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.
From the Pages of the Business Press … of all places
After real social progress regarding “pot”, now let society turn to economic injustice. We trim, blend, and append three 2012 articles from: (1) the Seattle Post-Intelligencer, Nov 9, on marijuana by L. Pulkkinen; (2) Libertarian News, May 18, on victimlessness by M. Suede; and (3) Wall St Jrnl, Nov 11, on white-collar crime by R. Sidel.
by Levi Pulkkinen, by Michael Suede, and by Robin Sidel
Public Prosecutor Dismisses All Minor Marijuana Cases
King County Prosecutor Dan Satterberg has dismissed all misdemeanor marijuana possession cases currently pending in the state of Washington’s largest county.
Taking action following Tuesday’s landmark vote on marijuana legalization, Satterberg said there would be “no point” in continuing to prosecute the 175 people currently facing misdemeanor charges of marijuana possession.
Friday’s announcement followed the passage of Initiative 502, which legalized marijuana possession of one ounce or less in Washington State. The law also called for a legal framework under which marijuana could be grown and sold; both those activities remain illegal outside the medical marijuana industry.
The initiative goes into effect Dec. 6, but Satterberg said he saw no reason to wait to drop the charges.
Following the prosecutor’s decision, King County Sheriff Steve Strachan directed deputies not to arrest or request charges against individuals caught with one ounce or less of marijuana.
Officials in the 12 municipalities that contract with the Sheriff’s Office for police services will have to decide whether to continue enforcing the doomed marijuana law. Friday’s decision only affects the deputies working in unincorporated King County.
The US Department of Justice has yet to weigh in on the initiative. Some are concerned the federal government may sue the state over legalization, though most agree the Department of Justice won’t be able to force the state to criminalize marijuana possession.
JJS: The Feds dedicate themselves to criminalizing people who don’t hurt others.
Most Federal Prisoners In For Victimless Crimes
When we talk about the war on drugs, which is increasingly turning into a real war, we often overlook the fact that everyone participating in the drug trade does so voluntarily. However, there are a lot more crimes for which this is also true.
The 2009 federal prison population consisted of:
Drug offenses are self-explanatory as being victimless, but often public-order offenses are, too. Public order offenses include such things as immigration, weapons charges, public drunkenness, selling lemonade without a license, dancing in public, feeding the homeless without a permit etc..
The United States has the highest prison population rate in the world. Presently 756 per 100,000 of the national population is behind bars. This is in contrast to an average world per-capita prison population rate of 145 per 100,000 (158 per 100,000 if set against a world prison population of 10.65 million), based on 2008 U.N. population data. In other words, the U.S. incarcerates its citizens at a rate that is 5 times the world average.
In 2008, according to the Department of Justice, there were 7,308,200 persons in the US corrections system, of whom 4,270,917 were on probation, 828,169 were on parole, 785,556 were in jails, and 1,518,559 were in state and federal prisons. This means that the U.S. alone is responsible for holding roughly 15% of all the prisoners in the world.
In other words, 1 in 42 Americans is under correctional supervision. This constitutes over 2% of the entire U.S. population. That percentage jumps up drastically if we limit the comparison to working aged adult males, of which there are around 100 million. Over 5% of the adult male population is under some form of correctional supervision, alternatively stated, 1 in 20 adult males are under correctional supervision in the U.S.
According to 2006 statistics, 1 in 36 adult Hispanic men are behind bars, as are 1 in 15 adult black men. Roughly 34% of all prisoners in the U.S. are incarcerated for victimless crimes.
If you live in the US, you are paying for all those people to subsist on a daily basis. In 2005 it cost an average of $23,876 per state prisoner nationally. In 2007, $228 billion was spent on police, corrections and the judiciary. That constitutes around 1.6% of total U.S. GDP.
JJS: The Feds criminalize people who don’t hurt others and look the other way when the rich rob the public.
Gap in U.S. Bank Prosecutions Seen
The banks run by executives now in prison for crimes related to the financial crisis had a combined $30 billion in assets. That is one-tenth the size of the largest bank failure in U.S. history, the 2008 seizure of Washington Mutual.
The gap is a sign of prosecutorial ineffectiveness to critics such as William Black, a regulator during the savings-and-loan crisis who now teaches economics and law at the University of Missouri-Kansas City.
“We have now the greatest epidemic of elite white-collar crime in the history of the world, and we have absolutely not a single individual who was actually elite and large in causing this crisis in prison or even credibly threatened with imprisonment,” said Mr. Black.
JJS: While the Feds and Wall Street commit crimes, guilt can be applied to almost everyone, since most people scramble to corral some of the publicly generated value of land for themselves. The best way to fix that is to have society’s agent — government — recover the worth of Earth and then share it among everyone. Any place that has tried it has benefited.
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
The relief groups present on New York’s battered Queens peninsula: National Guard, FEMA, the Police and Sanitation Departments — and Occupy Sandy, established by Occupy Wall St. How much state do people need? This 2012 article is from the New York Times, Nov 9.
by Alan Feuer
After its encampment in Zuccotti Park, which changed the public discourse about economic inequality and introduced the nation to the trope of the 1 percent, the Occupy movement has wandered in a desert of more intellectual, less visible projects, like farming, fighting debt, and theorizing on banking. While several nouns have been occupied — from summer camp to health care — it is only with Hurricane Sandy that the times have conspired to deliver an event that fully calls upon the movement’s talents and caters to its strengths.
Maligned for months for its purported ineffectiveness, Occupy Wall Street has managed through its storm-related efforts not only to renew the impromptu passions of Zuccotti, but also to tap into an unfulfilled desire among the residents of the city to assist in the recovery. This altruistic urge was initially unmet by larger, more established charity groups, which seemed slow to deliver aid and turned away potential volunteers in droves during the early days of the disaster.
Occupy Wall Street is capable of summoning an army with the posting of a tweet, and many of the volunteers last week were self-identifying veterans of the movement, although many more were not. Given the numbers passing through, both fresh-faced amateurs and the Occupy managerial class — a label it would reject — were in evidence.
