We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.
This 2014 excerpt of the New York Times, Jly 26, is by their Editorial Board.
It has been more than 40 years since Congress passed the current ban on marijuana, inflicting great harm on society just to prohibit a substance far less dangerous than alcohol.
The federal government should repeal the ban on marijuana.
We believe that on every level — health effects, the impact on society, and law-and-order issues — the balance falls squarely on the side of national legalization.
The social costs of the marijuana laws are vast. There were 658,000 arrests for marijuana possession in 2012. The arrested are disproportionately young black men, ruining their lives, and creating new generations of career criminals.
There are legitimate concerns about marijuana on the development of adolescent brains. For that reason, we advocate the prohibition of sales to people under 21.
Ed. Notes: Cool. The NYT considers it safe enough to take a stand. Some leadership would have been nice, but better late than never. And way cool that it shows the powers-that-be can change, that society has changed, and that eventually government will catch up. Now, if only those three players will get real about economic justice and promote a Citizen’s Dividend from society’s surplus, those trillions of annual rents, all our spending for nature and privilege, now lining the pockets of very few but available to make life a joy for everyone.
This 2014 excerpt of Pacific Standard, Jly 25, is by Tom Jacobs.
For women looking to attract a man, there are advantages to being caring. But new research shows it doesn’t work the other way around. Women do not equate responsiveness in men with attractiveness or masculinity.
Women may see emotionally responsive men as overly eager to please or as insincere cads who are clumsily trying to ingratiate themselves.
In the getting-to-know-you phase, potential partners often tend to rely heavily on conventional cultural scripts of how women and men should behave toward one another.
Ed. Notes: But where do those cultural scripts come from and why do they apply to the same gender across cultures? Whatever, the main take away is that people have frames and if you want open-minded people to support your new good idea, you must push the right buttons — no matter who’s your listener nor what’s their gender.
This 2014 excerpt of EcoWatch, Jly 24, is by Brandon Baker.
Hours after a jet flying over Ukraine was shot down, Congress members from both sides of the aisle presented cases to lift the 40-year-old ban on crude oil exports. The oil would cut Europe’s oil dependence on Russia and provide an economic boost to the U.S., they say [at least for those whose money comes from oil], ignoring the cost of further damaging our environment and collective health by drilling.
Ed. Notes: Since the only winner from this tragedy would be oil companies, and since there was no lag time whatsoever in politicians jumping to do what oil companies want, does that cast suspicion on the US Government as culpable of instigating another false flag? (like the Gulf of Tonkin, the Maine in Havana, perhaps even 9/11?)
Politicians and business people do conspire, meaning, their private discussions and plans are not part of the public record. But conspiracies aside, is isolating all the Russian people the best way to bring about peace with the Russian government? German leader Bismarck noted that when goods can not cross borders, armies will. But if Russia and Europe were to become more dependent upon each other, not less, then that scenario would be the likeliest path to peace. So on this score, US politicans are wrong again and just serving the “oiligarchy” again.
They are also wrong to allow more destruction of the natural world. More drilling in more places ruins ecosystems. So does extracting, transporting, refining, storing, and burning oil. Giving up the burning of fossil fuels would be altogether a good idea. And there are other power sources, such as solar and fuel cells, to turn to. They are probably even cheaper than oil — especially if polluters had to pay damages — but how can we know with politics hiding the truth?
This 2014 excerpt of BoingBoing, Jly 23, is by doctorow5d.
Have we a “shortage” of humans to care for other humans? What people really mean when is that employers don’t pay enough to attract and sustain workers to do it.
What business means by “there are not enough workers” is “there are not enough workers at the price we’re willing to pay.”
If we persist in the view that the dividends from robots’ increased productivity should accrue to robot owners, we’ll come to a future where there aren’t enough owners of robots to buy all the things that robots make.
Property rights may be a way of allocating resources when there aren’t enough of them to go around, but when automation replaces labor altogether and there’s lots of everything, do we still need them?
The unwillingness of economists and thinkers to contemplate it tells us that we’re arguing about what kind of railroad rules we should have once there are automobiles everywhere.
