Sustainability
Frank Stilwell and Kirrily Jordan: The
Political Economy of Land: Putting Henry George in His Place
Land is the most basic of all economic resources, fundamental to the form
that economic development takes. Its use for agricultural purposes is integral
to the production of the means of our subsistence. Its use in an urban context
is crucial in shaping how effectively cities function and who gets the principal
benefits from urban economic growth. Its ownership is a major determinant
of the degree of economic inequality: surges of land prices, such as have
occurred in Australian cities during the last decade, cause major redistributions
of wealth. In both an urban and rural context the use of land – and
nature more generally – is central to the possibility of ecological
sustainability. Contemporary social concerns about problems of housing
affordability and environmental quality necessarily focus our attention on ‘the
land question.’ ...
Environmental Concerns
What about the relevance of Georgist ideas to current concerns with environmental
quality and ecological sustainability? Here too there is a strong claim to
consider. Interest in Georgism has been reinvigorated in recent years by
the need to develop public policies that reflect the nature of land as a
finite natural resource. From a ‘green’ perspective, land tax
is a useful tool in discouraging the excessive and wasteful use of land.
That is, the prospect of paying a high rate of land tax can be expected to
discourage people from purchasing more land than they need directly for their
own purposes. It accords with the principle that people should be taxed according
to their use of scarce environmental assets.
This ‘ecological take’ on Georgism is particularly powerful
at a time of intensifying global environmental problems and recognition of
the need for remedial policy responses. It requires creative extension of
Georgist principles because the limitation of George’s own analysis
in this context is its primary focus on land. A range of other natural resources
needs to be considered, linking up with the broader concerns of modern environmentalists
such as Herman Daly (see, for example, Daly and Cobb, 1990). Hence, land
tax should be seen as an adjunct to taxes on the use of other scarce environmental
assets, including mineral, forestry and fishing stocks, and also bandwidth
for radio and telecommunications, for example (Stilwell, 2002: 316-317).
It should also be seen as a corollary to other taxes that discourage environmental
damage, including resource rental taxes, carbon taxes and fuel excises.
The case for these environmental taxes need not necessarily rest on Georgist
principles, of course, but Georgism can claim to provide a unifying analytical
framework. A common feature of ‘environmental taxes’ is that
they are all targeted, like land tax, at reducing the scope for profiting
from the private appropriation of natural resources, and thereby restricting
the profligate use of those resources.
A tension remains, reflecting the Georgist orientation towards taxes rather
than more directly regulatory interventions. Whether the use of the price
mechanism in this ‘environmental fine tuning’ is sufficient for
dealing with pervasive environment threats is a moot point. The nature and
severity of environmental stresses is such that more directly proscriptive
environmental policies are commonly needed to protect natural resources.
The creation and maintenance of national parks, for example, constitutes
a necessary direct regulation of land-use: the market, even when modified
by taxes, cannot absolutely guarantee the conservation of such crucial assets.
In other words, protection of ‘natural capital’ may commonly
require regulation as well as taxation. ... read the whole article
Jeff Smith and Kris Nelson: Giving Life to
the Property Tax Shift (PTS)
John Muir is right. "Tug on any
one
thing and find it connected to everything else in the universe." Tug on
the property tax and find it connected to urban slums, farmland loss,
political favoritism, and unearned equity with disrupted neighborhood
tenure. Echoing Thoreau, the more familiar reforms have failed to
address this many-headed hydra at its root. To think that the root
could be chopped by a mere shift in the property tax base -- from
buildings to land -- must seem like the epitome of unfounded faith. Yet
the evidence shows that state and local tax activists do have a
powerful, if subtle, tool at their disposal. The "stick" spurring
efficient use of land is a higher tax rate upon land, up to even the
site's full annual value. The "carrot" rewarding efficient use of land
is a lower or zero tax rate upon improvements. ...
Good for the economy, the PTS is also good
for the eco-system. Were land levied, the owners of the most valuable
sites would feel most pressure to develop; their sites tend to be
closer to the city center. Hence those owners draw any needed
development, infilling cities, sparing suburbs further encroachment.
Other highly valued sites are those rich in natural resources. Again,
using them more intensely frees up sites of lesser natural endowment.
Thus, besides conserving sites, the PTS also conserves resources.
Higher efficiency makes feasible the goal of sustainability. Going
sustainable must radically alter five basic strands in an economy:
- agriculture,
- home building,
- resource extraction,
- energy, and
- transportation.
The segment of the economy wasting the
most resources is probably
transportation. Sprawl
exacerbates the need for mobility while
infilling reduces it. Presently, cars claim 50% of urban surface. Land
dues would motivate owners to put their asphalt devoted to cars to
higher and better uses, ones that serve humans. A higher human density
provides mass transit with more riders so that the system could expand
and automobile dependency contract, letting both city and suburb
blossom.
Another resource-consumptive segment of the economy is construction. ...