Volunteers at field sites in the most hard-hit areas bring flashlights and hot meals to residents.
It’s evidence that when official channels fail, other parts of society respond.
The long-term needs are where the real problems are.
JJS: The Occupier’s last two points — about the self-reliance of non-official people and the long-term problems — are key. <p> Take the long-term poverty (please!). If people did not have to pay taxes on their houses, than they’d build higher quality ones, as the experience of Sydney Australia shows. And if people did have to pay a levy or dues for the land they claim, then they take less and use that wisely, leaving more land for others. And then others don’t have to do things like in-fill swamps and commit all the other acts that make an ecosystem more vulnerable to storms. Shifting the property tax off buildings, onto locations, is technically easy even if politically hard — but it sure is necessary medicine. <p> Consider widespread autonomy. If regular Janes and Joes had more resources, they might need less government. If regular people had less outgo and more income, than they might meet their needs in cooperative ways, face to face, rather than in the impersonal way of the state taking people’s money as taxes and returning, for the people’s payment, a mix of social services, waste, and corruption. <p> What if politicians and bureaucrats were to focus on defending rights? Punishing criminals, fining the dishonest, enforcing environmental standards, and the like, instead of trying to provide so many varied services. Could people take care of themselves? <p> If they no longer had to pay so many different taxes, imposts in which they had no say in creating, people would probably not feel so powerless. Indeed, feeling more in control of their lives, they might make better life choices in general, and become effective neighbors in times of need. And if they received a share of the revenue raised by land dues, then they’d have more resources for acting on their good intentions. <p> Libertarians and anarchists should love it! Somebody who did at least like it was the famous science fiction writer Robert Heinlein. In his </i>Number of the Beast, <i>between pages 408-412, he writes: “the United States (called that, although boundaries differ) is not as smothered in laws, regulations, licensing, and taxes as is our native country. There is no category “Lawyers” in the telephone book. Taxation is low, simple-and contains a surprise. The Federal government is supported by a head tax paid by the States, and is mostly for military and foreign affairs. This state derives most of its revenue from real estate taxes. It is a uniform rate set annually, with no property exempted, not even churches, hospitals, or schools-or roads; the best roads are toll roads. The surprise lies in this: The owner appraises his own property.” <p> If you’d like to understand the economics underlying the policy positions above, check out this teleseminar on war and peace: <A HREF=”http://instantteleseminar.com/?eventid=34431294 ” target=_blank> To read more</a> <p> Comments about Economics of War and Peace: <br> AMAZING… very powerful! By far the best teleseminar I’ve heard yet. – Hunt Henion, Montana, USA <br> A really great presentation and the Slideshow was terrific… very well coordinated and put together. The proposals for peace are brilliant. – Rob Wheeler, Maryland, USA <br> I found the speakers very moving and now have a better understanding regarding the link between war and land. – Carmel Harty, Melbourne, Australia <br> The presentation was exceptional! Presenters were all very engaging and powerful. – Nancy Lea Speer, California, USA <br> Another amazing seminar! Thanks from down under. – Ana Maria Rodriguez, Tasmania, Australia <p> Join two US Air Force veterans and Veterans for Peace activists – Frank Dorrel, producer of the video What I’ve Learned About U.S. Foreign Policy, S. Brian Willson, peace activist, author of Blood on the Tracks: The Life and Times of S. Brian Wilson along with Fred Foldvary, economics professor at Santa Clara University who teaches about how to build an economics for a peaceful planet.
Kashmir Valley’s Elite Schools Pay Peanuts as Land Rent
Norway tried to be generous with its oil revenue but failed. Kashmir tried to charge its elite but failed. How can the masses win? We trim, blend, and append two 2012 articles from (1) Reuters, Nov 7, on stolen aid by E. Biryabarema, and (2) Greater Kashmir, Oct 11, on avoided rent by Umer Maqbool.
by Elias Biryabarema and by Umer Maqbool
Uganda’s Graft Repels Norway’s Aid
Norway has become the fourth European country to suspend aid to Uganda after $13 million in donor funds was found to have been embezzled. The growing scandal adds to concerns about corruption under President Yoweri Museveri, accused by his critics of creating a culture of impunity for cronies who steal public money but are loyal to his party, the National Resistance Movement (NRM). Norway joined Britain, Ireland, and Denmark in suspending aid after Uganda’s auditor general last month exposed the theft of funds meant for reconstruction in two impoverished regions. It implicated officials in the prime minister’s office. Norway’s total aid to Uganda amounts to about $70 million a year. Aid accounts for about 25 percent of Uganda’s annual budget in Africa’s largest coffee exporter. To read more
JJS: Insiders not only get to take public funds for themselves, they also get to avoid paying what they owe their society.
Kashmir Valley’s Elite Schools Pay Peanuts as Land Rent
The annual rent paid by Valley’s prestigious missionary schools for using the state land at prime locations in the summer capital is 30 times less than the admission fee charged by them from a single student. Not only this, the lease of the land expired in 2009 on Dec 18. Same is the story of Presentation Convent Girls Higher Secondary School Rajbagh. Ground rent of the 85 kanals of land in prime Lal Chowk area under Biscoe School is only Rs 1250 per annum. The institution has failed to pay even this meager rent for last 36 years. To read more
JJS: Of course you can imagine who attends those schools — the children of the elite.
At one point, those in government knew enough to at least pass a law that was designed to recover the socially-generated value of land. Unfortunately, those in power also could not find the gumption to enforce the law. So insiders win and everyone else loses.
And it’s not just politicians in less developed regions. In America, most port districts are public land. Do the authorities get the full market value of those locations? Does that raised revenue reach the public in beneficial ways? Hong Kong exists on public land. Israel exists on land held in trust. The same question remains: to whom does all the annual rental value of the locations flow?
How can we make it so that everyone understands that the value of land, that the money to be made from locations, belongs to everyone? How do we raise awareness? How do we transform custom and law? We must keep repeating the message until people feel that it’s wrong for only a few to capture the worth of Mother Earth and feel cheated, ripped off, if they’re not getting their fair share.