Ed. Notes: If you want to live in the privacy of your own home, won’t you need that right and to own the house? And what about the land beneath it? And the land beneath the factories? And the land above those resources? And the locations in the EM spectrum? Somebody does and will own all those valuable aspects of nature. Which is fine. But should they keep the rents for those valuable locations or pay them?
By analogy, you may have a child, but do you own that child’s labor? Even after paying so much for the child’s upbringing? A better example. You park downtown or at a park in the country, because space is limited and the people excluded by your presence deserve compensation. Similarly, you as an owner of land would not keep the rent from your community but pay it to your neighbors, just as they would pay you.
Everyone would pay land dues (like land taxes) into the public treasury and get rent dividends back (like Singapore does). Plus, extra awesome is this: as technology progresses, it pushes up site values; look at Silicon Valley. So if your society is recovering and sharing those values, then the farther hi-tech advances, the fatter your dividend check grows. Finally, it would not matter at all how many jobs disappear — and property rights could stay the same.
It is standard economic theory that the best way to prevent pollution, as with other negative effects, is to make the polluter, hence also the buyer of its products, pay the social cost of the pollution. The economist Arthur Cecil Pigou provided a thorough explanation in his 1920 book The Economics of Welfare. A tax on pollution has since then been called “Pigovian.”
One of the most discussed Pigovian taxes has been on the use of carbon-based fuels such as coal, natural gas, and oil. A “carbon tax” can be on the fuel inputs or on the emission outputs. The most effective Pigovian levy is on the emissions, as that provides an incentive to reduce pollution such as by capturing the carbon before it gets spewed out. If the polluter does not compensate society for dumping on the commons, then in effect it gets subsidized, as it sells its output at less than the total social cost of production.
Many countries have been confronting pollution with inefficient policies such as regulations, credits for offsetting pollution with purchases of forest lands, and permits that can be traded. Australia enacted what was called a “carbon tax” with the Clean Energy Act of 2011, implemented in July 2012. But this was not a Pigovian tax. The Act created a “carbon price mechanism,” a cap-and-trade emissions trading scheme that at first set a price per ton of emissions. This mandated price had the effect of a ‘carbon tax’. But after 2015, the mechanism would have transitioned to a trading scheme.
However, in 2013 the newly elected prime minister sought a repeal of the “carbon tax” emissions trading scheme. In 2014, parliament passed the repeal.
The opponents of emissions taxes claim that this increases costs to business and households. This is narrowly true, but policy should consider the total costs to society. The pollution imposes a social cost on Australia and the rest of the world. This is not a cost paid in explicit money, but costs in the form of illness, a less productive environment, and possible effects on the climate.
The opponents of emission levies overlook that the absence of compensation for the pollution costs is in effect a subsidy to the polluters and their customers. A pollution charge is not a tax in substance, but rather the prevention of this subsidy, and compensation for dumping toxic materials on other people’s property.
The repeal did not provide a replacement, and this creates uncertainty for business about any future anti-pollution policy. This policy uncertainty reduces investment and growth.
The best way to implement a pollution tax is as a replacement of other taxes. Taxes on income, sales, and value added impose the excess burden of higher costs and less output and employment. If politicians are concerned with tax costs, why are they not repealing these taxes? When a pollution tax replaces such market-hampering taxes, the total costs paid by consumers does not increase, but rather shifts in favor of less-polluting products.
Actually, the revenue obtained from Australia’s brief carbon tax was used to compensate taxpayers and affected companies. But the most effective policy would have been to have an explicit tax on pollution instead of a trading scheme, and to lower other tax rates, along with a transitional compensation to those with net losses.
Some opponents claim that Pigovian charges would be good if applied globally, but in a single country, would put its industries at a disadvantage. But that would not happen with a “green tax shift,” the replacement of inefficient taxes with a “green tax” on pollution. A green tax shift would reduce the environmental cost of pollution while not increasing the total tax costs for the country’s economy.
This 2014 excerpt of Motherboard, Jly 24, is by Sam Gustin.
Two cities —- Chattanooga Tennessee and Wilson North Carolina —- have asked the federal government to help them bypass state laws banning them from expanding their community owned, gigabit, high-speed, fiber internet service.
