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
The people out there trying to make a difference, they too dig deeper, seeking to know how economies function and malfunction. Being cutting edge, those reformers and critics should appreciate, even help, the effort to determine Earth’s worth. They’re not like some bureaucrats, economists, and rentiers who ignore society’s spending on land and other items never produced by anyone. That torrential flow factors into pollution, gentrification, minimum wage, etc, the problems our watchdogs worry about. They should at least be curious and open-minded, right?
In 2014, Thomas Piketty had a bestseller with his fat magna opus called Capital in the 21st Century. With reams of data, he pointed out that the rich got richer and the poor poorer due to ownership (or lack) of capital, he said. He sold millions of copies. A few geonomists pointed out that actually, it was not capital but land—usually referred to sloppily as “real estate”—that was the father of enduring fortunes. How many read the correction? Maybe a few thousand.
Sitting side by side with Piketty on a televised panel discussion, Joseph Stiglitz noted that capital depreciates; it’s land that appreciates. Piketty seemed to not grasp or perhaps not take seriously the point being made. And making the point was the former Chief Economist of the World Bank, a winner of the ersatz “Nobel” prize, and professor at Columbia. Perhaps Piketty is one critic who won’t cotton to geonomics.
Piketty’s response is typical of people who use “capitalists” and “the rich” as synonyms. Often they overlook the Georgists, the followers of the 19th c. economist and land reformer Henry George, author of Progress and Poverty., declaring land to be “irrelevant today”. When asked to substantiate such an accusation, “simplistic” usually comes next. Yet the goal of science is to conceive the simplest possible explanation of reality, said Albert Einstein, an admirer of Henry George.
It’s not just ivory tower types who’ve not yet caught on to geonomics. Some activists don’t grok it either. Concerned about income inequality, they see the human-made cars and computers that enrich a few but not the nature-made locations downtown. Most people have no idea how valuable those lots are, or how often they re-sell, probably from lacking experience buying and selling buildings on pricey sites.
Most reformers know their history. There one reads how certain factory owners did rake in fortunes. Yet appearances are deceiving. Railroads made more money selling the land they were given by the US Congress than by ferrying freight. And given the fortunes made today in mortgages, oil, and land-like fields of knowledge, little has changed.
Other factors bolster the prevailing worldview.
But conventional answers can’t suffice for openminded reformers, can they?
Also seeking change are urbanites up in arms about the high cost of housing. Wouldn’t they want to know that, actually, the cost can not go up since the housing has already been built. What’s rising in value is the land. Further, owners and landlords are innocent; they can not raise what they charge unless others have earned more money and use it to spend more on locations. Might economic activists agree with engineers that if a problem can be defined, it can be solved, and welcome these insights?
What about people who’re concerned about something less emotional, more rational. Can they eagerly incorporate new information? Consider the less controversial GDP. As a measure of economic health and a guide for policy, GDP has long had its critics. Maybe they can handle the fact that the strongest stream in the GDP is our spending for the parts of nature we use. That means, what GDP measures is not so much the output of our labor and capital but the advantages built into our locations. Is that meaningful to GDP critics?
Going by the lack of interest in Earth’s worth, it seems critics and reformers like their current worldview as is, thank you very much. Aficionados of all things economic react like you’re arguing for an analysis akin to phrenology. Even critical economists seem unable to wrap their brains around what they call “rent”. Even those who want to do economic policy differently, with them this recondite aspect of reality gains little traction. Another case of Old Guard instinctively rejecting Young Upstart.
Despite wanting to close the income gap, they don’t know what makes owners rich and powerful. Pointing out what does generate undue fortunes—rents—implies that they did not know it before. Implying ignorance diminishes any chance of making an alliance. “Land? It’s antiquated,” may the kindest cut you hear.
Persistence does not seem to pay. You do enough of that and you become persona non grata. Wannabe agents of change move from indifferent at best to hostile at worst, like how a true believer believes others are diabolical. Yet, because reformers do care and do see much of the big picture, the occasional vehemence of their reaction comes as a shock. In their own way, they’re as conservative as the conservatives they critique. That’s progressive?
What’s the problem here? What’s wrong with announcing a discovery? What’s so precious about a wrongheaded belief?
The harder you try to intrigue the likeliest receptors, the more stubborn they get. Your facts not only fall on deaf ears but also raise pointy hackles. Psychological research shows that people set in their ways merely entrench themselves even deeper into what they “know to be true”. Staying loyal to ideology suits human nature.
It’s the nature of many people to identify someone as the cause of their troubles, which is not totally unfounded, since being extra rich or extra powerful does not automatically make one extra innocent. However, the actual problem is not so much the elite behaving badly as it is certain customs we all live by (namely, being able to own without owing any obligation to one’s community). But that analysis lacks an enemy while denigrating the enemy is instinctual fun.
Try to play the role of peacemaker. You propose a win/win solution and people hear that as offering an excuse to the bad guys to be bad. Even do-gooders grow attached to their enemies and refuse to quit that struggle for another.
It’s not just about ideology in particular that people get defensive. Humans get that way in general when confronted with another’s reality that differs from one’s own. Even when the aspect is minor and harmless, someone can come unglued when realities don’t match.
Remember those detailed, repetitive paintings were popular? If you stared at them long enough and unfocused your eyes, another picture would emerge in 3D that you could not see before. If you pointed and exclaimed, “oh look, there’s a dinosaur!” another would say, “where? I don’t see it.” If you declared, “there, see the biplane?” the frustrated doubter would say, “you’re trying to put me on.” If you kept at it and said, “look, can you see the angel?” the angry partially blind man would say, “liar, there’s nothing there!” People really hate it when they’re left out of detecting all of reality.
Not to excuse bad manners, but it’s the nature of the human beast. Truth is no shortcut to winning friends and influencing people. Not when they already have their own truth.
I’m saddened but as a lover of irony, I’m also tickled. People who want others to change are so unwilling to change themselves. Funny.
So, if anyone is to see what’s being talked about—all our spending on nature—who will change? Anyone?
Not the current crop of ideologues. On other fact-finding missions, they overcame bad data, uncooperative academy, and a censorious press; why can’t they do so now? What is it about rents that slams some minds shut with a loud clap of annoyance? I supposed fascination with spending on land is an acquired taste.
Whatever makes human consciousness and the structure of economies such a bad fit, the takeaway is: The rules of reality can’t change, but minds can, if reached via their own channels. Therefore, what must change is how the rent aspect of reality is described, and whom it is described for.
The target audience must be different, perhaps a new generation, if there’s anything to Kuhn. Figure out their wrong triggers and their right buttons. Avoid the former, push the latter, and titillate curiosity, open eyes, and enthuse new agents of change with a new way of seeing the world.
Then, not before, geonomics will spread to present activists and academics. They’re human and humans like to be on the winning side. They’ll count noses and join in. Everybody will be pulling on the same end of the rope. But before that happy day, shifting the paradigm remains pretty much a solo effort without a net.
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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.