Once enough people articulate such an understanding, then not so many would be willing to try keep the blessings of nature for themselves. Enough people would understand that our spending for land and resources is a social surplus and that social surplus should be our common wealth.
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
Funny how powerful is the unearned income from land. That’s probably why conventional people call by the income stream by euphemisms like “household balance sheet”. We trim, blend, and append two 2012 articles from (1) CNN, July 23, on the economy’s operation by R. Salam (of The Daily, the National Review, and e21, a non-partisan economic research group) and (2) Left Foot Forward, Oct 25, on taxing land by J. Jones (leader of the Green Party on the London Assembly).
by Reihan Salam and by Jenny Jones
US Economy Weakened Years Before the Crash
We think of the 2008 crash as the bomb that caused today’s economic woes. Evidence is building that U.S. economy was troubled years before that. If we measure gross domestic product by looking at incomes rather than expenditures, it actually started in the last three months of 2006.
The “housing” boom [i.e., land boom] hid the dire effects of manufacturing layoffs. The 37% rise in housing prices between 2000 and 2007 functioned as a kind of invisible stimulus. People in real estate made more money selling houses, and owners refinanced, taking the equity out of their home (sites).
As owners and people in real estate spent their takings, they created demand for goods and services which created jobs in building homes and other non-diploma fields. That shielded non-college-educated men from most of the fallout from the collapse in manufacturing jobs, 3.5 million of which evaporated over that same period.
One irony of the “housing” boom is that it convinced millions of American men that there was no need to retrain for a new economic landscape, a decision that many might now regret.
Because the over supply of houses for sale that remained when the bubble burst still persists, demand for housing has not yet reignited. And because many owners still owe more mortgage than they could sell their house for, they can’t borrow and use debt to finance new consumption. Therefore unemployment of mere high school graduates persists.
The power of the outsourcing issue flows from sharp decline in manufacturing. Though the offshoring of production has greatly benefited the American economy in many important respects — by lowering the cost of goods and services, by increasing the demand for skilled labor, and by facilitating innovation, among other things — it has contributed to the deterioration of the labor market position of non-college-educated men.
Automation has played a far larger role in declining manufacturing employment than offshoring, and indeed offshoring can be seen as nothing more than a transitional step as increasingly sophisticated machines start displacing less-skilled foreign labor. But it is offshoring that sparks the most anxiety in American workers.
JJS: People like to think the boom in the prices for land will make them rich, which it does — until it doesn’t. But is the socially-generated value of locations something that individual sellers and lenders should speculate in? Or is it a source of wealth that should benefit all members of society equally? If government did recover the value of land and resources for everyone, then economies would operate a lot differently — without recessions — and economists would have to find something else to scratch their heads about. Put Which Tax at the Heart of Economic Recovery?
Fairer, smarter taxes are needed for London to recover from the double-dip recession.
A tax on rising land values is one way to promote useful economic activity in a more fair way.
Land value taxation could keep down house prices, finance major transport infrastructure projects, and switch more of the burden of taxation onto unearned wealth.
For example, the £15 billion Crossrail project is expected to benefit many businesses in London, so they were required to contribute to the cost. A Business Rate Supplement has been levied on businesses with a rateable value greater than £50,000, raising £4.1bn towards the cost.
But building this new railway line will also benefit land owners along its route, estimated at a minimum to be a £5.5bn windfall gain.
A land value tax would enable government to reinvest a proportion of these windfall gains into new infrastructure, ensuring everyone who benefits pays their fair share.
The Metropolitan Line was built in the 1930s using a similar principle. The company who built the line bought up land along its length for housing, and used the uplift in land values to pay for the line.
There are many other strong economic arguments for land value taxation — putting a dampener on the housing market by making it a less attractive option for investors; giving developers with land banks and other owners of brownfield sites a strong incentive to develop; and possibly using the revenue to reduce business rates are just three.
From where does one get so much money to buy so much land? We trim, blend, and append two 2012 articles from (1) Business Insider, Oct 23, on large landowners by J. Zeveloff and G. Lubin and (2) BBC interview, May 4, of Carlo Nero (son of Vanessa Redgrave) on his new documentary film.
Good old fashioned land has become one of the hottest investments in the world, as stocks disappoint, currencies go to war, and food prices soar.
Luckily for some, America has a lot of land. Especially America’s 100 biggest private landowners.
The top dog on the list is, for the second year running, media tycoon John Malone, who owns 2.2 million acres — more than twice as much land as Delaware. He narrowly beat out fellow media tycoon Ted Turner.
JJS: When one person owns more land than they could possibly occupy or use by themselves, does that mean others own less than they need, or none at all?
And do those wealthy 1% really own all that land free and clear or do they owe banks mortgages for part of it?
Further, from where does one get so much money to buy so much land? Often the source is farming, which means agri-business subsides from the US Government, or logging, which means the same thing, or oil, which again means the same thing plus lots of environmental degradation that the degrader does not have to pay for.
Another source of vast, unearned income (unearned by the recipient, but earned by the non-recipients, whoever they are) is another form of “land” (or nature), such as the airwaves, which the US Government gives away for free.
So, if the US Government did not give away public property and did not subsidize powerful insiders but did charge them for the resources they take and for the damage they do, then would those businessmen be able to concentrate so much wealth in order to amass so much land? Not likely. Then there’d be more land for others at more affordable prices.
Plus, by charging people for the natural values they take, not for the economic values they create, then government would have enough money to either operate its justifiable services or pay the citizenry a dividend or do both.
Not only is such a geonomic system fair and efficient, it has also worked wherever tried, to the degree tried.
While a handful of rich nature hoarders would lose some land in a geonomy, society in general would gain some justice. And some prosperity. And some conversation of natural resources.
Why would requiring people to pay a tax or dues for land motivate them to use less land and use it wisely? Check out the below.
Killing Fields Director Carlo Nero Radio Interview
Director Carlo Nero (son of award-winning actress Vanessa Redgrave) is Interviewed on BBC Radio about his new documentary film, The Killing Fields. The film explores the relationship between wildlife, land taxation, and law. The film documents how the introduction of Land Value Tax would give Value to wildlife and ensure Its protection. The film is presented by economist Fred Harrison and features Peter Smith CEO and Founder of the Wildwood Trust, Dr Duncan Pickard, landowner and farmer, and Polly Higgins, environmental barrister, author and campaigner.