Federal Communications Commission Chairman Tom Wheeler has made clear that he believes the FCC has the authority to preempt state laws that erect barriers to community broadband efforts, which are proliferating around the country.
Many of the areas surrounding Chattanooga are “too rural for it to make economic sense for a major telecom to lay with fiber,” leaving residents in those areas in “a digital desert”.
Tennessee is one of 20 states with laws on the books that pose barriers to community broadband efforts —- laws that in many cases were pushed by cable and telecom industry lobbyists. In states throughout the country, major cable and telecom companies have battled attempts to create community broadband networks.
Rep. Marsha Blackburn, the Tennessee Republican who has received tens of thousands of dollars in campaign contributions from the cable and telecommunications industry, introduced an amendment to a key appropriations bill that would prevent the FCC from preempting such state laws.
Ed. Notes: Your internet bill could be a lot lower if your local government owns the fiber network. So does that make it a go? If your grocery bill were lower, should government own the supermarket chains? Where do you draw the line? Should a line be drawn?
Somethings historically have not been owned by individuals, such as paths, roads, and streets. Even land itself, long enough ago, was not owned by anyone. Of course, that changed. Now, only land that everyone can use in total view of everyone else — roads, sidewalks, parks, beaches, wilderness — is still held in common while land we use privately, such as the sites beneath our homes, has left the commons.
Some atomists want the roads to be owned privately, too. But should we allow that? Should everything be private, or public, or a mix?
Is there a principle to follow to determine what to own individually and what to own together? Some suggest monopoly. For instance, you couldn’t have competing water delivery systems in a city, those pipes constitute a natural monopoly, so the community should own them, to prevent anyone from over-charging for water delivery and raking in an undue fortune.
That model could serve for other utilities, too, such as power delivery and phone cables. That might make it easier to put the unsightly telephone wires underground, along with gas lines, along side water pipes, near any sewer system. Already, customers of public utilities pay much less than customers of privately-owned utilities. The goal of progress should not be to enrich a few owners of monopolies but to reduce the cost of living for everyone. Fiber connections make a logical addition to our resurrected commons.
This 2014 excerpt of Pacific Standard, Jly 24, is by Noah Davis.
Academics bemoan our growing lack of attention span. One infographic reported that our attention spans have dropped from 12 minutes to five. (The rise of infographics being yet another example of humanity’s inability to read anything for more than a few words at a time.) This site claims that attention spans have dropped from 12 seconds in 2000 to eight seconds in 2013 -— or one second shorter than the attention span of a goldfish.
Studies have shown that 32 percent of consumers will start abandoning slow sites between one and five seconds. Bounce rate can be improved by up to 30 percent with the reduction of page size and resulting speed improvements. A one second delay in page load time can result in 11 percent fewer page views, 16 percent decreased customer satisfaction and 7 percent lost conversions.
Leaving a page that isn’t loading isn’t a character fault; it’s smart. You can get the information you were after elsewhere, and you can get it faster.
This 2014 excerpt of CounterPunch, Jly 9, is by Mike Whitney.
Russia provides 30 percent of the gas the EU uses every year. And Gazprom’s prices are competitive too, sometimes well-below market rates which has been the case for Ukraine for years.
Ukraine’s Parliament adopted .. a bill under which up to 49% of the country’s gas pipeline network could be sold to foreign investors. This could pave the way for US or EU companies, which have eyed Ukrainian gas transportation system over the last months. US companies will be in the right spot to gouge Moscow for every drop of natural gas that transits those pipelines.
All Putin has to do is sit-tight and he wins, mainly because the EU needs Moscow’s gas. If energy supplies are terminated or drastically reduced, prices will rise, the EU will slide back into recession, and Washington will take the blame. So Washington has a very small window to draw Putin into the fray, which is why we should expect another false flag incident on a much larger scale than the fire in Odessa. Washington is going to have to do something really big and make it look like it was Moscow’s doing. [One week later, a jetliner crashed in Ukraine, shot down by Russian rebels, the US Government immediately concluded.]
Does the US Government really go to these extremes to enable US oil companies to swell their profits?
