The Geonomist Volume Eleven Issue One

Geonomics is …
… 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.

The only state where income grew faster during the last two decades for households in the bottom fifth than for families in the top was Alaska. The only state to share rent from a natural resource is Alaska. In 45 of the US 50, the gap between the richest 20% – averaging over $150k – and the poorest – averaging under $15k – widened during the past two decades. (Oregonian, 4/24)

Pulling up the top is executive pay of six and seven figures. Big business gives their execs credit when profit rises and when it doesn't, rewards them for “pulling thru”. Enron execs still got multi-million paychecks even after the corporation filed for bankruptcy. It's as if utility executives had invented electricity. (Oregonian, 4/19)

While income stagnated for the vast majority, those raking in more flocked to hot spots, driving up housing costs there. In desirable cities, about a quarter of homeowners and over 40% of renters pay more than they can afford for their homes. In Portland during the 90s, the median-priced housed inflated 84% to $163k (Oregonian, May 30) The newcomers even gentrified trailer parks. The park owner raises the Rent, slacks off in maintenance, inviting the authorities to shut down the place, then sells out to a developer for a bundle, a cycle repeated nationwide (Christian Science Monitor, April 22)

So what's kept down wages? The usual two causes: new immigrants work for less, and factory jobs take off for the immigrants' homelands. To close the gap, the authors of the study, the Economic Policy Institute and the State Fiscal Project for the Center on Budget and Policy Priorities (both in Washington, DC) harken to the past: bigger unions, more unemployment insurance, and higher minimum wages.

None of which is needed, if one just harkens back to Alaska. Collect and share the rental surplus not just from oil but from all natural resources, surface locations (as under pricey homes), the EM spectrum, monopoly patents, utility franchises, and corporate charters. Recovering Rents will deflate high incomes as sharing Rents will pump up low ones.

For that matter, why run for office? It's to dip one's paw into the public purse. In the newest war zone of the US, Afghanistan, the recently reinstalled warlords revived a favorite custom – highway robbery. While haggling with sentries over the transport tax total, some truck drivers were held up for weeks. Under the recently evicted Taliban and during the recently reinstalled king's first reign, levying “taxes” on truckers was frowned upon. Then government collected revenue the more modern way – largely exempt it while in transit, levy it when sold in stores. Whatever the method, the lion's share of the money raised goes to buy weapons, so states can continue to exact tribute. (Oregonian, April 23)

In more advanced nations, trucking companies lobby legislators so well that the road-user-fees they pay fail to come close to the cost that 20 ton trucks impose on pavement. To make up the shortfall, savvy states spread the tax burden widely over the sales and incomes of the dumbstruck majority. What will halt both overtaxing and under-feeing is having a critical mass understand that we're obliged to pay for the value we take, not for the value we create.

Being human, Canadians too are powerfully motivated by land and taxes. To avoid levies, they flock to oil-rich Alberta. The province does not tax sales, unlike its neighbors, British Columbia and Saskatchewan. To seek fresh opportunity, former fishermen are depopulating New Foundland, having decimated the ocean's fish stock, a kind of “land” in classical economics. (From the latest Canuck census, Christian Science Monitor, Apr 22)

Just like taxes on domestic goods, tariffs on foreign goods also make winners and losers. “US landowners are the big winners, not lumber industry,” headlines the Montreal Gazette (early June). Even if there were no foreign competition, US forests have not met US demand since 1996. So the tariffs on Canadian softwood won't send more timber to US mills. It'll just raise the price of wood. As David Ricardo noted almost 200 years ago, spendy trees make for spendy land. The US National Association of Home Builders figures the tariff will make owners like International Paper with over 10 million acres of woods and the thousands of small owners with just hundreds of acres about $1 billion richer. Since most stands of stumps-to-be are in the South, one of the strongest voices for timber tariffs is Jimmy Carter, an otherwise nice guy.

“President Bush's steel tariffs benefit no one but a few of his political backers. Here in Montreal, I (Ben Sevack, Jun 9) buy steel to turn into finished goods. So far this year, Canadian mills have made five price increases totaling over 20%. I wrote the president of Stelco (Canada's largest integrated steel mill) and told him that these increases are self-defeating as their customers, Canadian manufacturers, must pass on these costs and will lose business to cheap imports made from cheaper steel. As their customers lose business, they will buy less steel from Stelco. So far I have had no direct response from the prez but had a visit from the local rep who advised me I will soon receive a visit from the VP of Cold Rolled Sales. Will keep you posted.”

The Guardian's George Monbiot: “For the first time on record, the number of households in England has overtaken the number of homes. The House Builders' Federation blame greens campaigning against new development in the countryside. Yet construction companies – of which just a handful control much of the UK's buildable land – are sitting on their assets. House prices rise fastest and furthest in places with a pleasant environment; communities kept compact and well-served by public transport and public spaces, there only the rich can afford to live. Government needs to levy a land value tax on development land and a capital gains tax on main residences, then use the money for building the housing Britain needs.” (via The Progress Report website) Actually, were government to tax all land and resources (or lease them), that second tax on residences would be as superfluous as it is unfair.

Threatened with becoming a played-out mining town a century ago, the city fathers of (South Africa's) Johannesburg decided to collect Rent and forgo taxing buildings. The town turned back from the brink to become the financial capital of the nation. For years, the city enjoyed the fastest site recycling rate in the world; within a hundred years, landowners had built on most central business district (CBD) sites from three to five times, even more. During my time in Johannesburg, five and even fifteen storey buildings were imploded in order to put up more suitable ones. Using urban sites repeatedly meant sparing suburban and rural sites the degradation of sprawl.