JJS: If we all had to pay land dues to our community — that is, our neighbors, as they would have to pay land dues to us — that would go a long way toward resolving the ownership vs. stewardship dilemma. A couple other major pieces of the puzzle would be to end subsidies to the despoilers, enforce standards for land use, quit taxing people’s useful efforts, and pay a fair share of the recovered rents to the members of society. Grant people a monetary stake in the fate of the earth and watch them turn over a new leaf over night. Humans are materialists, after all.
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
The “fiscal cliff” is the economic plunge that will occur in the U.S.A. if Congress does not change the big tax hikes and spending reductions that will otherwise start on January 1, 2013. The income tax rate cuts enacted at the beginning of the ozo years (2000 to 2009), as well as the payroll tax cuts that followed the Crash of 2008, were temporary and are scheduled to expire at the close of 2012.
Congress enacted the Budget Control Act of 2011 to require “sequestration” – automatic sharp spending reductions in 2013 – unless it enacted the recommendations of a “supercommittee,” which then failed to achieve a consensus on raising revenues and cutting spending.
Now in mid November 2012 the economy is a train heading towards the cliff, and if Congress does not lay down a track to make the train veer off to the side, the economic train will plunge into another depression.
The redistributionists seek to sharply increase taxes on high incomes while leaving the reduced tax rates in place for lower and middle-income people, but merely taxing the rich will bring in much less revenue than needed to plug the deficit, and over the long run the high tax rates will shift ever more enterprise and employment out of the country.
Most politicians agree that government spending has to be cut, but few are proposing specific programs to cut. The scheduled cuts include less military spending, and it would be sensible to greatly reduce U.S. military bases in Japan, South Korea, and Europe, but conservatives have opposed reductions in alleged “defense spending.”
Another good candidate for spending cuts would be the elimination of the federal war on drug use. Colorado and Washington have now legalized the use of marijuana, but the possession remains illegal by federal law, despite any Constitutional authority for federal prohibition.
The best short-run remedy for the fiscal cliff would be the elimination of excessive spending such as for foreign military bases and the failed war on drugs, allowing the payroll tax cut to expire, and most of all, the removal of massive subsidies to land-rent seekers.
The public goods provided by government make territory more productive and attractive, which increases the demand for land, which generates higher land rent and land value, as the goods are paid for mostly by workers rather than landowners. The greatest of all subsidies is this increase in land value that subsidizes the owners of land and induces the excessive land speculation that results in real estate bubbles followed by economic collapse.
The optimal long-run remedy would be the replacement of all taxation with levies on pollution and land value. These levies would in substance not be a tax but the prevention of subsidy, by having those who receive this unearned value pay it back. This tax shift should be combined with the elimination of government programs that do not generate land rent, such as the failed wars on victimless acts, and the reduction of military bases that originated in the occupations of Japan and Germany and the subsequent Cold War with the USSR that no longer exists.
The optimal long-run remedy would also phase out mandatory Social Security and offer workers the alternative of enhanced private retirement plans that would provide triple the retirement income while greatly increasing the supply of the savings that fuels investment and growth.
Congress could simply continue its current spending and tax rates while eliminating the legal obstacles to borrowing more funds. The “lame duck” session of Congress during November and December 2012 could postpone action to January 2013, when Congress could make retroactive changes. One of the most urgent needs is to again patch up the alternative minimum tax, a second calculation of taxes that increasingly burdens the middle class, as the previous patch expired at the close of 2011.
Another source of damage would be the scheduled sharp increase in taxes on dividends, as dividend income would be taxed at the same rate as most other income. The problem there is that this income comes from corporate profit that is already taxed at rates up to 35 percent. Although some corporations avoid taxation with various exemptions and deductions, the corporate tax rate does affect many companies, and the result, including state taxes and steeper taxes on dividends for higher-incomes, could be a total tax rate of up to 90 percent on dividend income. Because cash dividends are the foundation of sound financial investing, this capital punishment would stifle investment, growth, and innovation, and increase the use of risky debt, even more than has already been done.
Given the divided party control of Congress, the action with the least political resistance is the continuation of trillion-dollar federal deficits. That could avoid the fiscal cliff of 2013 but make that much worse the coming fiscal crisis, crash, and depression of 2026.
Good riddance to a religious approach that preached salvation through constant hard labor. This 2012 article is from AlterNet, Oct 24.
by Robert S. Becker
For the first time only 48% of Americans deemed themselves Protestant. The dominant majority since Puritan days has shrunk to minority status. Let us project a similar demise for the “Protestant Ethic.” That triumphant code consecrates hard work, prosperity, and control over nature.
No doubt, America’s affluence mirrors perseverance, especially by underpaid laborers, but consider more critical advantages: freedom from central authority, relative tolerance, thus ethnic diversity, matchless resources (farmland, forests, water, minerals), and truly fortuitous geography, poised between Europe and Asia. Military might, material goods, isolation, and good fortune, not simply workloads, clarify how 5% of the world’s population commandeers 20% of most goodies.
What happened to promises of greater leisure time?
What needs challenge isn’t work per se but the Protestant work linkages: 1) that worldly success signals heavenly election; 2) that will power alone (and the right Christian values) will overcome all uneven playing fields; and 3) that status (read: money) awards “winners” the moral right to rule the entire roost. In fact, hard work by itself leads to exhaustion, without often gaining a livable wage. And America’s celebrated draw of exceptional socio-economic mobility has migrated to Canada and much of Europe and Asia.
Our New Deal’s 40-hour week base cut America’s average workload by 25% (from 1900 and 1950), yet that didn’t stop us from becoming the world’s richest economic power ever (not getting devastated by two wars helped).
In fact, leisure advances productivity. Conversely, overwork cuts efficiency while amplifying stress and health problems, impedes exercise, and ups our reliance on coping mechanisms, namely alcohol, cigarettes, and drugs.
