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This 2013 excerpt of of the London School of Economics’ blog, EUROPP – European Politics and Policy – Dec 26, is by Alexandre Afonso, Lecturer in Comparative Politics at King’s College London. It also appeared on their sister blog, Impact of Social Sciences, Afonso’s own blog, and was presented on November 19 at the European University Institute’s Academic Careers Observatory Conference.
The academic job market is structured in many respects like a drug gang, with an expanding mass of outsiders and a shrinking core of insiders.
Academic systems rely on the existence of a supply of “outsiders” ready to forgo wages and employment security in exchange for the prospect of uncertain security, prestige, freedom, and reasonably high salaries that tenured positions entail.
“Why drug dealers still live with their moms” was based on the finding that the income distribution within gangs was extremely skewed in favor of those at the top, while the rank-and-file street sellers earned even less than employees in legitimate low-skilled activities, let’s say at McDonald’s, calculated at $3.30 an hour, well below a living wage, so they still live with their moms.
Consider the risk of being shot by rival gangs, ending up in jail, or being beaten up by your own hierarchy. Yet, gangs have no real difficulty in recruiting new members. The prospect of future wealth, rather than current income and working conditions, is the main driver. It is very unlikely that they will make it (their mortality rate is insanely high) but they’re ready to “get rich or die trying”.
Because of the increasing inflow of potential outsiders ready to accept this kind of working conditions in academia and drug gangs, this allows insiders to outsource a number of their tasks onto them. In academia, where there are increasing pressures for research and publishing, it’s teaching. The result is that the core is shrinking, the periphery is expanding, and the core is increasingly dependent on the periphery.
In the United States, more than 40% of teaching staff at universities are now part-time faculty without tenure, or adjunct lecturers paid per course given, with no health insurance or the kind of other things associated with a standard employment relationship. The share of permanent tenured faculty has increased substantially, but it has been massively outpaced by the expansion of teaching staff with precarious jobs and on low incomes’ some adjunct lecturers rely on food stamps, as could the $3 hourly rate of the drug dealer.
The average age of the PhD, between the 1970s and 1990s, hasn’t changed substantially but the age of the first professorship has increased by about 5 years.
Ed. Notes: If academics are to supply the rest of society with useful findings, is this the best way to go about it? What if academia were not subsidized at all and all wannabe academics — the young and the old — had to make it in the real world like everyone else? Then learning would become student-driven — the ideal of George Bernard Shaw and many others. And why not? Isn’t the customer always right?
Ed. Notes: It’s still true that alcohol plays a huge role in setting the course of society, from lobbying functions to grassroots community building. Which does not mean overdo it, sobriety clearly has its role, too. It just means that the individuals who throw one back together take steps forward together.
This 2013 excerpt of the Wall Street Journal, Dec 25, is by Joseph Walker.
A fake surgical procedure is just as good as real surgery at reducing pain and other symptoms in some patients suffering from torn knee cartilage, according to a new study that is likely to fuel debate over one of the most common orthopedic operations.
As many as 700,000 people in the U.S. undergo knee surgery each year to treat tears in a crescent-shaped piece of cartilage known as the meniscus, which acts as a shock absorber between the upper and lower portions of the knee joints. The tears create loose pieces of cartilage that doctors have long thought interfere with motion of the joints, causing pain and stiffness.
The patients agreed to participate in the study prior to the procedure and were informed they would either receive the surgery or not.
The study of placebo surgery is likely to stir controversy over the minimally invasive procedure, known as partial meniscectomy, which can cost between $3,000 and $6,000. The study’s authors estimated that it accounts for $4 billion in annual medical costs in the U.S.
Doctors have a bad tendency to confuse what they believe with what they know,” said Dr. Järvinen, an orthopedic resident and adjunct professor at Helsinki University Central Hospital.
Ed. Notes: Since doctors can cut us and charge whether we need it or not, does their medical license protect us so much or their monopoly profits? Also, how much faster could medical science proceed on a level playing field, one that did not favor entrenched ways or untried ways but merely consensus between informed doctors and patients, and between researcher and willing subject, and between funder and laboratory? Progress is faster in fields without licenses. Maybe society should give it a try.
These two 2013 excerpts of the New York Times series about inequality, the Great Divide, are of (1) Dec 21, on trust by Joseph E. Stiglitz, and (2) Dec 22, on inequality by Bill Keller.
In No One We Trust
Trust is what makes contracts, plans, and everyday transactions possible; it facilitates the democratic process, from voting to law creation, and is necessary for social stability. It is essential for our lives. It is trust, more than money, that makes the world go round.
One of the reasons that the bubble’s bursting in 2007 led to such an enormous crisis was that no bank could trust another. Each bank knew the shenanigans it had been engaged in — the movement of liabilities off its balance sheets, the predatory and reckless lending — and so knew that it could not trust any other bank. Interbank lending froze, and the financial system came to the verge of collapse.
