At This Tipping Point, Can We Back Off?
People have bigger problems than measuring the “rents”. Or do they?
July 14, 2016
Jeffery J. Smith

This article is part of a series by Jeffery J. Smith on the surplus—also known as “economic rent”—that exists in the economy. Currently, this surplus is hoarded; yet once shared, this surplus could generate undreamed of possibilities for the entire human population. To see the entire series, visit

When Data is Needed Most, We’re Most Distracted

People interested in new ideas and old problems have yet to take much interest in the issue of persuading public agencies to publicize the worth of Earth. It seems like such a minor concern. Wannabe reformers have much bigger fish to fry.

And boy, are those fish ever getting fried! Innumerable crises have reached their tipping point. Yet ironically, all those major issues are related to the solitary minor issue of knowing how much we all together spend on the land and resources we use.

Reformers could more easily fry their fish if they knew the size of rent. Actually, it’s more serious than that. Without knowing the size of society’s surplus, can they even win the world we all want? As the world keeps careening off the rails, as the economics discipline stays on its silent path of complicity, both trends leave us all headed for a sorrier state not of our choosing.

Housing Out of Reach

One crisis afflicting young adults is they can no longer afford to live where they love, like San Francisco and Boston. Forcing young, imaginative people to move away means they lose their homes, their network of friends and any nearby family, and their jobs. Their formerly desired cities lose their vitality. You might say that New York’s loss is Philadelphia’s gain, but it does not work that way. It’s true, but only to a degree. Citizens and cities are both better off when communities are stable.

And the crisis does not stay centered on current hot spots. High rents in the biggest cities pushes rents up in the next tier of cities—like Portland—straining the family budget. That inflation persists until the emptied pockets reignite recession and only widespread unemployment and loan defaults knock land costs back down again, for a while.

What makes this crisis ironic is that it’s not the housing—which ages and wears out—going ballistic. Rather, it’s the value of the underneath location. Not understanding the nature of the problem, no way anyone can solve it.

Recession Within Reach

You hear feverish talk of a coming recession. You always hear such talk. And every now and then the talkers are correct without knowing why, without knowing the role of the money society spends for the nature it uses.

Every recession creates more suffering, more losers and winners, a bigger lower class, a smaller and more anxious middle class, and a more aloof upper class. At some point—coming soon—a tipping point must be reached where America stops being a predominantly middle class society. That means losing its democracy. Losing its environmental movement. Losing its rapprochement between the classes.

It’s ironic, it happening now, as other big nations are engaged in growing their middle class—China, India, Russia, Brazil. Just give those trends enough time—ours shrinking, theirs expanding—and not much more time is needed. Then no way America can remain the flagship nation among global powers.

Uncle Sam Bankrupt

You hear talk about our enormous public debts putting the US on the verge of bankruptcy, as deficit spending has bankrupted Detroit and other local governments. Yet private debt is also enormous. Most don’t realize that most of that debt is mortgage, and most of mortgage is land value.

The more that private citizens are in debt, the more that they need government services, which gets quite spendy, especially when you include bailouts of the private citizens who run the banks and big business in general. High debts and few opportunities lure some citizens into the military, dampening criticism of US foreign policy, which is enormously expensive and debt-swelling.

Bringing to light the size of rent would help bring to light the role of mortgage debt in these vicious cycles. If other nations do actually match deed to word and abandon the dollar as the world currency, the US would definitely go bankrupt. The only way for Americans to find a way out would be to recognize the role of our spending for land.

1%—Out of Control

Another crisis is the 1%. Not just the income inequality which is unimaginable—a few getting so much that they could not spend it all in several lifetimes of ultra luxurious living while others barely scrape by. But also how disconnected from reality they are. Anyone enjoying the exercise of absolute power would have to become irrational. Power corrupts, right? Trump might be an outlier but he’s far from alone.

His urge to offend anyone is matched by the US elite’s resolution to wage wars that kill mainly poor women and children. America may be one of  the most popular countries on the planet but is also one of the most disliked, and none of that animosity is necessary. As a military power, the US may not be at a tipping point but it has already reached the point of war without end, which is not only horribly sad for both attacker and attackee but impossible to perpetuate forever.

The role of rent in all this is both as the sustenance of the 1% and as the system of rent-winning that the lucky recipients are determined to maintain around the world. Who gets the rent and what do they do with it? Blocking the measuring of rent, and the publicizing of its total, blocks any scientific analysis of society, class, and public policy. It’s the same attitude of those long-departed titans of industry who owned the unsinkable Titanic and guaranteed everyone safe passage—all the way to the bottom of the sea.

Eco-librium Upended

Finally, there is one issue that is totally indifferent to anyone’s political beliefs and may be exceedingly critical, and that is the state of the earth’s ecosystem. Climate change gets the publicity and may merit it but it is merely one assault among many that may have human civilization on the brink of e-collapse.

Consider all the other pollutants—the exhausts that cause asthma, autism, and cancer, the runoffs and discarded medicines that poison the water table, the toxins intentionally lathered upon cultivated food, the acid rain and garbage that choke the oceans, devastating fisheries and the production of oxygen, the destruction of forests and erosion of topsoil, the risk of irradiating and mutating many living cells, etc. You could likely add to the list.

Any one of these could cave in everyone’s standard of living if not rid Earth of this troublesome species altogether. And every single one of these issue is a spinoff from our universal grasping for rents, that immense flow most don’t think about, because nobody measures it nor releases the data to the public. If our business-as-usual is to be altered in planet-saving ways—and in time—a critical mass must become cognizant of the role of rent.

Crisis = Opportunity? At All?

For me, it’s not the magnitude of these issues that causes despair but the inability or the unwillingness of people who’d address them—reform-minded political people—to dig deep, to discover our spending for Earth, and the role it plays in creating and solving these issues. Rent is a human blind spot, as you can tell by how unfamiliar the word is when used in the sense of the worth of Earth, of our spending for land and resources. The wannabe reformers constantly going off half-cocked and enjoying merely finding moral fault with their opponents—more so than actually succeeding—that is more discouraging to me than the way the elite wield their power, indifferent to the fate of even their own progeny.

It’s laughable that the 1% take umbrage when anyone brings up their bullying behavior. It’s flabbergasting that they’d risk even their own lineage. Are they truly willing to write off the rest of the planet—other humans, other species—and be content to interbreed and survive off artificial everything? Have they pulled up the ladder—as the massive student debt and other lifelong debts may suggest? And as some critics have warned?

How much worse can it get? How much more can the tattered social contract tolerate? How much more can the ravaged global ecosystem endure? While such trends seem to move at a glacial pace from the perspective of the individual, when they reach their tipping point, the collapse comes quick (as did the USSR), for better or worse, probably worse. By then it will be way too late to take the relatively easier steps of prevention—the tallying of rents included—versus the arduous steps of cure.

This article is part of a series by Jeffery J. Smith on the surplus—also known as “economic rent”—that exists in the economy. Currently, this surplus is hoarded; yet once shared, this surplus could generate undreamed of possibilities for the entire human population. To see the entire series, visit

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Jeffery J. Smith

JEFFERY J. SMITH published The Geonomist, which won a California GreenLight Award, has appeared in both the popular press (e.g.,TruthOut) and academic journals (e.g., USC's “Planning and Markets”), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland's mass transit agency), and recruited activists and academics to A member of the International Society for Ecological Economics and of Mensa, he lives in Mexico. Jeffery formerly was Chief Editor at