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This 2014 excerpt of the Financial Times, May 23, is by Dr Hugh Goodacre, University of Westminster and University College London, UK.
The current debates over the teaching of economics demonstrate how far university departments have fallen behind their own students in their response to the requirements of the times, just as they have been falling behind the economic and financial press and other opinion formers.
Departments aim to justify to first-year students that their further curriculum will centre overwhelmingly on mathematical models.
To suggest that the orthodox approach is amenable is not the same thing as “rethinking economics”, which is what is being called for by students and others. Indeed, giving the impression of change but not actually providing any change will hold back other attempts at breaking the orthodox stranglehold over the curriculum.
Ed. Notes: Economists are too conformists to think outside the box and come up with any good ideas for making the economy serve us instead of us serve the economy. That task is left to true scientists. As astrology gave rise to astronomy and alchemy did chemistry, some day economics must give way to geonomics, the discipline that puts the immutable laws of nature first.
Before the list gets any longer, here are a half dozen more references to an ideal reform in the rest of the media. These 2014 excerpts are of: (1) Albany’s Metroland, May 22, on MONOPOLY by Miriam Axel-Lute; (2) Ireland’s Independent, May 25, on planners by Ronan Lyons; (3) Mondaq, Jun 2, on owning Scotland by Gillian Campbell and Ainsley MacLaren; (4) The Economist, Jun 9, on fast trains by E.H.; (5) The Guardian, Jun 10, by George Monbiot; and (6) Sightline Daily, Jun 10, on urban renewal by Jerrell Whitehead and Clark Williams-Derry.
Who Owns the Land?
Monopoly was first invented under the name The Landlord Game to illustrate the problematic effects of private land ownership and the system of rents. Elizabeth Magie, who created the game in 1902, was a follower of Henry George, the economist who proposed a single tax on land value, and was in his own time a wildly popular author and public figure.
Thomas Paine, author of The Rights of Man: “Man did not make the earth, and though he had a natural right to occupy it, he had no right to locate his property in perpetuity in any part of it . . . It is the value of the improvement only, and not the earth itself, that is individual property” (Agrarian Justice, 1797)
And Abraham Lincoln: “The land, the earth God gave man for his home, sustenance, and support, should never be the possession of any man, corporation, society, or unfriendly government, any more than the air or water.”
Sometimes I think those of us who want to question some very fundamental things about how our culture does things fall into the trap of thinking we’re the first ones to be considering questioning them, or at least the first in anything like our context and culture. It can make any radical change feel rather more impossible than it necessarily is.
Our Planners Want to Land Us In Trouble Again by Not Listening
We could scrap all the various developer contributions, levies and charges, we could also scrap industrial and commercial rates, stamp duty on properties and, of course, the local property tax and replace them all with a single unified land value tax that raised the same revenue and stimulated building where it is viable.
The Land Reform Review Group is an independent review group set up in 2012. Their full report sets out 62 recommendations focused on the public interest and making the most of land in Scotland
give local authorities the right to force the sale of vacant or derelict land; and
tax land value taxation as an alternative to council tax, but this appears to have been quickly ruled out by the Scottish Government.
Reaction to the report has generally been positive. However, large landowners and their supporters have seen it is a fundamental attack on their property rights.
JR East, the largest by passenger numbers, does not require any direct public subsidy from the Japanese government, unlike the heavily-subsidised TGV in France. JR East owns all the infrastructure on the route: the stations, the rolling stock and the tracks.
JR East owns the land around the railways and lets it out; nearly a third of its revenue comes from shopping malls, blocks of offices, flats and the like.
Even so, 71% of the revenue from passenger tickets at JR East comes from the conventional, slower railway. Countries looking to lay down speedy new tracks might want to consider investing in their existing railway lines as well.
Ed. Notes: It’s not necessary for the railway to own the land. A public transit authority could tax it and dedicate the raised revenue to building and maintaining the mass transit system. Fares could still cover the cost of operation.
Unchallenged by Craven Labour, Britain Slides towards ever more Selfishness
Research across 70 countries suggests that intrinsic values are strongly associated with an understanding of others, tolerance, appreciation, cooperation and empathy. Those with strong extrinsic values tend to have lower empathy, a stronger attraction towards power, hierarchy and inequality, greater prejudice towards outsiders, and less concern for global justice and the natural world. These clusters exist in opposition to each other: as one set of values strengthens, the other weakens.
They tend to report higher levels of stress, anxiety, anger, envy, dissatisfaction and depression than those at the intrinsic end. Societies in which extrinsic goals are widely adopted are more unequal and uncooperative than those with deep intrinsic values. In one experiment, people with strong extrinsic values who were given a resource to share soon exhausted it (unlike a group with strong intrinsic values), as they all sought to take more than their due.
As extrinsic values are strongly associated with conservative politics, it’s in the interests of conservative parties and conservative media to cultivate these values. When people feel threatened or insecure, they gravitate towards extrinsic goals. Perceived dangers – such as the threat of crime, terrorism, deficits, inflation or immigration – trigger a short-term survival response, in which you protect your own interests and forget other people’s.