Bank managers and corporate executives still search out creative accounting devices to make their enterprises look good in the short run, even if their long-run prospects are compromised.
Without trust, life would be absurdly expensive; good information would be nearly unobtainable; fraud would be even more rampant than it is; and transaction and litigation costs would soar. Our society would be as frozen as the banks were when their years of dishonesty came to a head and the crisis broke in 2007.
America faces another formidable hurdle if it wants to restore a climate of trust: our out-of-control inequality. When 1 percent of the population takes home more than 22 percent of the country’s income — and 95 percent of the increase in income in the post-crisis recovery — some pretty basic things are at stake. Reasonable people can look at this absurd distribution and be pretty certain that the game is rigged.
When Americans see a tax system that taxes the wealthiest at a fraction of what they pay, they feel that they are fools to play along. All the more so when the wealthiest are able to move profits off shore. The fact that this can be done without breaking the law simply shows Americans that the financial and legal systems are designed by and for the rich.
We need higher norms for what constitutes acceptable behavior, like those embodied in the United Nations’ Guiding Principles on Business and Human Rights.
Some startling numbers: The top 10 percent of Americans used to take in a third of the national income. Now they gobble up half. The typical corporate C.E.O. used to make 30 times as much as the average worker. Now the boss makes 270 times as much as the minion.
The rich (and their children) stay rich, the poor (and their children) stay poor. A stratified society in which the bottom and top are mostly locked in place is not just morally offensive; it is unstable. Recessions are more frequent in such countries. The rich spend heavily on lobbyists and campaign donations to secure tax breaks and tariff advantages and bailouts that perpetuate their status. Not only does a dynamic economy stagnate, but the left-out citizenry becomes disillusioned and cynical.
The economy is not growing the way it did for most of the last century. The sluggish growth means that not only are the poorest stuck at the bottom, but the broad middle is in economic decline. Our economy is already 70 percent dependent on domestic consumers, way more than other developed countries.
Between now and 2030, the working-age population that pays into Social Security grows by 15 percent; the over-65 population that withdraws from Social Security grows by 65 percent.
We are overdue for a raise in the minimum wage. The public overwhelmingly supports it. It won’t help those with no jobs at all, but the best evidence is that it won’t kill jobs either, and it does help inequality by boosting the incomes of the working poor.
Ed. Notes: While the writers may be nice guys, their old ideas that have been used before — regulations and make-work jobs — were not able to prevent the recession and won’t be able to win us prosperity and justice for all. Yet these guys still want their old ways to prevail, rather than think outside the box. Outside the box you’ll find geonomics — share Earth’s worth instead of tax and spend like mad — and these novel Earth-focused reforms have always worked wherever tried, to the degree tried. You’d think the old media would take note, but I guess we’ll have to transform this economy so it serves us instead of we it without the oldsters on board — the way of the world.
These two 2013 excerpts of the Financial Times are from Nov 27 on jobs by Brian Groom and Dec 13 on flat debt by Lucy Warwick-Ching.
North-south Divide On View In Job Vacancy Statistics
The north-south jobs divide has widened sharply as an upturn in construction boosted job vacancies in the south.
Nine of the 10 best cities to find a job last month were in southern England, while nine of the worst 10 were in the north. It was 100 times more difficult to get a job in Salford, where there were 28 jobseekers per vacancy, than in Cambridge, where there were just 0.28 per vacancy.
Job opportunities in construction grew 31 per cent compared with six months ago, boosted by a surge in housebuilding, mostly in the southeast, and infrastructure projects in the capital such as Crossrail and the improvement of London’s Northern line.
Of the 55,663 construction vacancies advertised in October, almost half fell in London – 30 per cent – and the southeast – a further 18 per cent. Only 6 per cent were in the northwest and just 3 per cent in the northeast.
This stark divide is set to widen further when projects such as the Thames Tideway [London supersewer] begin in the south, creating even more jobs near London.
Ed. Notes: While people near London have an easier time finding work, it seems people all over England have a harder time affording housing. It’d be good to know if the people falling behind in paying their landlord are mostly where land is high, despite the jobs, or where jobs are few, despite the affordable housing, or both North and South. Wherever, high land costs could solve the paucity of jobs.
In the south of England, where there are more jobs because there is more construction, that’s because there are more people (think London). That means higher land costs, heavier mortgages, richer banks, and a wider North-South divide in wealth and income, too, not just in jobs. But note, the land values are generated by the presence of the populace. Society generates the value of locations, and nobody, not even owners, created land, so Earth’s worth becomes a perfect common wealth, perfectly fair. All society need do is institute Land Dues (or levy a land tax) and then pay citizens a dividend. People in the south of England would pay more, the people in the North would pay less, but everyone would get an equal share. In the North, where costs are lower, the rent dividend would go much further. In the South, where costs are higher, it would not go so far, but it wouldn’t need to, not with wages being higher.
