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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.
This 2014 excerpt of Squarely Rooted, Jly 14, is by M.
Land may be the key factor behind many of Piketty’s broader conclusions about capital, explaining why the returns to capital decline much more slowly than models with traditional assumptions would predict. E.g., progress hasn’t dampened the return to land on which computing-centric industries are based; quite the contrary (see Silicon Valley). Land (discounting structures) is a large share of national “capital”.
In a society where a handful of people control most of the wealth, even if that wealth is taxed at just-below-confiscatory rates, they still own most of the wealth. That gives them tremendous authority, first-and-foremost over the workplace, but also over politics and the media, and by extension an outsized role in dictating mores, norms, and values.
I deliberately capitalized “Economics” so at to distinguish it from “economics”. Capital-E Economics is a rigid dogma, complete with unchallengeable precepts and inscrutable texts whose minutiae are debated vigorously by devoted inner-circle keepers of the flame, that has stifled public debate about innumerable issues of overwhelming importance since the end of the Cold War.
Ed. Notes: Piketty wants to try tax the wealth the rich have piled up. Much more efficient — and fair — would be to deny them that wealth in the first place. That wealth that they are helping themselves to just happens to be our common wealth already anyway. So what are we waiting for? Let’s share it. As long as we don’t, as long as we leave it on the table for the more grasping among us to grab by hook or crook (or both), then we create the elite and the impoverished and all the problems that go along with an overly hierarchized society. Let’s get rid of corporate welfare and the rest of subsidies. Let’s get rid of taxes on our efforts. Instead, let’s pay in land dues and use that revenue to disburse “rent” dividends to us all. Sort of like Singapore does. That city state is hailed as a capitalist paradise but it’s pretty geonomic, too.
This 2014 excerpt of TakePart, Jly 12, is by Liz Dwyer.
According to the United Nations, of the top ten most common topics in tweets [over what time frame was not stated], the bottom rough one third of them are about environmental issues (about two million each), the middle rough one third are about political issues (well over two million each), and the top third, by far, are about getting a good paying job (from five to seven million). Number 8 was education, which is preparation for flinging oneself into the job market. Number 9 was discrimination, which flings some of us out of the job market. And number 10 was employment itself.
Ed. Notes: So if you want to interest people in reform, tell them how your reform creates jobs. Right? Yes, but bear in mind people who need money and see jobs as the way to get it probably don’t want an economics lesson. They often jump on anything that promises them jobs, even if it does not work out that way, such as giving tax breaks to big business, or if it is something not really good for the community, like a prison.
Worse, offering jobs reinforces the prevailing worldview. Touting jobs agrees with several implied false assumptions:
getting paid and creating value are the same — even if you’re just shuffling paper in an insurance office — while unpaid work is not worthy of pay — even if it is planting trees which exhale oxygen;
people are not good enough to start their own business but must have a boss forever; and
jobs can be conjured up while supposedly technological progress is not a natural process destroying them;
More than jobs, people need an extra income without working. Why? Because society automatically generates a surplus that does not attach itself to anyone’s labor or capital but to the region’s land and to the government-granted privileges such as banking charters and other corporate favors.
Americans spend trillions of dollars to use parts of nature, mostly to the few holders of valuable privileges. Hence now much of society’s surplus goes to the 1% whereas this common wealth should go to members of society equally.
Ironically, if we all did get a Citizen’s Dividend, then we could shrink the workweek which would create more jobs. We’d have more security to negotiate higher wages. We’d even have enough leverage to launch out own startups. It’s called geonomics and it has worked wherever tried.
This 2014 excerpt of Thom’s Blog, Jly 11 is by Thom Hartmann.
Oil Change International figures the oil, gas, and coal industries raked in $21.6 billion dollars in state and federal subsidies in 2013 alone. In comparison, the entire 2013 budget request for the Department of Labor was only $12 billion dollars, and the Environmental Protection Agency only requested about $8 billion. We’re giving the industry that destroys our planet more than two and half times the amount we pay to protect it.
Not only do these subsidies pad the pockets of oil companies, but they put tax payers on the hook for the social costs of destroying our planet. If Big Oil had to pay the true cost of fossil fuel extraction, they wouldn’t be able to drill away without a second thought about the communities and the lives that they devastate in the process.
Ed. Notes: If oil companies had to pay their way, they could not even turn a profit. No extractor could. By subsidizing them, making them profitable, we are paying for our own destruction.