Why not start a new crusade to Upend the Protestant Ethic? How hard must we work to find alternatives to the folly of glorying counter-productive, life-taking hard work — that destroys rather than serves life?
JJS: An opposite code, which could be dubbed the Polynesian Play Ethic, is growing more popular. You see people urge the acceptance of (not work for, of course) a shorter workweek, more vacation time, simpler living, the slow food movement, etc. But all those things take money. If people already had more money, without more work, they probably would work less and play more.
From where could we all get an extra income? Alaska pays residents a dividend from oil revenue, and other jurisdictions (Aspen CO, Singapore, elsewhere?) do something similar. Could every place pay its citizens a dividend?
Why not? The revenue that comes from people paying for aspects of nature is ideal. Morally, nobody made land or resources and everybody makes nature valuable (by needing sites, minerals, etc). Practically, while not every place has an oil field, everywhere does have a “gold mine” — downtown locations.
If the urban land is public — as is Hong Kong’s and most US port districts’ — then lease it. If it’s private, then tax it. Or institute user fees. Or land dues. However the socially-generated rental value of nature is recovered, it could then be used for an extra income to all. More than likely, it could also fund a svelte government (that does not waste public revenue on corporate welfare and a war machine). Indeed, if land dues are instituted, then the entire tax apparatus could be tossed onto the junk heap of history.
While radical reform of public revenue may seem farfetched, in small ways it is already in place. For example, Fiji recovers ground rent as a matter of routine. To read more . And wherever tried, geonomic policy has worked. May the rest of the world catch up!
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
Mechanical noise disrupts natural sound. Most places, it’s now nearly impossible to record uninterrupted natural sound.
by John Vidal
Musician and naturalist Bernie Krause traces the origins of human folk music back to the sounds of a place. The Baka in Cameroon, the Sami in northern Finland, some Inuit groups in Canada, and many others simulate the sound of the forest, the wind, the sea, or whatever natural surroundings are dominant to their own habitat.
Soundscapes, he says, are the most accurate way to understand the health of a whole habitat. He says he can tell how healthy a place is from a 10-second recording. Conservationists, he says, could learn how to assess ecological health from sound recordings. “It’s easy to do. It’s cheap. I don’t know why they don’t,” he says.
The evolution of natural sound, he says, seems to follow Darwinian evolution. Like an orchestra tuning up, a forest may wake up with the insects at around 2am, after which come the reptiles, the amphibians, the birds and lastly the mammals. Every animal has its niche, or its place in the animal orchestra, he says.
Mechanical, or industrial sound, he says, disrupts natural sound profoundly. It is now next to impossible in most western countries to record uninterrupted natural sound. Instead, planes, snowmobiles, traffic, chainsaws, mowers and human “music” pervade all habitats.
Noise may weaken immune systems in mammal and fish and compromise resistance to disease. Whales and cetaceans are profoundly affected by the sound of boats and underwater mechanical noise. For humans, the level of urban noise increased 12% from 1996 to 2005. More than one-third of all Americans complain of noise. More than 40% say it is so bad they would like to change where they live.
It’s awarded by Sweden’s central bank, foisted among the five real prizewinners, often to economists for the 1% — and the surviving Nobel family is strongly against it. This 2012 article is from Alternet, Oct 12.
by Yasha Levine
It’s Nobel Prize season again. News reports are coming out each day sharing the name of the illustrious winner of the various categories — Science, Literature, etc. But there’s one of the prizes that’s a little different. Well, that’s putting it lightly… you see, the Nobel Prize in Economics is not a real Nobel. It wasn’t created by Alfred Nobel. It’s not even called a “Nobel Prize,” no matter what the press reports say.
The five real Nobel Prizes — physics, chemistry, literature, peace, and medicine/physiology — were set up in the will left by the dynamite magnate when he died in 1895. The economics prize is a bit different. It was created by Sweden’s Central Bank in 1969, nearly 75 years later. The award’s real name is the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” It was not established by Nobel, but supposedly in memory of Nobel. It’s a ruse and a PR trick, and I mean that literally. And it was done completely against the wishes of the Nobel family.
Sweden’s Central Bank quietly snuck it in with all the other Nobel Prizes to give economics credibility. One of the Federal Reserve banks explained it succinctly, “Few realize, especially outside of economists, that the prize in economics is not an “official” Nobel. . . . The award for economics came almost 70 years later—bootstrapped to the Nobel in 1968 as a bit of a marketing ploy to celebrate the Bank of Sweden’s 300th anniversary.” Yes, you read that right: “a marketing ploy.”
“The Economics Prize has nestled itself in and is awarded as if it were a Nobel Prize. But it’s a PR coup by economists to improve their reputation,” Nobel’s great great nephew Peter Nobel told AFP in 2005, adding that “There is nothing to indicate that [Alfred Nobel] would have wanted such a prize.”
Members of the Nobel family are among the harshest, most persistent critics of the economics prize, and members of the family have repeatedly called for the prize to be abolished or renamed. In 2001, on the 100th anniversery of the Nobel Prizes, four family members published a letter in the Swedish paper Svenska Dagbladet, arguing that the economics prize degrades and cheapens the real Nobel Prizes. They aren’t the only ones.
In 2004, three prominent Swedish scientists and members of the Nobel committee published an open letter in a Swedish newspaper savaging the fraudulent “scientific” credentials of the Swedish Central Bank Prize in Economics. “The economics prize diminishes the value of the other Nobel prizes. If the prize is to be kept, it must be broadened in scope and be disassociated with Nobel,” they wrote in the letter, arguing that achievements of most of the economists who win the prize are so abstract and disconnected from the real world as to utterly meaningless.
The 1997 award was shared by economists Robert Merton and Myron Scholes for their work in figuring out how to value derivatives so as to minimize risk. The two economists used their Nobel-worthy economic models to run “the world’s biggest hedge fund,” which was called Long Term Capital Management (LTCM). And the fund really lived up to its name. Nine months after winning the Swedish Central Bank Prize in Economics, LTCM went belly-up, racking up over $1 billion in losses over a period of just two days. It was bailed out by then-Federal Reserve Chairman Alan Greenspan, who considered LTCM “too big to fail.”
Radiofrequency (RF) radiation, particularly from mobile-phone towers, has been rising rapidly. Is anyone liable?
by Lynne Wycherley
Aware of the rapid growth of radiofrequency (RF) radiation, particularly from mobile-phone ‘towers’, Colorado researcher Katie Haggerty had an inspiration: she planted three test plots of aspen seedlings. Carefully matched in all other respects, one plot was shielded from a nearby town’s RF radiation, one was ‘mock’ shielded, and the other was left unprotected. The difference, recorded in the International Journal of Forestry Research, was startling: the fully shielded saplings were vigorous and healthy, but both the ‘mock’ shielded and the exposed plants were small, lacked pigments, and had sickly leaves.
Across the Atlantic, Spanish biologist Alfonso Balmori of the Institute for the Environment (Consejería de Medio Ambiente) in Castilla y León was conducting a sensitive study of tadpoles. Sited 140m from a set of phone masts, those shielded from its radiation developed normally and in sync; but the unshielded tadpoles grew unevenly, and only 10% survived.
In Switzerland, the University of Zurich’s Michael Hässig recorded multiple cataracts in calves near masts, whilst Belgian researcher Joris Everaert of the Research Institute for Nature and Forest (INBO) mapped striking declines in house sparrows in fields that contained masts. Anil Kumar of the Department of Environmental Science at the University of Jammu in Kashmir, and Sukhdev Dongre of Jayvanti College in Betul, Madhya Pradesh echoed his findings.
Meanwhile, Marie-Claire Cammaerts and her team at the Université Libre in Brussels studied the effects of a weak signal on ant colonies and discovered that they became confused to such an extent that they no longer remembered the cues that led them to food.
In the words of Balmori, informed by his years of research, “the electromagnetic field is a perfect secret agent: you cannot see it, you cannot smell it, you cannot hear it, you cannot feel it, and its effects are slow but relentless.”
When human beings first walked the Earth, singing their praise to the stars, background radiation was low. Today, in the words of Olle Johansson of the Karolinska Institute in Sweden, “you are sitting in levels (3G) that are approximately one million billion times above natural background… Therefore you must ask yourself, do we through evolution have a microwave shield built into our bodies? …of course we don’t.”
Householders in America have been fleeing pulsed-microwave smart meters: the insomnia, headaches and heart arrhythmia these can trigger have sent some people to the law courts, and others to the hills.
An alternative is to return to the use of cable. (Many laptops and tablet computers can use ethernet; telephone landlines can take our bulk calls.) Following reports of health problems, a number of French libraries have swapped Wi-Fi for cabled internet. Others have binned cordless-phone stands: health researcher Magda Havas of Trent University, Ontario discovered that the non-stop pulsed microwaves they emit can disturb the heartbeat.
Similarly, Hermann Stever and Jochen Kuhn of the University of Koblenz-Landau found that few honeybees returned to hives exposed to microwave signals, and a small Dutch study at Wageningen University noted bark lesions and leaf death in ash trees next to routers.
Though brief lab studies quite often find no ill effects, this does not rule out chronic influences – Klaus Buchner of the Technical University at Munich, and Emad Eskander, an endocrinologist at the National Research Centre in Cairo, each found long-term hormonal imbalances in people living near new or existing masts. And even more ominously, when environmental engineer Adilza Dode of the University of Minas Gerais scrutinised public health records in Brazil, she found that cancer deaths increased sharply with local mast density. In Israel, physiologist Ronni Wolf of Tel Aviv University documented triple and quadruple cancer rates in their near fields.
How close to the brink are some fish? How tantalizing available is a viable solution?
by Fred E. Foldvary, Senior Editor, 15 October 2012
Sardines are delicious and healthy to eat, but much of the consumption of these fish is for feeding to animals, and this is destroying the wildlife of the seas. We are possibly witnessing the fulfilling of the prophetic verse in Revelation 8:9, “one third of the living creatures which were in the sea died” (World English Bible).
Already several fish ecologies, such as the fish by the coast of Namibia, have collapsed. Sardines and anchovies are in some places the main prey of the predators up the food chain, including birds, seals, dolphins, and whales.
Much of the sardine catch is ground up and fed to farmed fish and factory-farmed chickens and pigs. World-wide, 14 million tons of wild fish, such as sardines and anchovies, are fed to mass-produced food animals. About 75 percent of the fishmeal and oil fed to carnivorous farmed fish come from the harvest of small, open-ocean fish such as anchovies, herring, and sardines. When you eat a farmed salmon, you indirectly eat sardines and the other fish feed.
Marine scientists in organizations such as Oceana are advocating reductions in commercial fishing for sardines and other food fish. The Institute for Ocean Conservation Science convened the Lenfest Forage Fish Task Force of thirteen preeminent fisheries scientists to develop recommendations on forage fish management. Its report recommends cutting “global fishing for crucial prey species” by half. It stated that “globally, forage fish are twice as valuable in the water as in a net.” The report, published in 2012, is called “Little Fish, Big Impact: Managing a Crucial Link in Ocean Food Webs.”
The global fishing industry is now engaged in a vicious circle of the destruction of the ocean food base. After the large fish such as tuna are depleted, fishing then goes after the smaller fish, and then the depletion of the fish at the bottom of the food chain further reduces the animals higher up the chain, which then induces a greater catch of the smaller fish. The “little fish” now amount to 37 percent, by weight, of the global fish harvest, up from 8 percent 50 years ago.
An economic analysis of using fishmeal as livestock feed includes an ethical application, since the concept of the pure market economy necessarily involves ethics. The pure market consists of voluntary human action, and the concept of voluntary action requires a universal ethic to designate acts a good, evil, and neutral. Voluntary action includes acts that are neutral and good, while involuntary acts, those that coercively harm others, are morally bad or evil, and outside the market as violations of natural moral rights.
