Wealth and Want
... because democracy alone is not enough to produce widely shared prosperity.
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Take What You Need and Leave the Rest

(and don't take more than you will put to use, in order to make a profit off others' similar needs —
and don't condone a system that permits some of us to do so!)

Our corporations, REITS and wealthy families take as their own our very best land: the urban land served by extensive, expensive and sophisticated infrastructure, the ocean, lake and river coasts. Our system of taxation does not collect from them the economic value of the land they hold.  Some, like Ted Turner, wisely place more of their portfolio into land and other natural resource; our incentives provide them no reason not to do so.

Georgists seek a society and an economy in which each of us owns the amount of land we personally can put to good use, pay society its annual worth for the exclusive right to that property, and leave the rest of the land available for others to access. Some of that land will have little or no value, but it should be available. She or he who has a plan for putting an excellent piece of land to work should be able to access it, but its annual cost to them should take into account the competing uses of other entrepreneurs. This way, a good piece of land will be used well, producing jobs for many more people than it currently does in its underused state. The "100% location" should be put to a "100% use," because that will benefit all of us. (And its owner will profit from the security of possession, and putting it to a 100% use — but not from the economic rent of the site, which he will return to the commons in the form of land value taxation.) When our incentives allow someone (individual, family trust, corporation, real estate investment trust) to keep that land at 80% use, or 60% use, or even 40% use until they're good and ready to improve it, hundreds or thousands of us lose out, our cities sprawl, and land on the fringes gets developed prematurely; people must commute long distances. Those who say that "property rights" are more important, that if a 40% use is what that owner of a 100% location wants, that is his prerogative, miss the point that land is fundamentally different from things which are manmade, and we can't create another plot of land in that 100% location — and we all bear the costs of granting that level of property privilege, through pollution, energy and time usage, etc.

H.G. Brown: Significant Paragraphs from Henry George's Progress & Poverty, Chapter 4: Land Speculation Causes Reduced Wages

In communities like the United States, where the user of land generally prefers, if he can, to own it, and where there is a great extent of land to overrun, this cause operated with enormous power.

The immense area over which the population of the United States is scattered shows this. The man who sets out from the Eastern Seaboard in search of the margin of cultivation, where he may obtain land without paying rent, must, like the man who swam the river to get a drink, pass for long distances through half-tilled farms, and traverse vast areas of virgin soil, before he reaches the point where land can be had free of rent i.e., by homestead entry or pre-emption. He (and, with him, the margin of cultivation) is forced so much farther than he otherwise need have gone, by the speculation which is holding these unused lands in expectation of increased value in the future. And when he settles, he will, in his turn, take up, if he can, more land than he can use, in the belief that it will soon become valuable; and so those who follow him are again forced farther on than the necessities of production require, carrying the margin of cultivation to still less productive, because still more remote points. ... read the whole chapter

Ted Gwartney:  Estimating Land Values

Each person has a right to keep what he or she produces, but no one has the right to waste what belongs to all people, the land which includes the natural environment. Each person should have an opportunity to use the best land for his business or personal needs, as long as they are willing to pay the land rent that other land users are willing to pay.

If the value of land rent exceeds the community's needs for public services a method of dispensing of the revenue can easily be found. To maintain an equitable society, where nobody has special benefits that they do not pay for, it is important to collect all of the land rent. The community should use what is needed for public services and improvements such as schools, hospitals, parks, police, roadways, utilities and defense -- and reserve a fund for emergencies.

An ethical proposal might be to then divide the excess revenue that is not needed for public facilities and services at the end of each year and send each citizen in that community an equal portion of the remaining revenue. This is similar to the method used in Alaska and Alberta. Equality of opportunity to be productive can only be accomplished by recapturing all of the market rent of land and ensuring that all people benefit from its value.

Not only is land rent potentially an important source of public revenue, collecting all of it would ensure that the equal opportunity to be productive would be available to all citizens. People could fund useful buildings, equipment and wages, rather than having to buy land at inflated prices. Many countries, including the United States, were started on the premise of using land rent to fund public services. Many countries suffer economic loss because they no longer collect the market rent of land.

The value of land can be estimated with an acceptable accuracy, at a cost which is very small compared to the revenue to be obtained. A proper system of assessment and taxation of land can provide for the proper economic use of the land. A land site should be available to the user who can make the highest and best use of the site and maximize the site benefits for all people. A land tax can provide a major source of public revenue which the local governing body could use for the benefit of all people. A land tax can prevent the dispossession of our children, the future producers in the society. Justice requires that land values, which are created by society and nature, be made available for public improvements. This is the responsibility of good government.Read the whole article

Nic Tideman:  Peace, Justice and Economic Reform
These components of the classical liberal conception of justice are held by two groups that hold conflicting views on a companion issue of great importance: how are claims of exclusive access to natural opportunities to be established?

John Locke qualified his statement that we own what we produce with his famous "proviso" that there be "as much and as good left in common for others." A few pages later, writing in the last decade of the seventeenth century, he said that private appropriations of land are actually not restricted, because anyone who is dissatisfied with the land available to him in Europe can always go to America, where there is plenty of unclaimed land.[12] Locke does not address the issue of rights to land when land is scarce.

One tradition in classical liberalism concerning claims to land is that of the "homesteading libertarians," as exemplified by Murray Rothbard, who say that there is really no need to be concerned with Locke's proviso. Natural opportunities belong to whoever first appropriates them, regardless of whether opportunities of equal value are available to others.[13]

The other tradition is that of the "geoists," as inspired if not exemplified by Henry George, who say that, whenever natural opportunities are scarce, each person has an obligation to ensure that the per capita value of the natural opportunities that he leaves for others is as great as the value of the natural opportunities that he claims for himself.[14] Any excess in one's claim generates an obligation to compensate those who thereby have less. George actually proposed the nearly equivalent idea, that all or nearly all of the rental value of land should be collected in taxes, and all other taxes should be abolished. The geoist position as I have expressed it emphasizes the idea that, at least when value generated by public services is not an issue, rights to land are fundamentally rights of individuals, not rights of governments.

There are two fundamental problems with the position of homesteading libertarians on claims to land. The first problem is the incongruity with historical reality. Humans have emerged from an environment of violence. Those who now have titles to land can trace those titles back only so far, before they come to events where fiat backed by violence determined title. And the persons who were displaced at that time themselves had titles that originated in violence. If there ever were humans who acquired the use of land without forcibly displacing other humans, we have no way of knowing who they were or who their current descendants might be. There is, in practice, no way of assigning land to the legitimate successors of the persons who first claimed land. And to assign titles based on any fraction of history is to reward the last land seizures that are not rectified.

The second fundamental problem with the position of the homesteading libertarians is that, even if there were previously unsettled land to be allocated, say a new continent emerging from the ocean, first grabbing would make no sense as a criterion for allocating land.

It would be inefficient, for one thing, as people stampeded to do whatever was necessary to establish their claims. But that is not decisive because, if we are concerned with justice, it might be necessary for us to tolerate inefficiency. But the homesteading libertarian view makes no sense in terms of justice. "I get it all because I got here first," isn't justice.

Justice -- the balancing of the scales -- is the geoist position, "I get exclusive access to this natural opportunity because I have left natural opportunities of equal value for you." (How one compares, in practice, the value of different natural opportunities is a bit complex. If you really want to know, you can invite me back for another lecture.)

Justice is thus a regime in which persons have the greatest possible individual liberty, and all acknowledge an obligation to share equally the value of natural opportunities. Justice is economic reform--the abolition of all taxes on labor and capital, the acceptance of individual responsibility, the creation of institutions that will provide equal sharing the value of natural opportunities. ...   Read the entire article

Mason Gaffney: The Taxable Capacity of Land

 Another attractive feature of land taxation is its interesting positive effect on the economic base of a city. It strengthens it by its tendency to hit absentee owners harder than resident owners. The land fraction in real estate is generally highest in the CBD of any city, so that is a favorite place for absentees to buy and hold. They like the steady income, and the "trophy" quality. The surplus in real estate is what attracts outside buyers, and land is what yields the surplus. About 2/3 of downtown Los Angeles is owned by non-resident aliens, for example. In a more workaday city, Milwaukee, the absentee owners consist of former residents, or their heirs, who grew too rich to abide the harsh winters.

Consider the effect on your balance of payments. When you get more tax money from absentees, money that used to flow to Tehran, Zurich, or Palm Beach now flows into your local treasury to pay your local teachers and city workers, and relieve your builders and building managers. In this way taxing land actually acts to undergird the value of its own base.  ...   Read the whole article

Jeff Smith: Share Rent, Transform Society

If someone buys a ticket to Super Bowl and decides not to go and sells it for more than its face value, he could face the wrath of the law. If he bought a super location and sold it for more than he paid for it, he could become a pillar of society. Temporary ownership for profiteering is illegal; but if permanent ownership, it is legal. If only we had a single standard, I think society would change for better. It doesn't matter who owns what. What matters is who gets the rent. We have millions of acres of forest we Americans own together, and we are losing rent on it. 

The word property cannot convey the distinction between rent and land. Ralph Borsodi came up with an alternative, a trust that would claim publicly and occupy privately and use sparingly and compensate neighborly. Share the rent with neighbors. A word for that is geonomics, earth-focused economics. It hones in on all this flow of rent that is so overlooked. Shift the focus to sharing; then owning of land loses importance and belonging to earth regains its importance. It is a different identity for human beings as parts of the economic system. ... read the whole article

Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place

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

Peter Barnes: Capitalism 3.0 — Chapter 2: A Short History of Capitalism (pages 15-32)

In the seventeenth century, John Locke sought to balance the commons and private property. Like others of his era, he saw that private property doesn’t exist in a vacuum; it exists in relationship to a commons, vis-à-vis which there are takings and leavings. The rationale for private property is that it boosts economic production, but the commons has a rationale, too: it provides sustenance for all. Both sides must be respected.