The State Department applied a little muscle on Turkmenistan, Afghanistan, Pakistan and India and “voila”, Chevron and Exxon clinched the deal to build the TAPI pipeline. Who is going to protect that 1,000 mile pipeline through hostile Taliban-controlled Afghanistan? US military bases are conveniently located up an down the pipeline route. Coincidence?
From the Wall Street Journal: “Earlier this month, President Obama sent a letter to (Turkmenistan) President Berdimuhamedow emphasizing a common interest in Afghanistan and expressing Obama’s support for TAPI and his desire for a major U.S. firm to construct it.
In Iraq, oil production has surged to its highest level in over 30 years. Who’s raking in the profits? The oil giants: ExxonMobil, BP, and Shell.
Ed. Notes: While it’s hard for us to know what happens behind closed doors, everyone can see that oil and war go hand in hand, not just in Ukraine, the Mideast, and South Asia, but also North Africa and Nigeria, with political violence in Venezuela and a war on the environment and against environmental defenders in the American states of Louisiana, Texas, and Alaska. There are so many good reasons to quit burning fossil fuels, besides war and pollution, such as huge inequality and hierarchy. And ironically, we have the peaceful and clean technologies to switch to — solar, batteries, fuel cells, etc plus conservation — but political and institutional hurdles are almost insurmountable. About all we can do is push for a truly free market.
Corporate Taxation Is Inefficient
This 2014 excerpt of the New York Times, Jly 21, is by Tim Worstall, senior fellow at the Adam Smith Institute in London and a contributor to Forbes.
Corporate taxation is hidden taxation: everyone thinks that someone else is paying it, not them, which is why politicians love it so much. It’s a grossly inefficient tax. Taxing economic activity means that we will have less economic activity: the economy will be smaller than it would be without tax.
Government should raise revenue at the least cost in reduced economic activity. The deadweight cost, that lost activity, is higher for capital and corporate taxation than it is for income taxation, higher than for consumption and all higher than property taxation.
Optimal taxation theory tells us that we should therefore eliminate capital and corporate taxation and move to a progressive consumption tax and perhaps a land value tax.
Ed. Notes: Brave of him to cite land as a tax base (onceagain). Of course he had to cover his butt and add “perhaps”. Which is the difference between mainstream media, constantly catering to fear, and alternative media, always trying to lay it on the line.
Bear in mind that “land” here refers to location, not just downtowns but also sites above oil fields and the oil itself. And not just tangible land but also the intangible, such as the EM spectrum (a frequency is a location there). And not just land, the good, but also ecosystem, the service. Finally, what the tax or fee or lease or dues falls on is not land, the stock, but its rent, the flow.
This flow of money that we spend for the nature we use need not fund government; government can get by charging fees for its services. Instead, all those rents for all those locations could be disbursed as dividends to citizens. Receiving a fair share, citizens could get by with much less government, making the whole taxation question much more tolerable.
Hans Bruyninckx, the director of the European Environment Agency, has urged ministers to carry out fiscal reforms, such as moving tax from labour to activities that damage the environment.
“Well-designed environmental taxes can reduce pollution and increase resource efficiency in a very cost-effective way, and at the same time promote employment, economic growth and social fairness.”
The world does not have to choose between job creation and preserving the environment.
Bruyninckx added that environmental taxes were “still an under-used tool”. Environmental taxes currently account for 2.4% of EU GDP.
The informal ministerial comes after the European Commission published proposals earlier this month aimed at pushing the EU towards a ‘circular economy’, with higher recycling targets and a phase-out of landfill.
Ed. Notes: Shifting taxes from wages to pollution is one of three big green tax shifts. Another is to shift from purchases (e.g., VAT) to extraction of resources. The most powerful shift is the least obvious and well known: off buildings onto exclusive use of locations.
When owners pay land rent to their community rather than receive it from tenants or buyers, then they take no more land than they need and use that wisely. In urban areas, using land efficiently makes for compact towns that use fewer materials (the goal of the depletion tax) and less energy (the aim of the pollution tax).
Other powerful advantages of recovering rents is that doing so grows the tax base rather than shrinks it (since owners develop their lots), raising enough revenue to afford a dividend to citizens, merging everyone’s need for money with their love for Earth. Proposing land dues challenges society to see the worth of Earth as part of the commons. And shifting the property tax off buildings, onto land is something localities can do without waiting for states or nations or unions. So get busy geonomizing now.
More than a thousand people showed up outside Cobo Center in downtown Detroit, calling for an immediate moratorium on service shutoffs by the city’s water department.
Among them was “Avengers” actor Mark Ruffalo, who appeared unexpectedly, calling on others to join the demonstration.
Also appearing at the rally were UAW President Dennis Williams and Congressman John Conyers.
“Water should be available to everybody,” Conyers said. “It shouldn’t be something that only people who can afford it can get.”
“Right now in a household there is child thirsty who cannot have a drink,” Williams said. “Right now there is an elderly person who is ill that needs fresh water.”
The demonstration was organized by the group National Nurses United, which claims the shutoffs pose a public health emergency and that shutting off water is inhumane.
People who can’t afford water have to choose between medications and food, rent or mortgage payment, and water.
The Detroit Department of Water and Sewerage stepped up the shutoffs in March to collect some of the nearly $90 million owed by residents, businesses and other customers with past-due accounts. Through June, more than $43 million was owed on over 80,000 city residential accounts.
To get water back on requires a title deed because so many homes have squatters.
Ed. Notes: Is the City charging more than the cost of delivering water? If so, are they using the profit to lower bad taxes or pay residents a dividend? And why are so many residents poor?
Poverty has an easy economic solution, and that is geonomics.
One, don’t subsidize insiders, that only makes it easier for them beat competitors, and competitors keep prices low and wages high.
Two, don’t tax people’s efforts, that only makes it harder to hire helpers.
Three, don’t fail to recover socially-generated land rents, which merely rewards speculators; when owners pay “land dues” they put locations to best use, which attracts investment and creates employment. And
Four, disburse surplus public revenue as a dividend, which is substantial in cities where site values are higher than skyscrapers. Dividends mean people can always afford water.
The problem is not that there isn’t any solution. The problem is that people have no interest in fundamental solutions and prefer to just blame one another: rich are greedy, poor are lazy. If humans could get over that and rekindle their innate curiosity, they’ll discover what works — geonomics.
This 2014 excerpt of Vanity Fair, July issue, is by Michael Kinsley.
From the remarkable reaction in this country to Thomas Piketty’s fairly dense book of translated French philosophy, it is evident that many people believe that a “reset” in the distribution of income or wealth would be no bad thing.
His point — the return on invested capital exceeds the rate of economic growth — means the poor can never catch up. The mean income of the top fifth back in 1970 was 11 times that of the bottom fifth. Today it is more like 16 times as much.
The growing income-inequality figures we see today are wild underestimates. Wealth is larger and even more concentrated than annual income is. Most of it grows completely untaxed, year after year, because you don’t pay taxes on an investment until you sell it, which the very richest people never need to do. They live off the interest.
Suppose you take away the entire incomes of the 1 percent. That would be about $1.5 million from each. Transfer all the money to everyone else. How much money would each household in the 99 percent get? About $15,000. That’d more than double the incomes of those at the bottom of the heap.
Suppose we levy a mere 10-percent-of-income surcharge on the top 20 percent of family incomes, to be spread among the bottom 40 percent (households with incomes up to about $40,000). That’d be about $4,000 per household.
Frenchman Thomas Piketty and his book remind me of my favorite economist, the 19th-century American Henry George, and his best-selling book, Progress and Poverty (1879). Both men’s books offer a comprehensive explanation of the world, in particular the problem of poverty. Both men acknowledge the importance of market incentives and entrepreneurship and the evils of protectionism and all of that good conservative stuff, even as they rail against the plutocrats. Both think we can end or reduce inequality without giving up the benefits of market.
And both see the answer in a new tax. Henry George advocated a land tax to eliminate the need for any other revenue source. That’s why members of his briefly influential movement were called “single-taxers.”
Ed. Notes: People plot to tax wealth after the rich already got it rather than redirect our spending so that no insiders could corral it and become the 1%. “Our spending” here refers to both public and private. Take public spending: we could abolish corporate welfare and disburse revenue directly to citizens as a dividend.