Such ethical analysis includes the origin of property rights. Our equal self-ownership endows human beings with property rights to their own personhood as well as what they produce. But self-ownership does not extend to natural resources such as wildlife. The premise of human equality, from which natural moral law is derived, implies an equal global benefit from the surplus of natural resources such as the fish in the ocean, and equality applies also to future generations. Hence, natural moral law requires a sustainable harvest from the seas. One cannot logically blame a non-existing “free market” for the depletion of the world’s fish. The fishers do not have a morally justified property right to the ocean’s wildlife.
The efficient and equitable way to harvest the global fish stock is to set a quantity limit to the catch of each animal type and location, and then let fishers bid in auctions for portions of the catch. The funds from the auctions would be economic rent that should be devoted to research, monitoring, and enforcement of the catch quotas. Market demand would then allocate the fish to the most wanted uses. The limitation of the fish catch, such as half the current amount, would raise the price of sardines and other such fish, and would most probably greatly reduce the use of sardines for fishmeal for livestock. The industry would find substitutes, or reduce the amount of livestock as the feed price rises.
A sustainable harvest of oceanic fish requires an international agreement. Such treaties have been difficult to establish and enforce. Those governments which are more responsible and seek such agreement could implement the treaty, and then impose penalties on the countries that refuse to cooperate.
At any rate, there should be more popular awareness of the fish depletion problem, before Revelation 8:9 becomes reality.
Senior Editor Fred E. Foldvary applies logic to a damaging environmental problem and to various proposed solutions.
by Fred E. Foldvary, Senior Editor, 8 October 2012
“Fracking” or “hydrofracking” derives from “hydraulic fracturing,” a method of extracting oil and natural gas from shale deep in the ground. Water, sand, and chemicals are pumped at high pressure into the rock layer to create fissures, i.e. cracks or fractures, which enable gas and oil to flow into a wellbore. Fracking has been used since the 1940s, but better horizontal technology has greatly expanded the practice.
Advocates of fracking say that the method has greatly increased oil and gas production, reduced the price of energy, created much employment, and decreased oil imports. Critics of fracking say that the process uses up much fresh water, blocks off much land from farming and grazing, and uses harmful chemicals that, despite attempts to contain them, leak into ground water.
The claim by some fracking critics that the deep-injected fluids contaminate groundwater is not justified by the geological physics. Between the shale and the ground water above it there is several thousand feet of rock that prevents the cracks from expanding to the surface. Moreover, the fracking fluid is too dense to rise up through the fractures. However, methane from shallow deposits of natural gas has contaminated groundwater near some fracking sites.
An article that deplored fracking appeared in the September 19, 2012, SF Weekly: “Boom or Doom: This Environmental Disaster Is No Gold Rush,” by Denise Grollmus. Much fracking has occurred in Pennsylvania, where thousands of complaints have been submitted. Toxic chemicals contaminated the Monogahela river near Pittsburgh. Thereafter, New York State banned fracking while it conducts a public health study.
Two strong political forces are clashing on the fracking fracas. The oil and gas industry lobbies have paid hundreds of millions of dollars to campaign funds to prevent having to fully compensate for the damage it causes. Landowners who lease sites to energy companies obtain substantial rent and add to the political forces in favor of fracking. The thousands of workers newly employed in the production of natural gas are another potent political element.
These pro-fracking interests create regulatory capture, in which the regulators serve the regulated interests rather than the general public. Pennsylvania law allows drillers to extract gas from properties near leased land without any contract or payment to the nearby title holders. The Bush-Cheney administration pushed Congress to exempt fracking from the Safe Drinking Water Act. Allegedly scholarly studies of fracking pollution are sometimes funded by organizations such as the American Clean Skies Foundation, founded in 2007, with ties to the energy industry.
In opposition, vigorous environmentalists seek to completely ban fracking rather than just regulate it or require the industry to fully cover the costs of water and contamination. While greater use of natural gas rather than coal and oil would reduce air pollution, contamination from the fracking process may offset this gain. Methane evaporates from holding tanks and contributes to greenhouse warming. The tarps that hold the dumping ponds sometimes tear, leaking out toxic water containing chemicals such as benzene, methanol, formaldehyde, hydrochloric acid, arsenic, barium, and lead. Pipes leak, tap water turns brown, and creek water becomes red. Trucks transporting waste water do not always obey laws and property rights. There are many tales of water faucets that flame when turned on, and children and animals sickened and dead from the pollution. Environmentalists have also blamed fracking for generating some earthquakes close to the wells.
The economic cost-benefit perspective provides the optimal policy, that which would prevail in a pure free market. The ideal environmental policy has two rules: polluters compensate for the full long-term social costs they cause, and users pay to the relevant communities the value that arises from natural resources. The pollution costs should be paid from a combination of a periodic general compensation and damage payments to individuals for particular cases. Simply banning a product or production method is usually not the most effective method. Let the cost to the producer exceed the benefit, and the process will stop by itself.
Economic analysis has to go beyond advice as if to benevolent despots, to the political context that blocks the optimal solution. The special interests exert both financial and voting pressure on elected officials and appointed boards. Practical policy prescriptions have to also confront the political realities.
Those who seek justice and environmental protection need to base their policy prescriptions on both geological science, economic analysis, and political forces. We live in a world where the flawed political process may well make the more dubious remedies more politically feasible.
It cost more to rent an acre of cropland or pasture land in 2012, according to new figures from the USDA.
The average cost to rent an acre of cropland in Missouri went up by 4 percent. Pastureland increased by 10 percent.
Ron Plain is an agricultural economics professor at the University of Missouri. He says rental rates and a land’s market value are both tied to the value of what is being produced on that land.
“If crop prices go up or if cattle prices go up, the value of what you produce on an acre of land goes up and therefore people are willing to pay more to rent land or, if the owner of the land is willing to sell it, they’re willing to pay more on a market price to sell it,” Plain says.
The average acre of Missouri cropland rents for $110. The average pasture rent in $28.
Pasture land rent value is increasing because less of it is available, Plain says, as each year more pasture is converted to cropland.
