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.
These two 2013 excerpts are from (1) Vindy, Dec 14, on current rents by Burton Speakman and (2) Cattle Network (undated) on calculating rents by Michigan State University Extension.
Agent to farmers: Budget now for 2014
“Bull markets in corn in 2011 and 2012 helped create a marked increase in land rent,” said Eric Barrett, Ohio State University extension agent.
Land rents are supposed to decrease along with decreases in corn prices, said David Marrison, extension agent. However, it’s unlikely that landowners are going to be willing to reduce rents.
“Once rates have increased, it’s difficult for them to go back,” he said. “It’s sort of like a business telling you in a bad year that they want to take back 20 percent of your salary.”
The typical rent for an acre went from $55 in 2012 to $76 in 2013.
Landowners are reading stories about rental rates going up on farmland all over the country, and they’re trying to get a better return on their investment. “It’s amazing how many calls we get about average land rents,” he said.
Many property owners try to estimate the yield on their property by counting the number of vehicles that leave the property during the harvest, Marrison said. Typical yield helps determine rent amounts.
Land values overall are increasing, so farmers pay more either to buy land. Real-estate debt for farmers also is increasing due in part to the low interest rates [enticing farmers to buy more before rates go up].
Pasture land has been in short supply in recent years throughout the Midwest primarily due to record high grain prices and other commodity pressures. It appears the trend has peaked for corn and is headed back to a “new normal” trading range for grain. Pressure may still be on grazing lands in the short term as livestock producers looking to expand or find new grazing opportunities stay competitive in the market and bid pasture prices higher than national averages.
Over time, pasture values tend to follow cattle and corn prices. Following those prices and local land rent for cropping systems will help determine pasture prices in your region. The main focus when leasing pasture is for both parties to receive a fair value for the land resource and grazing opportunity.
For Midwest producers to prosper in the cow-calf or stocker business, they must have access to reasonably priced pasture lands from May-October. National pasture land prices are generally benchmarked from the Flint Hills area and Kansas State University does a nice job of laying out the prices paid for pasture based on rental surveys.
Mike O’Mara, Progress Report board member, notes: Ed. Notes: As the price of pasture land gradually rises, that makes it harder for farmers who’re buying or leasing. Meanwhile, land speculators, including some farmers, obtain revenue from selling or renting out their land, which they didn’t produce — that’s different from selling or renting buildings or other improvements.
The cost of farmland could be lower, and food prices could also be lower, if there was a limit on land speculation, by requiring that land speculators and other major land users paid land dues, based on the value of the location, not the improvements. Some of the land revenue could even be used as a equal dividend for citizens, somewhat similar to Alaska’s oil dividend.
That would also have the additional nice effect of being a second way of helping people to be able to afford food and other necessities, as well as having something extra to make life more comfortable. After all, no person made the land, so how can it make sense for a few people to live off of it without compensating others who don’t own any land?
College in Sweden is free but students still have a ton of debt. How can that be?
This 2013 excerpt of Quartz, May 31, is by Matt Phillips.
Swedish colleges and universities are totally free. But students there still end up with a lot of debt. The average at the beginning of 2013 was roughly 124,000 Swedish krona ($19,000). Sure, the average US student was carrying about 30% more, at $24,800. But: College in Sweden is free.
That’s not even all that common in Europe anymore. While the costs of education are far lower than in the US, over the past two decades sometimes-hefty fees have become a fact of life for many European students. And yet, students in Germany and the UK have far lower debts than in Sweden.
About 85% of Swedish students graduate with debt, versus only 50% in the US. Worst of all, new Swedish graduates have the highest debt-to-income ratios of any group of students in the developed world — somewhere in the neighborhood of 80%. The US student debt average is more like 60%.
Costs of living in Sweden are high, especially in cities such as Stockholm, which regularly ranks among the world’s most expensive places to live. But again, this stuff isn’t free for students in other European countries either. So why do Swedish students end up with more debt? In Sweden, young people are expected to pay for things themselves.
Despite nonexistent tuition costs, Sweden has a virtually 100% uptake rate on student aid.
Swedes, like other Nordic Europeans, have an independent streak. They leave their parental homes earlier than almost all their southern neighbors. One study found that just 2% of Swedish men lived with their parents after the age of 30. In Spain, a quarter of 30-year-old men still are shacking up with mom and dad; in Italy it was around 32%.