A better way is to not subsidize anybody for anything. Instead, government would merely distribute a dividend to citizens from society’s surplus. What’s that? Earth’s worth. It’s all the money that we spend for the nature we use. The land portion of mortgages. The value of oil in the ground embedded in the price of gasoline. Such “rents” are embedded in the price of everything we buy.
With its power to tax or fine or charge fees or institute dues, government could redirect this spending from oil companies and banks, etc, into the public treasury then back out as a Citizen’s Dividend. Even oil company owners and bosses would get their share. But it’d be a tiny fraction of the subsidies they’re getting now.
This 2014 excerpt of AlJazeera, Jly 11, is by Peter Moskowitz.
As the number of bike riders seems to increase dramatically in cities across the country, there’s been a backlash from people who say bikes are dangerous, and that the added infrastructure that comes with them — namely bike lanes — is an unnecessary burden in a time of large budget shortfalls.
But a new study concludes that policies and projects supportive of bike lanes are worth every penny, and then some. For every dollar spent on bike-related infrastructure, cities can receive anywhere from $6 to $24 in cost savings in the form of reductions to pollution, traffic congestion, and health care costs from decreased traffic fatalities and increased exercise, which alone is the biggest cost savings.
The larger the investment in bike infrastructure, the more people would be encouraged to commute by bike, and therefore the larger the return on investment would be.
Ed. Notes: While some people think bike lanes give privileged travel to the few at a cost to the many, it’s not true. If a road is a right-of-way, then that means anyone has the right to traverse it — not just drivers but walkers, pedalers, horseback mounties, bus riders, you name it. It’s because cars endanger others — not that the others endanger anyone — that cars get to hog what belongs to all.
Roads have not always been the lone province of cars. Not even a 100 years ago, roads were traversed by everyone, as they still are in most places on the planet. But when cars first came out, they were playthings for the rich, and the rich lobbied governments to pave roads for them — at a cost to everyone else — which was an improvement that only cars needed; bikes and horses were fine with dirt roads.
Today, drivers do not come anywhere close to paying for roads or other costs they impose on the rest of society. It’s not the tax on gas but the money in the general fund from other taxes that pay for all this: highway patrols, traffic courts, accident responses, health care for the uninsured, disability payments for those unable to return to work, wasted time of pedestrians and cyclists delayed by automobile congestion, pollution from exhaust, oily runoff, and dust, not to mention sprawling land use that stretches out trip distances, wasting energy and materials.
What’s really needed are not “sidelanes” along streets for bikes like sidewalks for pedestrians so much as entirely separate bike ways. In Germany, bike paths can be a quarter of a mile from highways. Let cyclists enjoy the experience of riding a bike!
To be fair and adhere to the User Pays Principle, there is a way to fund separated bikeways. Government need not register bikes and tax them or tax bike shops. Instead, government could tax land or institute land dues. Land alongside bike paths is of higher value than land alongside roads. Locations where bike paths intersect are of higher value still. Those site rents could be recovered by government and be dedicated to building and maintaining the network of bike lanes. And without any drunk young male car drivers tossing out glass bottles on a weekend night, you won’t even have to worry about flat tires!
Ed. Notes: Drinking coffee can not only help well-fed people of the North lose weight, it can also help the hungry people of the South put on a few pounds. Coffee comes from poor tropical places. Landowners in the tropics do especially well by the Northern demand for coffee … which is why everyone should own some land and not have to work the orchards for others.
The best way to reform land ownership is to institute land dues or land taxes. Having to pay dues makes it impossible to profit from owning more than one can use and just trying to be a middle man. Owners with excess sell off their excess in order to avoid paying land dues. That leaves more land available for former tenant farmers. It’s a reform that has worked wherever tried.
If only there were some way to tie drinking coffee in the North to sharing out land in the South!
This 2014 excerpt of Investors Daily, July 9, is by Russell S. Sobel.
Equilar reports a 6% annual increase in average compensation for the 200 highest-paid chief executives. Their companies receive tax breaks, subsidies, or other assistance from the federal government.
When federal money is up for grabs, businesses invest resources to secure it through a process known as “rent seeking.” Rather than making the entire business more profitable, however, this money remains at the executive level.
In fact, it’s not clear that shareholders or workers are getting a real return on their companies’ lobbying investments.