Values and baselines keep shifting, and what seemed intolerable before becomes unremarkable today.
Labour treats the deficit as a threat that must be countered at any cost. Its report says not a word about plugging the gap with innovative measures such as a Robin Hood tax on financial transactions, a land value tax, a progressively banded council tax or a windfall tax on extreme wealth. Nor does it mention tax avoidance and evasion.
The party says it will be “radical in reforming our economy” in support of “a determinedly pro-business agenda”. They appear to believe that success depends on becoming indistinguishable from their opponents.
It evinces a near-perfect psychological illiteracy. When a party reinforces conservative values and conservative ideas, when it fails clearly to expound any countervailing values, when it refuses to reverse the direction of the values ratchet, what outcome does it expect, other than a shift towards conservatism?
Downtown Seattle holds some of the most valuable real estate west of Minneapolis and north of San Francisco. Yet a stroll through Seattle’s urban core reveals unwelcome surprises: rundown, decrepit buildings; empty land parcels; and surface parking lots on prime real estate, just blocks away from high-rises worth tens or even hundreds of millions of dollars.
Is an underused (at midday), 63-spot parking lot the new normal for downtown Seattle? It shouldn’t be. Proximity to jobs, people, retail, and transportation should have made parcels like these ideal targets for new homes or office buildings. Yet a two-decade boom in downtown real estate has passed such sites by.
For example, the Eitel Building is a a stone’s throw from Pike Place Market, Seattle’s number one tourist attraction, and has been unoccupied above the ground floor since the 1970s. This marks four full decades of neglect and decay. Its immediate neighbor is a 38-floor glass and steel structure touted as “the West Coast’s most successful condominium high-rise.” Sorry, no vacancies, and resale prices begin at the low $1,000,000s!
These present just a few examples. There are plenty of other badly underutilized properties dotting the landscape of downtown Seattle, other major cities throughout the Northwest, and beyond.
Under today’s tax rules, leaving a lot empty, or letting a building slowly rot, gives the property owner a light tax bill. These land speculators become free-riders: their properties rise in value, sometimes dramatically, because of the hard-fought efforts by neighbors and city government to create vibrant and attractive downtowns. Yet many land speculators detract from the value of their neighborhood by leaving productive land derelict or by allowing buildings to disintegrate.
So what’s the solution to all this underutilized land? A land-value tax, or LVT. Shifting taxes from buildings to land would make downtown land speculators’ tax bills soar, creating powerful incentives to put high-value land to more productive uses — and diverting growth from lower-value properties in the suburbs.
The greatest advocate for the tax was 19th century economist Henry George, whose seminal work Poverty and Progress (1879) argued for a “single tax” on land.
Arden, Delaware (1900), and Fairhope, Alabama (1894) are extant, small Georgist single tax “colonies.” On a larger scale, Altoona, Pennsylvania in 2013 became the only US city that has a pure land-value tax.
Just because something is hard doesn’t mean it isn’t worthwhile. What’s required to get the LVT moving are equal doses of legal and political daring from determined champions that are willing to make the case for a fairer, more effective tax system.
This 2014 excerpt of Zocalo Public Square, May 22, is by Andres Martinez.
A small island nation of 5 million people (it’s really just a city), Singapore is tropical sticky but impeccably clean, inhabited by Chinese, Malays, Indians, and a multiplicity of guest workers from around the world all speaking English.
On the eve of celebrating its 50th anniversary as an independent nation, it boasts the world’s second-busiest seaport, a far higher per-capita income than its former British overlord, and a raft of number-one rankings on lists ranging from least-corrupt to most-business-friendly countries.
One business leader noted that he has never had to pay a bribe in his lifetime. It’d be a difficult claim to make in neighboring Southeast Asian countries (or developing nations anywhere. You couldn’t get by in Mexico without paying bribes, constantly.)
When it split off from Malaysia a half-century ago to become a separate nation of dubious viability, Singapore had little going for it, other than a determination to become whatever it needed to be —- assembly plant, container port, trustworthy banking and logistics center, semiconductor hub, oil refinery, mall developer, you name it.
A one-party technocracy has delivered the goods across two generations including affordable, publicly built housing for a majority of the population and a system of private lifetime savings vehicles.
Society’s cohesive glue, in addition to English, is a collective form of the “Singlish/Chinese” term “kiasu”, which roughly translates into a fear of losing or being left behind.
Kiasu usually refers to the extraordinary lengths to which people —- individually and collectively —- have gone to ensure success. And the motivating anxieties are not hard to discern in a nation-state so small it must rely on other countries for the water it drinks and the space to train its armed forces (they recall the brutal Japanese occupation during World War II).
Opposition parties are gaining some ground in parliamentary elections, capitalizing on unhappiness with strained public services, soaring prices, and an influx of super-wealthy foreign investors that resulted from the government’s openness to rapid growth.
Until recently, Singapore was among the most welcoming places to outsiders, with one out of every three residents born elsewhere. But with fertility rates dropping, the country opened the floodgates to immigrants to ensure continued growth and prosperity, turning immigration into a lightning rod.
