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Command and Control
Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)
Bill Batt: The Merits of Site Value Taxation
... Not all revenue collection on the part of government is grounded in the constitutional authority of its tax powers. Taxes in the strictest sense of the term are revenues involuntarily paid to general funds for the general purposes of government. But there are many other revenues paid to government that would never be construed as taxes: lottery revenues, fines, interest payments, environmental (green) fees, payment for information, and user fees being the most common examples. Fines, green fees, and user fees are instruments of police power precisely because their primary purpose is to correct behavior, and only secondarily to raise revenue. User fees, along with environmental fees particularly, are employed to recover the costs of use, wear or damage to environmental or government-provided "services." (Only in recent years has it been fashionable to regard use or degradation of the natural environment as a "service," necessitating "correction," as was originally explicated by Pigou earlier this century.
Fiscal measures such as those noted above can be employed under police powers to correct, or at least compensate for, otherwise egregious social behavior, and public policy makers must concern themselves with the question whether such measures are more or less appropriate or effective. These provide an attractive alternative to what have come to be known as "command and control" approaches. Just as are so many fiscal measures, command-and-control approaches to regulating and controlling social and economic behavior is also grounded in the police powers of government. Administrative theory has grown in appreciation for fiscal approaches and away from command-and-control approaches in recent years.8 This is because they are often far less expensive and more efficient to implement, easier to understand, have a greater degree of compliance, and has the added virtue, lastly, of raising revenue for the support of governmental responsibilities. This interest in "tax shifting" has inspired the slogan, "Tax Bads, Not Goods." ... Read the whole piece
Bill Batt: The Nexus of Transportation, Economic Rent, and Land Use
... These pricing approaches taken together offer the prospect of both recovering costs in their varied forms as well as fostering efficient transportation services. There are grave misconception in how much fiscal policies distort social and economic behavior. And the fiscal policies that foster the greatest distortions of all are those involving road costs and the failure to collect economic rent. Rather than resort to traditional command-and-control approaches which are frequently just as cumbersome and distorting as current unthinking fiscal measures, now is an opportune time to consider models which will help us to get things right. ... read the whole articleBill Batt: The Compatibility of Georgist Economics and Ecological Economics
The answers being offered, however, don’t address the root causes of the problem. The most talked about panacea is the institution of urban growth boundaries, but these have failed to be demonstrably successful even in the two communities most often cited (Portland and Boulder) where they were instituted over twenty years ago. Recent days have witnessed a profound and growing awareness of the problems due to sprawl development. In fact one opinion poll marked sprawl as the highest current concern among American voters.6061 Solutions such as these reflect the penchant of policy makers to rely upon so-called “command-and-control” (CAC) approaches to government rather than “pricing” approaches. The extension of government reach and weight to impose policies deemed appropriate is burdensome, expensive, and inefficient. ...
Daly and Cobb outline eight issues relating to the ecological economics perspective which call for clear public policy changes in their view. All relate to the American context: economic globalization, population, land use, agriculture, industry, labor, income policies and taxes, and national security policy. Put differently, there is no realm of policy outside of the reach of ecological economics; this is what makes it truly interdisciplinary. The second book focuses more directly on means by which to preserve natural capital, using what means governments have at their disposal. After first distinguishing between “command-and-control” (CAC) and incentive pricing systems, the authors continue by exploring the various ways that the latter, fiscal measures, can be engaged to alter the course of current economic practices in favor of more sound and environmentally sensitive ones. No short treatment can do justice to each class of proposals, but a quick summary indicates their general direction.