In Sweden, students are viewed as adults, responsible for their own finances. Compare that to countries like Germany, where any aid from the state agency that doles it out, known as BAföG, is premised on parental income. In Sweden, the entire system is aimed at severing the financial link between parents and young adults.
Ed. Notes: The author did not break down the typical student’s budget but in places of high costs, the highest is usually the location on which sits one’s housing. But paying a lot for a residential site need not be a problem.
All the society has to do is recover its socially-generated value of its land. Then disburse the revenue back to citizens. Its government can levy a land tax or require Land Dues to redirect spending for land into the public treasury then pay out dividends to the citizenry as their share of the worth of Earth in their nation.
Already Aspen CO and Singapore do something similar. It’s sort of like Alaska’s oil dividend, but from the most widespread natural resource — surface land. In places of bountiful resources and few people like Sweden, the “rent” share could easily be enough to obviate student debt.
This 2013 excerpt of Computerworld, Oct 7, is by Patrick Thibodeau.
Daryl Plummer, a Gartner analyst at the research firm’s Symposium ITxpo: “What we’re seeing is a decline in the overall number of people required to do a job.” Plummer points to a company like Kodak, which once employed 130,000, versus Instagram’s 13.
Gartner sees social unrest movements, similar to Occupy Wall Street, emerging again by 2014.
Tom Seitzberg, director of international IT operations for Genomic Health in San Francisco: “If you get just a top level, a small amount of very rich people, and a very large piece of very poor people, it leads to social unrest.”
By 2016, the 3D printing of tissues and organs, called bioprinting, will cause a global debate. Said Plummer: “If you start printing products, distribution systems change, where the work is done changes.”
By 2018, 3D printing will result in the loss of at least $100 billion a year in intellectual property globally. This could be particularly hard on a small business. “It’s now easy to steal an entire business,” said Plummer.
By 2017, more than half of consumer goods manufacturers will get 75% of their consumer innovation and R&D capabilities from crowd-sourcing. Companies are already soliciting customer feedback in product design and direction.
By 2020, imagine training your replacement, a machine, to take over your job. Revenues earned by IBM from Watson, the Jeopardy-playing supercomputer, will account for 1.5% of IBM revenues by the end of 2015, and 10% by 2018.
Ed. Notes: In the past, vanishing jobs has meant some unrest but also the creation of other jobs, such as paper-pushing and salesmanship — not necessarily the most useful jobs but they do pay the bills.
One thing you can say with certainty — since it has always played out before — is that techno-progress will push up land values, as it has done in Silicon Valley. Higher site values can either widen the widening income gap or be a boon for all humanity. All people need do is recover those values — via taxes, fees, leases, dues — and disburse them back to citizens as a dividend.
Getting a fair share of our common heritage — which both land and knowledge are — should not only keep the peace but also liberate humans from so much concern about all things materialistic, letting us return to the lifestyle of hunter / gatherers. Such a rebirth could become the best blessing of progress.
This 2013 excerpt of Popular Resistance, Dec 13, is by Steven Yablonski, Susan Raff, and Joseph Wenzel.
Connecticut has become a pioneer in food labeling as it is the first state to pass legislation to make companies say if their products contain genetically modified organisms or GMOs.
GMOs are used to help plants be resistant to herbicides and pesticides, but it’s done by taking DNA from a bacteria or a virus, which is inserted into the seed. GMOs are commonly found in corn, soy, canola, and sugar.
Connecticut’s law goes into effect after four other states enacted similar legislation. In addition, a combination of northeastern states with a combined population of at least 20 million, including Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, New York, Pennsylvania, and New Jersey, must adopt similar laws.
The bill also includes language that will protect local farmers to ensure regional adoption of the new labeling system before it will require local farms to analyze and label genetically engineered products.
Buying foods that are organic has become popular and in health food stores, yet it’s not common to find products that are already labeled GMO-free.
Ed Notes: With food labels, one small government inches toward protecting the public instead of favoring insider businesses. Let’s hope small steps do begin long journeys, perhaps all the way to ending the limits on the liability of corporations that knowingly put customers, workers, and nature at risk. BTW, Connecticut is also the first state in probably a century to allow some localities to utilize public recovery of publicly-generated land values, a policy already working well in Pennsylvania and beyond America. What are they putting in the drinking water in that progressive News England state? Certainly not GMOs.