A general unease about Singapore’s identity and concerns about overcrowding (owning a Honda Accord will set you back more than $100,000, in what has to be the bluntest form of congestion pricing anywhere) have forced the government to slow down its intake of immigrants and taper its growth projections.
Ed. Notes: Most reporters leave out that Singapore, like other Asian Tigers, could keep taxes low by keeping public recovery of socially-generated land rent high. Citizens paid a good portion of the rental value of their land into the public treasury (usually as a tax but as a lease premium in Hong Kong) but the taxes they paid on their buildings, purchases, and earnings was low. This formula worked so well in Singapore that they not only could afford classy public housing but also pay their citizens a dividend from surplus public revenue. Nowhere else can make such a claim. But the business press overlooks geonomics, unfortunately.
These two 2014 excerpts are of (1) Common Progress, May 20, by Jeremiah Luttrell; and (2) Basic Income News, June 1 by Karl Widerquist.
Basic Income in America: Welfare Aid in Direct Cash
Earlier this year, news sources have reported that voters in Switzerland are considering a Basic Income of $2,750 a month, for every person, regardless if they work or not. A Basic Income is a proposed system of social security in which all citizens or residents of a country receive an unconditional sum of money.
Nobody else has the right to tell you what you can best contribute to the world. There are a few people who would be parasites, but most people actually want to feel that they have contributed something to society.
One supporter among the political-right is Charles Murray, a libertarian political scientist and fellow at the American Enterprise Institute. Murray supports the Basic Income because he believes it’ll replace the current bureaucratically administered welfare system that costs more money than the Basic Income would.
So there’s no more food stamps; there’s no more Medicaid; you just go down the whole list. None of that’s left. The government gives money; other human needs are dealt with by other human beings in the neighborhood, in the community, in the organizations.
Another supporter among the political-right is Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University. It is simple and fair because it gives a lump sum of money to everyone. The minimum income assumes that they, better than anyone else in Washington, know what they need.
Even one of the greatest thinkers in libertarian thought, Friedrich Hayak, supported a Basic Income: The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born.
The Basic Income can also replace unemployment insurance, Social Security, disability coverage, and the federal minimum wage. It can either streamline or replace the US Department of Education and National School Lunch Program.
New Political Party that Endorses BIG Takes 5 Seats in European Parliament
Podemos, a new Spanish political party that includes unconditional basic income (UBI) as one of its main economic policy objectives, has won five seats in the European Parliament. Organized barely three months before elections, the party seemed to come out of nowhere to a win nearly 8% of the vote (1.2 million votes) and finish in fourth place in the elections held on May 25, 2014.
Podemos (which means “we can”) grew out of the anti-austerity protest movement known as Indignados. It claims to be a party of ordinary citizens who desire a fundamental change in the political process toward greater democracy, freedom, and social protection.
If the citizens don’t get involved in politics, others will. And that opens the door to them robbing you of democracy, your rights, and your wallet.
Party leaders promise to accept a salary of no more than three times the Spanish minimum wage.
The party also supports reducing the working week to 35 hours and lowering the retirement age to 60.
Ed. Notes: It’s great to see people willing to help the needy but it’d be even better if people could see that society has a surplus that belongs to everyone and if we shared it fairly, there’d be no need to create a basic or minimum extra income. It’s ironic that supporters propose paying this extra income but do not explore how to fund it. If they did, then they’d have to see the surplus, our common wealth, now merely funding a few private fortunes, and of course they’d call for sharing it.
This 2014 excerpt of The Web of Debt Blog, May 19, is by Ellen Brown.
In the nineteenth century, Mississippi, Arkansas, Florida, Kentucky, and Indiana all had their own state-owned banks. Some were extremely successful (Indiana had a monopoly state-owned bank). These banks, too, withstood constitutional challenge at the US Supreme Court level.
Several decades earlier, the states had been colonies that issued their own currencies in the form of paper scrip, typically called “bills of credit”.
After the Civil War, the expanding economy needed a source of expandable currency and credit, and when local governments could not provide it, private banks filled the void. They issued their own “bank notes” equal to many times their gold holdings, effectively running their own private printing presses.
Was that constitutional? No. The Constitution nowhere gives private banks the power to create the national money supply – and today, private banks are where virtually all of our circulating money supply comes from. Congress ostensibly delegated its authority to issue money to the Federal Reserve in 1913; but it did not delegate that authority to private banks, which have only recently admitted that they do not lend their depositors’ money but actually create new money on their books when they make loans.
When enough people understand that private banks rather than governments create our money supply, imposing interest and fees that constitute an enormous unnecessary drain on the economy and the people, we might wake up to a new day in banking, finance, and the return of local economic sovereignty.
Ed. Notes: Not that those in power obey the US Constitution always, but the old document does oblige the federal government to define and enforce weights and measures in the same article that it empowers Congress to coin money. So by that language, the government could set standards by which any currency could attain the status of legal tender. After a while, the competing currencies may get down to one or two — as along national borders — but the possibility of a new competing currency arising would keep the old established currency honest.
