By THE ASSOCIATED PRESS AUG. 20, 2014
By THE ASSOCIATED PRESS AUG. 20, 2014
Posted on August 23, 2014 at 02:27 PM in common good, commons, cui bono?, Earth for All, economic rent, financing services, government's role, land includes, land monopoly capitalism, Natural Public Revenue, natural resource revenues, natural resources, privatization, windfalls | Permalink | Comments (0)
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Last week, Joe Stiglitz posted a blog piece at http://opinionator.blogs.nytimes.com/2013/04/14/a-tax-system-stacked-against-the-99-percent/, in which, among other things, he wrote:
One of the reasons for our poor economic performance is the large distortion in our economy caused by the tax system. The one thing economists agree on is that incentives matter — if you lower taxes on speculation, say, you will get more speculation. We’ve drawn our most talented young people into financial shenanigans, rather than into creating real businesses, making real discoveries, providing real services to others. More efforts go into “rent-seeking” — getting a larger slice of the country’s economic pie — than into enlarging the size of the pie.
It doesn’t have to be this way. We could have a much simpler tax system without all the distortions — a society where those who clip coupons for a living pay the same taxes as someone with the same income who works in a factory; where someone who earns his income from saving companies pays the same tax as a doctor who makes the income by saving lives; where someone who earns his income from financial innovations pays the same taxes as a someone who does research to create real innovations that transform our economy and society. We could have a tax system that encourages good things like hard work and thrift and discourages bad things, like rent-seeking, gambling, financial speculation and pollution. Such a tax system could raise far more money than the current one — we wouldn’t have to go through all the wrangling we’ve been going through with sequestration, fiscal cliffs and threats to end Medicare and Social Security as we know it. We would be in sound fiscal position, for at least the next quarter-century.
to which I posted a response. The last time I looked, it was the only one, out of about 430, which discussed the issue of rent seeking. Here's what I wrote:
How do we unstack it? Collect the rent. Treat it as our COMMON treasure, not something subject to privatization by individuals, corporations, foundations, universities, etc.
Will it fund everything? We don't know. We can't know. We don't even collect the data that would permit us to calculate its magnitude. (Funny thing about that. Wonder who benefits from that. Could it be the rent-seekers?) Start collecting it, and using it to fund public goods.
At the same time, start reducing, even eliminating the dumb taxes which burden the economy: taxes on sales, buildings, wages, starting with the lowest wages earned. Watch the 99% recover. Watch the economy recover. The 1% will do all right under such a set up, but the rest of us will begin to thrive. Most likely, we'd be able to reduce the amount we need to spend on the social safety net, so that collected rent might cover a large share of our internal revenue needs.
What else might we collect revenue from? How about the privileges we've given out -- the privilege of using the airwaves (think how much a strong radio signal sells for in a large city) and the entire electromagnetic spectrum; franchises of various kinds, landing rights at LaGuardia, particularly at rush hour;
Then there are our nonrenewable and scarce natural resources: water, oil, natural gas, various metals. Royalties on many of these things are trivial, or they are going into private pockets, instead of being treated as our common treasure.
"Though there are still many comfortably-situated men and women who believe that, on the whole, industrial conditions are such as to apportion the 'good things in life' in accordance with the deserts of the recipients, this belief is rarely held either by those whose circumstances give them a close and wide acquaintance with the 'hard facts of life,' or by those who have brought intellectual analysis to bear upon the processes by which distribution of wealth is affected. The political economy, not only of 'the masses,' as voiced by Karl Marx, Henry George and their followers, but also of the classes, through the mouths of academic teachers, is full of frank avowals of the deep injustices which underlie the existing apportionment of wealth. The following words of J. G. Hill may be taken as a representative expression of this feeling: 'The very idea of distributive justice or any proportionality between success and merit, or between success and exertion, is, in the present state of society, so manifestly chimerical as to be relegated to the region of romance.'"
When you pick up a special privilege and examine it, — whether it be a franchise, a rebate, a tax or a tariff, — you have in your hands someone's special preserve. He is hurt if you criticise, and you are hurt if you don't. The social organism is filled with these special preserves. They are a prolific source of economic inequality. They leave no place for a buffer in the successive distributions of labor brought about by the successive discoveries in the arts and of mechanics and tools. When the natural resources are someone's preserve and are closed to retreat, those crowded out of employment by machines and tools cannot fall back, — they must stagnate and starve, or else go forward. And "forward" here means to turn backward upon the preserves.
-- in The Painter and Decorator, a union journal, 1907
Cloten. Why tribute? Why should we pay tribute? If Caesar can hide the sun from us with a blanket, or put the moon in his pocket, we will pay him tribute for light.
—Shakspere, "Cymbeline," Act III, Scene 1.
"The Lord's Prayer says, Give us this day our daily bread. Our daily bread comes from the land. No man made the land. It is God's gift to mankind. It belongs to all men. Therefore individual ownership of land is wrong. Individual control of the fruits of the land is wrong."
— Hall Caine, "David Rossi," in "The Eternal City."
The monopoly of the natural resources, principal among which is land, causing rent, and the monopoly of exchange, causing interest, are at the bottom of all the misery and wretchedness of humanity.
As soon as I see landed property established, then I see unequal fortunes, and from these unequal fortunes must there not necessarily result different and opposed interests, all the vices of riches, all the vices of poverty, the brutalisation, the corruption of civil manners?
—Jean Jacques Rousseau, "Douies sur L'Otdre Naturel."
Posted on January 09, 2013 at 12:37 AM in all benefits go to landholder , Earth for All, enclosure, income concentration, natural resources, Occupy Wall Street's values, private property in land, privatization, privilege, special interests, wealth distribution or concentration | Permalink | Comments (0)
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The only point where I do not find myself in complete accord (and that is perhaps more due to your comparative silence than anything else) is that I attach relatively more importance to the initial injustice done by the permitted monopoly of raw material in a few hands. It seems to me that individualism, in order to be just, must strive hard for an equalisation of original conditions by the removal of all artificial advantages. The great reservoir of natural wealth that we sum up as land (including mines, etc.) ought, it seems to me, to be nationalised before we can say that the individual is allowed fair play. While he is thwarted in obtaining his fair share of the raw material, he is being put at a disadvantage by artificial laws.
—Grant Allen, Letter to Herbert Spencer, 1886, in "Grant Allen, A Memoir," by Edward Clodd.
Posted on January 08, 2013 at 12:06 AM in as much and as good, charity and justice, commons, Earth for All, economic justice, equal freedom, equal opportunity, equality, inherited wealth, land includes, land monopoly capitalism, landlordism, make land common property, monopoly -- not the game, natural resource revenues, natural resources, pay for what you take, private property in land, privatization, privilege, property rights | Permalink | Comments (0)
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In our society, established upon a very rigorous idea of property, the position of the poor man is horrible; he has literally no place under the sun. There are no flowers, no shade, no grass but for him who possesses the earth. In the East these are the gifts of God, which belong to no man. The proprietor has but a slender privilege; nature is the patrimony of all.
—Ernest Renan, "Life of Jesus," Chapter X.
Posted on January 07, 2013 at 12:01 AM in Earth for All, ecosystem services, inherited wealth, landed gentry, landlordism, make land common property, monopoly -- not the game, natural resources, private property in land, privatization, privilege, property rights, reaping what others sow, sharecropping, slavery, theft, time making wrongs into rights | Permalink | Comments (0)
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God has ordered all things to be produced, so that there should be food in common to all, and that the earth should be a common possession to all. Nature therefore has produced a common right for all, but greed has made it a right for a few.
— ST. AMBROSE, On the Duties of the Clergy (A. D. 391), Chap. XXVIII., Sec. 132. Nicene and Post-Nicene Fathers, Vol. X., p. 23.
The Creator has made ample provision for all men in the storehouse of nature and in the faculties and powers of man. To do God's will, we must make room at the Father's table for all His children.
— FATHER EDWARD McGLYNN, Lecture on the Fatherhood of God and Brotherhood of Man.
Praise John from whom oil blessings flow.
Praise him oil creatures here below:
Praise Teddy some, but John the most,
Praise Baer next, and then the Holy Ghost.
This appeared in The American Cooperator. Searching a bit, another verse turns up:
Praise John from whom oil blessings flow.
Praise him oil creatures here below:
Praise him above, ye heavenly host,
Praise William some, but John the most.
Pigou, a key bridge figure in the history of his field, was one of the earliest classical economists to notice that markets do not always produce the best possible social outcomes. The pollution generated by a factory imposes costs on those who live downstream or in the path of its airborne emissions. The risks assumed by banks leading up to the recent financial crisis imposed costs on just about everybody. Market transactions often generate what economists call “externalities” — side effects, sometimes positive but often negative, that affect people who do not participate in the transaction.
Pigou, having recognized the problem, was the first to propose a solution. Society should tax the negative externalities and subsidize the positive ones. This simple notion — if you want less of something, tax it — is why his ideas periodically bubble up in the service of combating a recognizable cost to society, like pollution. We think that his approach offers an answer to another great problem of our time: inequality.
Does the extreme degree of inequality in America today really create, as Pigou would put it, negative externalities? Does the fact that hedge-fund manager Mr. Jones rakes in 100 or 1,000 times what office manager Mrs. Smith earns impose costs on everybody else? Plenty of Americans think not. Defenders of our skewed income distribution point out that a free-enterprise system requires some inequality. Unequal rewards give people an incentive to work hard and acquire new skills. They encourage inventors to invent, entrepreneurs to start companies, investors to take risks. It’s fine in this view that some people get astronomically rich. As Mitt Romney likes to say, “I’m not going to apologize for being successful.”
On the other side, many of us have a gut feeling that inequality has gone too far. Our times are reminiscent of the Gilded Age’s worst excesses. Hence the popularity of the Occupy Wall Street movement’s slogan, “We are the 99 percent.”
LVTfan here: Wouldn't it be better to prevent the inequality by such measures as treating the natural creation as our common treasure, instead of permitting its privatization and then taxing back what is taken? Treating the natural creation, and that which the community creates by its presence and its investment in public goods -- schools, roads, libraries, etc. -- as our COMMON treasure would create equal opportunity for all, a much better idea than permitting some to capture it and then taxing some of their booty back after the fact. When we let some reap what others sow, and then take back a share after the fact, we're still permitting them to reap which deprives the sowers of that right. Whether it be nature doing the sowing, or the community as a whole, no good can come of permitting the privatization of that. Henry George, in "Progress and Poverty" and "Social Problems" showed the logical, efficient, just way to do better.
Posted on November 15, 2012 at 07:10 PM in equal opportunity, FIRE sector, Henry George, income concentration, municipal ownership of utilities, natural monopolies, natural resource revenues, natural resources, Occupy Wall Street's values, one solution for many problems, pay for what you take, population, privatization, privilege, reaping what others sow, rent-seeking, toll-takers, user fees, wealth distribution or concentration | Permalink | Comments (0)
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Note: this has some statistics you might want to know, but it is primarily a post on public policy.
... many Americans are facing the likelihood of not having sufficient income in retirement unless they increase their savings, work longer, or significantly decrease their expenditures in retirement if they hope to make ends meet.
The Employee Benefits Research Institute recently published an analysis of 2010 Survey of Consumer Finances data. It demonstrates how few people have the traditional defined-benefit retirement plans, and the account balances people of various demographics have in their individually-directed retirement accounts.
Here are some statistics worth considering as we think about the effects of a system which permits a few of us to capture a large share of the nation's net worth and a large share of its income, and to unduly influence our elections with advertising which works to conceal and reinforce the structures of that system:
Enough said. Time to circle back to the study's conclusion:
... many Americans are facing the likelihood of not having sufficient income in retirement unless they increase their savings, work longer, or significantly decrease their expenditures in retirement if they hope to make ends meet.
What public policy reforms might one suggest based on these data points?
If you have other suggestions, I'd like to hear them.
But the reason for this blog is that I believe I have found the public policy reform which would accomplish these goals, in collecting the lion's share of the annual rental value of our land, and in collecting for the commons certain other kinds of natural public revenue which our current system permits to accrue to individuals and corporations. I didn't invent it. Henry George is the clearest exponent of it, but not the first or last. Is it perfect? No, but it is vastly superior to what we've got now, and I believe it is consistent with the ideals to which Americans pay the most honor.
Posted on October 27, 2012 at 03:05 PM in a wedge driven through society, common good, cost of living, cui bono?, economic justice, economic rent, ecosystem services, fixing the economy, Henry George, housing affordability, income concentration, income tax, Jefferson, land monopoly capitalism, land value created by community, land value taxation, make land common property, Natural Public Revenue, natural resource revenues, natural resources, Occupy Wall Street's values, one solution for many problems, poverty, poverty machine, poverty's cause, prosperity, public spending, trickle-down economics, unburdening the economy, wage taxes, wages, wealth distribution or concentration, wobegon | Permalink | Comments (0)
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The common ownership of mines necessarily followed, with an allotment of lands to anyone who wished to live by tilling the land; but not a foot of the land was remitted to private hands for purposes of selfish pleasure or the exclusion of any other from the landscape.
— W. D. HOWELLS, A Traveler from Altruria, Chap. XI., p. 271.
Well, not quite. The film's a little older than I am.
Watched that film last night ... great quote:
Billie: Because when ya steal from the government, you're stealing from yourself, ya dumb ass.
And when we allow others to steal from the commons what rightly belongs to the community, what are we? Some of that theft we all recognize as theft, and other kinds are perfectly legal, even honored, under our current laws. I find the latter even more troubling than the former.
And when neither our economists nor our leaders even SEE it, it is fair to call that a corruption of what their businesses are supposed to be.
Posted on October 13, 2012 at 11:42 AM in absentee ownership, capital gains are land gains, common good, commons, commonwealth, corruption in government, corruption of economics, cui bono?, ecosystem services, government's role, justice of the single tax, land value created by community, landlordism, make land common property, Natural Public Revenue, natural resource revenues, natural resources, neoclassical economists, pay for what you take, poverty's cause, rent-seeking, rich people's useful idiots, socializing risk and privatizing profit, special interests, time making wrongs into rights, toll-takers | Permalink | Comments (0) | TrackBack (0)
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Equity, therefore, does not permit property in land. For if one portion of the earth's surface may justly become the possession of an individual and may be held by him for his sole use and benefit as a thing to which he has an exclusive right, then other portions of the earth's surface may be so held; and eventually the whole of the earth's surface may be so held; and our planet may thus lapse into private hands.
— HERBERT SPENCER, in 1850, Social Statics, Chap. IX.
Posted on October 05, 2012 at 12:23 AM in a wedge driven through society, all benefits go to landholder , as much and as good, commons, commonwealth, corruption of economics, cui bono?, Earth for All, economic rent, enclosure, equal freedom, equality, FIRE sector, government's role, income concentration, land different from capital, land includes, land monopoly capitalism, landed gentry, landlordism, make land common property, money in elections, monopoly -- not the game, natural resources, no victims, poverty machine, poverty's cause, private property in land, privatization, privilege, rent-seeking, socializing risk and privatizing profit, special interests, the disenchanted, the right to life, time making wrongs into rights, toll-takers, wealth distribution or concentration | Permalink | Comments (0)
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In the early ages of society it would have been impossible to maintain the exclusive ownership of a few persons in what seems at first sight an equal gift to all (the land) — a thing to which everyone has the same claim.
— WALTER BAGEHOT (1826-1877), Economic Studies, Essay I., Part I., p. 31.
Posted on October 04, 2012 at 12:17 AM in a wedge driven through society, as much and as good, commons, commonwealth, corruption of economics, cui bono?, Earth for All, ecosystem services, income concentration, is this socialism?, landed gentry, landlordism, make land common property, monopoly -- not the game, natural resources, political economy, private property in land, privatization, property rights, rent-seeking, rich people's useful idiots, socializing risk and privatizing profit, special interests, the right to life, time making wrongs into rights, wealth distribution or concentration | Permalink | Comments (0)
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Let us suppose that a people is excluded from the ownership of the land. I say that this exclusion, even if followed by no other injustice (which I think impossible), by making a man a stranger to the commonwealth, makes him indifferent to the existence of the State.
— MARMONTEL, Address in Favor of the Peasants of the North (1757), Oeuvres, Vol X., p. 72.
Posted on October 03, 2012 at 12:03 AM in a Manhattan acre, absentee ownership, all benefits go to landholder , as much and as good, better cities, civilization, commons, commonwealth, corruption in government, Earth for All, enclosure, equality, fruits of one's labors, government's role, landed gentry, landlordism, make land common property, natural resources, pay for what you take, poverty machine, rent-seeking, socializing risk and privatizing profit, special interests, the disenchanted, the right to life, time making wrongs into rights, unemployment and underemployment | Permalink | Comments (0)
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That any human being should dare to apply to another the epithet "pauper" is, to me, the greatest, the vilest, the most unpardonable crime that could be committed. Each human being by mere birth has a birthright in this earth and all its productions; and if they do not receive it, then it is they who are injured, and it is not the "pauper," oh, inexpressibly wicked word! — it is the well-to-do who are the criminal classes.
— RICHARD JEFFERIES, The Story of My Heart, Chap. X., p. 122.
Posted on October 02, 2012 at 12:56 AM in charity and justice, commons, commonwealth, corruption of economics, Earth for All, economic justice, economic rent, ecosystem services, enclosure, equality, is this socialism?, land appreciates buildings depreciate, land different from capital, land includes, landlordism, make land common property, Natural Public Revenue, natural resource revenues, natural resources, no victims, pay for what you take, poverty machine, poverty's cause, private property in land, privatization, privilege, rich people's useful idiots, socialize, socializing risk and privatizing profit, the right to life, usufruct | Permalink | Comments (0)
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"But how is it that you allow these chiefs — landlords, don't you call them? — to taboo the soil, and prevent you all from even walking on it? Don't you see that if you choose to combine in a body, and insist upon the recognition of your natural rights — if you determined to make the landlords give up their taboo, and cease from injustice, they'd have to yield to you? And then you could exercise your natural right of going where you pleased, and cultivate the land in common for the public benefit, instead of leaving it as now, to be cultivated anyhow, or turned into waste, for the benefit of the tabooers?"
— GRANT ALLEN, The British Barbarians (Words spoken by Bertram).
Posted on September 12, 2012 at 12:50 AM in absentee ownership, common good, commons, commonwealth, Earth for All, ecosystem services, employment, enclosure, ending poverty, landed gentry, landlordism, make land common property, monopoly -- not the game, natural resources, one solution for many problems, pay for what you take, poverty's cause, private property in land, privatization, privilege, reaping what others sow, sharecropping, the land question, the right to life, toll-takers, underused land, unemployment and underemployment, wealth distribution or concentration | Permalink | Comments (0)
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The post below this one, "Mitt Romney's 'Fair Share' " refers to his fair share of the costs of providing public goods.
But perhaps an equally important question is the nature of one's fair share of the output of our economy and the output of the earth. Some of the former output is the result of individual efforts, and one ought to be able to keep that portion. But at the same time we must recognize how much comes from the division of labor, from drawing down on the non-infinite supply of non-renewable natural resources on which all of us today must depend and on which future generations of human beings must rely. Those who draw down more than their legitimate share owe something to the rest of the community. Our wealthiest tend, we suspect, to use many, many times their legitimate share, and the median American likely draws far more than their share, when one considers the planet as a whole.
Perhaps "legitimate" is not the right word here. It refers to what is permissible under current law. (The word gets misused a lot -- see the discussion on "legitimate rape," which seemed to be about the circumstances under which a woman has a right to make a specific very personal, decision, and when it is considered by some to not be left to her and is the province of government, legislators or others.)
What is one's "fair share" of natural resources? America is using a hugely disproportionate share of the world's resources. Are we entitled to it because we're somehow "exceptional"? Because "our" God is somehow better than other nation's Gods? Or do we genuinely believe that all people are created equal, and intend to live our lives accordingly?
Our output of greenhouse gases exceeds our share of the world's population. This is not without consequences for the world, and for peace on earth.
We ought to be re-examining our incentives so that they move us in the direction we ought to be going, which is, to my mind, using less. We can build transportation infrastructure which will permit many more of us to move around with less impact on the environment. We can fund that through collecting the increases in land value that infrastructure creates. We can correct the incentives which cause us to use today's inferior technologies to extract natural resources from the earth in ways which damage the environment, as if ours was the final generation, or the only one worth serious consideration.
Better incentives could reduce, eliminate, even reverse urban sprawl. I refer specifically to land value taxation as a replacement for the existing property tax, particularly in places where assessments are for one reason or another not consistent with current property values -- e.g., California and Florida, parts of Delaware and Pennsylvania which currently use assessments from the 1970s, and many other places where assessments are simply out of whack with current reality!) We should be replacing sales taxes, wage taxes, building taxes with taxes on land value and on natural resources. Most of that value is flowing generously into private or corporate pockets, to our detriment. It concentrates wealth, income, and, of course, political power.
Collecting the rent, instead of leaving the lion's share of it to be pocketed by the rent-seekers, would go a long way to making our society and our economy healthier. Eliminating the privilege of privatizing that which in a wisely designed society would be our common treasure would make our society a better place in which to live, a place in which all could thrive and prosper without victimizing their fellow human beings.
Posted on September 04, 2012 at 11:30 AM in all benefits go to landholder , America in the world, as much and as good, common good, commons, commonwealth, corporations, cui bono?, Earth for All, economic justice, economic rent, ecosystem services, environment, equal freedom, equal opportunity, equality, fruits of one's labors, greenhouse gases, incentive taxation, incentives, income concentration, infrastructure, inter-generational equity, land includes, land rent, land value created by community, land value taxation, Natural Public Revenue, natural resource revenues, natural resources, oil, pay for what you take, payroll tax, popular ignorance of land economics, privatization, privilege, property tax, property tax reform, Proposition 13, prosperity, special interests, sprawl, tax reform, toll-takers, unburdening the economy, unearned income, untaxing buildings, untaxing production, user fees, wealth distribution or concentration | Permalink | Comments (0)
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A major theme of the underlying political debate in the United States is the role of the state and the need for collective action. The private sector, while central in a modern economy, cannot ensure its success alone. For example, the financial crisis that began in 2008 demonstrated the need for adequate regulation.
Moreover, beyond effective regulation (including ensuring a level playing field for competition), modern economies are founded on technological innovation, which in turn presupposes basic research funded by government. This is an example of a public good – things from which we all benefit, but that would be undersupplied (or not supplied at all) were we to rely on the private sector.
Conservative politicians in the US underestimate the importance of publicly provided education, technology, and infrastructure. Economies in which government provides these public goods perform far better than those in which it does not.
But public goods must be paid for, and it is imperative that everyone pays their fair share. While there may be disagreement about what that entails, those at the top of the income distribution who pay 15% of their reported income (money accruing in tax shelters in the Cayman Islands and other tax havens may not be reported to US authorities) clearly are not paying their fair share. ...
I have to disagree with the second sentence of this next paragraph. And I think Stiglitz knows better, if he stops to think about it:
Democracies rely on a spirit of trust and cooperation in paying taxes. If every individual devoted as much energy and resources as the rich do to avoiding their fair share of taxes, the tax system either would collapse, or would have to be replaced by a far more intrusive and coercive scheme. Both alternatives are unacceptable.
The billionaire investor Warren Buffett argues that he should pay only the taxes that he must, but that there is something fundamentally wrong with a system that taxes his income at a lower rate than his secretary is required to pay. He is right. Romney might be forgiven were he to take a similar position. Indeed, it might be a Nixon-in-China moment: a wealthy politician at the pinnacle of power advocating higher taxes for the rich could change the course of history.
But Romney has not chosen to do so. He evidently does not recognize that a system that taxes speculation at a lower rate than hard work distorts the economy. Indeed, much of the money that accrues to those at the top is what economists call rents, which arise not from increasing the size of the economic pie, but from grabbing a larger slice of the existing pie.
Those at the top include a disproportionate number of monopolists who increase their income by restricting production and engaging in anti-competitive practices; CEOs who exploit deficiencies in corporate-governance laws to grab a larger share of corporate revenues for themselves (leaving less for workers); and bankers who have engaged in predatory lending and abusive credit-card practices (often targeting poor and middle-class households). It is perhaps no accident that rent-seeking and inequality have increased as top tax rates have fallen, regulations have been eviscerated, and enforcement of existing rules has been weakened: the opportunity and returns from rent-seeking have increased.
Today, a deficiency of aggregate demand afflicts almost all advanced countries, leading to high unemployment, lower wages, greater inequality, and – coming full, vicious circle – constrained consumption. There is now a growing recognition of the link between inequality and economic instability and weakness.
There is another vicious circle: Economic inequality translates into political inequality, which in turn reinforces the former, including through a tax system that allows people like Romney – who insists that he has been subject to an income-tax rate of “at least 13%” for the last ten years – not to pay their fair share. The resulting economic inequality – a result of politics as much as market forces – contributes to today’s overall economic weakness.
Posted on September 04, 2012 at 09:58 AM in common good, commons, cui bono?, economic rent, ecosystem services, financing education, financing health care, financing infrastructure, financing services, financing Social Security, FIRE sector, fixing the economy, government's role, highest salaries, income concentration, infrastructure, land includes, land rent, land value created by community, money in elections, Natural Public Revenue, natural resource revenues, natural resources, political economy, popular ignorance of land economics, privatization, privilege, public spending, reaping what others sow, rent, defined, rent-seeking, socializing risk and privatizing profit, special interests, Stiglitz, tax reform, time making wrongs into rights, toll-takers, unearned income, urban land value, wealth distribution or concentration | Permalink | Comments (0)
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seen on Twitter:
"If you extract economic rent from the value of your land, you didn't build that." -- Henry George http://en.wikipedia.org/wiki/Geoism
We -- WE! -- built that -- and we ought to be collecting it, month in and month out, and keeping our hands off what the individual or small business or corporation DID build. (Of course, this presumes that each of us is expected to compensate the community for the pollution we create, and the non-renewable resources we take.)
Not seldom a piece of barren ground or swamp, worth nothing in itself, becomes a source of huge fortune to him from the development of a town or a district, and he pockets the results of the labor of thousands upon thousands of men, and calls it his property.
— WILLIAM MORRIS, Signs of Change, p. 188.
Society will be changed from its basis when we make the form of robbery called profit impossible by giving labor full and free access to the means of fructification — i. e., to raw material.
— WILLIAM MORRIS, Signs of Change, p. 201.
The great social problem, then, that cannot fail ere long to appear in the arena of European discussion is, "to discover such a system as shall secure to every man his exact share of the natural advantages which the Creator has provided for the race; while, at the same time, he has full opportunity, without let or hindrance, to exercise his skill, industry, and perseverance for his own advantage."
— PATRICK EDWARD DOVE, Theory of Human Progression, (1850), Chap. III., Sec. 3, p. 305.
The social problem of the future we consider to be, how to unite the greatest individual liberty of action with a common ownership in the raw material of the globe, and an equal participation of all in the benefits of combined labor.
— JOHN STUART MILL, Autobiography, Chap. VII., p. 232.
Yes, ye may fill your garners, ye that reap
The loaded soil, and ye may waste much good
In senseless riot; but ye will not find
In feast or in the chase, in song or dance,
A liberty like his, who, unimpeached
Of usurpation, and to no man's wrong,
Appropriates nature as his Father's work,
And has a richer use of yours than you.
— COWPER, The Task, Book VI.
I thought this 110 year old article worth sharing. (See also, over at wealthandwant.com, the page on "ownership and possession.") Seems appropriate as we enter the celebration of the Declaration of Independence.
The Railroad trainman, Volume 19 - By Brotherhood of Railroad Trainmen
December, 1902, page 918
Florence A. Burleigh
THE recent coal strike has brought the subject of property rights to the minds of many people who had never before thought of it seriously. In a general way, most people think that no one should appropriate to himself what does not belong to him, and that every one has a right to keep what does belong to him. The only question is, what constitutes rightful ownership? Possession certainly does not, neither does any one rightfully own anything simply because he bought it and paid for it in "hard-earned money."
It is a little amusing to hear people argue that such and such a person — often a "poor widow" — owns a piece of land, a horse or a building because it was paid for in "hard-earned money." Is it his or hers any more because the money was hard to earn than if it was easily earned or came down from heaven like manna? Paying for a thing, whether with "hard-earned" money or money that is easily earned, gives no valid title; there must be a little back of that which is transferred or there is no rightful ownership. A man might buy a horse and pay to the seller its full value in gold; but if the horse had been stolen, no matter how many times it had been sold since, it belonged to the man from whom it was stolen. A man can give no better title to anything than he possesses, and title is not made by buying or selling.
Hard and unjust as were the demands of the mine owners in the recent coal strike, they are perfectly legitimate, if it is once conceded that those men or corporations own the mines. A man may do what he likes with his own if he does not aggress on other people's rights. If these men really owned the mines they had a perfect right to sit back and say to the miners, "You shall not work for us unless you come to our terms; there is nothing to arbitrate." They have a right to close their mines for as long a time as they choose, to offer only starvation wages, to compel their employes to trade at "pluck-in" stores, or to exact any other terms they may choose to impose if the mines are really theirs.
Ownership includes absolute control by the owner of the thing owned. If a man owns a tool, a piece of furniture or a watch, he is at liberty to break or burn it, or give it away if he does not care to use it. He may refuse to lend it to any but men with black hair or may put it in a glass case in his parlor if he chooses; it is nobody's business but his own what he does with it, so long as he injures no one else. It may be that he would be foolish, selfish in his disposal of it, but that is his own affair; the article is his without question — his to do with as he pleases.
So it is with mines or any other land; if a man really owns them and can show a good title, he has a right to "dictate terms'' to any one else who wants to use them or whom he wants to work for him; no one can justly interfere. But is the title to coal mines or other natural resources as good as that to labor products? Can it be traced back to the Creator? If so, private property in land is right; if not, private property in land is wrong.
Ownership comes from production -- production being used in the large sense to include exchange. If a man makes a hat it is his; if he exchanges the hat for a coat or a pair of shoes, they are also his because that for which he exchanged them was his. But how is it with land? Can anyone show a title from the producer? Henry George says in "Progress and Poverty," Book VII, Chapter 1: "What constitutes the rightful basis of property? . . . Is it not, primarily, the right of a man to himself, to the use of his own powers, to the enjoyment of the fruits of his own exertions? . . . As a man belongs to himself, so his labor when put in concrete form, belongs to him. And for this reason that which a man makes or produces is bis own as against all the world — to enjoy or to destroy, to use, to exchange, or to give. No one else can rightfully claim it, and his exclusive right to it involves no wrong to anyone else. Thus, there is to everything produced by human exertion a clear and indisputable title to exclusive possession and enjoyment which is perfectly consistent with justice as it descends from the original producer in whom it is invested by natural law. . . . . There can be to the ownership of anything no rightful title which is not derived from the title of the producer and does not rest upon the natural right of the man to himself. There can be no other rightful title because, (first) there is no other natural right from which any other title can be derived, and (second) because the recog nition of any other title is inconsistent with and destructive of this.
" . . . If production give to the producer the right to exclusive possession and enjoyment, there can rightfully be no exclusive possession and enjoyment of anything not the production of labor and the recognition of private property in land is wrong. For the right to the produce of labor cannot be enjoyed without the right to the free use of the opportunities offered by nature, and to admit the right of private property in these is to deny the right of property in the produce of labor."
Herbert Spencer, in the unrevised edition of "Social Statics," Chapter 9, said: "Either men have the right to make the soil private property or they have not. . . . . If they have such a right, then is that right absolutely sacred, not on any pretense to be violated. . . . If they have such a right, then it would be proper for the sole proprietor of any kingdom — a Jersey or a Guernsey, for example — to impose just what regulations he might choose on its inhabitants — to tell them that they should not live on his property unless they professed a certain religion, spoke a particular language, paid him a specified reverence, adopted an authorized dress and conformed to all other conditions he might see fit to make. . . . There is no escape from these inferences. They are necessary corollaries to the theory that the earth can become individual property. And they can only be repudiated by denying that theory."
These quotations are given not because Mr. George or Mr. Spencer or anyone else is infallible, but because the conclusions are irrefutable if once the premises are granted and it is inconceivable that anyone who is at the same time thoughtful, intelligent and fair can deny the premises.
It may be that the statute law allows private property in land, but statute law never of itself made right. Statute law has always winked at or allowed much wrong and injustice, but notwithstanding that, piracy and chattel slavery were finally abolished. When the majority of people come to see the enormous and fundamental wrong in private ownership of land, they will change the laws and wonder how they could have been so blind before as to think that private ownership, in what was not and never could be made by man, was right.
When once the right of all men to the use of the earth is recognized and land is free for all to use as long as they pay to the community the value of that use, then labor will be really free and employers will find that they cannot get a man to work for them unless they treat him justly and fairly.
Imagine a man saying to his physician, "I will not employ you unless you will trade at my store, profess my religion and vote the ticket I tell you to!" The idea is preposterous; yet it is not essentially different from what we see about us everywhere. The sick man employs his physician in essentially the same way that he employs his coachman or his tailor, but the physician is a free agent and the coachman is not, yet both do him a service.
It is seldom that people see that anyone who works for them does them a service, yet that is the case. A rather amusing incident which illustrates this point happened not so long ago at an out of the way town where there are no very poor and no very rich people. A lady who was spending the summer in this place needed extra help and went to ask for it from a woman who had occasionally helped in an emergency, but who at this time did not, for reasons of her own, care to go out to cook even for a day. The burden of the would-be employer's sad song was not so much that she was inconvenienced by the woman's refusal, but that she (the lady) had so kindly and generously offered work and it was scorned. The truth probably was that the woman did not want the small amount of money she would have received as much as she wanted to stay at home and, fortunately, she was free to make her own choice which is not often the case. The reverse of this is so generally the rule that it is a pleasure to occasionally find workers who can afford to be independent. Sometime, when enough people see the injustice of our present social conditions, when we have real freedom and equality, men will not need to almost sell their souls in order to keep their bodies alive for employers will not ask anyone to do it, as they would know it would be useless. Competition will be free and both sides can make a fair bargain, not only between employers and employes, but between all business men.
Among the proper subjects for ownership the one which stands pre-eminent among the others is the man himself. A man's ownership of himself is one of the most sacred things in the world, for it includes his right to freedom of thought, speech and action and the just claim to the product of his labor. It means that every man will have a chance to make the most of himself without interference from anybody.
Let us, then, do what we can to bring about this condition that the world may be the better for our having lived in it, and the next generation may enjoy their right to "life, liberty and the pursuit of happiness.''
The land it is the landlord's,
The trader's is the sea,
The ore the usurer's coffers fills —
But what remains for me?
— ERNEST JONES (1819-1868), The Song of the Wage-Slave, Songs of Freedom, p. 130.
I came across an excellent site at http://www.resourcerentalsrevenue.org, and thought their FAQ page particularly worth sharing. The links will take you to answers.
We don't HAVE to burden ourselves and our economy with taxes which throw a wet blanket on jobs, on production, on homes. There is a better way to finance our common spending!
The following list comprises the most commonly asked questions about the concept of making land and resource rentals the source of revenue for government. As you continue this study, you will see the value from giving resources the respect they deserve and the benefits resulting from the freeing of labour, production and exchange from taxation. If you have any questions which are not covered here, or observations you would like to put to our panel, please feel free to do so by sending your question as an e-mail query and we will attempt to respond.
The inclusion of land and resources in the economic equation is central to any solution for revenue raising. A taxation solution which does not consider the nature of taxation itself and allows the continuing private monopolisation of community land and resources fails to recognise the essential role land plays in the economic equation and will not work. Land is the only element in the economic equation which is both fixed and finite. It can be monopolised. It is a unique class of asset which must be treated accordingly. If we were to wrest not the land itself, but its unimproved value from private monopolies and return the value to the community — whose very presence creates it — then we would have reduced many problems in one stroke with great benefit to production, to the environment and to the cause of individual freedom and justice.
On the subject of land and resource rents, Henry George said this:
Posted on June 13, 2012 at 02:44 PM in a Manhattan acre, better cities, capital gains are land gains, common good, commonwealth, connect the dots, Earth for All, equal freedom, equal opportunity, equality, facilitating commerce, financing education, financing health care, financing infrastructure, financing services, fixing the economy, government's role, Henry George, housing affordability, justice of the single tax, land speculation, land value created by community, land value taxation, make land common property, monopoly -- not the game, natural monopolies, Natural Public Revenue, natural resource revenues, natural resources, one solution for many problems, opportunity, pay for what you take, popular ignorance of land economics, private property in land, privatization, privilege, property rights, public spending, sales taxes are wrong, special interests, sufficiency of land rent, tax reform, taxation, toll-takers, unearned income, unearned increment, unemployment and underemployment, untaxing buildings, untaxing production, user fees | Permalink | Comments (0)
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This excerpt makes some important points about a number of topics this blog focuses on:
I look forward to reading the book. I'll be curious to see whether Professor Stiglitz gets into what we can do via reforming our tax system to reduce the amount of rent that is available for private and corporate rent-seekers. Treat rent as our COMMON asset... Natural Public Revenue!! Don't leave it there for corporations to privatize.
It is no accident that the periods in which the broadest cross sections of Americans have reported higher net incomes — when inequality has been reduced, partly as a result of progressive taxation — have been the periods in which the U.S. economy has grown the fastest. It is likewise no accident that the current recession, like the Great Depression, was preceded by large increases in inequality. When too much money is concentrated at the top of society, spending by the average American is necessarily reduced — or at least it will be in the absence of some artificial prop. Moving money from the bottom to the top lowers consumption because higher-income individuals consume, as a fraction of their income, less than lower-income individuals do.
In our imaginations, it doesn’t always seem as if this is the case, because spending by the wealthy is so conspicuous. Just look at the color photographs in the back pages of the weekend Wall Street Journal of houses for sale. But the phenomenon makes sense when you do the math. Consider someone like Mitt Romney, whose income in 2010 was $21.7 million. Even if Romney chose to live a much more indulgent lifestyle, he would spend only a fraction of that sum in a typical year to support himself and his wife in their several homes. But take the same amount of money and divide it among 500 people — say, in the form of jobs paying $43,400 apiece — and you’ll find that almost all of the money gets spent.
The relationship is straightforward and ironclad: as more money becomes concentrated at the top, aggregate demand goes into a decline. Unless something else happens by way of intervention, total demand in the economy will be less than what the economy is capable of supplying — and that means that there will be growing unemployment, which will dampen demand even further. In the 1990s that “something else” was the tech bubble. In the first decade of the 21st century, it was the housing bubble. Today, the only recourse, amid deep recession, is government spending — which is exactly what those at the top are now hoping to curb.
The “Rent Seeking” Problem
Here I need to resort to a bit of economic jargon. The word “rent” was originally used, and still is, to describe what someone received for the use of a piece of his land — it’s the return obtained by virtue of ownership, and not because of anything one actually does or produces. This stands in contrast to “wages,” for example, which connotes compensation for the labor that workers provide. The term “rent” was eventually extended to include monopoly profits — the income that one receives simply from the control of a monopoly. In time, the meaning was expanded still further to include the returns on other kinds of ownership claims. If the government gave a company the exclusive right to import a certain amount of a certain good, such as sugar, then the extra return was called a “quota rent.” The acquisition of rights to mine or drill produces a form of rent. So does preferential tax treatment for special interests. In a broad sense, “rent seeking” defines many of the ways by which our current political process helps the rich at the expense of everyone else, including
- transfers and subsidies from the government,
- laws that make the marketplace less competitive,
- laws that allow C.E.O.’s to take a disproportionate share of corporate revenue (though Dodd-Frank has made matters better by requiring a non-binding shareholder vote on compensation at least once every three years), and
- laws that permit corporations to make profits as they degrade the environment.
The magnitude of “rent seeking” in our economy, while hard to quantify, is clearly enormous. Individuals and corporations that excel at rent seeking are handsomely rewarded. The financial industry, which now largely functions as a market in speculation rather than a tool for promoting true economic productivity, is the rent-seeking sector par excellence. Rent seeking goes beyond speculation. The financial sector also gets rents out of its domination of the means of payment — the exorbitant credit- and debit-card fees and also the less well-known fees charged to merchants and passed on, eventually, to consumers. The money it siphons from poor and middle-class Americans through predatory lending practices can be thought of as rents. In recent years, the financial sector has accounted for some 40 percent of all corporate profits. This does not mean that its social contribution sneaks into the plus column, or comes even close. The crisis showed how it could wreak havoc on the economy. In a rent-seeking economy such as ours has become, private returns and social returns are badly out of whack.
In their simplest form, rents are nothing more than re-distributions from one part of society to the rent seekers. Much of the inequality in our economy has been the result of rent seeking, because, to a significant degree, rent seeking re-distributes money from those at the bottom to those at the top.
But there is a broader economic consequence: the fight to acquire rents is at best a zero-sum activity. Rent seeking makes nothing grow. Efforts are directed toward getting a larger share of the pie rather than increasing the size of the pie. But it’s worse than that: rent seeking distorts resource allocations and makes the economy weaker. It is a centripetal force: the rewards of rent seeking become so outsize that more and more energy is directed toward it, at the expense of everything else. Countries rich in natural resources are infamous for rent-seeking activities. It’s far easier to get rich in these places by getting access to resources at favorable terms than by producing goods or services that benefit people and increase productivity. That’s why these economies have done so badly, in spite of their seeming wealth. It’s easy to scoff and say: We’re not Nigeria, we’re not Congo. But the rent-seeking dynamic is the same.
LVTfan here: Think what would happen if we SOCIALIZED rents, and substituted them as our revenue source for all the taxes we pay ... sales taxes, wage taxes, building taxes, excise taxes ...
Recall what Leona Helmsley told us: "WE don't pay taxes. The little people pay taxes." Think what a weight would be lifted off our economy if those taxes were taken off the produces of labor, and put onto Rent, in all its forms!
As introduced on June 6, 2011
S. 1144 would require the Department of the Interior (DOI) to charge a 2 percent royalty on the value of soda ash produced on federal lands through 2016. Under current law, CBO expects that the royalty rate would remain at 6 percent over that period. CBO estimates that implementing S. 1144 would reduce net federal offsetting receipts from soda ash royalties by $75 million over the 2013-2016 period; therefore, pay-as-you-go procedures apply. Enacting S. 1144 would not affect revenues.
CUI BONO? Seems to me that the states involved lose revenue and the Federal Government loses revenue! What a deal!!! A lose, lose, lose situation! Whose resources are we talking about anyway? (Hint: corporations are not we-the-people! Aren't WE nice to give THEM low royalties on OUR natural resources?)
Here's more from the CBO paper; I've omitted the tables because they don't reproduce well:
S. 1144 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of S. 1144 is shown in the following table. The costs of this legislation fall within budget function 300 (natural resources and environment).
By Fiscal Year, in Millions of Dollars
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013-2017 2013-2022
CHANGES IN DIRECT SPENDING
Estimated Budget Authority 30 15 15 15 0 0 0 0 0 0 75 75
Estimated Outlays 30 15 15 15 0 0 0 0 0 0 75 75
BASIS OF ESTIMATE
For this estimate, CBO assumes that the legislation will be enacted near the end of 2012.
S. 1144 would reduce the royalty rate on the value of soda ash produced on federal lands from 6 percent to 2 percent over the 2013-2016 period. Based on information from the Bureau of Land Management, CBO expects that, under the bill, firms that paid 6 percent in royalties during 2012 would receive refunds in 2013 of any amounts in excess of the 2 percent rate established by the bill. In addition, because CBO expects that royalty rates charged for soda ash production on state and private lands would be higher than 2 percent, we also expect that, under the bill, the amount of soda ash produced on federal lands would be higher over the next four years than it would be under current law. However, CBO estimates that any increase in production would only partially offset the loss of receipts from lowering the royalty rate through 2016.
In 2011, the last time the royalty rate was set at 2 percent, firms produced 8.8 million tons of soda ash on federal lands and paid royalties totaling $22 million. Based on information from DOI regarding soda ash production and royalty collections through the first half of 2012 (when the royalty rate increased to 6 percent), CBO estimates that firms will produce 7.2 million tons of soda ash on federal lands in 2012 (a decline of roughly 20 percent from 2011) and will pay gross royalties totaling $44 million (double the amount collected in 2011). Thus, under current law, we estimate that, after payments to states of half the gross proceeds, net receipts to the federal government in 2012 will total $22 million. If S. 1144 is enacted, we expect that DOI would refund about $15 million of that amount to firms in 2013. CBO also estimates that implementing the bill would reduce receipts in each year over the 2013-2016 period by a similar amount. In total, CBO estimates that enacting S. 1144 would reduce net offsetting receipts from soda ash royalties by $75 million over the 2013-2016 period.
The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or revenues. The net changes in outlays
that are subject to those pay-as-you-go procedures are shown in the following table.
CBO Estimate of Pay-As-You-Go Effects for S. 1144 as introduced on June 6, 2011
By Fiscal Year, in Millions of Dollars
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012-2017 2012-2022
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact 0 30 15 15 15 0 0 0 0 0 0 75 75
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
S. 1144 contains no intergovernmental or private-sector mandates as defined in UMRA.
The royalty reduction required by the bill would temporarily reduce federal payments to California, Colorado, New Mexico, and Wyoming by a total of $75 million over the 2013-2016 period.
PREVIOUS CBO COST ESTIMATE
On June 5, 2012, CBO transmitted a cost estimate for H.R. 1192, the Soda Ash Royalty Extension, Job Creation, and Export Enhancement Act of 2012, as ordered reported by the House Committee on National Resources on May 16, 2012. S. 1144 is similar to H.R. 1192, and the CBO cost estimates are the same for those bills.
ESTIMATE PREPARED BY:
Federal Costs: Jeff LaFave
Impact on State, Local, and Tribal Governments: Melissa Merrell
Impact on the Private Sector: Amy Petz
ESTIMATE APPROVED BY:
Theresa Gullo, Deputy Assistant Director for Budget Analysis
I should myself deny that the mineral treasures under the soil of a country belong to a handful of surface proprietors in the sense in which these gentlemen appeared to think they did.
— LORD CHIEF JUSTICE COLERIDGE, The Laws of Property, Address before the Glasgow Juridical Society, Macmillan's Magazine, April, 1888, p. 407.
The masthead for "The New Earth" -- by 1899 already in volume XI -- says "Devoted to the study and illustration of Social Problems on Moral and Religious Grounds."
Below that, each issue says,
TO EFFECT THIS,
In our address "To our readers " last month we advanced the proposition, which indeed is an almost self-evident truth, that the better side of human nature, the side of him which lifts man above mere animalism and materialism, which enables him to transcend mere self-seeking and to find his highest delight in ministering to the welfare of others, requires for its orderly growth and development, social and material conditions which shall parallel, correspond to or embody this better side of us. We maintained that it was as irrational on the part of sincere religious-minded people to expect the graces of the spirit to flourish in social conditions which bear no relation to these graces save that of inveterate antagonism to them as it would be on the part of a farmer to expect a crop of wheat from seed sown on the sand of a rainless desert. Social conditions are, of course, no more the cause of the higher life of man, than fertile ground is the cause of the crop. They are simply the soil in which the higher life can germinate and be nursed to maturity. The cause in the one case is within man himself, as in the other it is within the seed; in both cases it is the creative energy.
But man, both as an individual and as a race, is at first unconscious of this better nature of his, as well as of the kind of life of which it is capable, and through which it must eventually express itself. He becomes conscious of this part of himself by degrees, one step at a time. This process is called evolution. But all evolution necessitates a corresponding previous involution. No plant can grow, or be evolved, from a seed unless the germ of the plant first exist within the seed. So in the case of mankind, no advance in social development is possible unless the germ of better social conditions be within man himself.
Of this germ within it mankind becomes conscious slowly and as the years and ages roll by. It first takes the form of aspirations, and longings and hopes for gentler, humaner and juster relations between men, and of clearer and ever clearer perceptions in respect to the character of the Creator and His relations to His creatures. But these aspirations and perceptions must ever remain as dreams more than any thing else, and even then be confined to a few, until they become sensibly imaged or embodied in corresponding social conditions.
That society as at present organized bears true relation neither to our best aspirations nor to the conceptions of the character of the Creator entertained by every intelligent mind needs no showing. That our Creator and source of life should be a respecter of persons, that He should consider some of His creatures as more fitting objects of His regard than others, that He should provide for the eternal progress of some and leave that of others unprovided for, is a conception of Him utterly discarded by every man today whose mental growth has gone beyond that of the dark ages. But such gross conception of the Creator is just that of which organized society at this day is an embodiment. The kind of ownership of the natural opportunities with which we invest some among us is a representative picture of a conception of the Creator that makes Him a capricious, unjust monarch, granting privileges to a few favorites, and venting His spleen on all others. This is the only kind of conception of His character possible to the great mass of human beings as long as such conditions exist. Preach as we may, institute revivals of religion as we may, no other conception of the Creator can germinate, bear fruit and be a reality among us than this pagan and savage one.
To every honest holder of the more enlightened conceptions of the character of the Creator, then, the questions at once present themselves: What are the principles which society must recognize in order that social and material conditions may fittingly reflect these conceptions; and what can I do to bring about these conditions? True belief, especially on a subject of this kind, must lead to action. The self-satisfaction of entertaining more enlightened convictions than others, and being content with that, is the most hideous form of unbelief.
The answer to these questions is not hard to discover. Organized society, in order that it make any approach to the conditions required of it as a soil in which may flourish true ideas of spiritual life must recognize the equal right of all its members in the bounties of nature and the opportunities offered by the general advance of civilization. It must find means jealously to protect these rights amid all the changing and more and more complex conditions which every progressing body of people must experience.
We, now, unhesitatingly assert that only by building upon the Single Tax ideal can these rights be maintained. In no other way can any real equality of opportunity be assured to every one. When the rental value of land, and nothing but that, is taken through taxation and spent for public needs, opportunities for making a living become open to all more equally than would be possible under any artificially devised scheme of government control. The Single Tax would do the work automatically, and without the the friction and consequent waste of power involved in any direct control and allotment of opportunities by the government.
The Single Tax would, moreover, provide another requirement of orderly social conditions. It would make every man work out his own material salvation, and so embody to us the truth that every man must work out his own spiritual salvation. Under the Single Tax there would be no royal road to the acquisition of material wealth, even as there is no royal road to the acquisition of mental wealth or of spiritual riches.
I came across this in my files, and thought it worth sharing. It fills a regular sheet of paper.
No one generation of people
has a greater right to the
use of the planet
God didn't make a plan like
Inquire within or call 727-784-3543
It is well known that these materials and agencies, as fast as they become available, are in the main appropriated by individuals, through the agency or consent of the government, and are then held as private property. Such is the case with the soil and the minerals beneath it. The owners of this property charge as much for the use of it as if it were their own creation, and not that of nature.
— PROF. SIMON NEWCOMB, The Labor Question, North American Review, July, 1870, p. 151.
a link and a longer except follow ...
Posted on April 23, 2012 at 12:23 AM in all benefits go to landholder , capital gains are land gains, commons, commonwealth, corruption in government, cui bono?, Earth for All, ecosystem services, environment, government's role, income concentration, is this socialism?, land different from capital, land includes, land speculation, landed gentry, landlordism, leased land, location, location, location, make land common property, monopoly -- not the game, natural resource revenues, natural resources, oil, popular ignorance of land economics, poverty's cause, private property in land, privatization, privilege, property rights, rent, defined, socializing risk and privatizing profit, special interests, time making wrongs into rights, toll-takers, unearned income, wealth distribution or concentration | Permalink | Comments (0)
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Land, which nature has destined to man's sustenance, is the only source from which everything comes, and to which everything flows back, and the existence of which constantly remains in spite of all changes. From this unmistakable truth it results that land alone can furnish the wants of the state, and that in natural fairness no distinctions can be made in this.
— EMPEROR JOSEPH II., in Oestreichische Geschichte fur das Volk, Vol. XIV. (Vienna, 1867).
Posted on March 30, 2012 at 12:43 AM in common good, commons, commonwealth, Earth for All, economic justice, ecosystem services, enclosure, equality, government's role, justice of the single tax, land rent, landed gentry, make land common property, Natural Public Revenue, natural resource revenues, natural resources, private property in land, privilege, socialize, sufficiency of land rent, unburdening the economy | Permalink | Comments (0)
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BY HENRY WARE ALLEN
from Land and Freedom, 1938
As our time honored political maxims become hackneyed they are very apt to pass into what Grover Cleveland would call innocuous desuetude. We subscribe to the sentiment that "eternal vigilance is the price of liberty" and yet little is done to counteract those aggressive forces which nullify that freedom which we profess to prize so highly. Even the prayer, "Thy Kingdom Come," is repeated as a mere wish that something good would happen rather than with a determination to bring about those righteous conditions which make for a heaven on earth. Possibly the most neglected of all of our national ideals is our professed adherence to that most democratic of all maxims, "Equal rights for all and special privileges for none." For at the present time our country is honeycombed with special privilege that has become so entirely entrenched as to be regarded on all sides as vested right. Special privilege is condoned by force of its familiarity. Like vice it is endured, then pitied, then embraced.
There lived in a Colorado city years ago a housewife who made convenient use of coal cars on the side track across the street from her dwelling with which to replenish her stock of fuel. This she did without any qualm of conscience but as a special privilege which, by the sanctifying touch of time had grown into a vested right. This woman doubtless was punctilious in the ordinary obligations of life and would have hotly resented any statement to the effect that she was stealing coal. She was guided by that all too common kind of honesty which is based upon expediency rather than principle. Not on any account would she have withheld what was due from her to a neighbor who would have suffered by her delinquency, but the advantage to her of getting this coal was so great and the loss to some impersonal owner of same, mine, railroad, or smelter, was relatively so negligible that the argument was all in favor of her acting in her own interest without question. No personal equation was involved and if at first there had been any hesitation on her part of this practice, that was long ago a thing of the past. But the railroad company put a watchman on guard and her supply of fuel was thereby stopped. She then turned to the local charity organization with request for a continuation of the supply which had thus been rudely taken from her and the very righteous indignation with which she told her story was ample proof of entire absence of comprehension on her part that she had been stealing.
This incident, which is a true story, illustrates very nicely the evolution and the nature of that special privilege which eventually becomes a vested right. And if the searchlight of analysis is turned upon our social system we may be surprised to find the presence of special privilege in unexpected places and of a volume that is, in the aggregate, enormous.
As a basis for this inquiry it may be well to state the fundamental truth that property may be secured in three ways only; first, by labor; second, by gift; and third, by theft. If this test is repeatedly kept in mind, the task will become easier. One of the commonest forms of special privilege is that which is provided under ninety-nine year leases on valuable business property sites. These leases convey to the owner of the land a stipulated income after the tenant has paid all taxes and expenses. In the parlance of political economy this revenue consists of what John Stuart Mill defined as unearned increment, a value which is produced by no individual but which is purely the result of population reflected upon desirable locations. For this revenue to be turned over to individuals as is now the unquestioned custom in all of our large cities and to an amount of billions of dollars annually is a procedure which is precisely in the same class as the stealing of coal from the railroad car by the Colorado housewife.
A much larger source of public revenue which is diverted to individuals is that of the rent of valuable property in excess of a fair interest return upon the intrinsic value of improvements on the property. This applies to practically all property located at the center of our large cities and involves enormous revenues. There is a mixture here of legitimate return on capital invested with the unearned increment which belongs absolutely to society but the case is not less clear on that account.
Another prolific source of public revenue which is diverted to individuals is that which comes from the lucky possession of oil wells. This possession frequently gives incomes of thousands of dollars daily to those who have no more claim on such revenue than is involved in the possession of the land upon which the wells were developed. The wealth that has by this means been given to certain sections of the country and certain groups of people has run into the billions of dollars. The Osage tribe of Indians in Oklahoma are said to have been made the richest people in the world due to this special privilege. Such beneficiaries are no more justly entitled to the revenue which they receive than was the Colorado woman justified in stealing coal from the railroad car. It will be said that the oil industry involves a great deal of capital and that many dry wells are paid for before a single producing well is developed. This is true and therefore makes the proposition somewhat more complicated but does not alter the conclusion.
Another source of revenue which diverts public funds into private hands is speculation in land. Purchase of inside property sure to increase in value is the one investment that has been invariably recommended by shrewd financiers. This speculation is far greater than has been generally realized. More than one-half the area of New York City consists in vacant lots which are held out of use for speculative purposes, and the same is true of all our larger cities. Incidentally, this speculation has the effect of enhancing the selling price of desirable land to artificially high figures. When land which is purchased with a hope of subsequent rise in value, the investor practically lays a trap by which he may secure values that rightfully belong to the community. And this process makes an artificial scarcity of land with consequent artificially high cost to those who must use it. This process of securing a profit, of getting something for nothing, is persistently the same in character as that by which the Colorado housewife secured her supply of coal. Here again objection may be interposed to the effect that land frequently has to be sold for less than it cost. This is an objection that was raised by no less an economist than Francis A. Walker, the foremost critic of Henry George during his lifetime. General Walker exclaimed, "Mr. George has much to say about unearned increment: He says nothing, however, about unrequited decrement." Mr. George's rejoinder to this was an expression on his part of his inability to discuss the problem with one who spoke of unrequited decrement in something which originally had no value. In other words, so far as society is concerned its interest is only in the rental value which is produced from year to year and which rises or fall accordingly as population grows or wanes. The important fact is that this increment, whether large or small, belongs to the community which produced it.
The most spectacular form of special privilege which we have to deal with today is that provided by the protective tariff. This protection enables the America manufacturer to secure an artificially high price for his product. The common argument in support of the protective system is that the American standard of living must be maintained by this artificial means, but this argument falls to the ground, if at the same time, we permit any improvement in labor-saving machinery which naturally has far greater effect upon the labor market than is produced by the competition of merchandise imported from abroad. The enormity of special privilege due to the tariff is perhaps more conspicuous in the State of Pennsylvania than elsewhere, a single family in Pittsburgh, the direct beneficiaries of the tariff on aluminum, being reputed to be worth in excess of $2 billion. There will be found that, with a few rare exceptions, the great fortunes of America are based upon special privilege of one kind or another.
Although there are many minor sources of special privilege which are embedded in our political and social institutions, those above enumerated are the principal ones.
The special privileges provided by legislative action at Washington are in a different class from those which have become a regular part of our system of taxation but are none the less to be condemned. The most flagrant of these in recent times was the appropriation by Congress and approved by President Hoover, of $500,000,000 of tax payers' money for the specific purpose of stabilizing or artificially enhancing the price of wheat, cotton, and other farm products. It was presumed by the makers of this law that it would have the effect of giving artificial advantage to the farming class, which would offset in a measure the special privileges which had been given so generously to Eastern interests by means of the protective tariff. The plea for this farm legislation was repeatedly based upon that consideration. It so happened that even the immense waste of money involved by the farm marketing act was negligible as an influence in the world wide markets and that it did not affect in any considerable degree the law of supply and demand upon the prices of the agricultural products which were supposed to be favored. But the very fact that this legislation was put through with little opposition furnished a very good illustration of the fact that special privilege legislation is regarded as perfectly legitimate. And this has been further illustrated in monstrous degree by the New Deal legislation under President Roosevelt.
There is everywhere consciousness of a mysterious force which is responsible for easily acquired fortunes on one hand together with an increase of unemployment and consequent lower incomes on the other hand. Each succeeding census report makes more appalling this undemocratic and unjust condition in our social fabric.
If prosperity is to be secure, there must be an end to special privilege of every kind, and a system of taxation inaugurated in place thereof which shall be based upon justice to all. Henry George has demonstrated how this should be done.
Posted on March 19, 2012 at 11:44 AM in absentee ownership, all benefits go to landholder , land speculation, landed gentry, leased land, location, location, location, Natural Public Revenue, natural resource revenues, natural resources, oil, popular ignorance of land economics, population, privilege, protection or free trade, subsidies, tariffs, time making wrongs into rights, triple net leases, underused land, unearned income, unearned increment, urban land value, wealth distribution or concentration | Permalink | Comments (0)
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38. Mining companies which mine on public lands pay far less to the Federal government than they pay on privately held lands.
A. That's fair, because the private landholders are better negotiators
B. That's fair, because the 1872 Mining Act set the price, and it wouldn't be fair to change the business environment after setting the rules.
C. That's fair. Corporations need subsidies to create jobs.
D. That's unfair, and the federal government should be getting just as much from the miners as the private landholders are getting
E. That's unfair, and not only should the federal government be getting more from the mining companies, but the federal government should be collecting a significant portion of the royalties now privatized by private and corporate landholders, since we're all equally entitled to nature's bounty. This would permit us to reduce other taxes on wages and production, and perhaps lead to a citizen's dividend, similar to the Alaska Permanent Fund
F. That's unfair, because the 1872 Mining Act was based on old prices and old mining technology.
G. Your reactions?
Posted on March 08, 2012 at 02:15 AM in all benefits go to landholder , as much and as good, common good, commons, commonwealth, conservatism, corporations, corruption in government, cui bono?, Earth for All, economic rent, enclosure, financing education, financing health care, financing infrastructure, financing services, financing Social Security, financing war, government's role, justice of the single tax, land includes, land rent, make land common property, Natural Public Revenue, natural resource revenues, natural resources, oil, pay for what you take, privatization, privilege, special interests, subsidies, the land questions, wealth distribution or concentration | Permalink | Comments (1)
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37. Our ancestors bought or stole the land which the ancestors of some of those now identified as "Native Americans" relied on. How should we and our children pay back them and their children?
A. By giving them the privilege of selling cigarettes without taxes, forgoing revenue that could help meet the health costs associated with smoking, both for smokers and for those who live with them.
B. By giving them the privilege of running casinos, even if a percentage of that revenue must be contributed to the state, and even if gambling is creates tremendous problems for some individuals in society, beyond those who actually gamble.
C. By collecting from everyone who owns land and natural resources the annual economic value, and giving everyone a per-capita share of those resources, every year, forever. (Similar to the Alaska Permanent Fund)
D. By collecting from everyone who owns land and natural resources the annual economic value, and giving everyone a per-capita share of those resources, every year, forever, and providing a double share to those who are starting from a disadvantaged position for some fixed number of years
E. By collecting from everyone who owns land and natural resources the annual economic value, paying the costs of government and common spending from that source, producing equal opportunity for all.
F. Your suggestions?
Posted on March 07, 2012 at 02:50 AM in Alaska Permanent Fund, common good, cui bono?, Earth for All, economic justice, economic rent, ending poverty, equal freedom, equal opportunity, equality, facilitating commerce, financing education, financing health care, financing infrastructure, financing services, financing Social Security, franchises, government's role, inter-generational equity, is this socialism?, justice of the single tax, land rent, make land common property, Natural Public Revenue, natural resource revenues, natural resources, one solution for many problems, private property in land, privilege, Social Problems, special interests, the land questions | Permalink | Comments (0)
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30. What should we do with our public lands?
Posted on March 01, 2012 at 09:54 AM in commons, corporations, corruption in government, cui bono?, economic rent, government's role, land rent, leased land, make land common property, marginal land, Natural Public Revenue, natural resource revenues, natural resources, pay for what you take, popular ignorance of land economics, privilege, special interests, subsidies, the land questions, underused land, water | Permalink | Comments (0)
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25. Fares on inter-city public transportation may not be high enough to finance all the costs of providing the transportation. Does that mean that it is a poor investment?
17. There's a conflict in Israel. What's the real issue?
B. Armageddon / Apocalype
C. Land -- everyone needs secure access to some if they are not to be subject to others
D. Differences in religious tradition.
F. Your suggestions?
Posted on February 17, 2012 at 05:25 AM in all benefits go to landholder , better cities, cui bono?, Earth for All, equal freedom, equality, fruits of one's labors, justice of the single tax, land value taxation, make land common property, natural resources, one solution for many problems, pay for what you take, popular ignorance of land economics, population growth, reaping what others sow, tax reform, teach your children well, the land questions, urban land value, water | Permalink | Comments (0)
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16. How should we pay for the war in Afghanistan?
A. Don't worry about that. Our children should pay for it, and their children if necessary, with interest accumulating. The economy will grow sufficiently that it will not unduly burden them.
B. We should pay for it via federal taxes on wages.
C. We should pay for it via a federal tax on sales (or consumption).
D. We should pay for it via a federal tax on land value; people and corporations (domestic or foreign) who own land in midtown Manhattan or downtown Los Angeles would pay a lot; those who own rural property would pay little or nothing. Tenants' rents -- residential, commercial, agricultural -- would cover their share, and be collected from landlords.
E. We should pay for it via royalties on non-renewable natural resources. (Whose natural resources? from U.S. soil? from Afghanistan soil? other?)
F. Your suggestions?
Posted on February 16, 2012 at 05:15 AM in financing war, income tax, inter-generational equity, land value taxation, location, location, location, natural resource revenues, natural resources, oil, pay for what you take, payroll tax, public spending, sales taxes are wrong, the disenchanted, the land questions | Permalink | Comments (0)
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15. We were at war in Iraq. What was the real issue?
A. Oil revenues: who gets them?
B. A stable supply of oil -- don't worry about who gets the revenues
C. Providing water systems, electricity, schools for the people of Iraq
D. Providing a safe period in which they can replicate 250 years of American experience and develop government structure to provide security, infrastructure, etc.
E. your suggestions?
15a. We're in Afghanistan. Is it about that country's natural resources?
12. Foreign corporations own the water utilities in parts of New England. Often these companies came with significant acreage on picturesque reservoirs, some within easy commuting distance of New York City. Water is a vital resource, and the infrastructure which supplies it and cleans it is vital to everyone. In other places, including NYC, municipal utilities supply the water. Is private ownership of the water supply acceptable?
A. Sure! Why not?
B. As long as it is regulated by stong public utility commissions
C. No, this should be a public function.
D. Private ownership is fine, as long as it is American corporations. They'll take care of us, and not overcharge us.
E. This is a natural monopoly situation, and rightly should be owned by the local, county or state government, or some local public entity. Clean water is too important to leave to the private sector, even where the supply is abundant.
F. Your suggestions?
10. The advent of digital TV freed up many broadcast frequencies. What should we do with them?
A. Give them to the media companies, in proportion to their current share of market. Let them decide what to do with them; after all, they are the experts.
B. Give them to the media companies, in proportion to their current share of market. Let them decide what to do with them; after all, they created them!
C. Auction off the frequencies to the highest bidders, forever, with no further strings attached; they can hold onto them without using them if they choose, for as long as they like, or simply put a test pattern on the air, or whatever they prefer. When demand rises and they believe they can make a high enough profit, they are welcome to sell them to the highest bidder, forever, and use the profits to enrich their deserving and smart shareholders.
D. Auction off to the highest bidder the licenses, for five year terms, with the auction to be repeated every five years, or the price to be set as a function of the size, wealth, income of the available audience. Use the revenue to reduce taxes on productive activity.
E. Auction off to the highest bidder the licenses, for five year terms, with the auction to be repeated every five years, or the price to be set as a function of the size, wealth, income of the available audience. Use the revenue to provide a dividend to every American, something like the Alaska Permanent Fund.
F. Your suggestions?
9. The corporations which pump oil from beneath federal lands are paying low royalties into the federal treasury, despite the fact that the price of oil has risen significantly since their royalties were set. The royalties should be raised. To whom should the revenue go?
A. The Roman Catholic Church, the Southern Baptist Church, the Methodist Church, the Episcopal Church, the LDS Church, the orthodox, conservative, and reform bodies of Judaism, the American Islamic governing entity, etc., in proportion to their proven membership. Further provision should be made to insure that those who belong to no religious group can name an entity which should control their share.
B. Keep giving it to the corporations, but increase their corporate income taxes. Or reduce their loopholes.
C. Use the revenue to fund education, providing all children the same amount of funding, to be used at any school their parents choose.
D. Use the revenue to fund education, providing all children some funding, but more for those in poverty or handicapped, autistic, special needs, gifted.
E. Create a national version of the Alaska Permanent Fund, to provide, over the decades, an income to every American.
F. Use the revenues to reduce other taxes which burden the economy, and most particularly those which burden the poor most heavily.
G. Give the revenues to the people of the states where the oil is pumped. They're more entitled than the rest of us.
H. Use oil royalties to fund wars overseas, particularly those which relate to oil.
I. Use oil revenues to finance health care, or fund Social Security.
J. Your suggestions?
8. The corporations which pump oil from beneath federal lands are paying low royalties into the federal treasury, despite the fact that the price of oil has risen significantly since their royalties were set. Should their royalties be raised?
A. No. A deal is a deal, and those corporations made their business plans in good faith. The spoils belong to them. They can sell those rights to whomever they choose to, at whatever price they can get, for the benefit of their shareholders and their management.
B. Yes. All persons have equal rights to the gifts of nature.
C. Yes. The resource is finite, and the oil companies don't create it.
D. Yes. We can now see that we will be running out of oil, and the price is rising, for reasons that have nothing to do with the oil companies.
E. your suggestions?