Take private spending. Presently, our spending for things that nobody created — like land, natural resources, the EM spectrum, ecosystem services, and privileges that force consumers to pay “tolls” (jacked up prices) to the privilege holders — go to banks, oil companies, and other insiders, creating that 1%. Instead, we could institute land dues rather than tax buildings, purchases, and earned incomes. When the public gets those values (via the dividend), then they’re not available for the more grasping to amass into fortunes.
We could stop worrying about how much anyone has by redirecting what everyone spends for our common heritage, which should belong to us all already. It’s called geonomics and it has worked wherever tried, to the degree tried.
This 2014 excerpt of EcoWatch, Jly 15, is by Elliott Negin of the Union of Concerned Scientists.
A majority or plurality of residents in red congressional districts and states disagreed with their blue district and state counterparts on gun control, abortion, and gay rights.
But approximately 80 percent of both blue and red district respondents agree that the U.S. has “a responsibility to take steps to deal with climate change.”
Americans are prepared to make modest sacrifices to avoid the worst consequences of global warming. And slim majorities —- 54.7 in blue districts and 51.5 percent in red districts —- say “climate change should be given priority even if it causes slower economic growth and loss of jobs.”
Yet Congress is more concerned about protecting special interests than the public interest. Since 2004, utilities and fossil fuel industries have spent more than $2.6 billion to lobby Capitol Hill. Over that time, Congress has beaten back attempts to put an end to the nearly $5 billion in annual tax breaks and subsidies afforded the oil and gas industry.
South Florida, a red state, is already dealing with routine flooding from high tides and heavy rainfalls. Sea levels off the coast have jumped 5 to 8 inches over the last 50 years. Elsewhere, Americans have been grappling with prolonged droughts, extreme precipitation, and heat waves.
Ed. Notes: People in general are often ahead of politicians on many issues, such as socialized medical insurance (which might be better than the present US system but not as good as, say, a more open, competent, and competitive system). Because people can be enlightened while politicians are not, that makes it a mistake to view the pronouncements of government officials as the only reality while ignoring the values and openness of one’s neighbors. If do-gooders want to really change the world, they will have to focus less of their energy on their opponents and more on you and me. Instead of us being ignored by the powers-that-be, we must ignore them and pay attention to ourselves, creating a reality that anyone who wants to be in power can not ignore. According to thinkers like Gandhi and Margaret Mead, that’s the only way fundamental policies — like major pocketbook issues — can ever change.
I live in California. It’s a great state. Too great.
A proposition to split California into six states may be on the ballot in 2016. “Six Californias” has announced that it has collected sufficient signatures. Why six? California’s population of over 38 million is six times lager than the US state average. The ruling powers may find a way to block the proposal, as some opponents claim that the signature gathering was unlawful. If “Six Californias” does get on the 2016 ballot, in my judgment, this will be a rare chance for fundamental reforms.
Many Californians have said that the state is too big to govern effectively. But the governance problem is not size, but structure. After the property-tax limiting Proposition 13 was adopted in 1978, taxes and political power shifted from the counties and cities to the state government. California could be governed well if decentralized, but the concentration of fiscal power to the state has made the state among the highest taxed and worst regulated in the USA.
There have been many attempts to reform the lengthy California constitution, but they have all failed. Attempts to replace the Proposition 13 have gone nowhere. The best option is to start over. Creating new states would provide six fresh starts.
Critics of the six-state plan say that the wealth of the new Californias would be unequal. The Silicon Valley state would include the high-tech wealthy counties of San Francisco, San Mateo, and Santa Clara, among others. The promoter of this initiative, Timothy Drapers, happens to be a Silicon Valley entrepreneur.
But the current 50 US states are also unequal in wealth. The income inequality problem is a national and global problem. Income can become more equal without hurting production by collecting the land rent and distributing it equally among the population. Since the critics of Six Californias are not proposing or even discussing this most effective way to equalize income, their complaints should be dismissed as irrelevant, immaterial, and incompetent.
US states have been split in the past. Maine was split off from Massachusetts in 1820, and West Virginia was carved out of Virginia in 1863.