That means, issuers of currency — whether government, bank, or a consensual currency club — would have to constantly settle their debts and not issue too much new money. That means, inflation would not occur, and the true cost of living would show up as constantly falling prices.
Once again, it appears that allowing people to both cooperate and compete — rather than merely obey a central bank or government — solves an issue of centralization that some reformers try to address with the coercive power of the state. Let a free and fair market rule!
This 2014 excerpt of the Washington Post, May 14, is by Charles Lane, a Post editorial writer, specializing in economic policy, financial issues and trade.
The year 2014 marks the 50th anniversary of the Beatles’ arrival in the United States. The Allies liberated Paris 70 years ago. And, of course, it’s been 135 years since “Progress and Poverty,” by the American journalist Henry George, was published in 1879.
What’s that? Never heard of George or his treatise on the causes of inequality? It sold 3 million copies. Perhaps you missed “Progress and Poverty’s” anniversary while perusing this year’s equally improbable bestseller, “Capital in the Twenty-First Century” by French economist Thomas Piketty.
With its sweeping review of historical data, culminating in a warning about capitalism’s inexorable, destabilizing, tendency toward inequality — to be cured by a global wealth tax — Piketty’s book has earned comparisons with “Das Kapital,” by Karl Marx.
Yet Piketty’s project may have more in common with George’s book than Marx’s, and not only because each tome reached U.S. readers six years after a ruinous financial crisis — the Panic of 1873 for George, the 2008 collapse of Lehman Brothers for Piketty.
Analyzing the stagnant economy and rich-poor gap of his day, George blamed not free markets, which he considered efficient and fair, but their corruption by a privileged few.
Specifically, George argued, land owners commanded a high and growing share of U.S. income even though their claim to it was based on something as unproductive as mere ownership — as opposed to the laborer’s work effort or the investor’s risk-taking.
For George, the solution was to abolish all taxes except a “single tax” on the value of land. Since land could neither be created nor destroyed, taxing it would reduce neither society’s total wealth nor owners’ incentives to put property to productive use — buildings and other improvements wouldn’t be taxed.
To the contrary, taxing land, and only land, to pay the government’s bills would liberate labor and capital to seek their most productive use and thus to grow the economy. A huge source of unearned wealth would be curbed, if not eliminated. Capitalism would be redeemed and democracy saved.
“It is not enough that men and women should vote,” George wrote (including a gender that could not, at that time, cast ballots). “They must have liberty to avail themselves of the opportunities and means of life; they must stand on equal terms with reference to the bounty of nature. . . . This is the lesson of the centuries. Unless its foundations be laid in justice, the social structure of the United States or any other country cannot stand.”
To Piketty, like George an admirer of market efficiency and opponent of protectionism, the resulting accumulation of wealth in relatively few hands threatens economic fairness, economic dynamism — and democracy.
And so, updating Henry George’s single tax, Piketty proposes a global wealth tax.
For Piketty and George, the bottom line, both moral and economic, is to socialize “rent” — rent, that is, not in the colloquial sense but in the economic sense of income disconnected from productivity.
It’s an attractive vision: an egalitarian, productive society, purged of parasitical rent-seeking through the expedient of well-aimed taxes.
Ed. Notes: The author claims that the problem with taxing land — or charging land use fees or deed fees or leasing public land or instituting land dues — is not moral but practical. He thinks that assessing the value of a location — apart from any building atop it — can not be done. However, there are many jurisdictions already doing it — notably Singapore and Hong Kong — and private parties in the real estate business appraise the value of sites all the time. So determining rent for land is really not an issue and should not be an obstacle. Governments should be gathering all the rents they can, while not taxing people’s efforts, and disburse the revenues in the most equitable ways possible.
One of the contributions to economics made by Friedrich Hayek is the theory of scattered knowledge. In his famous article, “The Use of Knowledge in Society,” Hayek analyzed how the knowledge needed for economic activity by consumers, producers, legislators, and bureaucrats is dispersed, tacit, and ever-changing. Sellers of goods can conduct surveys to find out what people want, but such data collection reveals only a small fraction of the subjective desires of buyers. The knowledge of how to produce goods is decentralized among the firms, each of which has its own local knowledge of the costs and the demand for its goods.
Much of the knowledge about goods is tacit, not written down. A label can list the ingredients, but it will not tell the buyer about how good it will taste, and does not reveal the full story about the nutritional benefits and harmful effects. A government bureaucrat cannot know all the details about the way a company handles its goods. The biggest and fastest computers cannot be programmed to know everything the economy is doing. The supplies and demands for goods are dynamic, always changing, like the weather, so that even when knowledge is gathered and analyzed, it soon becomes obsolete.
The Hayekian knowledge problem is one reason the Austrian school of economic thought concludes that only a truly free market can effectively apply the relevant knowledge. Government officials who try industrial policy, the promotion of some goods at the expense of others, often fail. For examples, subsidies to energy from the wind end up wasting resources, as a uniform policy cannot be applied to suit local conditions, and the full effects (such as windmills killing birds) are not known in advance, resulting in bad unintended consequences.