Joburg is presently going through a very rough time, totally unrelated to the site-value tax. Since the pass laws were repealed, there has been an influx of squatters and hawkers into the CBD and immediate environs. In parts of the city it became impossible to walk down the pavements and violence grew. Shoppers stopped shopping in the CBD, and supermarkets proliferated in residential areas. It then became dangerous for office staff to get to and from work and to do lunchtime shopping. So business also moved out, and then former residents of apartments also abandoned the central areas.

Buildings were taken over by people whose culture was totally different from that of hardened city dwellers. Water and electricity were not paid for and then cut off. High-rise buildings no longer had elevators working, water had to be carried in, wooden fittings were burnt for cooking and heat etc. An effort is being made to reverse the tide.

The centre of Cape Town (SA's other main city) also became dangerous with criminals and street children, but commerce clubbed together and installed closed circuit television with cameras all over the city and a control centre in close touch with armed response. Many would-be petty thieves and car hijackers were caught in the act, and street children are being moved out.

However there is a new threat to our cities. The new Central Government Municipal Rating Bill, still in draft form after many years, now calls for taxing sites AND buildings, in spite of tshe fact that 70% of the country has levied only upon site value for many years. The drama continues and is yet to play itself out. (from Godfrey Dunkley, International Union for Land Value Taxation, May 07)

Most members of the old British Commonwealth recovered some Rent rather than taxed buildings. In New Zealand by 1982, 90% of all municipalities exempted improvements and collected Rent (official book of Local Government Statistics which the government no longer publishes). Now, due to the growth of site values and the success of speculators, only two-thirds of localities tax only land.

Ed Glaeser of Harvard and Joe Gyourko of the Wharton School of Business (University of Pennsylvania) conclude that, "in large areas of the country, housing costs are quite close to the cost of new construction." There "land is quite cheap. The average home price nationwide is about $150,000, but it's $500,000 from San Francisco south 30 miles to Silicon Valley. A home on a quarter-acre lot in Chicago sells for about $140,000 more than its construction costs, in San Diego $285,000 more, in New York $350,000 more, and in San Francisco nearly $700,000. In Palo Alto, CA, two houses under 1,500 sq ft were advertised at $1,095,000 each. Why the astronomical housing prices in some places? The key factor was the cost of the land. Strict zoning laws "are highly correlated with high prices," Glaeser and Gyourko find. “Housing is expensive because of artificial limits on construction.” (Thomas Sowell, Washington Post, June 7, via Ed Dodson)

Is the bay and ocean on three sides of San Francisco an artificial limit on development? What we have here is the old logical fallacy of calling a coincidence a cause. Actually, prices are high where people want to live. Where many people cram in, they devise rules (like zoning and building codes) to keep some semblance of order. The rules might constrain supply a bit, but it's the huge demand that really rules price.

And this wasn't the first time experts discovered land. Michael A. Pagano & Ann O. M. Bowman once discovered it, too – right inside of cities. “On average, 15% of a city's land was deemed vacant. Cities with low proportions of vacant land tended to have high numbers of abandoned structures.” (“Vacant Land in Cities: an urban resource”, Brook.edu/es/urban/pagano/paganofinal.pdf, Brookings, 2001. From Groundswell, 2002, by Chuck Metalitz). So there's plenty of land for building new affordable housing. Rather than use it, owners prefer to speculate and cities to procrastinate. But if cities were to nudge up the tax rate on land, or charge land use fees or land dues, those fallow sites would sprout houses overnight. Every town in Pennsylvania that shifted its property tax from buildings to locations saw a jump in construction. Every one.

So, should we repeal the rules, live in chaos, and slightly lower land costs? Or de-tax buildings and collect site rent, thereby putting fallow land into productive use? High land values would be a blessing – like the sun, scenery, and social services and public goods (such as Stanford University in Silicon Valley) that generate them – were we to share them. Getting a share of local land values lets you afford living in that locality.

Bob Dunphy of the Urban Land Institute once discovered land, too. He found that the land beneath houses in Portland fell by $5,600 for each mile removed from the city center (“The Cost of Being Close: Land Values and Housing Prices In Portland's High Tech Corridor”, ULI Working Paper Series Paper 660, October 1998). Buying 10 miles out from the center, you'd carve $56,000 off your purchase price, maybe $150,000 off a 30-year mortgage. But during those 30 years, you'd spend anywhere from $90,000 to $135,000 extra on transportation (depending whose figures you believe), not counting time lost traffic. The more you drive, the more you spend, not just on fuel and repairs, but also sooner replacement and lower trade-in value and more collisions and traffic citations. The less you drive, the more you save. If you trade in your SUV for an old but reliable used car, share it with other drivers if possible, and use transit, cycling, and walking whenever possible, you can cut your vehicle expenses in half, an annual savings of $4,000. If you invest the savings at 7%, in 10 years you have $55,266, in 20 years you have $163,982, and in less than 44 years, a typical working lifetime, you have a million dollars. (From the "Online TDM Encyclopedia", vtpi.org/tdm)

