his vow only against the milk of cows and buffaloes. “You cannot have any objection to goat’s milk,” she argued.
Gandhi knew he was betraying the spirit if not the letter of his intentions, but he conceded and drank goat’s milk for the rest of his life. “The will to live proved to be stronger than the devotion to truth,” he wrote sadly.
During Gandhi’s slow recovery, World War I ended and a fresh chapter in English oppression began. During the war, many Indian nationalists had been jailed for criticizing the British, and the Indian press had been censored. The Indian people expected to have their civil liberties restored at the end of the war; instead, a British commission headed by Sir Sidney Rowlatt went to India to study the situation and recommended that measures suppressing free speech, free press, and the right of assembly be continued.
The Rowlatt proposals became law on March 18, 1919. The following morning Gandhi said to a friend, “The idea came to me last night in a dream that we should call upon the country to observe a general hartal.”
A hartal is a strike. An epic satyagraha campaign was about to begin with Gandhi as its undisputed leader and freedom from Britain as its inevitable consequence.
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.
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what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
a way to redirect all the money we spend on the nature we use – trillions of dollars annually. We can’t pay the Creator of sites and resources and are mistaken to pay their owners this biggest stream in our economy. Instead, as owners we should pay our neighbors for respecting our claims to land. Owners could pay in land dues to the public treasury, a la Sydney Australia’s land tax, and residents could get back a “rent” dividend, a la Alaska’s oil dividend. We’d pay for owning sites, resources, EM spectrum, or emitting pollutants into the ecosphere, then get a fair share of the recovered revenue. The economy would finally have a thermostat, the dividend. When it’s small, people would work more; when it’s big, they’d work less. Sharing Earth’s worth, we could jettison counterproductive taxes and addictive subsidies. Prices would become precise; things like sprawl, sprayed food, gasoline engines, coal-burning plants would no longer seem cheap; things like compact towns, organic foods, fuel cells, and solar powers would become affordable. Getting shares, people could spend their expanded leisure socializing, making art, enjoying nature, or just chilling. Economies let us produce wealth efficiently; geonomics lets us share it fairly.
more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part and parcel of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?
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.
an economic policy based on the earth’s natural patterns. Eco-systems self-regulate by using feedback loops to keep balance. Can economies do likewise? Why don’t they now produce efficiently and distribute fairly? The answers lie in the money we spend on the earth we use. To attain people/planet harmony, that financial flow from sites and resources must visit each of us. Our agent, government, must collect this natural rent via fees and disburse the collected revenue via dividends. And, it must forgo taxes on homes and earnings, and quit subsidies of either the needy or the greedy. As our steward, government must also collect Ecology Security Deposits, require Restoration Insurance, and auction off the occasional Emissions Permit. And that’s about it – were nature our model.
a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heri-tage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.
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!
one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.
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.