The natural environment, everything apart from human action, is too complex for human beings to fully understand it. As with economic knowledge, the data needed to understand human effects on the environment is both global and local. The knowledge of environmental conditions is tacit, and changing. The ecologies of the earth, like the economies, have interconnected elements with feedback loops. Kill the mountain lions, and the deer multiply, eat up the vegetation, and then the rains wash away the soils.
The Hayekian perspective on global climate change as well as local impacts is to admit that we don’t know the full effects of human activity, but we do know that interference with long-established interconnections can be deadly. The policy implication is that we should minimize unnecessary human interference with the natural environment. Any human presence displaces the natural presence, as a farm replaces meadows and forests. But it is excessive to burn down large areas of rainforests in order to have a few years of crops until the soil nutrients are depleted.
The optimal application of the knowledge issue is to understand that we can apply some general knowledge but not specific knowledge. For example, we know that emissions from power plants, factories, and vehicles have bad effects. Costs are ultimately subjective, but some costs, such as lost income and resources, can be quantified. We cannot precisely measure the social cost of pollution, but by comparing places with various amounts of pollution, and the various rates of diseases in those places, we can obtain some estimates of the ill effects. Policy can therefore require a payment for emissions that invade others’ property. To do nothing is to declare a price of zero, which is less accurate than the positive price obtained by statistical means.
The Hayekian policy for emissions is therefore a payment for the estimated damage. A pollution charge requires less knowledge than detailed regulations such as engine requirements, gasoline additives, and smog tests. The emissions charge would not be based on uncertain climate changes, but on the proposition that human interventions into the atmosphere and oceans could be catastrophic. The probabilities are uncertain, but what we do know is that a small probability times a huge cost equals a substantial present value. Because the earth’s environment is a balance of water and air temperatures, cycles of carbon emissions and absorptions, feedback loops, and substances such as the ozone layer, the probability that human interventions are harmful is much greater than the chance that they are beneficial. The mutual relationship of wolves, deer, and vegetation imply that killing off either the wolves or the deer will have bad effects.
The knowledge problem implies that policy has to confront the environmental issue rather than ignore it, because human activity is inherently environmentally interventionist. In some cases, intervention can help the environment, such as with artificial coral reefs. But large interventions such as deliberately dumping iron compounds into the ocean should be avoided.
The Austrian school of economic thought is critical of central planning due to its absence of economic calculation via market prices, and due to the knowledge problem. But the absence of pollution charges itself implies mispricing and the presumption that we know nothing about the effects of emissions. Given today’s highly regulated economy, the implication of Hayek’s thought on knowledge is to replace regulations and emissions trading schemes with the requirement to pay the estimated social costs. Firms (and their customers) can then either pay that cost or else avoid that cost by polluting less. To be most effective, pollution charges would need to be applied globally.
Some free-market economists respond to the pollution issue by stating that property rights are sufficient to solve the problem. But any negotiation or lawsuit to compensate others for negative external effects necessarily requires an objective estimate of the damages. A complete prohibition of an external effect, whether of emissions or noise or visual effects, imposes a cost on the emitter. Tort law, or lawsuits, as well as arbitration and mediation, could replace governmentally enacted pollution levies when the victims can be identified, but there is no avoiding some objective estimate of costs. And where torts are not effective, an international agreement on pollution charges would be optimal.
This 2014 excerpt of IDG News Service, May 14, by Loek Essers.
Samsung offered its “sincerest apology” for the sickness and deaths of some of its workers, vowing to compensate those affected and their families.
Samsung’s apology came in response to a proposal by families and the Supporters for the Health And Rights of People in the Semiconductor Industry (SHARPS) group.
So far there have been 26 victims of blood cancers (leukemia and lymphoma) reported to SHARPS, who worked in Samsung’s Gi-Heung and On-Yang semiconductor plants. Ten have died, the group said on it site.
Other alleged workplace-related illnesses reported to SHARPS include miscarriages, infertility, irregular menstruation, loss of hair, blood disorders, kidney troubles, and liver disease.
Thousands of chemicals that are used for the manufacturing of chips aren’t disclosed to the workers. Cleanrooms in the factories don’t filter toxic gases and are designed to protect the wafers rather than the workers. Workers are also often forced to turn off recently installed protective devices to keep up with the production rate.
Ed. Notes: Until robots perform the lethal jobs, employees die and employers grow rich. The bosses who decide to put their profit above their workers’ lives don’t suffer. The money for the compensation comes from the company, not from the managers, from stockholders not from those culpable. That must change. The liability of managers should not be limited. Indeed, they should work in the same environment that their assemblers do — good for the goose, good for the gander. Then those in charge would likely keep the factory clean and safe.
It would also help if employees had more say in job-place conditions. Workers could negotiate a greater say if they had more leverage. They could get that needed leverage if the corporation no longer were to receive corporate welfare and if the general public were to receive a Citizen’s Dividend. Then potential employees would not be so desperate to accept anything while companies would not exactly become desperate but would lose some political clout for hiding crimes.