Jeffery J. Smith said on October 2, 2012 at 1:52 pm
The Geonomist: Long ago David Ricardo showed that how much one could make on a parcel of land is what determines the price of land, not the other way around; conversely, that cost for land is not what determines the price of the products from the land.
This fact matters because it shows how land — that is, the landowner — can and does swallow up monetary gains to be made from whatever factor. If demand for cattle goes up, or supply down, or if science can make fat healthy, or if government rules that fat is already healthy regardless, no matter what drives up the price of cows, land — or more precisely the landowner — can and does raise what they charge for the land and capture much of the gain in price of products.
To recover that value for the public, government need not own land but can instead levy a tax on land or institute land dues or charge a land-use fee.
Whatever the method that ends up being used, it allows government to get rid of the taxes on private efforts, taxes that shrivel the output of goods and services.
And if government redirects a society’s spending for all natural resources — not just rurual land but urban, too, not just surface land but subsurface resources like oil and iron, too, and not just subsurface but supra-surface, too, like the airwaves — then the public treasury would be so stuffed it’d become entirely feasible to pay the citizenry a dividend, a la Alaska’s oil dividend. Then, as the rent for land were to rise — for whatever reason — so would one’s dividend. So average-cost land would be remain forever affordable.
If you’d like to know more about land prices, business cycles, and markets next year and beyond, you might try to make an upcoming talk with Phil Anderson. You can connect with Phil on Facebook, Twitter, and Youtube and keep up to date via his blog at Economic Indicator Services.
There is a fuzzy border between trading and sharing. Suppose Adam gathers apples and Eve gathers oranges. The each want some of the other, so they can either trade some of the fruits, or they can share them. The result is the same: they each eat some of both.
Sharing implies that one gives the other some of the goods, and the other gives some to you, but reciprocal sharing is about the same as trading, perhaps though with a psychological difference.
Now comes the income tax to turn the beautiful act of sharing into a taxable commercial transaction. To the government, barter is just as much income as selling for cash. If you trade an apple for an orange, it has the same economic effect as selling the apple for cash, and then using the cash to buy the orange from your trading partner. The person trading his apple is subject to the same tax as the one selling for cash.
But since sharing has the same economic effect as trading, sharing too might fall under the tax code. This is what people are finding out when they share apartments.
In San Francisco, California, as in some other cities, there is a hotel tax, officially called the Transient Occupancy Tax. If you have guests stay in your apartment, you must pay a 14 percent occupancy tax to the city.
Many city residents have been using web-based services that find tenants for short-term stays. The guest benefits by paying less than he would for a hotel, and also by being able to stay in locations in which there are no hotels. The resident gets some income during the time he goes on vacation or stays elsewhere. There are also organizations that provide for car sharing, or short-term car use. Such services have been called a “sharing economy.” But the sharing is subject to income taxes, as well as special taxes such as the hotel tax.
Other problems arise from tenant’s rentals. In San Francisco, for example, it is illegal to sublet an apartment for more than is paid in rental to the landlord. The rationale is that when apartments are subject to rental controls, tenants can exploit their subsidized unit by subletting, in effect getting some of the economic rent. Also, some landlords could circumvent rent control with phony subletting.
The problem with subletting is the rent control itself. What is being controlled is not the economic rent, but who receives it. If the landlord is not allowed to collect it, then in effect the tenant is obtaining the rent implicitly, as a benefit. Properly, the people should be receiving the economic land rent in equal shares, and restrictions on development should be eliminated, to allow the quantity of housing units to match the quantity demanded.
The issue of taxing barter is inherent in income taxation. Barter is economically similar to using money as a medium of exchange. Sharing does provide net gains, and if gains are to be taxed, then if sharing is not taxed, that offers a way to avoid paying the income tax. The dentist will share dental services with members of a sharing economy, and they will share the food they produce with the dentist, and so there is no income tax, but indeed the income is there. Production is income.
The basic problem is the taxation of activities. A tax on the activity of production or consumption stifles the activity, which is the purpose of the economy and of living. To live is to consume. To tax consumption is to tax life, and to consume we must produce, so to tax production is also to tax the creation of life.
We can avoid taxing life if we tax the surplus from production that goes to land rent, because the landowner has not produced anything in return. If the landowner keeps the rent surplus, he gets a subsidy. The problem is not just the inequity of society’s surplus going to land title holders, but that the surplus creates a land value that rises with economic expansion. Speculators then jump in to capture the rising land value, and that carries real estate prices beyond what people who want to use it can afford, and then we get a recession like the Crash of 2008.
A tapping of land rent for public revenue is not based on any activity. The tapping does not depend on what the landowner does. He can hold vacant land and pay the same community rent as his neighbor who has a tall apartment building. A single tax on land value would avoid a special tax on occupancy. The abolition of taxes on income, other than land rent, would let people share as much as they wish, tax-free. And with no taxes on gains other than from land, there would be no tax evasion, and most folks would trade for money, since money evolved to facilitate trade. A lot of the “sharing” comes from the desire to escape taxes.
With a single tax on land value, sharing would be authentic. So the presence of the income tax pollutes genuine sharing. The replacement of hotel taxes with public revenue from land rent would promote a fuller use of real estate. Government’s “War on Sharing” destroys community spirit along with productive activity.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
not exactly Georgism, the Single Tax on land value proposed by Henry George. He did, tho’, inspire most of the real-world implementations of the land tax that some jurisdictions enjoy today, and modern thinkers to craft geonomics. While his name and our remedy both begin with “geo” since both words refer to “Earth”, the two have their differences. (a) George pegs land monopoly as the fundamental flaw while geonomics faults Rent retention. (b) To fix the flaw, George was content to use a tax, while geonomics jettisons them in favor of price-like fees. (c) George focused on the taking while geonomics headlines the sharing. George envisioned an enlightened state judiciously spending the collected Rent while geonomics would turn the lion’s share over to the citizens via a dividend. (d) And George, as was everyone in his era, was pro-growth while geonomics sees economies as alive, growing, maturing, and stabilizing. Despite these differences, George should be recognized as great an economist as Euclid was a geometrician.
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 way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old loggers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?
a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.
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 study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.