If the initiative passes, a board of commissioners would draw up a plan to divide the state’s assets and liabilities among the six new states. A good way to do this would be to divide the value of the assets by population, but to divide the liabilities (including both the official debt and the unfunded liabilities such as promised pensions) by the wealth of each state. That would go a ways to deal with the inequality problem.
California’s complex water rights could be simplified by eliminating subsidies, instead charging all users the market price of water. There could continue to be a unified water system with a water commission with representatives from the six state.
If this measure is approved by the voters and by Congress, each state will design a constitution. The new constitutions should be brief, like the US Constitution, in contrast to the lengthy current California constitution that contains many provisions best left to statute law.
The new constitutions should retain the declaration of rights in the current state constitution, including Article I, Section 24: “This declaration of rights may not be construed to impair or deny others retained by the people.” This wording, similar to the US 9th Amendment, recognizes the existence of natural and common-law rights. This text should be strengthened with something like this: “These rights of the people include the natural right to do anything which does not coercively invade the properties and bodies of others, notwithstanding any state interest or police power.”
These new constitutions will be an opportunity to replace California’s market-hampering tax system with economy-enhancing levies on pollution and land value. There should be a parallel initiative stating that if Six Californias passes, the states will collect all the land rent within their jurisdictions and distribute the rent to all six states based on their populations. A tax on land value is by itself market enhancing, better than neutral, because it promotes an efficient use of land, it reduces housing costs for lower-income folks, and eliminates real-estate bubbles. Combined with the elimination of taxes on wages, business profits, and goods, the prosperity tax shift would raise wages and make California the best place in the world for labor and business.
This is all a dream, but the past dreams of abolishing slavery, having equal rights for women, and eliminating forced segregation all came true. This proposition will at least provide a platform for discussing such fundamental reforms.
This 2014 excerpt of the Sacramento Bee, Jly 15, is by Dan Walters.
Economist Anne Osborn Krueger coined the term “rent-seeking” in 1974, the year in which Jerry Brown was first elected governor of California. There is a connection between those two events.
“Rent-seekers” came to mean those who use government spending to enhance their private investments, giving hundreds of millions of dollars in subsidies from the state treasury and consumers’ wallets to a favored few.
At Brown’s behest, the Legislature abolished two long-standing subsidy programs that had been largely controlled by local governments, redevelopment and “enterprise zones.”
The rationale was that they had become expensive boondoggles that rarely, if ever, resulted in the private, job-creating investment and urban renewal they were supposed to produce.
They were to be replaced, although it wasn’t apparent at the time, with state-controlled “incentives” for investment, including a sales tax break for manufacturing equipment and a special pot that Brown could use to lure and/or retain business.
Simultaneously, the state was embarking on a massive overhaul of its electric power system, aimed at replacing fossil fuel and nuclear generation with “renewable” power and providing billions of dollars in subsidies, either from taxpayers or utility ratepayers.
And it also was pushing alternatives to gasoline-powered cars, such as electric vehicles, again with subsidies. Elon Musk is building Tesla electric cars. They get direct injections of money and zero-emission credits that Tesla sells to other firms.
Musk’s Solar City has become the state’s leading installer of photovoltaic electric panels, his SpaceX firm aspires to be the nation’s leading conveyor of satellites, and he’s planning an immense battery factory.
This year alone, Brown signed one budget “trailer bill” that extends subsidies for solar panels, another that exempts some SpaceX property from taxes, and a third to subsidize construction of a new strategic bomber. It includes an obscure amendment to subsidize a battery factory. Legislators were never told about that provision.
Ed. Notes: If Musk needs state favors, how good are his ideas? If investors won’t make them happen, why should taxpayers? Sure, I’d love to live in an economy with industries that were lean and clean. But to get there, I’d rather make polluters pay than let insiders engorge. I’d make only polluters, extractors, site-occupiers, and privilege-holders pay and not tax anyone’s buildings, purchases, or valid earnings or over-charge for permits. To top it off, I’d disburse surplus revenue to citizens as a dividend. Receiving such support, independent inventors would be freed to contribute their, often break-thru, ideas. The liberated market — not political dealing — would provide the technological progress the environment needs.
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.
shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.
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 study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.
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.
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.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
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 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?
the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.