What would be the source of funds for the Citizen’s Dividend? It’d be the value of sites and resources, which is the money that society spends for the land and nature it uses. Government would use its taxes or fees or leases or dues to redirect our spending so that it would not land in the pockets of sellers and lenders but in the public treasury. From there, government would pay a dividend a la Alaska’s oil share. Receiving it would give workers the leverage they need … until robots take over.
This 2014 excerpt of Thom’s Blog, May 12 is by Thom Hartmann.
Prior to a large and illegal ATV – or All Terrain Vehicle (something none of the riders invented, nor their rifles, nor the sewing machines that made their cowboy outfits) – ride through Recapture Canyon in Utah, there had been a great deal of criticism and concern from the Navajo Nation. The ride through Recapture Canyon would put thousands of years of cultural resources for Native Americans at risk, not to mention that the ride also went over an ancient and sacred Native American burial ground. But the riders ignored federal law and religious rights.
Some of the ATV-riding law breakers in Utah this weekend were members of the Cliven Bundy camp. In an email blast to his “followers,” Bundy wrote that, “We need to help the people of Blanding re-establish who is in control of the land. This is your next stand. Will you be there to help them like you helped us?”
While Bundy’s call to his followers to illegally ride on government land and put thousands of years’ worth of history and culture at risk is deplorable, it’s a symptom of a much larger problem in America, a problem which has been around since Columbus first sailed the ocean blue. If the culture isn’t White and European-based, much of white America pretty much doesn’t give a damn about it.
Ed. Notes: First Bundy and his followers refused to respect public land, next was sacred land. They still believe that might makes right and land is there for the taking. While they are petty and selfish and threaten violence, they are not much different from land-greedy groups elsewhere in America, everywhere on the planet, and all through human history.
While they are in the wrong, part of the blame falls on conventional society for not making clear the nature of property. Land becomes property only when the occupant or wannabe owner compensates those whom he excludes — his nearby neighbors. All of us have an equal right to life, none of us can live without land, so we all have an equal right to Earth.
Bundy, his followers, and many others despise this notion of paying rent to their community. But they shouldn’t. Not just because morally we all are obliged to compensate those whom we exclude from a part of Earth. But also because, bottom line, they can’t lose. As members of the community, they’ll be getting compensated, too. Everybody would pay land dues into the public treasury and get rent dividends back. Owners of land of average value or less — as are most of Bundy’s followers — would get back more than they pay. With a happy wallet, all they’d have to mollify is their egos about being renters to their neighbors.
This 2014 excerpt of Reuters, May 9, is by Philip Pullella.
Pope Francis told U.N. Secretary General Ban Ki-moon that the world body must do more to help the poor and should encourage the “legitimate redistribution of economic benefits by the State.”
Since his election last year, Francis has often called for significant changes to economic systems.
“An important part of humanity does not share in the benefits of progress and is in fact relegated to the status of second-class citizens,” Francis said.
Francis, an Argentine, is the first non-European pope in 1,300 years and the first-ever Latin American pontiff. He has consistently used his meetings with world leaders, including U.S. President Barack Obama in March, to champion the cause of the world’s have-nots.
He told the U.N. officials that while there had been a welcome decrease in extreme poverty and improvements in education “the world’s peoples deserve and expect even greater results.”
An awareness of everyone’s human dignity should encourage everyone “to share with complete freedom the goods which God’s providence has placed in our hands,” Francis said.
He told the United Nations leaders that the organization must have “a real impact on the structural causes of poverty and hunger”.
Ed. Notes: If the Pope, or anyone, is serious about sharing God’s providence and correcting the structural causes of poverty, then one has to institute the distribution of “natural rents” to everyone. These “rents” for use of parts of nature total the biggest part of GDP. Members of society spend (often indirectly) about half their income for land under their homes (whether a mortgage or a lease), for land growing the food they eat, for resources like oil that becomes fuel for cars and furnaces, for bandwidth in the EM spectrum when buying products advertised on radio or TV, etc.
Presently, only a few people capture this massive spending. They own the land or lending banks or other corporations. The immense stream they now corral could be redirected from the few to society at large if government were to charge taxes or fees or dues on occupation of locations, extraction of resources, and pollution of the environment. Once the funds are in the public treasury, then the government could pay citizens a dividend a la Alaska’s oil dividend, which is not redistribution but mere distribution.
Since most people are not now on the receiving end of society’s spending for Earth, nor do a good number of people own land (never mind an oil field), those people must work for others … when they can find land at all. To avoid poverty, people need land, a share of their region’s land value, and to be able to keep their earnings for themselves untaxed. It’s good that the Pope speaks about these topics, however vaguely, but it’d be great if he’d specify land as God’s providence and society’s failure to share Earth’s worth as the structural cause of poverty.
This 2014 excerpt of News Alert, May 11, is by David Stockman.
