Q: In Globalization and its Discontents, you write (p. 81): "But land
reform represents a fundamental change in the structure of society, one that
those in the elite that populates the finance ministries, those with whom
the international financial institutions interact, do not necessarily like."
JES: Yes. Let me try to approach the question a little more systematically.
Once you take the perspective I just gave, that means the management should
be done in such a way that it maximizes the amount of money available to
the US government from natural resources because they are within its domain
and control. So, looking at the United States, one of the implications of
this is that a foundation such as yours [the Robert Schalkenbach Foundation,
created to promote the ideas of Henry George, as expressed in Progress & Poverty]
ought to be very much against the policies of the US government of giving
away our natural resources. Here is a case where we not only are not taxing
it much, we're actually giving it away.
Q: I assume you're speaking in particular of oil and mineral rights, but
would not Broadband Spectrum rights also be included in that category?
JES: Yes, Broadband Spectrum rights as well. Now, giving away rights such
as those would be anathema to the spirit of Henry George. And the second
part is that when you sell them, you want to do so in such a way as to maximize
the revenues. And whether you decide to sell it or whether you decide to
rent it, would be the question of what is the way that maximizes the extraction
of public revenues.
Q: And those revenues go to the people. Not to private concerns.
JES: Exactly. So you're trying to say, from the perspective of public management,
how can we take this inelastic supply of public resources and maximize the
rents that we can extract from it, consistent with other public objectives?
That is a very deep philosophical approach, and requires a re-thinking of
how we manage all aspects of those public resources. However, much of what
we do is inconsistent with that. Now, the issue of land reform is a little
bit different. There, it's a two-step analysis. My concern that I expressed
about land is that in many developing countries, you have most land owned
by a few rich people, and the land is relatively little taxed. But
the land is worked in a system of sharecropping in which workers have to
pay the landlord
50% of their output. In a way, you can look at that 50% as a tax. The sharecroppers
are paying a 50% tax to the landlord. But it's worse than a tax. Because
it's not a land tax, it's a tax on their labor. And it's a tax that goes
to the landlord rather than to society. So the notion is that land reform
could take a variety of different forms. For instance, the government could
take over the land and rent it to the people. Or give it to the people and
have a land tax that would not have the distortionary effect of land reform.
So, in a way, these systems of share-cropping are worse even than anything
that Henry George was worried about in terms of misuse of land. ... read the entire interview