A big problem needs a big solution which in turn
needs a
matching shift of our prevailing paradigm. Geonomics -- advocating that
we share the social value of sites and natural resources and untax
earnings -- does just that. Read the whole article
Bill Batt: How Our Towns Got That
Way (1996 speech)
Because our society is
characterized by suburban sprawl and is
therefore motor vehicle dependent, community is destroyed. George
Kennan expresses this well in the book cited earlier, but it is more
empirically documented in a recent article entitled "Bowling
Alone", which David Broder of the Washington Post
considered the most important academic article of 1995. The
author of that piece, Harvard Professor Bob Putnam, shows that our
communal relationships are declining, and that an ever smaller
proportion of the population is involved in social activities of a
cooperative and communal nature. As Tocqueville noted, this used to
be the unique strength of American society; we're now losing it.
Suburban sprawl and the automobile play a large part in this. And the
reason we have these land-use configurations is in good part, to my
way of thinking, due to our property tax policies and our subsidies
to motor vehicle transportation.
It doesn't take much reflection to
realize that the practices
which we are following are unsustainable. This is true not only
environmentally but also economically and socially. Author James
Howard Kunstler recently has described in his book Home from
Nowhere how our cities are becoming not only ugly but
unlivable. The irony is also that, by having followed the legacy of
classical economics, we could easily have provided for all our
government services through taxes based on land value.... read
the whole article
Bill Batt: The
Compatibility of Georgist Economics and Ecological Economics
Not only are human
beings co-equal with other living beings of the
earth, so also are beings yet born entitled to an existence. The
Iroquois Indians of New York State are often quoted to the effect that
“In our every deliberation, we should consider the impact of our
decisions on the next seven generations.” 101
Several contemporary environmental organizations have adopted the
Iroquois “Great Law of Peace” so that it has become the vernacular
equivalent of the Brundtland Report’s definition of sustainability.
Sustainable economics, or 7th generation planning, also requires Daly’s
“steady state” economy, 102
where (as if natural resources constitute “capital”) one lives only on
interest and not principle. Daly contrasts two notions of economic
practice: growth and development. The former may momentarily increase
economic productivity and wealth, but is in the long term a fatal
course of policy. It increases quantity but not quality. Development,
rather, is what should be aspired to, an increase in quality,
efficiency, and fulfillment through minimal uses of energy and material
resources. For development, the value-added dimension comes from
treading lightly on the earth, from the use of mental capital rather
than physical capital.103 Daly
in still another article talks about three parameters of
sustainability: “allocation, distribution, and scale,” which will lead
to an economy which is “efficient, just and sustainable.” 104... read the whole article
Peter Barnes: Capitalism
3.0 — Chapter 6: Trusteeship of Creation (pages 79-100)
By contrast, if pollution rights are assigned to trusts representing pollutees
and future generations, and if these trusts then sell these rights to polluters,
the trusts rather than the polluters will capture the commons rent. If the
trusts split this money between per capita dividends and expenditures on
public goods, everyone benefits.
At this moment, based on pollution rights allocated so far, polluting corporations
are getting most of the commons rent. But the case for trusts getting the
rent in the future is compelling. If this is done, consumers will pay commons
rent not to corporations or government, but to themselves as beneficiaries
of commons trusts. Each citizen’s dividend will be the same, but his
payments will depend on his purchases of pollution-laden products. The more
he pollutes, the more rent he’ll pay. High polluters will get back
less than they put in, while low polluters will get back more. The microeconomic
incentives, in other words, will be perfect. (See figure 6.1.)
What’s equally significant, though less obvious, is that the macroeconomic
incentives will be perfect too. That is, it will be in everyone’s interest
to reduce the total level of pollution. Remember how rent for scarce things
works: the lower the supply, the higher the rent. Now, imagine you’re
a trustee of an ecosystem, and leaving aside (for the sake of argument) your
responsibility to preserve the asset for future generations, you want to
increase dividends. Do you raise the number of pollution permits you sell,
or lower it? The correct, if counterintuitive answer is: you lower the number
of permits.
This macroeconomic phenomenon — that less pollution yields more income
for citizens — is the ultimate knockout punch for commons trusts. It
aligns the interests of future generations with, rather than against, those
of living citizens. By so doing, it lets us chart a transition to sustainability
in which the political pressure is for faster pollution reduction rather
than slower.
There’s one further argument for recycling commons rent through trusts.
As rent is recycled from overusers of the commons to underusers, income is
shifted from rich to poor. That’s because rich households, on average,
use the commons more than poor households. They drive SUVs, fly in jets,
and have large homes to heat and cool — thus they dump more waste into
the biosphere. Studies by Congress and independent economists have shown
that only a rent recycling system like the one just described can protect
the poor. Absent such a system, the poor will pay commons rent and get nothing
back. In other words, they’ll get poorer.
As always, there are a few caveats.
- First, to the extent commons rent is used for public goods rather
than per capita dividends, the income recycling effects are diminished.
This
is offset, however, by the fact that public goods benefit everyone.
- Second, the less-pollution-equals-more-dividends formula doesn’t
work indefinitely. At some point after less polluting technologies have been
widely
deployed, the demand for pollution absorption will become elastic. Then,
lowering the number of pollution permits sold will decrease income to citizens.
But
that time is far in the future, and when it comes, the world will be
a healthier place. And even then, trustees won’t be able
to increase the number of pollution permits without violating their
responsibility
to future generations.
... read
the whole chapter
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