The auto bailouts did not save or create a single new auto job. They just shifted 25,000-50,000 assembly plant and supplier jobs from south of the Mason-Dixon Line to the rust belt in Ohio, Michigan, Wisconsin, and Illinois. That is, the North American and global auto industries were drowning in excess capacity on the eve of the crisis, and the only question was whether consumer demand for new cars would be satisfied by the efficient foreign transplant suppliers located in Alabama or high-cost, long-in-the-tooth UAW dominated plants in the north.
Thus, the political decision of the Bush and Obama Administrations to allocate auto jobs based on electoral politics and crony capitalist coddling of the UAW and the Chrysler/GM business complexes did not add a dollar to GDP; it just reshuffled the given level of consumer spending on new cars among regions. And the ultimate result is that the free market was blocked from doing its job of liquidating excess investment and uncompetitive suppliers and plants. In short, true national wealth was reduced by the auto bailouts.
Yet the damage goes beyond dollars and cents. The bailouts have also enabled the rise of a whole generation of soap-salesmen CEOs who tout miracle “recovery” stories, thereby reinforcing the “all fixed” meme. Fiat-Chrysler is a standout case of the latter, and its CEO, Sergio Marchionne, is a bubble illusion merchant of the first rank.
Ed. Notes: Getting bailed out is just one of many subsidies that car makers get. They also get subsidies for “research” and tariffs on imports and exemptions on pollution. If it weren’t for these favors from taxpayers, Detroit probably could not sell one more car — unless they made it non-polluting and fuel-efficient. If they can’t, they should lose market share to those who can. That’s how the market would deliver techno-progress, and how such progress would deliver clean air. And that’s why economic policy should be off limits to politicians of any stripe.
This 2014 excerpt of the Associated Press, May 11, is by Jack Chang.
A protest in eastern China over a plan to build a waste incinerator turned violent, with state media reporting that at least 10 demonstrators and 29 police officers were injured in clashes.
Thousands of people turned out for the protest, which followed government assurances that the project would not pose a health threat, and blocked a highway.
Environmental protests have been on the rise in China, with the public becoming increasingly critical of pollution and health hazards from industry.
“People are losing confidence in the way the government is handling these projects,” said Wu Yixiu, head of environmental group Greenpeace’s toxics campaign in East Asia. “There’s more of a perception that people are not willing to sacrifice the environment and health in exchange for development.”
District government said construction on the incinerator would not begin until the project had won public support. Hangzhou law enforcement authorities also said that protesters could receive more lenient punishment.
Ed. Notes: Pollution is not deadly only in China. People should demand an end to it everywhere. It’s not like there aren’t any solutions. Most waste can be recycled. Even toxic waste can either be neutralized or not used in the first place as there are usually non-toxic alternatives. It seems China and other developing nations are determined to mimic both the West’s good ideas and the bad. If only one Western nation were enlightened enough to geonomize — to defend rights, especially our rights to a healthy environment, to a share of the common wealth, and to our own earning untaxed — then other nations could copy that successful model and their societies could conserve and prosper both. After those newly growing nations geonomize, then the older industrial countries would be the ones to have to play catch up!
This 2014 excerpt of the New York Times, May 9, is by Edward Alden and Rebecca Strauss of the Council on Foreign Relations.
Each year, state and local governments in the United States spend more than $80 billion, or roughly 7 percent of their total budgets, on tax breaks and subsidies to attract investments from auto companies, movie producers, aircraft makers, and other industries.
State governments would be better off if they collectively ended the handouts and competed for business in other ways, such as making investments in infrastructure or education or offering lower overall tax rates.
The World Trade Organization has rules that restrict government subsidies. The Organization for Economic Cooperation and Development has a longstanding arrangement to limit financing subsidies to exporters. These international models should be adapted to our states. Kansas and Missouri are trying to reach a truce to stop bribing businesses to move from one side of the Kansas City area to the other.
Ed. Notes: It’s not just when state politicians compete that opening loopholes is bad; it’s always bad. Either everybody pays or nobody pays; fair is fair. If any state or locality or nation wants to be a haven for business — as are Singapore or Hong Kong — all it has to do is geonomize — as did Singapore and Hong Kong. That is, cut taxes on people’s efforts — even eliminate them. Instead, recover the rental value of land. Land is something that a new business moving in has to pay for anyway, so if the local government gets the payment, it’s only sellers and lenders who’d lose, and the value of land is not theirs anyway.
The value of land is created by the presence of community while land itself is created by nobody. Ground rent makes the perfect common wealth. It’s our earnings and purchases and buildings — private wealth — that should never be taxed.
And if we did not tax what we should not in the first place, we’d have no excuse to open loopholes for favored insiders.
This 2014 excerpt of the Los Angeles Times, May 5, by Amina Khan.
Looks like good news may come in threes. The teenage pregnancy rate, birth rate and abortion rate have all dropped sharply since their respective peaks in the 1990s. Fewer teens are getting pregnant in the first place.
The teenage pregnancy rate dropped 51% between 1990 and 2010. The 2010 rate of 57.4 pregnancies per 1,000 teenage girls and women 15-19 also represents a drop of 15% since 2008 alone.
The teen birthrate also declined by 44%, from its peak in 1991 of 61.8 to 34.4 births per 1,000. The teen abortion rate experienced the steepest drop of 66%, from 43.5 abortions per 1,000 at its 1988 peak to just 14.7 per 1,000.
The declines were seen across racial and ethnic groups, declining 56% among white teenagers (from 86.6 to 37.8 per 1,000), 56% among black teenagers (from 223.8 to 99.5 per 1,000) and 51% among Latino teenagers (from 169.7 to 83.5 per 1,000).
Progress from state to state was uneven. New Mexico had the highest rate, with 80 pregnancies per 1,000, and New Hampshire had the lowest, with 28 per 1,000.
Ed. Notes: Nobody in-the-know knows why today’s teens are not playing Juno, altho’ perhaps a teen does. It amazes me that society can change so much yet sociologists haven’t got a clue, really; maybe it’s not hearing “education” from adults but seeing older sisters lose their fun time.
BTW, if someone could figure why and how society changes, then perhaps they could create the conditions to guide society to make positive changes for the good of all … and if they could predict a fad or fashion, they could probably make a fortune!
Meanwhile, having kids later should be better for the kid, the mom, and the planet which might need a breather from humanitis. More at Progress.org.
This 2014 excerpt of Vox, May 5, is by Matthew Yglesias.
Dentists’ participation in Medicaid means dentists see more publicly insured patients without decreasing the number of visits provided to privately insured patients. Dentists manage to pull this off without increasing the number of hours per week that they work. Dentists don’t do much work in a typical dental visit; dental hygienists are the people who do the vast majority of the work in a dental office — and as a result, more patients increase not dentists’ work time but their incomes.
Waiting times for patients waiting to get in to see a dentist go up modestly. The increased wait times are concentrated in states with relatively restrictive “scope of practice” laws. In some states, hygienists can clean teeth with considerable autonomy from dentists whereas in other states a hygienist can only clean teeth if she’s employed by a dentist.
An essentially parallel situation exists in mainstream medical care. Some states allow certified nurse-practitioners to evaluate patients, diagnose, order and interpret diagnostic tests, initiate and manage treatments. People with serious medical conditions still need to see doctors. But patients with routine care needs can get them taken care of by nurses. Other states, by contrast, create more of a financial windfall for MDs.
Proponents of restrictive licensing say that the issue is patient safety and not greed. But research says otherwise. As Health Affairs has noted, “studies comparing the quality of care provided by physicians and nurse practitioners have found that clinical outcomes are similar” while subjective measures of patient satisfaction indicate that nurse practitioners do better than MDs.
As the number of people with insurance rises thanks to Obamacare, that’s great news for doctors but a much worse result for patients than we could achieve if we changed these laws.
Ed. Notes: Competition among competent providers is one main way that markets are efficient and why they need to be free of statist interference. Let government handle cases of fraud. The law need not create oligopolies and monopolies but instead defend our rights.
a discipline that, compared to economics, is as obscure as Warren Buffett’s investment strategy, compared to conventional investment theory, about which Buffett said, “You couldn’t advance in a finance department in this country unless you taught that the world was flat.” (The New York Times, Oct 29). The writer wondered, “But why? If it works, why don’t more investors use it?”
Good question. Geonomics works, too. Every place that has used it has prospered while conserving resources. Yet it remains off the radar of many wanna-be reformers. Gradually, tho’, that’s changing. More are becoming aware of what geonomics studies – all the money we spend on the nature we use. Geonomics (1) as an alternative worldview to the anthropocentric, sees human economies as part of the embracing ecosystem with natural feedback loops seeking balance in both systems. (2) As an alternative to worker vs. investor, it sees our need for sites and resources making those who own land into landlords. (3)As an alternative to economics, it tracks the trillions of “rent” as it drives the “housing” bubble and all other indicators. And (4) as an alternative to left or right, it suggests we not tax ourselves then subsidize our favorites but recover and share society’s surplus, paying in land dues and getting back “rent” dividends, a la Alaska’s oil dividend. Letting rent go to the wrong pockets wreaks havoc, while redirecting it to everyone would solve our economic ills and the ills downstream from them.
People must learn to stop whining so much and feel enough self-esteem to demand a fair share of rent, society’s surplus, the commonwealth.
a study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.
not a panacea, but like John Muir said, “pull on any one thing, and find it connected to everything else.” Recall last month’s earthquake in El Salvador. We felt it and its formidable after-shocks in Nicaragua. Immediately afterwards, my host nation, one of the poorest in the Western Hemisphere, sent aid to its Central American neighbor. The Nica newspapers carried photos of the devastation. They showed that the cliff sides that crumbled had had homes built on them while the cliffs left pristine withstood the shock. Could monopoly of good, safe, flat land be pushing people to build on risky, unstable cliffs? If so, that’s just one more good reason to break up land monopoly. What works to break up land monopoly, history shows, is for society to collect the annual rental value of the underlying sites and resources. That’d spur owners to use level land efficiently, so no one would be excluded, forced to resort to cliffs. To prevent another man-induced landslide is yet another reason to spread geonomics.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
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.
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.
close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)
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.