First, people would have to get over seeing themselves as worthy only of jobs, and see themselves as worthy of a fair share of Earth’s worth, too, just as worthy as those now getting it. The 1% get “rent”, or the money that society spends for the nature it uses, plus they get corporate welfare; they don’t have to worry about getting hired. The rest of society needs to lose its feeling of dependence upon jobs — a real disadvantage — then geonomize, and move from jobs to joy.
This 2013 excerpt of Clawback (of Good Jobs First), Oct 23, is by Phil Mattera.
Three years ago, newly elected governors in several states decided to outsource economic development functions to “public-private partnerships” (PPPs). Things have gotten demonstrably worse since.
“Enterprise Florida is our state’s most glaring example of cronyism and institutional corruption,” said Dan Krassner, executive director of the nonpartisan government watchdog group Integrity Florida. “The organization engages in pay to play: it sells seats on its board to corporations for $50,000 and then gives away taxpayer-funded subsidies and vendor contracts to them in return.”
The Wisconsin Economic Development Corporation (WEDC) was accused of spending millions of dollars in funds from the U.S. Department of Housing and Urban Development without legal authority, failed to track past-due loans, and hired an executive who owed the state a large amount of back taxes.
JobsOhio received a large transfer of state monies about which the legislature was not informed, intermingled public and private monies, refused to name its private donors, and then won legal exemption from review of its finances by the state auditor.
The Rhode Island Economic Development Corporation is still litigating the biggest economic development scandal in Rhode Island history: its $75 million loan to the now-bankrupt 38 Studios.
Ed. Notes: The well-meaning author and his organization want to keep the public funds with a public agency to make jobs. However, if we want jobs (and the bosses that come with them) — here I confess I’d prefer co-ops, self-employment, startups, a shrunken workweek, and lots of leisure — then why do we tax them? And just as dumb, why do we let prime sites in cities where hundreds could be working lie fallow? Some governments have generated jobs in the past, not by creating a bureaucracy to create jobs but by getting out of the way, by getting their taxes out of the way and getting their subsidies to land speculators out of the way. What these jurisdictions did was shift the property tax off buildings, onto land. When owners erected or improved buildings, they didn’t get taxed, but they did hire people. Owners who had been speculating, keeping prime sites from best use, got busy and developed their locations, so they generated jobs, too. That’s how you do it. It worked in Denmark, New Zealand, and could anywhere. Just takes a little understanding a lot of political chutzpah.
These two 2013 excerpts of Ellen Brown on the Fed are from (1) her Web of Debt blog, Dec 7, and (2) the Huffington Post, Dec 23.
Amend the Fed: We Need a Central Bank that Serves Main Street
December 23rd marked the 100th anniversary of the Federal Reserve.
At an IMF conference on November 8, 2013, former Treasury Secretary Larry Summers suggested that since near-zero interest rates were not adequately promoting people to borrow and spend, it might now be necessary to set interest at below zero. This idea was lauded and expanded upon by other ivory-tower inside-the-box thinkers, including Paul Krugman.
Negative interest would mean that banks would charge the depositor for holding his deposits rather than paying interest on them. Runs on the banks would no doubt follow.
To ordinary mortals living in the less rarefied atmosphere of the real world, the proposal to impose negative interest rates looks either inane or like the next giant step toward the totalitarian New World Order.
Paul Craig Roberts, former Assistant Secretary of the Treasury, calls the idea “harebrained.” He is equally skeptical of quantitative easing, the Fed’s other tool for stimulating the economy. Roberts points to Andrew Huszar’s explosive November 11th Wall Street Journal article titled “Confessions of a Quantitative Easer,” in which Huszar says that QE was always intended to serve Wall Street, not Main Street. Huszar’s assignment at the Fed was to manage the purchase of $1.25 trillion in mortgages with dollars created on a computer screen. He says he resigned when he realized that the real purpose of the policy was to drive up the prices of the banks’ holdings of debt instruments, to provide the banks with trillions of dollars at zero cost with which to lend and speculate, and to provide the banks with fat commissions from brokering most of the Fed’s QE transactions.
100 Years Is Enough: Time to Make the Fed a Public Utility
The Federal Reserve Act was passed in 1913 in response to a wave of bank crises, which had hit, on average, every six years over a period of 80 years. The resulting economic depressions triggered a populist movement for monetary reform in the 1890s. Mary Ellen Lease, an early populist leader, said in a fiery speech that could have been written today:
“Wall Street owns the country. The great common people of this country are slaves, and monopoly is the master … Money rules … Our laws are the output of a system which clothes rascals in robes and honesty in rags. The parties lie to us and the political speakers mislead us…
We want money, land, and transportation. We want the abolition of the National Banks, and we want the power to make loans direct from the government. We want the foreclosure system wiped out.”
That was what they wanted, but the Federal Reserve Act was what they got. What the populists sought was a national currency issued debt-free and interest-free by the government, on the model of Lincoln’s Greenbacks. What the American people got was a money supply created by private banks as credit (or debt) lent to the government and the people at interest. Although the national money supply would be printed by the U.S. Bureau of Engraving and Printing, it would be issued by the “bankers’ bank,” the Federal Reserve. The Fed is composed of twelve branches, all of which are 100 percent owned by the banks in their districts. Until 1935, these branches could each independently issue paper dollars for the cost of printing them, and could lend them at interest.
The new system was supposed to prevent bank runs, but in 1929 the United States experienced the worst bank run in its history. At that time, banks were required to keep sufficient gold to cover only 40 percent of their deposits. When panicked bank customers rushed to cash in their dollars, gold reserves shrank.
For its first half century, the Federal Reserve continued to pocket the interest on the money it issued and lent to the government. But in the 1960s, Wright Patman, Chairman of the House Banking and Currency Committee, pushed to have the Fed nationalized. To avoid that result, the Fed quietly agreed to rebate its profits to the U.S. Treasury.
But the central bank own some of the federal debt. Commercial banks hold the majority of it and do not rebate the interest they collected to the government. They also “buy: government bonds with newly created demand deposit entries on their books — nothing more.
At the end of 2013, the total for the previous 26 years came to about $9 trillion on a federal debt of $17.25 trillion. The federal debt has been accumulating ever since 1835, when Andrew Jackson paid it off and vetoed the Second U.S. Bank’s renewal.
How about the power to issue money be returned to the government. Make the Federal Reserve a public utility. The firehose of cheap credit lavished on Wall Street needs to be re-directed to Main Street.
Ed. Notes: Money sure does bring out the urge to reform in many of us.
Bankers have found a lucrative gravy train by controlling the money supply. Yet that control has been given to governments before, sometimes with happy results, sometimes not; witness the places with rampant inflation and near worthless national currency.
What might work better would be to allow currencies to compete, as we do credit cards. The role of government would be to set standards — as it does with weights and measures — and prosecute fraud. The government could still issue its own notes to anyone who’d take them, and so could banks, but also could currency clubs like local currencies. The competition would tend to keep all currencies honest. After a while, probably one or two would prevail, as do Visa and Master Card, but the possibility of an upstart currency would keep the successful ones honest.
One key component most monetary reformers overlook is that debt is not something ethereal but rather people borrow money in order to buy something, and usually that something is land, often with a house on it. If people did not have to buy land, they’d not have to borrow so much, by a long shot. Small mortgages would greatly reduce the profit and power of banks.
What would make it possible for people to not buy land? Well, they could “rent” the land from their community, or pay Land Dues or a land tax to their local government. When society gets the rent for land, then owners can’t charge a price for land, a gift of nature they did not create, whose value the presence of the populace generates. It’s fair, and prevents land from becoming an object of speculation, so the rent or dues or tax always stays affordable.
(Rebating some of the rental public revenue to residents would of course also help keep land affordable.)
While individuals now borrow to buy land, governments often borrow because they can’t tax enough. The reason they can’t raise enough funds with their taxes is because politicians levy dumb taxes that shrink the tax base rather than levy smart taxes that expand the tax base. The typical taxes on income, sales, and buildings reduce the worth of jobs, of purchasing power, and of improvements (respectively). The more things they tax and the higher they raise the rates, the more sand they throw into the gears of the economy. Not too smart.
But one tax, rarely used, does just the opposite: the tax on land. Having to pay it or Land Dues, owners don’t speculate but develop their sites and keep their locations at highest and best use (or sell to others who will). All that construction and development and efficient land use pushes up the value of locations in the region — a fatter tax base for the smartest of all taxes. With all that collected as public revenue, governments would no longer have to borrow much if anything at all — again cutting the money issue down to near dismissive size.
So, why is land invisible and money so fascinating?
This 2013 excerpt of Grist, Dec 24, by Heather Smith.
On April 29, the European Union voted to ban three of the most widely used pesticides in the world. The ban on clothianidin, imidacloprid, and thiamethoxam — collectively called neonicotinoids – was specifically aimed at seeing if this class of pesticide was indeed making honeybees too stupid to find their way back to the hive, as some studies suggested.
The EU ban came with many exceptions: The ban was only for two years. It did not ban all neonicotinoids; even the ones that were banned could still be applied to crops like winter wheat, because honeybees don’t fly in the winter and could care less about wheat. Greenhouses were also exempt from the ban.
The ban on likely bee-killing pesticides starts on Dec.1; so the seeds for 2014′s harvest were soaked and planted months ago, and neonicotinoids can persist in the soil for years.
Ed. Notes: However feeble, it is still a step in the right direction, toward defense of nature. Still, it is ironic that those who care must struggle to defend nature (including the human species) while those whose priority is to make a buck heedless of others don’t have to struggle at all; it is completely legal to alter nature for profit, without having demonstrated in advance that such alterations are totally safe, and expect no negative feedback from government, indeed, just the opposite, a forgiving and encouraging government. It’s an attitude and values embodied in the corporate charter whose salient power is to limit the liability of those making the decisions to profit at nature’s (and our) expense. Government should get out of the business of limiting liability, forcing business to buy insurance and to simply be more careful, which would totally reverse the present business mindset.
This 2013 excerpt of GB’s Telegraph, Spt 24, is by Alex Spillius.
Xinjiang Production and Construction Corp (XPCC), a quasi-military organisation also known as Bingtuan, said that it had signed a £1.7 billion agreement in June with KSG Agro, Ukraine’s leading agricultural company. KSG Agro however denied reports that it had sold Ukraine farmland to the Chinese, saying it had only reached agreement for the Chinese to modernise 3,000 hectares and “may in the future gradually expand to cover more areas”.
Under the 50-year plan, China would eventually control three million hectares, an area equivalent to Belgium or Massachusetts, which represents nine per cent of Ukraine’s arable land. Initially 100,000 hectares would be leased.
Any sort of “land-grab” deal can be highly sensitive politically. Madagascar was forced to scrap a plan to lease 1.2 million hectares to South Korea in 2009 after angry protests against “neo-colonialism”. The Philippines has also blocked a China investment deal.
With its current population of 1.36 billion predicted by the UN to rise to 1.4 billion by 2050, China is among the leading renter of overseas farmland in Africa, South America, and Southeast Asia, though the XPCC deal would make Ukraine China’s largest overseas farming centre.
China consumes about one-fifth of the world’s food supplies, but is home to just nine per cent of the world’s farmland, thanks in part to rapid industrialisation.
Apart from China, India, South Korea, the Gulf states, and western European corporations began taking tracts of land, especially in Africa, after global food prices spiked in 2008.
XPCC however is making the first such major foray into continental Europe. It has a country that has the largest land area in the continent and was known as the “bread basket as the Soviet Union” but which has progressed slowly since the fall of the Iron Curtain.
Ed. Notes: It matters little who owns the land; it matters a lot who gets the rent. As long as Ukraine’s populace get a fair return, the deal makes sense, sending surplus to where there is need. And paying rent for food and land is far more just than the invasions almost all societies have done in the past.
In California, the voters are able to put proposed laws on the ballot if they gather enough signatures. This process is called an “initiative”. The legislature may also place propositions on the ballot, a process called a “referendum”.
One of the ballot propositions for 2014 is “The Neighborhood Legislature Reform Act”, which would decentralize the election of representatives in order to reduce the political power of special interests such as corporations, labor unions, and trial lawyers. This reform would shift political power to the people of California. (text of the initiative).
Like the US Congress, the California legislature has two houses, a Senate with 40 members and an Assembly with 80 members. The population of California is 38 million. The districts for the California Senate now have 950,000 persons, a greater number than for Congressional districts, while about 475,000 people live in each assembly district. It now takes a million dollars to win a California Senate seat.
The Neighborhood initiative would instead create Senate districts of 10,000 persons and Assembly districts of 5000. These neighborhood districts would form a greater association of 100 neighborhood districts within the current districts. The association council would elect a representative to the state legislature, thus keeping the same number of representatives in the state legislature. However, the final approval of a law would require a vote by all the neighborhood district representatives. That vote could be done on an Internet web site, as corporations now do for their elections of board members and propositions.
The Neighborhood Legislature proposition was initiated by John H. Cox, who has been a lawyer, real-estate management executive, and local office holder. The aim is to have the measure on the November 2014 ballot. That will require over 800,000 valid signatures, 8 percent of the votes cast for governor in the last election, by May 19. That is a high hurtle, which usually requires several million dollars to pay for signature gatherers. This initiative has already made a splash, with articles in the Wall Street Journal, the Washington Post, the The Los Angeles Times, and other media.
I have been writing for years on reforming democracy with tiny voting districts in a bottom-up structure. Back in 2007, I wrote an article, “Democracy Needs Reforming”, proposing that the political body be divided into cells of 1000 persons, each with a neighborhood council. A group of these would then elect a broader-area council, and so on up to the national congress or parliament. The state legislature would then only need one house, rather than a bicameral legislature that mimics the US Congress and British parliament. This “cellular democracy” would eliminate the inherent demand for campaign funds of mass democracy.
The Neighborhood Legislature Reform Act would not be quite as thorough a reform as a cellular democracy based on tiny districts, but it has the same basic concepts: smaller voting groups, and bottom-up multi-level representation. This initiative would indeed greatly reduce the demand for campaign funds that are needed in today’s huge California electoral districts.
It will be a great challenge to obtain the needed signatures. It could happen if the media provide editorial support and coverage. At any rate, the fact that this initiative is taking place will go a long ways to publicizing the gross corruption of democracy that is taking place, and the only effective remedy to the inherent dysfunction of mass democracy. Many reforms are needed in today’s governments, reforms in taxation, pensions, environmental protection, transit, criminal law, and economic deprivation. The main reason that useful reforms are not taking place is the subsidy-seeking and reform-blocking induced by mass democracy. The initiative process in California and other states is a way to circumvent the corrupt legislature, but in a large state like California, that process itself requires big money.
It will be interesting to watch the progress of the Neighborhood Legislature initiative, and to watch the special interests jump in with misleading negative ads. If this goes on the ballot and wins, it will be a victory for the people and a defeat for the moneyed special interests.
Silicon Valley investor Tim Draper wants to break California into six states.
This 2013 excerpt of the Los Angeles Times, Dec 21, is by Jessica Guynn.
Technology investor Tim Draper is drumming up support to create six states in California, one of them being Silicon Valley. He’s looking to get an initiative on the California ballot.
His argument for redrawing the California map: The state is underrepresented in Washington. “It is about time California was properly represented with senators in Washington. Make our number of senators per person about average.”
In October at Y Combinator Startup School, one tech entrepreneur called for Silicon Valley to secede from the United States altogether.
Balaji Srinivasan, co-founder of San Francisco–based genetics company Counsyl, gave a talk to aspiring entrepreneurs about “Silicon Valley’s ultimate exit,” saying, “We need to build opt-in society, outside the U.S., run by technology.”
Google CEO Larry Page spoke of his desire to set aside a place in the world where technological experimentation can be conducted unfettered by regulation. (“There are many exciting things you could do that are illegal or not allowed by regulation,” Page said.)
Investor Peter Thiel has championed the “seasteader” movement, which would create floating societies off the coast of California just beyond the clutches of the U.S. government.
And the Blueseed project wants to put foreign-born workers on a cruise ship off the coast of Northern California in international waters to evade immigration laws.
Ed. Notes: Couples get divorced all the time. Should counties be allowed to likewise secede? OOH, we do need to be free from unwarranted interference in order to express our true selves, yet OTOH we also need to mesh smoothly and respectfully with the larger society.
In this case, Silicon Valley owes a lot of its success to the proximity of Stanford University and to the “anything goes” attitude of California, but have techies paid back the valley? Not really, altho’ they could by paying Land Dues — which they should do to their own jurisdiction even if they do secede.
Redrawing the map is something going on right now; politicians always gerrymander boundaries for their own corrupt purposes. And now that people are so mobile and economies so extensive, political borders are relics that no longer reflect anything meaningful.
Perhaps it’d be better if there were some principle in place that would automatically redraw boundaries according to factors like topography, population size, and settlement pattern; coincidentally, such a region often matches the footprint of a major daily newspaper — a map of where its subscribers live. The reach of a major daily newspaper is also the area where land values are pulled up by the major central city. Hence in a geonomy, residents would pay their Land Dues to the regional government whose capitol is in that city.
Finally, must borders be hard and fast or could they be broad swaths like the transition zones between ecosystems? Perhaps we could let people living near the edge be the ones to choose which jurisdiction to whom to pay their Land Dues. If we weaken small group identity, maybe that’d strengthen species-wide identity … even universe-wide!
The petroleum industry wins one in Alberta and loses one in Pennsylvania.
These two 2013 excerpts about government oversight of oil extraction are from (1) Common Dreams, Dec 24, on Alberta by Jacob Chamberlain, and (2) PennFuture, Dec 20, on Pennsylvania.
In Alberta, Environmental Regulators Now Funded by Fossil Fuel Industry
Alberta, home to massive tar sands reserves, has a new environmental regulator in town. Roughly 150 publicly funded environment department staff including fish and wildlife officers, forestry officers, biologists, rangers, and others who watch over the oil industry’s activities in the province are expected to move over to the new Alberta Energy Regulator. The new organization will get all of its funding from levying fees on oil and gas companies; employees’ salaries are to be paid by the industry they are monitoring.
Gerry Protti, who helped found the Canadian Association of Petroleum Producers, an oil industry lobby group, has been chosen as chairman of the board of the new tar sands regulators.
Chief executive Jim Ellis, a former deputy minister of environment, has criticized environmental groups for publishing “negative media on the oil sands” and also attempted to bar environmental groups from taking part at a recent tar sands hearing.
Pennsylvania Supreme Court Strikes Down Key Portions of State’s Oil & Gas
In a 4-2 decision, the Pennsylvania Supreme Court affirmed a 2012 Commonwealth Court decision striking down controversial portions of Act 13, under the Pennsylvania Constitution. Most notably, the Court struck down parts of Act 13 that would have created a statewide zoning scheme for oil and gas activities, and required municipalities to allow those activities in all zoning districts, including residential districts.
PennFuture opposed Act 13 because of the issues relating to local preemption raised by Chief Justice Ronald D. Castille, insufficient regulatory safeguards to protect natural resources and communities, and an inadequate impact fee.
The decision is a substantial rebuff of attempts by the legislature and governor to treat the new shale gas industry differently in Pennsylvania than other heavy, industrial land uses.
Act 13′s evisceration of local land use powers was unprecedented — a “blanket accommodation of industry and development,” the Supreme Court wrote.
Chief Justice Castille articulates a new framework for evaluating government actions under Article I, Section 27, which guarantees each citizen the right to “clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment.” Those environmental rights are “presumptively on par” with other civil liberties found in Article I’s Declaration of Rights, writes Castille.
Ed. Notes: While Big Money got what it wanted in Alberta, its grab in Pennsylvania was way to audacious for at least one judge, a judge who nicely spelled out our rights to a healthy natural world. Hopefully, his point of view will prevail but in the real world, money rules, and most of that ruling money is unearned “rent” from nature, the money society spends for oil, land, and other aspects of the natural world. The favors that insiders buy with such money are items like limited liability and a stacked deck.
If we don’t want oil corporations to use that money to rule us, then we have to capture that money for ourselves. And why not? It already belongs to us. The money is spent for things like oil, which none of us created, and the value of oil is set by demand, which is something we all create. So let us use taxes, fees, leases, dues, etc, to redirect our spending for resources into the public treasury, so the funds can benefit us all.
Until we do, we must expect the petroleum industry to spend our common wealth any way they want. But once we do share what is already ours, then we can get government on our side. It’d quit limiting the liability of the culpable and start defending the health of both people and planet.
Ed. Notes: During scary times, many people get rid of currency and stock up on gold, behavior that bankers don’t like, since they make their money off people borrowing and remaining dependent upon currency. While gold did rise this recent recession, it did not rise as high as perhaps it should have during a downturn labeled “the Great Recession”. What kept the price of gold from soaring thru the roof was the above sale of tons of gold by the IMF, ostensibly to have cash for poor nations, but could the real motive have been to keep gold from displacing the official currencies of nations?
Also, does creating debt, even at zero interest, create prosperity? Or, does it merely distract attention from the real causes underlying endemic poverty and from the real solutions? The real problems are lack of owner occupancy and of honest dealings. How is lending to corrupt elites supposed to fix that? It never has before.
If rich nations really wanted to help poor nations, they’d allow true free trade and set a better example at home, a model of economic justice that could be copied everywhere — a geonomy of no corporate welfare, no taxes on our efforts, no privatized “rents”, and a total and equal sharing of the worth of Earth. Then hello prosperity, bye-bye debt, gold, and the rest of distracting non-solutions.
This 2013 excerpt of IRIN, Dec 11, is by Elizabeth Blunt.
Daniel Runde, aid worker at the Washington-based Center for Strategic and International Studies (CSIS), asked donor countries to shift their focus away from alleviating poverty and concentrate on helping developing countries reach a position from which they can end poverty and deliver social goods for themselves.
Economists Francois Bourguingon and Stefan Dercon found a significant relationship between economic growth and people who live on less than a dollar a day, but they found no little or no correlation between growth and any one of the non-income Millennium Development Goals, such as child nutrition, girls’ education, or the number of children in school.
“So the role of assistance and expertise is going to change,” Runde said. “It’s not going to be about the most money on the table but about the best ideas, the best solution to a problem.”
The help that is needed now, Runde thinks, is in the fields of economic growth and governance. At the moment, these areas receive a very small part of the aid budget from his own country, the US. What little money is available for growth and governance goes largely to Afghanistan and Pakistan.
Going forward, Runde says there should be more focus on issues such as tax collection, commercial law, contract enforcement, and secure land tenure. These ideas were greeted politely at the London meeting, but with considerable reservations by many attendees.
Ed. Notes: Given that land tenure and taxation (or community dues) are so important, the best help the North could give the South is the power of a good example. The North could lead the way by following the dictum “pay dues for what you take, not taxes on what you make.” The dictum to follow regarding property in land is to: claim publicly, occupy privately, pay rent neighborly (as they’ll pay you), and use sparingly. If the North were to adopt these powerful reforms, the South would not be far behind. Then the whole planet could enjoy prosperity, and sustainable prosperity at that.
This 2013 excerpt of OtherWords, Oct 9, is by Sam Pizzigati, author of The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class.
Those janitors who clean Smithsonian museums? Those cooks at military bases? Those programmers writing software for Medicare? More and more of the workers who keep our government running work for private contractors. And many of these workers don’t make much at all. About 560,000 Americans employed by contractors have jobs that pay $12 an hour or less.
Meanwhile, the federal government reimburses private firms for up to $763,039 of the compensation they pay executives, a figure that will shortly rise to $950,000 under federal law. The federal government is now spending $20.8 to $23.9 billion annually, overall, for the compensation of top private contractor executives.
The government pays the President $400,000, the Vice President $230,700. If government reimbursed CEO salary at $230,700, it could give a $6 an hour raise to the 560,000 federal contractor workers who currently make $12 or less an hour.
Contractors like Lockheed Martin and other weaponeers owe their robust profitability to federal contracts. This profitability keeps corporate share prices high. Stock options and other stock awards translate these high share prices into whopping executive windfalls. Lockheed’s CEO Stevens took home $23.8 million last year.
The federal government already denies our tax dollars to companies with employment practices that discriminate on the basis of race or gender. We’ve decided, as a society, not to subsidize racial or gender inequality. Why should we subsidize economic inequality?
Ed. Notes: Bigger picture, why subsidize anything? We could forget about padding the wages for low-skilled work if instead we shared the worth of Earth. If everyone got an extra income from the value of land and resources — a la Alaska’s oil dividend or Singapore’s land dividend — then people could directly negotiate higher wages without having to have government intervene. People could also afford retraining. Or maybe even start their own business. All those futures sound brighter than being locked into an undemanding, tho’ better paying, job with a boss.
Even better, if we not only paid ourselves a Citizen’s Dividend but also axed the counterproductive taxes on earnings, purchases, and houses, why would we subsidize anything, even schools and clinics? Costs of living would be lower and with income higher, we would have the wherewithal to choose our own teachers and doctors, again without having to have government intervene.
Let our concern for struggling workers, and our distaste for income inequality, blossom into a campaign for geonomic justice.
as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.
not exactly Georgism, the Single Tax on land value proposed by Henry George. He did, tho’, inspire most of the real-world implementations of the land tax that some jurisdictions enjoy today, and modern thinkers to craft geonomics. While his name and our remedy both begin with “geo” since both words refer to “Earth”, the two have their differences. (a) George pegs land monopoly as the fundamental flaw while geonomics faults Rent retention. (b) To fix the flaw, George was content to use a tax, while geonomics jettisons them in favor of price-like fees. (c) George focused on the taking while geonomics headlines the sharing. George envisioned an enlightened state judiciously spending the collected Rent while geonomics would turn the lion’s share over to the citizens via a dividend. (d) And George, as was everyone in his era, was pro-growth while geonomics sees economies as alive, growing, maturing, and stabilizing. Despite these differences, George should be recognized as great an economist as Euclid was a geometrician.
a way to connect the dots. Making the cyber rounds is “The Cavernous Divide” by Scott Klinger, from AlterNet (posted March 21): “As the number of billionaires in the world expands, so does the number of those in poverty.” Duh. The yawning income gap is not news. Nearly every issue of our quarterly digest carries a similar quote. Yet the connection was worked out long ago by one of America’s greatest thinkers, Henry George, who labeled his masterpiece, Progress and Poverty. Techno- and socio-advances always enrich few and impoverish many. Yet progress also pushes up location values – the geonomic insight (is Silicon Valley cheaper now or more expensive?). Instead of taxing income, sales, or buildings, society could collect those values of sites, resources, EM spectrum, and ecosystem services via fees and dues, which would lower the income ceiling, and instead of lavishing corporate welfare, pay out the recovered revenue via dividends, which would jack up the income floor. Dots connected.
an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.
suitable for framing by Green Parties. When Greens began in Germany two decades ago, they defined themselves as neither left nor right but in front. Geonomics fits that description. The Green Parties have their Four Pillars; geonomists have four ways to apply them:
Ecological Wisdom. Want people to use the eco-system wisely? Charge them Rent and, to end corporate license, add surcharges. To minimize these costs, people will use less Earth.
Nonviolence. Want people to settle disputes nonviolently? Set a good example; don’t levy taxes, which rely on the threat of incarceration, to take people’s money. Try quid pro quo fees and dues.
Social Responsibility. Want people to be responsible for their actions? Don’t make basic choices for them by subsidizing services, addicting them to a caretaker state. Let people spend shares of social surplus.
Grassroots Democracy. Better have grassroots prosperity. Remember, political power follows economic. Pay people a Citizens Dividend; to keep it, they’ll show up at the polls, public hearings, and conventions.
a 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!
in part the Great Green Tax Shift maxed out. Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net. Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent.
a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.
close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)
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.
One should be able to see that things are hopeless and yet be determined to make them otherwise. This philosophy fitted on to my early adult life, when I saw the improbable, the implausible, often the “impossible,” come true.
F. Scott Fitzgerald
We are all in the gutter, but some of us are looking at the stars.
The difference between the right word and the almost right word is the difference between lightning and a lightning bug.
We have, I fear, confused power with greatness.
We must learn to live together as brothers or perish together as fools.
Martin Luther King, Jr.
There are two ways to slide easily through life; to believe everything or to doubt everything. Both ways save us from thinking.
Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.
You see things; and you say, ‘Why?’ But I dream things that never were; and I say, “Why not?”
George Bernard Shaw
Learn from the mistakes of others. You can’t live long enough to make them all yourself.
I have never let my schooling interfere with my education.