In the wake of the financial crisis, businesses have rushed to ensure that their interests were and continue to be heard in Washington. With more than 12,000 registered federal lobbyists seeking influence in policymaking, the reported expenditures on lobbying federal government in 2013 topped $3 billion.
Programs such as the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act of 2009 (or the “stimulus”) doled out more than $1 trillion in federal subsidies, grants, and contracts directly to specific private businesses.
It’s now a common belief that business success depends partly on a company’s ability to secure favors through political connections. This “cronyism” — rather than consumer-driven market forces — picks the winners and losers in the marketplace. Such logic is taught in actual business-school classes.
Political activity and connections do not lead to higher profits for the vast majority of firms or industries, with the only notable exception being banking-related firms [they use mortgages to capture land rents].
We see no statistically significant correlation between firm or industry profitability and firm (or industry) lobbying or political action committee activity.
If lobbying and political efforts do not increase returns for firm shareholders, why would firm executives channel resources in this direction? Our research suggests that — while measures of firm performance and profitability are not correlated with political activity — the compensation of top firm executives is strongly correlated.
Ed. Notes: Robbing the public treasury to pay insider schmoozers might be legal but it’s not moral.
And if it’s only banks that lately have gained, the others must keep up their lobbying to at least not lose market share.
Further, companies in brand new fields such as IT don’t need handouts to grow since those recently launched industries are growing rapidly anyway.
Finally, the only solution is to remove the power of discretionary spending from politicians to the public. That means, putting the budget on the ballot as some towns in Brazil do or better yet, paying citizens a dividend, like Singapore often does, and that city state is often rated the world’s best for business.
From whence the surplus? From society’s spending for assets never created by anyone’s labor or capital (or lobbying for privilege). Goods like land, oil, EM spectrum, ecosystem services, etc, yield huge rents that society — via its agency, government — should be seeking, recovering (site value is socially generated), and sharing. Doing so allows the repeal of most taxes and subsidies. Called geonomics, the policy has worked wherever tried.
This 2014 excerpt of the Schumacher Center for a New Economics blog, Jly 7, is by their Staff.
Thomas Piketty’s book Capital in the 21st Century shows that owners of capital assets – including stocks, bonds, and real estate – have historically realized a financial return higher than wage growth, favoring those with capital assets over those living on wages alone.
Though this bias of the economic system is recognized intuitively, the myth of a level playing field has persisted, largely based on the exception to the rule following World War II. Pent up demand for new goods meant an unusual period of wage growth that was almost equal to the income from rents, dividends, and interest.
Piketty imagines possible mechanisms for adjustment, his preferred being a global progressive tax on capital assets. It would rely on transparency regarding reporting of assets and the cooperation of all nation states – so hard to achieve.
Peter Barnes proposes a more pragmatic approach. In his new book, With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don’t Pay Enough, he suggests a tax on assets such as atmosphere. Those using up that commons, environmental polluters for instance, would pay a tax into a fund for equal distribution to all citizens of a region.
His latest book is an evolution of Barnes’s thinking, starting in the 1970′s with Who Owns the Land. An author and entrepreneur, Barnes co-founded Working Assets (now Credo) and has written extensively on capitalism and the commons.
Barnes names Thomas Paine, as one of the influences on his thinking. In the 1797 pamphlet, Agrarian Justice, Paine proposes a “ground rent” on land, paid into a fund from which cash payments would be made to citizens when they reached twenty-one.
Peter Barnes will discuss inequality of wealth distribution and ways to address it in a Schumacher Lecture titled “Economics for the Anthropocene.” Sunday, July 27th, 7:30PM at the American Institute for Economic Research. The Lecture will be available online later this summer.
Ed. Notes: These are good ideas that I wish were more popular. I think part of the problem is mixing commons and taxes. Commons belong to community whiles taxes belong to government. Paying taxes to politicians does not mean you’ll ever see the money again. But a commons means you get to take your turn using the resource, without having to go through any bureaucracy. If wannabe reformers did not bundle commons and government together but reinforced their distinct differences, then people might warm up to the idea of sharing the common wealth, which is the worth of Earth. Doing that would both protect the environment and narrow the income gap.
Israel’s bombing of Gaza has not stopped its rocket attacks, so it is counterproductive. Instead, Israel should help the people of Gaza establish a communitarian democracy.
The government of Israel would announce on radio, television, web sites, and leaflets, that it will be sending in troops, not to fight against the people of Gaza, but to empower their communities.