The Rand Corporation, a conservative nonprofit that sells consultations to militaries, in 2000, April, sold 11.3 acres of a Main Street, Santa Monica, CA property for $53 million. This is $4.69 million/acre. Rand listed gain on the sale of land at $44.984 million. This puts the original purchase price at $8.016 million or $709,380/acre. As Churchill said, "The land speculator profits in direct proportion to the damage done to society." This "taking" from the people of Santa Monica, who created this increase in land value, equals $44.984 million/84,084 (population of Santa Monica) or $534.99 per person – from one land sale! Mike Feinstein, the mayor of Santa Monica, is a Green and conversant in geonomics; could a lawsuit recover this "takings" for the people? Rand might be a good target because they get 75% of their revenue from the government. (by GeoSoc VP Gary Flo from the Rand Corp 2001 Annual Report)

Was it a taking by Rand? Or a giving by a public grown morally lethargic? Whichever, the royalist US Supreme Court turned the tables on the takings movement. These conservative justices, 6 to 3, ruled that the landowners who were prevented from building on the banks of Lake Tahoe, which would have despoiled the blue waters for 700 years, were not entitled to compensation from local government. Now each case of developer vs. regulator must be tried separately – until land abusers again get their day in high court. (NYT, April 23)

Bush's new farm act, at least $171 billion over 10 years, is mostly for wealthy absentee owners of farmland, living in places like Beverly Hills, contributing heftily to congressional campaigns. Agricultural subsidies have not reduced the concentration of farmland ownership, while a falling property tax (half a land tax, half a building tax) has exacerbated the problem. If you don't tax land, its price rises, and deep pockets buy out shallow.

Mason Gaffney, UC-Riverside, notes that when California irrigation districts taxed land and exempted improvements, the nation saw its only drop in acreage in big farms (1,000 acres and over), by 15% from 1900 to 1910. From 1930, when the national average of farm property tax rates peaked at 1.32%, to 1987 (last year of available data) when they subsided to 0.85% (a 40% drop), the average size of farms went from 155 acres to 462. The Gini Ratio (1 = total monopoly) went from .63 to .76. For farms with irrigation (the most valuable land), it went to .82. Using not acreage but value, the concentration is higher. GRs for personal income are half as bad, .40, and more stable over decades. The number of years a person must work at the average wage to afford a farm (without eating and saving every penny) tripled from 6 years' wages in 1954 to about 17 years' wages in 1987. (Land Ownership and Taxation in American Agriculture, ed. Gene Wunderlich, 1992; presented to the Annual Conference of Georgist Orgs, 2000; see p 12)

The millionaire US Republican Senator from Oregon, Gordon Smith, owns a frozen food factory out in the boonies that is taking a hit from foreign competition and changing consumer tastes. So Smith's factory wants its property tax halved, from under $300k to nearly $150k, which would severely crimp the spending of the rural county the plant sits in. (Oregonian, May 12)

In the urbs, department stores, like Wards, are losing out to cost-cutting big boxes. To keep a Meier & Frank department store in the heart of downtown, a Portland bureaucracy pays 30,000 public dollars for a study on remodeling the privately-owned building, listed on the National Register of Historic Places and owned by New York's May chain. (Oregonian, May 4)

About 20 years ago outside Pittsburgh, USX wanted to close a steel mill still making money, but it was in a town that taxed land, not buildings, so USX would still owe even if the mill vanished. Instead, USX sold the factory to their former employees at a price they could afford. Now, if a retailer at the busiest corner in the Columbia River Basin could not survive when not paying taxes, only site rent, then let them go, to be replaced by others. While the food processor may deserve a tax break, the department store does not deserve a tax subsidy. Rather than play favorites, government could do what it's supposed to do. Don't tax, don't subsidize; with dues and dividends, just run publicly-generated land values thru the public treasury then back out to state residents.

Collecting the market value of sites, government will automatically collect less when business turns down. Disbursing a rent dividend to residents in the whole region – not subsidies to absentee owners – government will automatically endow both downtown honchos to buy desired studies and countryside cowboys to buy needed social services.

After decades of talk, a couple of Congressmen have finally introduced a bill to staunch the bleeding let by the 1872 Mining Act, signed into law by US Grant. Jill Lancelot of the conservative Taxpayers for Common Sense: "Mining on US public lands represents one of the greatest taxpayer heists in history." Unlike drillers for oil or gas, miners pay their fellow Americans zero royalty on minerals worth about $2 billion per year. The mess they leave behind will cost $30 billion or more to clean up (Mineral Policy Ctr, Washington, DC). Some corporations patent land for mining, then sell it for lucrative development. So the Hons. Christopher Shays (R, CT) and Nick Rahall (D, WV) want to: end patents, recover an 8% royalty on extracted hardrock, set aside funds for fixing abandoned mines, and require operators to restore the land well enough to be a wildlife habitat once again. (Chr Sci Mtr, May 22) If you can read this, maybe you can write them.

Since nobody writes down all the tips that waiters make, the US Supreme Court gave the green light to the IRS to guess how much tax it may take from restaurants (United States v. Fior d'Italia). The IRS may use credit card receipts from audited restaurants to extrapolate all tips, despite that tips in cash are smaller and waiters share tips with busboys. In 1999 the IRS collected $14.31 billion in Social Security taxes on restaurant employees' tips, yet did not credit the taxes to the individual workers' credit histories. (AP, USATODAY, Jun 18)

These busboys and waiters aren't exactly living high in the West Hills, are they? While tips and pay under the table amounts to something, what about depreciating the same building over and over, every time it changes hands, and all the other tax scams that make real estate so lucrative? And with offshore bank accounts, people and corporations (who also receive enormous subsidies) not only dodge income taxes sometimes legally, the richest even get back refunds cut from the US Treasury (USA Today, April 10).

In order to tax waiters, mere guesses are good enough. But to recover Rent, critics claim it's hard to determine the value of land. Meanwhile, the assessors Down Under do it daily for towns in Australia and New Zealand; they say it's easier than having to appraise a remodeled bathroom or new granny flat (Land and Building Taxes; ed. Becker, Arthur P; 1969; U Wisconsin). Forget taxing what individuals earn; recover and share what society generates – Rent.

While Congress people warned about the sacrifices needed to fight terrorists, they ballooned budget pork by 1/3, reaching over $20 billion by the count of Citizens Against Government Waste. US Sen. John McCain called it "war-profiteering". The Bush Congress is doling it out at a record pace, noted the conservative Heritage Fdn (The Weekly Standard, April 22). Plus the Senate, without public debate, passed Bush's energy law, drafted by the fossil fuel industry behind closed doors. And Star Wars, which so far has proven itself unworkable, will cost another $200 billion.

Rep. Bernie Sanders (I-VT) on the annual report by a diverse coalition of 21 organizations including: Friends of the Earth, Taxpayers for Common Sense, US Public Interest Research Group, Concord Coalition, and Republicans for Environmental Protection America (REP America): "Every year, the US government doles out more than $125 billion in corporate welfare – tax breaks, subsidies, and other wasteful spending – to huge, profitable corporations that should not be receiving taxpayers' support. The Export/Import Bank alone gets $1 billion. The Green Scissors coalition targeted 78 environmentally harmful and wasteful programs that if cut, would save taxpayers more than $54 billion." The Green Scissors campaign has helped cut more than $26 billion since its inception in 1994. (Bernie's website, 4/17)

Bernie puts corporate welfare at $125 billion, yet Green Scissors tags $54 billion that can be cut. Why not cut the whole $125 billion? Why save the other $71 billion in waste? Yet it's not just these subsidies that are losers; the whole idea of letting politicians play favorites is silly. Better for us to just carve up the public revenue pie equally, and pay each of us a Citizens Dividend from recovered natural rents.

The stink from the Enron bankruptcy at least spurred politicians to pass a version of McCain's campaign finance reform and Standard & Poor's, the evaluators of stocks and bonds of 10,000 US companies, to report the financial performance of companies more honestly. S&P will no longer count as profits such revenue as pension fund gains (needed to pay retired employees). And S&P will no longer count toward per-share-earnings the stock options that corporations grant to their executives; it's a cost, what companies pay their top managers. Minus these two phony boosts of profit, the new "core earnings" paint a truer picture for investors. (Oregonian, May 15) But Enron did much worse than that. Believing they enjoyed immunity after another Bush, one of their pahdnuhs, entered the White House, top Enron executives also sold off the company's future income stream to cronies, booked debts as income, reported a single deal as plural, and lied about their reserves during the California energy crunch. (Oregonian June 17 ran our letter on this.) Let the stench from the latest scandal at WorldCom, who reported losses as gains, embolden government to convict the guilty and charge full-market value for utility franchises, so too much revenue can't concentrate in too few hands.

The World Bank's Sr VP and Chief Economist from 1997 to 2000 and the Nobel Laureate in Economics in 2001, Joseph Stiglitz: “Argentina is a country rich in human and natural resources. Before its crisis, these resources, even with inefficiencies, generated one of the highest GDPs in Latin America. Those resources have not been destroyed by the financial crisis. What is required now is to 'restart' the engine. Besides providing the assistance to do this, there is another way the United States can help: On an 'emergency' basis, we should open our markets to Argentine goods. More than anything else, it was trade with the United States that brought Mexico out of its crisis. This is a form of assistance that would cost us nothing -- Americans as consumers would be better off.” (Washington Post, May10; via Alanna Hartzok) Earlier the new Joe had also promoted land reform. About a century and a half ago, Argentina had a president, Bernardino Rivadavia, who tried to collect some natural rents, to spur owners of land and resources to produce. May they at last realize their tradition.

In a report prepared for the World Bank Group in 1998 by Roy Prosterman and Tiom Hanstad, Chapter 10, “Land Taxation” by Jennifer Duncan: “Land tax is an important vehicle for transferring some of the benefits of land privatization to the public sector. Revenues from land tax can fund significant and increasing portions of infrastructure and social services, fostering public and local government support for privatization.” She went on to worry that taxing land could force small farmers to sell to big ones, which levying more than the annual rental value has done. (Thanks, Ed Dodson) Yet collecting only the market value (or even less) has had just the opposite effect, breaking up huge latifundia in Denmark, California, Australia, and Taiwan, putting land into the hands of former peons, without spilling one drop of blood.

Cutting-edge greens are starting to connect the dots, land monopoly to natural ruin. At a Washington, DC conference critiquing the World Bank, Stephan Schwartzman, an anthropologist for the 300,000-member-strong Environmental Defense: "The massive concentration of land ownership in the hands of a privileged few keeps millions in poverty and drives large scale destruction of natural resources around the world." (Progress Report site) Hence ED endorses agrarian reform. Yet in Africa, Zimbabweans face famine since their corruptly-elected ruler, Robert Mugabe, confiscated white farmland for black farmers who voted for Mugabe, combined with a 3-month drought (ChrSciMtr, May 1). Instead of an eye for an eye, more bloodshed and theft, a government of a developing nation could collect Rent to redistribute land (above), a move that environmentalists and world bankers could applaud and reward.

In his address of April 30 to his ex-employer, the World Bank in Washington, DC, Herman Daly, the proto-steady stater, likened faith in infinite growth to the quest for perpetual motion. He left unsaid the connection between land reform and sustainable development but cited Henry George, saying, "Value added belongs to whoever added it. But the original value of that to which further value is added by labor and capital should belong to everyone. Scarcity rents to natural services, nature¹s value added, should be the focus of redistributive efforts." (thanks to GeoSoc VP Gary Flo) Translation: he meant not “redistribution” but predistribution, collecting and sharing what's already ours, before a state or elite has a chance to misspend this money we spend for sites and resources.

A former writer for the Christian Science Monitor and for Redefining Progress, Jonathan Rowe (April 30): “The commons, the heritage of us all, includes the gifts of nature, such as oceans and atmosphere, wilderness areas, and the quiet of the night. The present obsession with the market has put the commons under siege.” Nicely poetical, but way too safe. The most crucial part of the commons is soiled geld, the money we spend on the nature we use. Be bold enough to say that, would-be world-savers, and other ideologues won't stand a chance. Besides, the commons has been yielding to human greed since long before Adam Smith had groupies. The real driver of commons, markets, states, and ideologies is technology. As it progresses, facilitating communication, we may yet realize what is ours – Rent – and save what is all living things' – Earth.

A professor at Michigan State Univ, A. Allan Schmid, in his Property, Power, and Public Choice (1987) cites J. S. Mill, Henry George, and our own Mason Gaffney (who dues be due). He notes (p 134-5) that current ownership privileges not only redistribute income but also increase pressure to change publicly made land-use plans. He quotes Galbraith: “there must be public land acquisition wherever market influences are palpably adverse” then comments it's odd Galbraith recommends acquiring land over recovering rent. By sharing Rent, society would share the advantages of different locations among all residents. Then if government zoned one's lot for building or for open space, one would be happy either way. Overall rents are higher when some parcels are left alone.

Dr. Papa Meissa Dieng, Professor of Environmental Law, Universite Gaston Berger, Saint-Louis, Senegal, at a workshop preceding the Congress of the African Confederation of Green Parties held in Dakar, Senegal, March 7 – 11: “In accordance with Henry George philosophy, we know that to put in practice environmental rights is to propose that the rent of the land be a decision that the community has to take and all labor taxes be abolished.” (thanks to Alanna Hartzok, US GP candidate, Apr 5)

The lines inscribed on the Statue of Liberty in the New York harbor, “Give me your tired, your poor/ Your huddled masses yearning to breathe free”, are by Emma Lazarus, a famous poet in her day and a strong supporter of Henry George and his single-tax. Addressed to the “wretched refuse” of the earth in 1883, she tried to welcome them as equals in the American dream. (Special Civil Liberties issue of The Nation, June 3, “Patriotism's Secret History”, p. 40; thanks to Alanna Hartzok)

German reformer Silvio Gesell earned fame for the successful application of his monetary reform in Austria between the world wars. John Maynard Keynes and Irving Fisher cited Gesell's proposal of allowing local currencies and requiring savers to buy stamps for their savings, so people would spend instead, keeping bills circulating. In his main work, The Natural Economic Order through Free Land and Free Money, Gesell rejected the association of "blood" with "land". The whole earth is an integral organ; everyone should be free to travel and settle anywhere. Gesell advocated an open world market without monopolies, customs frontiers, and colonial conquest. Inspired by Henry George, whose Single Tax on land value had become known in Germany, Gesell called upon government to buy land and lease it to the highest bidder and to forgo taxation. Since the amount of Rent depends on population density, Gesell would distribute Rent to mothers, freeing them from working fathers, letting the sexes relate for love. Gesell's reform is a third way, "a market economy without capitalism", a la Pierre Joseph Proudhon, the Frenchman who also blamed monopolies of land and money. (From http://www.inwo.de/archiv.htm by Werner Onken via Cui Ziyuan, a political scientist at MIT, thanks to Charlie Michael, a massage therapist in Denver)

Organizers of the annual green tax conference (p 10) gave conferees Eco-Economics, the latest by Lester Brown, founder of Worldwatch. He recommended shifting taxes and subsidies, but devoted most of his text to enviro-problems and techno-solutions. For engineers, economy is technology, mere tools. At the other end, economy is money, mere symbols. Actually, economy is our interactive eating and excreting, as it is for any living thing. As a subset of the eco-system, it also strives to maintain balance via self-regulating feedback loops – the pricing cycle. But our failure to share Rent, impelling society to tax and subsidize instead, distorts price and thus our collective taking and leaving. Fix that, leaving price precise, and we'll employ the marvelous gizmos automatically.

Tomorrow's Global Community by Jim Mann overflows with insightful ideas, analysis, and presentation, innovatively closing with fiction to portray a world that works right for everyone. Included is the Sapir-Whorf hypothesis of linguistic relativity (how native tongues influence world view). He sums up memes as a unit of cultural information, such as a practice or idea, that is transmitted verbally or by repeated action from one mind to another. Anticipating Enron, he coined "Ledger Legerdemain." Almost every solution one may have thought of for our social problems, Mann has, too. He proposes confidence in intuition in education, the backbone of Steiner's Waldorf system. My lone critique: while Mann describes economies as organic, he criticized the market for faults outside its control. Yet if markets are autonomous, then we'd replace taxes with fees and dues, and subsidies with a dividend, in order to preserve the integrity of price, the critical feedback loop in economies. More than counter-balancing this was Jim's faith in cooperation, in teams replacing corporations, even giants like GM. I bet if people received a share of Rents (the trillions we spend on the nature we use), granting them security, then cooperate they will.

“When people sell their labor or capital, they increase the stock of goods and services. Doesn't selling land also increase society's wealth?”

Ralph Anspach, prof at San Francisco St, inventor of the game, Anti-Monopoly, and winner of an infringement suit brought by Parker Bros (Apr 27): “Sometimes one understands what really happens only when one observes an institution at its beginning. In the case of land privatization, it's part of the landscape, so it is hard for most people to understand that Rent is only an unproductive transfer income based on the achievements of the economy. One day there will be ocean lords for fishing. The ocean has not been privatized yet because titles require a government to grant title and to set boundaries to the owned piece of nature. But nations are extending sovereignty over the oceans from 3 miles to 200 miles. And once that technological problem of borders is solved (by lasers etc), it's inevitable that ocean lords will arise. Soon thereafter, mainstream economists and national income accounting will claim that ocean-lord income is a contribution to national income. And Georgists will strive to confront this nonsense.”

Jonathan Hall (Mar 29): “At progress.org, I was reading your article, 'How to optimize the Environmental Tax Shift', and had to differ with a comment about taxing extraction being regressive. When taxing a substance, e.g. oil, that is a tax on production and is regressive. But taxing extraction rents will not raise prices at all and may, like taxing land rents, even bring prices down since the rise due to hoarding/speculation is eliminated. Be sure to tax the extraction rent, but not the effort of extraction; it'd help optimize the Environmental Tax Shift.”

Jeff Smith: Right. In fact, shifting the property tax off buildings, onto land, for most is easier to pay. Pittsburgh had shifted its PT and so had most towns in South Africa. The chief assessor for the county that includes the Steel City said the tax shift did not increase appeals. The president of South Africa's society of public treasurers said that in his 17 years there were only two defaults. (Incentive Taxation, April) Actually, the querulous sentence that triggered Jonathan was supposed to read, “taxing pollution (not extraction) is regressive.”

The estate of Nigeria's late dictator, Sani Abacha, is being sued for the $4 billion he stole (NYT, April 18). The figure rivals the $5 billion petrol dollars embezzled by Russia's ex-PM, Victor Chernomirdyn. A recent Mexican president, Jose Lopez Portillo, cached enough oil revenue to become the biggest landowner in Spain. These sums are dwarfed by the legal siphoning of oil rent by Muslim sheiks and the Yankee oiligarchy. Since we still see oil, resources, and Earth as up for grabs, such grabbing without restraint, with the bloodiest of hands, is what ambitious people do. As long as wanna-be do-gooders merely complain about the cutthroat grasping, and remain silent about our equal right to a fair share of natural bounty, they'll remain ineffective. Proclaiming our right to a Rent dividend is the key to building the world we all want. Kudos to African Greens trying to establish an oil dividend, a la Alaska, in Nigeria, where rentiers murder opponents.

For the first time in a decade, a decade of economic growth, the US murder rate rose, this time 2+%, after the economy stopped growing. Yet the rate of violent crime does not rise evenly everywhere. Places where neighborhoods are stable, crime is low. And neighborhoods are stable where housing is affordable. Pittsburgh, with its track record of affordable housing, often ranked as the safest major US city. Until this past year, Pittsburgh taxed land more than buildings, keeping speculators at bay, and housing affordable. Among nations, the safest country in the Western Hemisphere, Costa Rica, also enjoys the widest distribution of land in Central America and hence the biggest middleclass and healthiest economy. It's simple. Safety follows security, which follows economic justice. So respect what's yours, what's mine, and what's ours, the commonwealth, the rent of land.

From our pals around the world, we Americans received a record number of cars, VCRs, and other goodies. Feel worried? You're supposed to, because getting more value than you give, conventional savants call a “trade deficit”, which topped $32 billion in April. If these trends continue, we'll be getting all our wealth from foreigners and won't be paying a cent for it. How could the headliners cast that as bad news? Meanwhile, buying lots of stuff from abroad means lots of gringo dollars flow overseas. Losing so much currency from our domestic economy is one reason why the US Federal Reserve can counterfeit, er, print, so much of the stuff without causing runaway inflation in the American economy. So you have two things to thank outsiders for, low inflation and low priced imports. Plus, saving on imports lets you spend more on whatever else you want (like this newsletter?)

At the 3rd Annual Global Conference on Environmental Taxation, April 12 – 13, Woodstock, VT, I chaired a panel on reforming the property tax that included Bill Batt, formerly on the staff of the New York legislature, and Tony Vickers, formerly a mapmaker for Her Majesty's army. All three of us plus a vivacious lady from Singapore were the only conferees quoted in the local press. Fifty copies of this newsletter were gobbled up the first day. A grant from the Robert Schalkenbach Fdn made my participation possible. Next year's conference will be in Sydney, Australia, one of the globe's few land-taxing cities. Its organizer, Dr. Hope Ashiabor, wrote me (Apr 19): “Gauging the responses I gathered from private discussions with delegates at Vermont, there was a great deal of interest in the Property Tax Shift issue. It will therefore be firmly placed on the agenda for next year.”

Here in Portland, OR, the Ecumenical Council on Sustainable Development, thanks to Diane Pinney, invited us to their May meeting to show how sharing Rent helps them reach their goal. By luck, fate, or the grace of God, Rick Rybeck, transportation specialist for the city of Washington, DC, was in town for a conference and with local clean air lobbyist, Kris Nelson, delivered an inspiring talk, allowing me to listen, learn, and appreciate. Our gracious hosts had budgeted us a half hour in their busy agenda but grew fascinated enough to extend the dialog to an hour and a half.

Earth Day weekend, in the fat Sunday paper, the local daily ran a paean to land speculation. At least they, about a month later, ran our critique in their website version, noting seven key differences between speculating in land and in physical capital (The Oregonian, May 13). Then a few days before the Solstice, they ran our article on the politics behind the Enron scandal and the innocence of markets (The Oregonian, June 17). If you can't read them at the paper's website, contact us for a copy.

The McKeever Institute of Economic Policy Analysis held a contest on alternatives to loans and foreign aid. Along with essays by Alanna Hartzok and three others, our “Geonomics: Bootstrap Development” (also presented at the UN NGO Conference in Monterrey in March) won. Michael Pierce McKeever, Sr. teaches economics at Vista Community College, Berkeley, CA. Read the winners at www.mkeever.com.

VTPI NEWS, the newsletter of the Victoria Transport Policy Institute, run by the very capable Todd Litman, listed our updated, “Does Public Transit Raise Site Values Around Its Stops Enough To Pay For Itself, Were The Value Captured?” (Spring Vol. 5, No. 1). With a lengthy bibliography (over 70 entries), it's also in his "Online TDM Encyclopedia" (vtpi.org/smith.htm), the most comprehensive resource available anywhere to help identify and evaluate innovative solutions to transportation problems (vtpi.org/tdm).

Angela Waceke, Best Practices & Local Leadership Programme, United Nations Human Settlements Programme, UN-HABITAT: “Dear Alanna Hartzok; The BLP and its partners produce casebooks, engage in the transfers of best practice, knowledge, and expertise, and invite best practices to be showcased in conferences, seminars and training workshops. Your initiative "Land Value Taxation" is under consideration as a case study in a publication for the World Summit on Sustainable Development. We are interested in learning more about your experience and considering it also for the 2002 cycle for the Dubai Awards. We would be grateful if you would send us updates on any new developments as well as photographic material.” If others have progress to report, contact Angela Waceke; P.O. Box 30030, Nairobi, Kenya; Tel: 254 2 624981, Fax: 254 2 623080; E-Mail: BLP2@unhabitat.org

Silvano Borruso (Apr 23): “When the Kenya Land Commission asked the public for ideas, I sent them two papers. For two years nothing happened, until they called for an oral representation. The four commissioners were impressed. I left them with your 20 Georgist success stories, your list of Georgist quotes, and James Robertson's speech at Mansion House that merges land reform with monetary reform. One without the other is like trying to fly with only one wing. Meanwhile the Nairobi City Council has decided to revise the Unimproved Site Value rate, which is very clumsily applied. The rate is extremely modest: between 0.5 and 1% of the increase in value over 20 years. My next move will be to try to convince the Westland Association. Everybody would stand to gain, but of course mental inertia stands in the way. I will keep you posted. If you would like to see my two papers, just ask.” Good work, fellow geonomist. Please do keep us posted, even if two years hence (ah, bureaucracy; you hear of the Hindi called back for a job interview three decades later, after he'd already retired?). Meanwhile, your papers are very persuasive. Anyone interested, write Silvano at silbor@strathmore.ac.ke.

Sunny Akuopha, Gateway Africa (May 31): “Starting a center is quite difficult, especially one that shall affect the lives of people in a whole continent. Within the next few months we shall be needing office equipment and furniture and some cash for full-time, part-time, and volunteer staff. We shall appreciate any form of help you can render, especially at this take-off stage. What we need mostly is your moral support and if possible access to little funds from good moral sources. Regards and thanks once again for your solidarity.” Sunny, aadc52@hotmail.com

Contestants of our quizzes on the Progress Report website (Jun 8): “I really enjoyed the 20 questions about corporate welfare. I got a score of 115, which is pretty good according to the break down of scores. How did I get that way? I listen to Pacifica Radio, KPFK 90.7 in Los Angeles. Thanks for the interesting and educational quiz!” And “Thank you very much! I learned a lot and was pleased to score a 105. I think this would be a great tool for children esp. those in jr. and sr. high. I'm interested in looking up more information about some of questions in the quiz, and find a way to raise awareness here in my conservative AZ town. I'll definitely use your site as a resource in the future. Thanks again.” – Trudy Lacey. “Well done. Of course I received 115 so what's not to like? Keep up the good page.” – Alan. “I was really amazed at how well I did. I tried to answer as to what my thoughts were with each question. I am 73 yrs old and have seen and done a lot for my country and will do more if asked.” – Mike M. (thanks to webmaster Hanno Beck)

Jonathan Hall (Mar 29): “First let me express my admiration for your recent pages on the Progress Report. Which led me to read more from the Geonomy Society. I have been thinking about how landowners in my state of California were able to Trojan horse their attack on LVT (Prop 13) using the rage against taxes as their cover. A similar tactic can be used to get it back, but more honestly. The problem with Prop 13 is that it interferes in how a community raises its funds – a local affair. Dissatisfaction with state meddling could be used to shepherd a county independence protection. The protection would limit the state from passing any laws or taxes that are not precisely germane to the state. All possible authority would be left to the counties. Localities would keep themselves in order by having to compete on the quality of government, and life. And this competition would eventually reward the locales levying LVT.”

Bill Boyer, retired prof of education (May 13): “Books stores and peace groups need to be notified. Jack Yost's book, 'Planet Champions: Adventures In Saving the World (Portland: Bridge City Books, 1999; which includes yours truly briefly), is listed in the 2002 Apex catalogue with a picture at $14.95. Apex is at the Council on International and Public Affairs, 777 United Nations Plaza (Suite 3C), NY NY 10007. I don't know yet if that is the way it will be listed in Books In Print.” It's an inspiring collection of successful movement people who ushered in real change.

Tom Greco, Director of Tucson's Community Information Resource Center (Dec 25): “Our website contains an abundance of useful material on economic, social, and political transformation, including creative ideas about money, finance, community empowerment, and sustainable economics, including links to other excellent sources dealing with a wide range of related issues. You'll also find the text of my book, 'New Money for Healthy Communities'. http://azstarnet.com/~circ. My new book, 'Money: Understanding and Creating Alternatives to Legal Tender', published by Chelsea Green, is now available. You can get the free abridged e-book version at: http://www.chelseagreen.com/Livelihood/MoneyEBook.htm.

Bob Andelson, emeritus Auburn (Apr 22): “I thought your report on the Monterrey Conference (the long version, not the abbreviated one in The Geonomist) very perceptive. (But last issue, a brief paragraph crammed with cabinet departments erroneously switched identities.) The State Department has existed under that name since the presidency of George Washington. But I remember when the War Department and the Navy Department were combined to create the Department of Defense. This was in 1947, under Truman.” Thanks for catching that. Anyone want to catch errors before the world sees them?

Jim Mann, retired publisher (Apr 20): “Just finished your latest issue. Lots of good stuff. I was going to write a critical note, but it was already written by John Watkins. I don't know who Watkins is, but he made some very good points, and maybe you should ask him to be "copy editor" for your newsletter. To show my heart is in the right place, I am mailing you a check for a "subscription." After paying my April 15 "fees" to the federal government and the state of Connecticut, I think there's $15 left. Best!” We'll forgive you for paying the status quo before tithing for progress – this time. And John, want to edit? Anyone?

Dick Strong, California soil expert (Jun 11): “I'm studying pastoralists and forage for their animals and the health of the soil for that forage. That leads to the global warming, population explosion, and justice issues. I still need to pay attention to how the rent works out. That reminds me that I owe you some money. Am a bit scattered but mean to continue on this. Sounds like you are having fun with the travel and exposure. Hope this finds you well.” Keep up the good work. I'm doing even better with promises of resources dangling over the horizon.

The Robert Schalkenbach Fdn (April 10) granted us $2,000 for adding up the amount of Rent in Oregon, all the money we here spend for land, resources, environment as sink, and special privileges. Is there enough for government? Is there a surplus for sharing? The answers should appear in our next issue.

For joining or rejoining, thanks to double stalwart John A. Morales (Missouri, retired Panama Canal director, earmarked for presenting at conferences around the world; huge thanks!), double sustainer Franklin Hayashida (Hawai'i's labor lobbyist; many thanks!), sustainers C. Lowell Harriss (Columbia emeritus), Al Hartheimer (Massachusetts architect and gracious host), supporters Hamlet Hilpert (Washington, retired Naval officer), Heather Remoff (Pennsylvania anthropologist), Ronald Rosenberger (Pittsburgh advocate), and subscriber Jim Mann (Connecticut, retired publisher). Anyone else if so moved, please contribute. Heap on that money manure; help us spread like weeds, able to outpace any petro-mechanical mower.

“Economic Justice & the Green Movement” captures this year's conference of Georgist organizations in Canada, Ontario, New London, Aug 21-25. Dialog with environmental leaders from both sides of the border on fascinating issues and inspiring strategies. We'll also chair one of the panel discussions. Linking up with people for whom land has not yet disappeared will recharge your batteries. To register, call Sue Walton 888/262-9015.

Franklin Hayashida, lobbyist at Hawai'ian state and county governments for labor unions (Apr 30): “I searched for Henry George websites and found yours the most interesting and helpful. Regarding your terrific article "The Definitive Report on the Property Tax Shift – A Landmark Paper", do you have it as a booklet for sale? I passed out a few copies of your summary to a few labor union legislators and it was well received. I would be interested in purchasing booklets and distributing them for discussion to union leaders (construction), candidates running for county and state governments, community groups such as Honolulu's Neighborhood Boards and grassroots organizations with an interest in increasing the livability of their communities, and small business organizations such as the many union associated signatory contractor organizations. That's a tall order but I think the time is ripe to push for the PTS again in Hawaii (it was gutted by large landed interests in 1977 or thereabouts).” Here's a plan perhaps other readers could follow.

Christopher Thacker, Missouri student (Jun 14): “Can you check if my subscription to the Geonomist (print version – newsletter) has run out or not? I think it has, but I do not know for sure. If it has run out, then please tell me where to send a check (and how much) to re-subscribe. Thanks.” Can I? Hey, thank you for asking. Dues do be due. Just use the coupon below. Anyone can do it. And send as much as your conscience allows. Cheers.

THE GEONOMIST

Vol. 11, No. 1
Editor: Jeffery J. Smith

THE GEONOMIST

Vol. 11, No. 1 Editor: Jeffery J. Smith

Vol. 11, No. 1
Editor: Jeffery J. Smith