A Calculation Equal to the Calendar?
The size of rent is enough to make you bowl over.
February 28, 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 Progress.org/Counting-Surplus

Huge New Knowledge Alters Living

Imagine what life would be like without the biggest insights ever. No realization of the solar system. Reality would stretch no farther than our horizon. No discovery of germs. Doctors would still kill people with their blood-soaked hands. No understanding of electricity. Pretty obvious you’d not be reading this on a computer screen under a bright light, boiling a tea kettle on a glass-top stove in a room with radiant heat while fiddling with your phone.

You don’t even have to imagine what life is like without a general grasp of how economies work. Due to our widespread ignorance, we force ourselves to endure dehumanizing poverty, scarcity of free time, overbearing elites running amuck, and sickening of the natural world. All because we have a blindspot toward our paying for land versus our paying for human-made goods and services.

Earlier discoveries made sci-fi and visits to the planetarium fun, made washing hands and sticking to the three-second rule for dropped food de rigeur, and made powered devices a staple of civilized living. Our next major breakthrough—being able to picture the main economic factors interacting—would allow us to replace economic superstition with rational behavior. We’d figure out how to stop working for the economy and have it work for us for a change, as it is supposed to.

Who’ll Count the Bounty?

We’re raised being taught to make informed decisions. Yet we can’t look before we leap since we as society do not know how economies operate, why they sometimes fail, and what we can do about it. If we knew how much money we as society spent on the nature we use, that would clue us in on the size of the issue. Seriously. Our land and resources are more valuable (not just for life but also for profit) than our labor and capital. What are we to make of that?

All the major insights above took only one person to come up with them and they could be tested by other individuals. Einstein’s theory could not be tested by one person but because it was so interesting, a group of fellow physicists were willing to organize a test (relativity passed). However, measuring rents and watching them drive the rest of the economy takes cooperation of the officials who collect the raw data.

Yet we’re talking about the most valuable assets in the economy and those are owned by the most powerful entities in the society. Even glancing at property creates controversy, as would a male glancing at a female’s leg back in the Victorian Era when chaste matrons even put skirts on the legs of their pianos. You could forget male doctors examining the plumbing of female patients back then, just as now you can forget conventional statisticians and economists examining the flow of rents. You really need somebody on the inside with a thick hide who’s willing to ignore all that social pressure and stand up for science.

Don’t underestimate the peer pressure put on economists to conform. When Gregory Mankiw, a Harvard prof who later was selected to be a president’s advisor on economics, published a paper predicting the next recession (the last one), his colleagues roasted him. Instead of praising his attempt to be scientific—which cited the 18-year period in demographics—other highly credentialed ridiculed him. Not even the guys at the top can escape the critique.

First, probably, the contest between us demanding an accounting of spending streams versus blind-spotted humanity remaining aloof would have to be won by us scouts trying to lead everyone else into this unexplored field of economic knowledge. Not an easy task, given the fact that any discipline that goes by the moniker of “the dismal science”—and only half of that is true; the science part is a polite exaggeration—is not going to have broad public appeal. Further, those economic “scientists” already have their pet theories, which—despite none of them being provable in reality—the theorists would be loathe to abandon.

Momentum for a Momentous Discovery

I’m both anxious and hopeful. It’s a close game—in the late innings, if it’s true we’re on the verge of e-collapse—and the outcome could go either way. All it takes is a nudge in the right place to topple the dominos and trigger an official inquiry into all the money we spend on nature in order to produce our goods and provide our services. A presidential candidate could promise to do it. A president could actually do it. No act would be more presidential, truthfully.

Bernie Sanders had his start in the grassroots, but he’s leftist and neither left nor right get it, staying stuck in their antiquated industrial isms. Hilary could get it, having made money in real estate, as could Trump, having won and lost so many millions in real estate. And the current guy Obama got a gift from real estate, too. Would any of them let the rest of us know, how much we all together spend on land and resources? Is any reader able to reach any of those figureheads?

While getting a president on board would be great, it would not be a first.

  • Back when the idea of using land value as public revenue was the progressive policy, many candidates supported that reform—Democrats Edmund Muskie and Alan Cranston and Republican Jack Kemp.
  • Indeed, even some sitting presidents did—Democrats FDR and Grover Cleveland and Republican Teddy Roosevelt. Even Louis Brandeis, a Supreme Court justice, was on board.
  • Not be outdone, so were Winston Churchill and Lloyd George, a couple of British prime ministers. So there is a precedent for socializing rents at at very high level.

What about you, dear reader? How crucial to you is knowing the worth of Earth? Recall that capturing the flow of ground rent drives the business cycle. If you have savings, surely you want to invest them well, or have others invest them well, right? If you vote, surely you’d prefer a more equitable disbursal of our social surplus, rather then let just a tiny fraction of us hog it all, right? Right? Could you reach a candidate or an officeholder?

How long can our perverse attitude toward economies—letting opinion substitute for knowledge persist? Too long for my taste. I’d like to live by the natural laws of economics tomorrow, if that’s not rushing things.

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 Progress.org/Counting-Surplus

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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 Progress.org. A member of the International Society for Ecological Economics and of Mensa, he lives in Mexico. Jeffery formerly was Chief Editor at Progress.org.