The Israeli government would also apologize for its misguided policies of the past, and for the suffering and humiliation it caused for the Gaza Palestinians. Of course the Israelis have suffered also, but if one demands a counter apology, one is not really repenting and regretting.
The Israeli administration would designate neighborhood boundaries for communities of about 1000 residents and also enterprise owners. Residents would volunteer to serve on the community council. The Israeli troops would defend the community from any extremist opponents of the new democracy. The communities would set up their own protective elements, and the Israeli troops would withdraw.
Israel should have democratized Gaza in 1967 rather then let the area fester. Then in 2005, Israel removed its settlements without negotiating with the Palestinian rulers. Now Israel should do what occupiers world-wide have failed to do, lay down an infrastructure of democracy.
The community councils of Gaza would elect representatives to regional associations, and the regions would elect representatives to a Gaza parliament. The Palestinians of the West Bank should also elect their own parliament. Then the two parliaments would elect a Palestinian federation of two provinces, Gaza and the West Bank (perhaps renamed East Palestine). It would be best to leave local matters to the two provinces.
Israel should then stop imposing tax policy on the Palestinians and let them set up their own public finances. But advisers should encourage the Palestinian councils to collect the land rent and use that for public revenue rather than tax their wages and goods.
Unfortunately the Palestinian governors have focused their resources on fighting Israel rather than economic development. But after the communities in Gaza have become empowered, Gaza will no longer be occupied territory. Israel would remove the barriers around Gaza gradually, since there will still be extremists who seek destruction. But Israel should facilitate the greatest possible mobility for the Palestinians under the constraint of protection, rather than treat the Palestinians with the arrogance that has been practiced in the past. “No more humiliation” should be the stated slogan.
A similar policy should be pursued in the West Bank. The Palestinian authority chiefs will resist transferring power to the people and their local councils, but a democratic Gaza (or West Palestine) will cause the East Palestinians to demand genuine democracy. A bottom-up governance in the West Bank would then result in a federation of West and East Palestine that would then negotiate a lasting peace with Israel.
There have been some peace gatherings among Israelis and Palestinians to humanize their relations and to see that individuals are people much like themselves. But such personal interactions are no substitute for confronting the essential issue of who shall own the land.
The solution that is both just and politically feasible is to recognize the pre-1967 boundaries and then convert the Israeli settlements as leaseholds that pay rent to the Palestinian government.
Ideally all landowners in Israel and Palestine should pay the market rent of their land possessions. Land rent would serve as the best public revenue for a Confederation of Israel and Palestine. Palestine would be a state within the Confederation and would itself also be a federation of West and East Palestine.
The other contentious issue has been the return of displaced Palestinians to their pre-1948 lands. A peace treaty should allow a limited return of Palestinians to Israel, with some compensation for lands that have become homes for others. So long as justice is sought, the maximalists will usually be in the minority.
If justice is not established, time will be an enemy of both the Israelis and the Palestinians, as extremists and nuclear perils are on the rise. The choice is either justice now or destruction later.
This 2014 excerpt of the UK’s New Economics Foundation blog, Jly 9, is by Faiza Shaheen.
80% of Brits want the government to stop talking about economic inequality and do something.
Lisa Nandy MP, participated in the launch of a new NEF report setting out the five pressure points:
5. Fairer taxes
Progressive tax reforms, such as a Land Value Tax, would help address inequality at root and redistribute economic power. Shifting the burden of taxes onto environmentally unfriendly activities would kill two birds with stone by relieving struggling families and speeding up the transition to a low-carbon economy.
in part the Great Green Tax Shift maxed out. Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net. Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent.
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.
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 manual. The world did not come without a way for people to prosper, and the planet to heal and stay well; that way is geonomics. Economies are part of the ecosystem. Both generate surpluses and follow self-regulating feedback loops. A cycle like the Law of Supply and Demand is one of the economy’s on/off loops. Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus. Those profits without production (remember, nobody produced Earth) can become our commonwealth. To share it, we could pay land dues in to the public treasury (wouldn’t oil companies love that?) and get rent dividends back, a la Alaska’s oil dividend. Doing so let’s us axe taxes and jettison subsidies. Taxes and subsidies distort price (the DNA of exchange), violate quid pro quo by benefiting the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer (you don’t really need so much bureaucracy, do you?). Conversely, land dues motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves. Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature. Then in all that free time, maybe we could figure out just what we are here for.
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.
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, in-cluding 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.
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 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 neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heri-tage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.