Geonomics, the longer story
You buy or rent land under your home, you buy oil in your gasoline and other fuels, you rent the airwaves when you buy a product or service advertised on radio or TV, etc. All totaled, Americans spend trillions of dollars on aspects of Earth each year. It’s a lot to ignore, as economists do even though investors don’t.
This new word “geonomics” is similar to the phrase “geo-economics”, which refers variously to geographic features used in economies (like ports), to worldwide economic activities like global trade, international investment, and mobile labor forces, to competition among nations, and to the relationship between politics and economics, which used to called political economy.
Some cutting-edge thinkers condensed the term into “geonomics” at roughly the same time. In the 1990s, CNBC cablecast a business news show by that name with Jim Rogers. In the mid 1980s, an institute by that name was founded on Middlebury College campus in Vermont. Both organizations meant global economics. Before then, in the early 1980s, we coined the neologism to mean Earth-focused economics.
Like “economics”, geonomics refers to how people go about getting the things they need. Unlike economists, geonomists make a big distinction between our spending for things that other people produced, like clothes, cars, and computers, and our spending for things that others did not produce, like land, oil, and the airwaves (parts of Earth or “geo”). The difference matters hugely because when people sell their products, then they produce more; but when people sell parts of creation, they don’t produce more – they can’t – but instead get busy lobbying for more privilege.
When people have to spend more for earth, they have less to spend for the goods and services that others’ produce. That causes bankruptcies and unemployment, so economists say “housing” or “real estate” – actually, locations – are what drive the business cycle. And between recessions, keeping some locations underused, over-priced, and otherwise unavailable to millions of wanna-be land-users also condemns them to poverty – unnecessarily.
Scientists say being able to predict accurately is the acid test of science vs. a mere discipline. Just about every economist – including the so-called “Nobel” laureates – failed to forecast the recent recession. In 1997, “Nobel” laureates Merton and Scholes with their long-term capital management nearly bankrupt the world’s biggest financiers (ruin staved off by big banks).
Yet geonomists did predict the recent recession, in advance, citing a year, in print, and explained why it had to happen: Fred Harrison and Phil Anderson and Fred Foldvary – even this editor (Jeff Smith) did it.
One shouldn’t be too harsh on economists. Their field covers things like wealth, property, and distribution, which are controversial topics. It’s hard for most people, especially in the mainstream, to go against the powers that be.
There have been exceptions. In the last 19th c., millions of people rallied around amateur economist Henry George and his campaign for fair land tenure and a single tax on location values. To reduce his influence, economists portrayed economic behavior as a struggle between the two human factors, labor and capital (left and right), leaving out land (and the environment). While academics can get by without land, real people still need locations, natural resources, and dumpsites. Further, the same feedback loops keep balance in nature and markets.
Just as biologists discovering germs led to doctors recommending hygiene, so did geonomists discovering “rentention” (the private capture of publicly-generated rents) lead to reformers recommending land dividends. Members of society would pay land dues, like Sydney Australia’s land tax, into the public treasury and get rent dividends back a la Alaska’s oil dividend.
Then government could repeal counterproductive taxes, and if citizens did receive rent shares, then government could repeal addictive subsidies. Both taxes and subsidies present intractable problems. They 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. Sharing rents, not taxing efforts, does just the opposite; places that have taken steps in this direction have all benefited.
Big problems require big solutions. Geonomics is not a panacea; it just resolves the problems that putting a several trillion-dollar flow into wrong pockets causes. Geonomics stands ready to do to economics what astronomy did to astrology and chemistry to alchemy: replace superstition with science. So humanity can prosper while conserving Mother Earth.