Locke believed that God gave the earth to “mankind in common,” but that private property is justified because it spurs humans to work. Whenever a person mixes his labor with nature, he “joins to it something that is his own, and thereby makes it his property.” But here Locke added an important proviso: “For this labor being the unquestionable property of the laborer,” he wrote, “no man but he can have a right to what that is once joined to, at least where there is enough, and as good, left in common for others.” In other words, a person can acquire property, but there’s a limit to how much he or she can rightfully appropriate. That limit is set by two considerations:

  • first, it should be no more than he can join his labor to, and
  • second, it has to leave “enough and as good” in common for others.

This was consistent with English common law at the time, which held, for example, that a riparian landowner could withdraw water for his own use, but couldn’t diminish the supply available to others.

Despite Locke’s quest for balance, the English commons didn’t last. In the eighteenth and nineteenth centuries, the movement to enclose and privatize it accelerated greatly. According to historian Karl Polanyi, this enclosure was the great transformation that launched the modern era. Local gentry, backed by Parliament, fenced off village lands and converted them to private holdings. Impoverished peasants then drifted to cities and became industrial workers. Landlords invested their agricultural profits in manufacturing, and modern times, economically speaking, began. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 8: Sharing Culture (pages 117-134)

The larger lesson of this chapter is that all three branches of the commons — nature, community, and culture — are under similar assault from corporations, and all need to be fortified. The means of fortification will vary with the particular commons. When commons are scarce or threatened, we ought to limit aggregate use, assign property rights to trusts, and charge market prices to users. When commons are limitless (like culture, the Internet, and potentially the airwaves), our challenge is the opposite: to provide the greatest benefit to the greatest number at the lowest cost. To create scarcity where it doesn’t need to exist diminishes rather than enlarges our well-being.

In both limited and unlimited commons, corporate and commons algorithms clash. In limited commons, the corporate algorithm says: use as much as you can as quickly as you can, because if you don’t, someone else will. The commons algorithm, by contrast, says: preserve the asset for future generations, enhance it whenever possible, and live off income rather than principal. In unlimited commons, the corporate algorithm says: restrict use and charge what the market will bear. The commons algorithm, by contrast, says: the more users the merrier, and the cheaper the better. In both situations, the commons algorithm conflicts head-on with the corporate one, and that’s just fine. Indeed, it’s precisely the point.

Commons algorithms need to be unleashed in real-time markets, where they can duke it out with their corporate counterparts. Managers in each sector will know what to do, and the public will know what to expect. If corporations keep winning, then add more property to the commons. Eventually, we’ll get the best of both worlds, and when there’s conflict, more balanced outcomes than we get today. We’ll also gain clarity about the real costs of current practices.

After we fortify, we should enhance; just as we take from the commons, so should we give back. Art and music can be reproduced by corporations, but they don’t come from corporations; they come from the commons. Folk music, country music, jazz, blues, garage bands — these are the roots of our musical heritage. We must nourish the soil in which these roots grow. This, not copyright extension, is the way to enrich culture. ... read the whole chapter

Robert H. Browne: Abraham Lincoln and the Men of His Time

“Christ knew better than we that 'No man having put his hand to the plow and looking back is fit for the kingdom of God;' nor is many man doing his duty who shrinks and is faithless to his fellow-men. Now a word more about Abolitionists and new ideas in Government, whatever they may be: We are all called Abolitionists now who desire any restriction of slavery or believe that the system is wrong, as I have declared for years. We are called so, not to help out a peaceful solution, but in derision, to abase us, and enable the defamers to make successful combinations against us. I never was much annoyed by these, less now than ever. I favor the best plan to restrict the extension of slavery peacefully, and fully believe that we must reach some plan that will do it, and provide for some method of final extinction of the evil, before we can have permanent peace on the subject. On other questions there is ample room for reform when the time comes; but now it would be folly to think that we could undertake more than we have on hand. But when slavery is over with and settled, men should never rest content while oppressions, wrongs, and iniquities are in force against them.

“The land, the earth that God gave to man for his home, his sustenance, and support, should never be the possession of any man, corporation, society, or unfriendly Government, any more than the air or the water, if as much. An individual company or enterprise requiring land should hold no more in their own right than is needed for their home and sustenance, and never more than they have in actual use in the prudent management of their legitimate business, and this much should not be permitted when it creates an exclusive monopoly. All that is not so used should be held for the free use of every family to make homesteads, and to hold them as long as they are so occupied.

“A reform like this will be worked out some time in the future. The idle talk of foolish men, that is so common now, on 'Abolitionists, agitators, and disturbers of the peace,' will find its way against it, with whatever force it may possess, and as strongly promoted and carried on as it can be by land monopolists, grasping landlords, and the titled and untitled senseless enemies of mankind everywhere.” ... read extended excerpts




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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper