Society
An Integration of Ideas
The implementation of justice requires a combination of ideas on ethics, governance, and economics.
January 31, 2016
Fred Foldvary, Ph.D.
Economist

I have studied and written on several topics: ethics, land, economics, governance, and communities. As these are all related, here is a summary of how these ideas fit together.

The foundation of policy is ethics. There exists an ethic universal to humanity, which in philosophy is called natural moral law. The universal ethic derives from the independence and equality in human nature, that human beings think and feel as individuals, and that there is no inherent master-slave relation in human nature. From these premises is derived a universal ethic with three basic rules:

  1. Acts that are welcomed benefits are good
  2. Acts that coercively harm others are evil.
  3. All other acts are neutral.

Harm consists of an invasion into a person’s proper domain, in contrast to offenses that depend on a person’s beliefs and values. The universal ethic is comprehensive to all acts, so it includes the treatment of animals. Cruelty to animals, inflicting suffering beyond what is needed to obtain food and materials, is evil. The universal ethic is best implemented as explicitly inscribed in the constitution of the governance.

Applied to labor, the universal ethic implies two economic rules:

  1. To the creator belongs his creation.
  2. To all equally belongs what man has not created, the benefits of nature.
The universal ethic is implemented in the economy with a pure free market, in which there is no restriction nor imposed cost on acts which do not coercively harm others, and in which the benefits of nature, as measured by land rent, are shared equally in cash or in public services.

The universal ethic is implemented in the economy with a pure free market, in which there is no restriction nor imposed cost on acts which do not coercively harm others, and in which the benefits of nature, as measured by land rent, are shared equally in cash or in public services. People can have greater choice of services with vouchers, such as for education. The ethical sources of public revenue are user fees, land rent, fees that prevent congestion, and levies on environmental damage.

As ethics and economics are in harmony, the policies that are ethical also generate maximum prosperity, as taxes on enterprise and labor impose losses, while revenues from rent reduce inequality while inducing efficient land use and preventing the land-value and financial bubbles that end in depressions. Economic freedom is also implemented with free-market money and banking, in contrast to centrally-planned manipulations.

Governance is least corrupted when people choose in small rather than large groups.

Governance is least corrupted when people choose in small rather than large groups.

Voting should therefore start with councils elected by neighborhoods of about one thousand persons. A group of neighborhood councils elect a broader council, and the process continues to legislatures and a parliament or congress. Besides voting, people can make social choices with demand revelation, in which the members state what they are willing to pay, and when their stated values change the outcome, compensate the group for the resulting loss to others.

A voluntary society is possible when communities are based on explicit contracts. Such communities can be proprietary, with tenants and landlords, or associations of co-owners as in condominiums, homeowners’ associations, and cooperatives. Landlords can include land trusts.

Territorial conflicts can be resolved with joint sovereignty and compensation. For example, the conflict in Kashmir can be resolved with local self-governance combined with the joint sovereignty of India and Pakistan. The conflict between Israel and the Palestinians can be resolved with West-Bank settlement leaseholds that pay rent to Palestine.

Territorial conflicts can be resolved with joint sovereignty and compensation. For example, the conflict in Kashmir can be resolved with local self-governance combined with the joint sovereignty of India and Pakistan. The conflict between Israel and the Palestinians can be resolved with West-Bank settlement leaseholds that pay rent to Palestine.

Liberty and prosperity are founded in an integration of ethics, governance, and economic policy.

We can see that liberty and prosperity are founded in an integration of ethics, governance, and economic policy. The universal ethic, small-group voting, economic freedom, and the egalitarian sharing of land rent are in mutual harmony.

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FRED E. FOLDVARY, Ph.D., is an economist and has been writing weekly editorials for Progress.org since 1997. Foldvary's commentaries are well respected for their currency, sound logic, wit, and consistent devotion to human freedom. He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and currently teaches at San Jose State University.

Foldvary is the author of The Soul of LibertyPublic Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary's areas of research include public finance, governance, ethical philosophy, and land economics.

Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.