Ed. Notes: Even where people are used to paying over land value to government, government still does not recover all of this socially-generated value. Universally, it seems, speculators are that powerful. What might make a difference would be to share out a goodly portion of the rental revenue as dividends to residents, taking any sting out of paying land taxes or land dues while encouraging people with surpluses to invest in something more productive than just bidding up the price of land and housing.
Newly public court documents shed light on mysterious and sudden closure
This 2013 excerpt of Common Dreams, Oct 3, is by Sarah Lazare.
The head of Lavabit, the email service used by Edward Snowden, shut down his own company rather than comply with FBI orders to expose its 400,000 users to direct surveillance.
“[P]eople using my service trusted me to safeguard their online identities and protect their information,” founder Ladar Levison declared in a statement posted to his Facebook. “I simply could not betray that trustI simply could not betray that trust.”
Levison repeatedly refused to hand over information requested in the hunt for Snowden, who used the Lavabit service to organize a July press conference at the Moscow airport. He was dealt a search warrant in July, followed by government orders for “all information necessary to decrypt communications sent to or from the Lavabit e-mail account [redacted] including encryption keys and SSL keys.”
Levison eventually complied with the order, but presented the keys in barely-readable 4-point font on printed paper.
“If the Obama administration feels compelled to continue violating the privacy rights of the masses just so they can conduct surveillance on the few then he should ask Congress for laws providing that authority instead of using the courts.”
Ed. Notes: What if government — people addicted to power — were less worried about who might be an enemy and more concerned about not creating so many enemies in the first place? What if the US military quit killing civilians in drone strikes? What if the US converted its 800 military bases around the world into video arcades? What if America adopted economic justice at home so that geonomics could spread abroad? Then the world would become such a safe place, the war machine would become useless — and no longer a gravy train for soulless insiders who prefer spying on citizens and warring on foreigners. Yet such must happen if America is ever to live up to its self-image of home of the brave and land of the free.
UBS AG (UBSN), Switzerland’s biggest bank, is entering Australia’s property market to invest as much as A$10 billion ($9 billion) over the next five years.
The bank, which now only holds property shares in the country, is partnering with Australia’s largest closely held builder Grocon Pty to beat a rush of global capital that’s seeking a home in its real estate market.
Investor demand for Australian property is climbing, driven by relatively higher yields, and as home prices in the nation’s biggest cities reach records each month. Australia was among the three most active Asia-Pacific markets for commercial property transactions in the three months to Sept. 30, after Japan and China.
UBS manages $8 billion of retail and industrial property in Japan through a joint venture with Mitsubishi Corp., and partners with Chinese developer Gemdale Corp. in a residential development fund.
The Aussie partnership will begin by focusing on prime office properties for more conservative investors, and residential developments to cater to those seeking higher returns.
Ed. Notes: If ground rent is good enough for a big church and a big bank, it sure is good enough for society as a whole. There’s nothing wrong with getting hefty returns from land, but it’s something we should do together, since we as society generate the value of locations, just by our mere presence. It’s the value of the buildings and other improvements that belong to the owner exclusively. If society were to recover the site values it creates, it could repeal the counterproductive taxes on income, sales, and buildings (property). That’d allow residents to become more productive, which is good for business, and would lift up location values, swelling the tax base. Singapore uses this geonomic policy to a degree and is one of the best places on the planet for business. And the timing must be right; let speculators lead the rest of society to benefitting from the worth of Earth.
A new study by researchers at the London School of Economics found that for some creative industries, copyright infringement might actually be helping boost revenues.
Internet-based revenues have been a significant component of the music industry’s growth since 2004 as the industry has slowly adopted methods of distributing and consuming content modelled on those used by file-sharing services and sites such as BitTorrent, Pirate Bay, and the now defunct Napster, which pioneered music file sharing in the 1990s.
While it acknowledges that sales have stagnated in recent years, the report points out that the overall revenue of the music industry in 2011 was almost $60 billion US, and in 2012, worldwide sales of recorded music increased for the first time since 1999, with 34 per cent of revenues for that year coming from digital channels such as streaming and downloads.
Had the record companies adapted to a digital environment earlier, rather than resisting it, they could have witnessed growth much earlier, the authors say.