Underlying the whole agenda is a commitment beyond simple description to sustainable development economics and to Daly’s “steady state” economics. This entails the institution of environmental safeguards, protection of cultural and biological diversity, minimal resource use, and recycling. It further means protection of small countries and localities — of both ecosystems and populations — against all-encompassing economic units that preclude the possibility of their being able to survive independently. It presumes also that not just humans alive today have entitlements, especially privileged elements of wealthy countries; it recognizes rather the justice and moral claims of people and natural ecosystems yet to live to survive as intact and integral units. It recognizes that governments must take a hand in the preservation of such ecosystems, as markets forces left to themselves will wreak destruction on the most vulnerable parts of the earth and ultimately upon the earth itself. It accepts the fact that the carrying capacity of the earth is limited, and that we appear to have already exceeded that carrying capacity in our ignorance.119
119One oft-cited article is that of Peter Vitousek, et al, “Human Appropriation of the Products of Photosynthesis,” BioScience, Vol. 36, No.6 (1986), pp. 368-373, available at http://dieoff.org/page83.htm. It calculates that consumption of earth’s resources is doubles at an ever increasing rate, and that humans have already appropriated 40% of terrestrial biological productivity. The most comprehensive collection of articles addressing this perspective is created and maintained by retired Cornell Professor Jay Hanson, at www.dieoff.org. The site name arises from his view that the world economy’s dependence upon fossil fuels faces an imminent end, and the earth will then be capable of supporting only about two billion people. Hence a looming dieoff.
The distinction between CAC approaches to environmental challenges as compared with pricing approaches is central to all this analysis. Daly’s shows a strong preference for the latter. In what he calls “graded ecozoning,” for example, potential atmospheric impacts are divided into three areas.
Green taxes, sometimes also called corrective taxes or Pigouvian taxes, are their first candidates for consideration. This is because they can, if priced right, recover the costs of externalities in ways that allow individuals to use their own discretion about employing environmentally damaging practices. But the authors extend their thinking to cover goods and materials that may have negative ecological impacts although not yet conclusively demonstrated by science. The answer there is to rely upon a “precautionary polluter pays principle” based on the present value of the forecast impact should the worst case scenarios be borne out. The annual cost of using a car in the early 1990s, for example, was $51,656 according to their calculations.120 This would obviously entail an enormous imposition of taxes, far above the less than $7,000 direct annual costs typically shouldered by drivers now,121 the rest of which are now passed on to society generally. Grave doubt exists about the potential impact of various externalities of driving, along with concern about the extent of damage which might possibly occur to the ecosystem; this warrants employment of the precautionary principle and calls for policy solutions to curtail this travel mode. Complete prohibition of certain materials and chemicals may be warranted in some cases. ...
POINTS OF SYNTHESIS OF GEORGIST AND ECOLOGICAL ECONOMICS
The commonalities of Georgist economics and ecological economics appear to be organizable into six general points:
1) preservation of the commons,
2) sustainable development,
3) appropriate valuation of natural capital,
4) ensuring social and biological community,
5) fostering individual self-realization, and
6) securing economic justice.
Implicit in all these points is the view that market activity needs to be circumscribed and juxtaposed to the non-human, biological realm. It appears that there is lots to be gained by some synthesis of the two fields of discourse.
Ecological economists worry about the encroachment, and even the elimination, of those elements of nature to which private property title has not been granted. In their concern about the need to protect the “commons,” they are torn between the view that only through privatization can all the world’s assets be preserved and the alternative view that any private appropriation of the commons constitutes a moral compromise. They fear a repeat of Garrett Hardin’s “tragedy of the commons.” Their argument often proposed is rather complex to explicate: it assumes that private property titles may perhaps provide the best incentive not to exploit the fruits of the earth and the earth itself.126 To Georgists, on the other hand, the earth and all its resources are already in fact the birthright of all humanity; individuals are entitled to its use in return for the payment of rents. Further privatization is anathema. The key rather is in distinguishing the various components of ownership and getting prices right — mainly in the collection of economic rents.
One must ask then whether there is some such means by which to accomplish the goal of environmental preservation — through either of the means by which government has at its disposal: command-and-control (CAC) approaches or pricing approaches. It has already been noted how difficult CAC approaches are to enforce, and how expensive they are both in terms of administration and economic inefficiencies. Pricing on the other hand suffers from the difficult challenge of getting it “right,” som ething which typically must be resolved through formal public decisions, especially when and insofar as they involve public goods or common property.... read the whole article
Bill Batt: Stemming Sprawl: The Fiscal Approach
Mason Gaffney: Red-Light Taxes and Green-Light Taxes
Likewise, there are at least two kinds of containment policies for urban sprawl.
