"Practical men who believe themselves exempt from intellectual influence are slaves of some defunct economist." ― John Maynard Keynes
Do we let the economic discipline’s devotees continue to tread water? Or do we curious ones raise the bar and nail down that number for the worth of Earth in America? Ascertaining that stat wins us key insights, while not knowing the stat loses us that.
Currently we’re stuck in our worldview of the economy as something that happens to us. Despite living amid plenty, we endure dehumanizing poverty, scarcity of free time, overbearing elites running amuck, plus sickening of the natural world.
"It is hard to imagine poverty that is worse than this [in America], anywhere in the world. Indeed, it is precisely the cost and difficulty of housing that makes for so much misery for so many Americans, and it is precisely these costs that are missed in the World Bank’s global counts." — In "The U.S. Can No Longer Hide From Its Deep Poverty Problem" by Angus Deatonjan; New York Times, 2018 January 24
"Environmental degradation is one of the largest threats that are being looked at in the world today." — In "What is Environmental Degradation?" at Conserve Energy Future
To address these issues, many laypeople favor one or another conventional proposal. Economists who … yet:
- suggest a stimulus, don’t distinguish between spending that rewards effort and spending that does not;
- suggest austerity, don’t calculate the size of society’s surplus; and
- extol growth, can’t predict the business cycle.
All those competing voices generate much noise for the rent-signal to penetrate.
Economists who ignore privilege propose what does not work. Complicit politicians who can’t deviate from the norm adopt what does not work. Officials bark up the wrong tree while society marches along like lemmings off a cliff.
Hearing requests to know the value of land and resources, most economists and statisticians seem to recoil in horror. They want to know how much we spend on the nature we use? Heaven forbid! Finding that out would capsize the conventional economics boat. That good dunking alone lures me onward.
Finding out the annual total of all rents could be an ah-hah moment for economists. The discipline could leave behind its superstitions and develop into an actual science. Economics could play its role of helping make life on Earth as easy and as pleasant as it could be.
But if we remain ignorant of the value of land and resources, we can’t shake our collective poverty consciousness, nor can we anticipate booms and busts, and economics will likely keep adrift.
Within Our Reach
OTOH, if a figure for the value of land and resources were in circulation, it’d fill in our blindspot—land. As a society, we might realize that:
- the value of real estate is in large part the value of location;
- buildings age, need maintenance—they depreciate;
- what appreciates—despite the regular (and recoverable) downturns—is the value of the location;
- such value is not due to whoever owns or sells the building but due to its surrounding populace;
- as creator of that value, society has a surplus, and …
- by tracking changes in the size of our rent stream, we’d have an indicator of future economic performance that’s accurate.
"The saying [location, location, location] is repeated three times for emphasis, and it is the number one rule in real estate, though it is often the most overlooked." — In "Why Location Needs to be Repeated Three Times" by Elizabeth Weintraub; The Balance, 2017 December 8
"A 5,000 square foot home in the middle of Manhattan holds a different value than if the property was in Arkansas." — In "What Are The Biggest Factors In Determining Property Value?" by JD Esajian at Fortune Builders
"Over the past decade, it has become increasingly clear that the presence of transit can increase property values and result in valuable development opportunities." — In "Capturing the Value of Transit" by Center for Transit-Oriented Development, 2008 November 19, at Reconnecting America
"In the US economy over the past twenty-five years, house prices exhibit fluctuations considerably larger than house rents and these large fluctuations tend to move together with business cycles." — In "Liquidity Premia, Price-Rent Dynamics, and Business Cycles" by Jianjun Miao, Pengfei Wang, Tao Zha; NBER Working Paper No. 20377, issued 2014 August
To date, some economists have sought this Holy Grail—the sum total of the value of land and resources. Decades ago, Steve Cord (US; Ch 13), Ronald Banks (UK), Terry Dwyer (Australia) let their curiosity get the best of them, went out on a limb, and estimated a figure for our spending on nature. Those lone voices in the wilderness are like sirens—not the kind who’d pull us off course but the kind who paved the way and kept our goal in view.
A big thanks to them, since so far a total of all rents that’s serviceable has not dropped into our laps. That said, likely some mainstream economists have felt aroused by the lack of good data. Surely some have taken a stab at calculating an accurate figure for the worth of Earth in America.
Let’s root around, see what those specialists had to say. Johann Wolfgang von Goethe was paraphrased, "Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now." Such perfect inspiration for a Don Quixote.
We gadflies will dig into the US Information Almanac and of course turn to Googling. The key are the key words. Which will lead to the number for the current worth of Earth?
Hard to believe, but not every printed word is in cyberspace; some still hide away in paper books and journals. Besides being an armchair researcher, to cover all the bases we’ll visit libraries, check card catalogs for tomes never uploaded, pester researchers and librarians. Who knows what overlooked nuggets they may hold?
Whatever we find, we’ll eagerly report back. It could get interesting. People in general could grasp how economies operate, why they sometimes fail, and what we can do about it. We’d figure out how to stop working for the economy and have it work for us, as it is supposed to. We’d get to live in societies with high-performance economies.
This article is Part 9 of a series highlighting the forthcoming book, “Bounty Hunter: a gadfly’s quest to know the worth of Earth,” by Jeffery J. Smith. To date, the experts have not risen to meet the challenge. Indeed, some have even stood in the way. Yet the payoff for knowing this datum is huge.
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