The same holds true for the movie industry, the researchers suggest. While sales and rentals of DVDs have declined — by about 10 per cent between 2001 and 2010 — global revenues have increased by five per cent in that same period. The U.S. film industry alone was worth a healthy $93.7 billion in 2012, the authors said.
The video game and book publishing industries have also been successful at finding new revenue streams within the digital space and are making healthy profits, the report said. In 2013, the global book publishing industry was worth $102 billion, more than any of the other entertainment industries.
“Although revenues from print book sales have declined, this has been offset by increases in sales of e-books, and the rate of growth is not declining despite reports lamenting the ‘end of the book’,” the researchers write in their report.
The researchers make the argument that the digital culture that has sprung up around the file sharing of music, video games, movies, and other content has spawned new models of producing and distributing creative content that don’t rely on exclusive ownership of that content.
Creative Commons licences, for example, which allow artists to specify how their work is shared by the public, are increasingly being used by some musicians to release their content on music-sharing sites like SoundCloud, the report said.
The report points to the 10 million user-generated videos of Gangnam Style by South-Korean musician Psy that were created on YouTube after the original song was released and went viral as evidence that digital culture thrives on the ubiquitous sharing of digital content.
The report points to the results of a consumer tracking study by the U.K. communications regulator Ofcom that found that file sharers in the U.K. spent more on content than those who only consumed legal content.
The LSE researchers urge countries like the U.K. and the U.S. to reform their copyright enforcement regimes, which they say are out of step with such developments and with online culture generally and do not necessarily even serve the interests of the creators they claim to be protecting.
“Insisting that people will only produce creative works when they can claim exclusive ownership rights ignores the spread of practices that depend on sharing and co-creation and easy access to creative works; this insistence privileges copyright owners over these creators,” the report says.
Ed. Notes: This is good news. Now my conscience is relieved after excerpting so much from the original article. And if government is to grant patents and copyrights, it should charge full market value (as would any business) for those exclusive monopolies. Then use the revenues to fatten a Citizen’s Dividend, compensating people for being excluded from exploring where others have already patented or for not being allowed to replay a story or song as one would retell a joke. Some things are just meant to be shared.
This 2013 excerpt of Xerox’s Real Business, Dec 13, was rerun by Business Insider, Dec 16.
In my home country of the United States, the average workweek is 38 hours, after factoring in for part-time jobs. I know what you’re thinking: “I work way more than 38 hours a week!” Believe me, I did too when I lived in New York. The most standard U.S. workweek is 40 hours, which is fairly average compared to other countries around the world.
European countries generally work shorter weeks, with France (where I now live and work) famously defending a 35-hour week. Side note: as I have discovered since working in Paris, most French employees actually work much longer weeks, they just get extra vacation days to balance things out at the end of the month.
Productivity is lost if an employee works too few hours but also if an employee works too many hours and “burns out.” Tom Walker, of the Work Less Institute agrees, stating, “that output does not rise or fall in direct proportion to the number of hours worked is a lesson that seemingly has to be relearned each generation.”
In the early 1990s, the famous industrialist Henry Ford decreased the lengths of working weeks from 45 to 40 hours, to the surprise and mockery of his competitors. Over the next decade, Ford’s business boomed and, in 1937, the 40-hour workweek was enshrined in Franklin D. Roosevelt’s New Deal.
Not only do longer working weeks fail to bring proportionate gains in productivity, they also engender negative consequences such as workplace accidents and the inevitable lawsuits that follow. This argument is perhaps best outlined in a 2012 Salon article entitled “Bring back the 40-hour workweek.”
Data from other countries suggests that perhaps even a 40-hour workweek is too long and that the optimum number of hours lies in the 30s. The French, with their legally enshrined 35-hour week and lengthy holiday period (the entire country more or less shuts down every August), work the least amount of hours per year in the world.
For the hours the French do work, though, they are much more productive than workers almost anywhere else. France’s total economic output divided by the number of hours worked is among the highest in the world, even higher than in Germany. Quality over quantity seems to be the French philosophy, working less but working better.
In Germany, the average workweek is also only 35 hours, and the notoriously efficient German economy is the fourth largest in the world. Working fewer hours could also be one of the reasons that Germany has maintained such a low unemployment rate (currently sitting at 5.2%) compared to the United States (7.3%).
The British New Economics Foundation say the optimum number of hours in a workweek would be 30. In their book “Time On Our Side,” they argue that the 30-hour week would safeguard natural resources, reduce greenhouse gases, undercut unemployment by creating new jobs and benefit workers’ general health.
Ed. Notes: The length of the workweek does not have to be mandated. Instead, empower people to work as much as they like, as little as they like. The way to do that is to pay everyone a non-work income, an extra income derived from the value of nature and privilege in a region. Every society pays a lot for land and resources and to holders of government-granted privileges such as banking charters. Get government to charge full-market value (as would any business) for the little pieces of paper it grants and get it to recover the socially-generated value of sites and resources via taxes, fees, leases, and dues. Then disburse the raised revenue to the citizenry in equal shares. Enjoying that cushion, employees will be on a level playing field with employers and can decide how much to work.
Further, government could fatten the Citizen’s Dividend if it doesn’t tax people’s income, sales, and buildings. Out from under such taxes, people will produce more and more efficiently, which drives up land values. Government would funnel those “rent” increases into the dividend.
Once we’re liberated from often meaningless labor, will we define ourselves by what we do for work or what we do for play? “Hi. I pet cats and row across oceans. And you?”
This 2013 excerpt of Occupy, Spt 26, is by Steve Rushton. Truthout reran it Oct 3.
Along with the financial crash that hit the island hard in 2008, Icelanders’ trust in politicians also crashed. So two eDemocracy pioneers created the online platform, Your Priorities. During the 2009 elections for mayor of Iceland’s capital, each candidate was given an equal space to use the site. The Best Party used it most widely, and went on to win an election in which 10% of voters took part and created some 1,000 policy initiatives. Since then, the new mayor has continued to implement citizen-led legislation.
Better Reykjavik was started by Gunnar Grímsson and Róbert Bjarnason of the Citizens Foundation. They identified themselves as both entrepreneurs and activists. “It just felt right using our extensive IT knowledge and experience to be proactive for a better world instead of being reactive in protests.”
The Your Priorities platform has also been used elsewhere in Europe, such as Estonia, as part of a people’s assembly project to create new legislation following numerous political scandals in the small Baltic nation in 2012. Grímsson and Bjarnason explained: “Close to 60,000 people participated, over 1,500 ideas were submitted and the best ideas were prioritized.”
Within representative democracies, “generally politicians won’t listen to the people unless there’s a lot of participation. But the people won’t participate unless they believe they will be listened to.”
“Changing your world takes time and persistence,” they added. “Crowd-source the highest priorities, organize through ideas and speak with one voice. Get media attention and work with it instead of being frustrated about it. Also, use social media to promote eDemocracy and organize open meetings offline.”
“You need to animate the general public to participate, whichever way you can,” they continued. “Many fragmented voices achieve little, but united we can change the world. We need to find the most important ideas for every community and mobilize to support those ideas.”
“Some people are good at expressing themselves in writing, others in person. Some look good in photos or TV, many get really nervous during any kind of broadcast,” they said. “This obviously does not excuse leaving older people behind, but to be brutally honest, that problem will solve itself in time. As for leveling the playing field for people that lack internet knowledge and confidence, we definitely need to make eDemocracy as simple as possible.”
Ed. Notes: Once we win economic justice we won’t need to debate and argue so much, so our good ol’ democracy could become a fondly remember anachronism; but until we do win a fair share for everyone we do need an aroused and demanding public and electorate, something tools such as crowd sourced democracy could deliver.
This 2013 excerpt of OpEdNews, Nov 27, is by Ellen Brown.
In at least 26 countries — including Switzerland, Australia, Austria, China, India, France, Germany, Hungary, Luxembourg, Greece, Bulgaria, Poland, Italy, Mexico, and Russia — GMOs are totally or partially banned; and significant restrictions on GMOs exist in about sixty other countries. In US supermarkets, sixty to seventy percent of the foods are genetically modified.
Often known as Roundup after the best-selling Monsanto product of that name, glyphosate poisons everything in its path except plants genetically modified to resist it. Glyphosate is an essential partner to the GMOs that are the principal business of the burgeoning biotech industry. Glyphosate-based herbicides are now the most commonly used herbicides in the world.
Roundup-resistant crops escape being killed by glyphosate, but they do not avoid absorbing it into their tissues. Herbicide-tolerant crops have substantially higher levels of herbicide residues than other crops. In fact, many countries have had to increase their legally allowable levels–by up to 50 times–in order to accommodate the introduction of GM crops. In the European Union, residues in food are set to rise 100-150 times if a new proposal by Monsanto is approved. Meanwhile, herbicide-tolerant “super-weeds” have adapted to the chemical, requiring even more toxic doses and new toxic chemicals to kill the plant.
Human enzymes are affected by glyphosate just as plant enzymes are: the chemical blocks the uptake of manganese and other essential minerals. Without those minerals, we cannot properly metabolize our food. That helps explain the rampant epidemic of obesity in the United States. People eat and eat in an attempt to acquire the nutrients that are simply not available in their food.
Glyphosate enhances the growth of fungi that produce aflatoxin B1, one of the most carcinogenic of substances. Fungi growths have increased significantly in US corn crops. We’ve gone from a pretty healthy population to one with a high rate of cancer, birth defects and illnesses seldom seen before.
The endocrine-disrupting properties of glyphosate have been linked to infertility, miscarriage, birth defects, and arrested sexual development. Animals fed GM soy were sterile by the third generation. Vast amounts of farmland soil are also being systematically ruined by the killing of beneficial microorganisms that allow plant roots to uptake soil nutrients.
The US Food and Drug Administration allows biotech companies to determine if their own foods are safe.
The Obama administration is trying to fast-track the Trans-Pacific Partnership. Negotiations have been kept secret from Congress but not from corporate advisors, 600 of whom have been consulted and know the details. The TPP would give multinational corporations unprecedented right to demand taxpayer compensation for policies that corporations deem a barrier to their profits.
In 2011, 40% of Russia’s food was grown on dachas (cottage gardens or allotments). Russia only has 110 days of growing season per year. In the US, only about 0.6 percent of the total agricultural area is devoted to organic farming. The area taken up by lawns is two times greater than that of Russia’s gardens — and it produces nothing but a multi-billion-dollar lawn care industry.
Ed. Notes: If people are to win against corporations, then they’re going to have to have a fair fight. Right now it’s Big Money vs. little money, and that’s not fair. For the battle to be fair, the many little people need more economic power, at the expense of Big Business. That means, shifting government spending out of corporate welfare, into a dividend paid to the citizenry in general. Where would the money come from? From all of society’s spending for the nature it uses — mortgages for land, utility bills for oil, etc. Using taxes and fees and rebates and dividends, redirect all that spending for things of great value that nobody made away from the coffers of corporations and into the pockets to citizens and then people can win these struggles.
This 2013 excerpt of BBC News, Oct 3, is by James Morgan.
Five physics discoveries with the potential to transform the world have been selected by Physics World for its 25th birthday issue:
Hadron therapy – targeting tumours with miniature, table-top particle accelerators.
Quantum computers – potentially able to simulate new drug molecules.
Nanoscopic “superlenses” using evanescent light.
Power on the go – kinetic energy harvesting using triboelectrics that could enable shoes to charge a mobile phone.
Graphene – for electronics and super-strong materials.
Graphene’s strength, flexibility, and conductivity make it a potentially ideal material for bendable smartphones and superior prosthetic limbs. Despite being just one atom thick, it is impervious to almost all liquids and gases. Generating holes in sheets of graphene could therefore create a selective membrane – “the ultimate water purifier” – which might someday create drinking water from the sea.
The magazine also picked its top five breakthroughs of the last 25 years:
Quantum teleportation (1992)
The creation of the first Bose-Einstein condensate (1995)
The accelerating expansion of the universe (1997)
Experimental proof that neutrinos have mass (1998)
The sighting of the Higgs boson at Cern (2012)
The magazine’s 25th anniversary issue also highlights five images that have allowed us to “see” a physical phenomenon or effect. In all, the publication compiled five lists of five to examine different aspects of physics.
Physics World is the monthly magazine of the Institute of Physics and was first published in October 1988.
Ed. Notes: Physics gets real results while most economic conclusions can’t even reach the standard of accuracy. No wonder economists suffer from “physics envy”. And when physicists make mistakes, after a while of competing physicists arguing and providing counter evidence, then the truth usually wins out.
None of this is true for economics, mainly because economics must confront profit and property in order to become a science, and those topics are way too controversial for most people, economists included.
Because economics is not a science, mainstream economists can not predict accurately, while geonomists can. Yet these scientific geonomists are ignored by the conventional economists. What will it take for the paradigm to shift?
This 2013 excerpt of MoneyWeek, Dec 11, is by Merryn Somerset Webb, and continues earlier British press coverage of the proposal.
We’ve written here several times before about how useful a land/location value tax (LVT) might be.
If you build a bypass around a village, the price of houses in the village goes up. And if the taxpayer has put up the cash for the bypass, why should the owners of this tiny group of houses reap a windfall of tax-free cash? Makes no sense really.
But what of the people who can now see and hear the bypass where before they lived in peace? Some of them will have ended up with a little compensation. Most will have had none. Yet they will have suffered one way and another, so why shouldn’t they be compensated via the tax system – paying less tax on their now devalued land than those inside the village in their newly desirable homes?
Imagine if a new wind farm were going up in clear sight of your hill-top cottage, or perhaps that fracking was about to ruin your sense of rural idyll. Would you complain so hard if your compensation came in the form of zero council tax for ever?
The current compensation system for those living around new infrastructure projects is geared to paying out as little as possible. That pretty much guarantees that people will oppose it, and do so for as long as possible.
In the Autumn Statement was a decision to “run a pilot project that will share some of the benefits of the development directly with the individual households adversely affected by it.”
There have been a good many hints since the last election that the coalition is unusually interested in the LVT. This is another one.
Ed. Notes: Bigger picture, all of us should be compensated for being excluded from everyone else’s private property on Earth, our common heritage, just as each of us should compensate everyone else for our excluding them. That means, we’d all pay Land Dues into the common kitty and get Rent Dividends back. Those who claim more desirable locations would pay more while all citizens would get back an equal amount. Compensation could go a long way to taking the sting out of nuisances such as above, plus people might not mind so much when they must move to make way for progress. And extra money in the pocket would undoubtedly help pass the land tax or land dues into law.
These three 2013 excerpts on banking and money are from the New York Times, Oct 2, by (1) Ellen Brown on public banks and (2) James K. Galbraith, U. of Texas, author of Inequality and Instability on public currency; and (3) Consent Chronicle, Dec 18, on currency competition by James Wilson.
Public Banks Are Key to Capitalism
To ask whether public banks would interfere with free markets assumes that we have free markets, which we don’t. Banking is heavily subsidized and is monopolized by Wall Street, which has effectively “bought” Congress. Banks have been bailed out by the government, when in a free market they would have gone bankrupt. The Federal Reserve blatantly manipulates interest rates in a way that serves Wall Street, lending trillions at near-zero interest and pushing rates so artificially low that local governments have lost billions in interest-rate swaps.
Public banks lend countercyclically, providing credit when and where other banks won’t. This does not crowd out private banks. Germany and Taiwan, which have strong public banking sectors, are among the most competitive banking markets in the world.
In North Dakota, the only state with its own “mini-Fed,” the state-owned Bank of North Dakota routes its public lending programs through community banks. The Bank of North Dakota cooperates rather than competes with local banks, aiding with capital and liquidity requirements. Its deposit base is almost entirely composed of the revenue of the state and state agencies. North Dakota has more banks per capita than any other state, because they have not been forced to sell to their Wall Street competitors. The North Dakota Bankers’ Association endorses the Bank of North Dakota, which has a mandate to support the local economy.
The Bank of North Dakota takes almost no individual deposits, but a national postal bank would, just as postal banks have done routinely in other countries without destabilizing markets. One-fourth of American families are unbanked or underbanked. With $3 trillion in excess deposits, Wall Street doesn’t want these small depositors.
By providing inexpensive, accessible financing to the free enterprise sector of the economy, public banks make commerce more vital and stable.
Could the Treasury pay its bills without bonds? Well, the Fed does have regulations governing “overdrafts”.
Yet under present law, Secretary of the Treasury Jack Lew could pay off public debt held by the Federal Reserve by issuing a high-value, legal-tender coin – so long as the coin happened to be platinum. A coin is not debt, so that simple exchange would retire the Fed’s debt holdings and lower the total public debt below any given ceiling.
Legally, the president’s officers have the power to use one gimmick to deflate the other.
The Zero Aggression Project and DownsizeDC urge Congress to pass the Free Competition in Currency Act (HR 77).
For 100 years, the Fed notes have robbed the dollar of over 95% of its value. This money inflation led to and perpetually higher prices and devalued savings and overheated stock markets.
HR 77 ends the Fed’s monopoly on issuing new currency; it allows we the people to choose better, non-inflationary forms of money, such as gold or silver. If it becomes law the Fed will either have to stop inflating or lose customers.
Free market money would mean my savings would be protected and prices would stabilize and Congress couldn’t borrow so much.
Send Congress a letter using DownsizeDC.org’s Educate the Powerful System. Please share your letter with friends. Ask them to take the same action.
Ed. Notes: Like most people, these writers can see money but can’t see land. Money we touch every day but land, eventho’ we can’t go anywhere without stepping on it, has faded away into the background.
Yet why do banks lend most of their money? So people can buy land and the building upon it. Why are governments continually in debt? Because they refuse to recover the socially-generated value of land and resources, a value that’d make an ideal tax base.
Society’s spending for land is plenty of money, and unlike other tax targets — income, sales, buildings — the value of locations actually grows when recovered by the community. That’s because the land tax or land dues prompt landowners to quit speculating in land and instead put their sites to good use, which raises the value of all parcels in a region.
If government were to tap this growing flow of funds and keep itself out of debt, it’d have no reason to over-issue new money. Instead of inflation, as technology advances then the cost of living would fall. And if government paid surplus public revenue to citizens as a dividend, then people would not have to borrow so much.
Even without reforming the creation of new money — and the process sure deserves to be corrected — you could turn money, banking, and debt into non-issues by recovering and sharing the value of land and natural resources.
This 2013 excerpt of Business Standard, Dec 10, is by Hrusikesh Mohanty.
Salt manufacturers in the state of Odisha suffered major blow to their business couple of months back because of cyclone Phailin and subsequent floods.
Now the central government has increased the ground rent on salt fields from Rs 5 to Rs 120 per acre per annum. It has also increased the assignment charge on the manufacturers from Rs 4 to Rs 100 per tonne of salt per annum, retroactive to last January.
The salt manufacturers’ association will ask the government to reconsider its decision.
Ganjam is the major salt producing district in the state having around 5,000 acres of lands. There are 43 manufactures, including private ones and two cooperative societies engaged in making salt from the sea water. They produce 15,000 to 20,000 tonnes of salt every year. The salt farming land is leased to cooperative and private sector firms by the central and state governments.
While the infrastructure facilities like the sheds, pump sets, iodization godowns, and electric transformers were damaged in the cyclone, there was heavy siltation in the fields due to heavy rains and floods following the storm. At least Rs 10,000 per acre is needed to de-silt the salt fields to revive the production.
Ed. Notes: While it is fair for those who use land to pay their community for excluding everyone else from the land, and fair for government to collect such rent for community use, it is not fair for government to collect more than the annual market value of the land. After a devastating storm, wouldn’t the land be worth less? Wouldn’t lowering the rent make more sense? However, perhaps in this case, where the rent had been so low, the increase is still not much, only raising the amount to a fair amount. It’s not possible for us to judge without knowing how much profit the salt farmers make on public land each year. If only the reporter would complete the story!
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
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.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
a 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?
a manual. The world did not come without a way for people to prosper, and the planet to heal and stay well; that way is geonomics. Economies are part of the ecosystem. Both generate surpluses and follow self-regulating feedback loops. A cycle like the Law of Supply and Demand is one of the economy’s on/off loops. Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus. Those profits without production (remember, nobody produced Earth) can become our commonwealth. To share it, we could pay land dues in to the public treasury (wouldn’t oil companies love that?) and get rent dividends back, a la Alaska’s oil dividend. Doing so let’s us axe taxes and jettison subsidies. Taxes and subsidies distort price (the DNA of exchange), violate quid pro quo by benefiting the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer (you don’t really need so much bureaucracy, do you?). Conversely, land dues motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves. Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature. Then in all that free time, maybe we could figure out just what we are here for.
the policy that the earth’s natural patterns suggests. Use the eco-system’s self-regulating feedback loops as a model. What then needs changing? Basically, the flow of money spent to own or use Earth (both sites and resources) must visit each of us. Our agent, government, exists to collect this natural rent via fees and to disburse the collected revenue via dividends. Doing this, we could forgo taxes on homes and earnings and subsidies of either the needy or the greedy. For more, see our web site, our pamphlet of the title above, or any of our other lit pieces; ask for our literature list.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old loggers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.
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.