Consider Philadelphia, once the City of Brotherly Love founded by an idealistic English Quaker. Today, after 3 centuries of development, Philadelphia has 15,800 vacant lots, but that only begins the story. It has 27,000 empty houses (i.e. junkers on usable lots that might as well be vacant); 1500 acres of vacant land and brownfields; and 700 vacant commercial bldgs. A local journalist names it BlightTown, U.S.A. If he travelled a bit he'd find it is only one of many.
The result of decay without renewal is to threaten the countryside; settlers spill out, "like ghosts from an enchanter fleeing." Yet, these are not ghosts, nor autumn leaves in the west wind; these are live people. Destroy man's habitat here and he moves it there, and takes habitat from other life forms. The solutions to urban decay and disintegration are infilling and renewal. Here is where the Green Light Tax is such a good management tool. It lets cities rebuild themselves without tax penalties on new building, and rise like the phoenix from their own ashes.
There is a reflex against growth and development we must learn to overcome. "Growth" should not be an issue to divide us: it depends on the kind of growth. Resentment of growth and development stems in large part from associating them with territorial expansion. Infilling and renewal and rehab, however, UNCOUPLE growth from sprawl: they let cities grow (or at least stop shrinking) without sprawling. Ascending to a satellite view, let's look at the whole system of settlement: focusing people where they should be keeps them away from where they shouldn't be.
Here is an aerial view of Albuquerque, New Mexico, a state dominated by owners of million-acre ranches, and therefore with about the lowest property tax rate in the U.S. Albuquerque sprawls out about 30 miles east-west, and another 30 miles north-south, giving a density of about 300-400 people per square mile for its 330,000 residents. Many of its homes are slums.
Contrast that with the aerial view of Sydney, Australia, a city that raises a lot of its budget from "Green Light" taxes on site value. Sydney and suburbs have nearly 3 million people, on less land than Albuquerque, and with no slums.
There is plenty of land to go around. The pleasant green villages of Shorewood and Whitefish Bay, Wisconsin are upper-income Milwaukee suburbs that feature detached homes on tree-lined streets, with detached garages, laws against overnight curb parking, a number of lakeshore mansions with parklike grounds, ample public parks, good shopping, and a little industry. Their densities are 10,000 persons per square mile. At this density, 250 million Americans would fit nicely into less than half of Wisconsin, an average-sized one of 50 states. (They would occupy 0.7% of the United States.)
At the 10,000 density, Greater
Milwaukee would fit inside
Milwaukee County, yet it now sprawls out over several counties. It
sprawls farther yet if one counts the rural residents who float in
and out of town for seasonal work. Shorewood and Whitefish Bay have
high density because they are the only Milwaukee suburbs with no
vacant land; the others, and the central city itself, are full of
holes. Result: sprawl, invasion of wildlands, loss of farmland,
forced automobilization of former pedestrians, water pollution from
new grading - the whole litany of green laments. High density is not
their cause, but their cure. ... read
the whole article
The red, red herring
Royal libertarians are fond of confusing the classical liberal concept of common land ownership, particularly as espoused by land value tax advocate Henry George, with socialism. Yet socialists have always been contemptuous of George and of the distinction between land monopoly and capital monopolies. However, Frank Chodorov and Albert J. Nock (the original editors of The Freeman) were both advocates of George's economic remedies as well as lovers of individual liberty.
The only reformer abroad in the world in my time who interested me in the least was Henry George, because his project did not contemplate prescription, but, on the contrary, would reduce it to almost zero. He was the only one of the lot who believed in freedom, or (as far as I could see) had any approximation to an intelligent idea of what freedom is, and of the economic prerequisites to attaining it....One is immensely tickled to see how things are coming out nowadays with reference to his doctrine, for George was in fact the best friend the capitalist ever had. He built up the most complete and most impregnable defense of the rights of capital that was ever constructed, and if the capitalists of his day had had sense enough to dig in behind it, their successors would not now be squirming under the merciless exactions which collectivism is laying on them, and which George would have no scruples whatever about describing as sheer highwaymanry. —Albert J. Nock "Thoughts on Utopia" ... Read the whole piece
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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper