Professor Duby examined the influence of numerous competing interest groups over the vital period from the eleventh to the fourteenth century, during which time the introduction of formal Separation of Church and State laws gave the Roman Catholic Church (RCC) authority over traditional laws around European family life and spiritual dogma, and the introduction of new laws defining land ownership "in perpetuity" based on the argument that since the Church is the "body of Christ" it is immortal, therefore can own land "in perpetuity".
Church Monasteries 'held' large tracts of land across Europe and England, which were worked by farmers with a life interest only. The Viking Age (793–1066AD) aka the North Sea Empire, introduced Danelaw, where land was owned by individuals and could be bought, sold and inherited. The first English Pope, Hadrian IV, aka Adrian IV, (1154-1159) and his close adviser John of Salisbury, extended feudal land tenure to the North Atlantic Islands: for all islands are reputed to belong by long-established right to the Church of Rome.
According to Maurice Sheehy (1975), sometime between November 1155 and July 1156 John of Salisbury spent three months with Pope Hadrian at Beneventum, and it was during this visit that he obtained papal approval for the English invasion of Ireland. He describes the event himself:
[Salisbury] It was at my request that he (the Pope) granted to the illustrious king of England, Henry, the hereditary possession of Ireland, as his letters, still extant, attest: for all islands are reputed to belong by long-established right to the Church of Rome, to which they were granted by Constantine, who established and endowed it.
– Maurice Sheehy, (1975), 1998 Ed., When The Normans Came To Ireland, p.11). *
Of particular interest here is Duby's documentation of the consequences of confiscation of land: methods introduced by the expansion of the role of the RCC’s Inquisition (circa 1231) for the suppression of heresy: extending RCC scope to classify traditional and non-Christian beliefs, including traditional healing arts, as heresy and witchcraft. Since women on the Western rim of Europe traditionally held rights to land ownership, an accusation of heresy or witchcraft allowed immediate confiscation of their property, before trial, and without right to council. Countless numbers of men and women were burned at the stake over a period of five long centuries, ending in the 18th century. This time span includes an initial 250 years of concentrated "witch hunts" and land confiscation, and suppression of the life-style, laws, and medical practices of traditional Western cultures.
Louis XVI (1754-1793) advocated the abolition of serfdom, an increase in religious tolerance, and fewer taxes on the poor. He supported the American Revolution, hoping to weaken the British Empire. However, these aims were blocked at every juncture by a hostile aristocracy desperate to preserve the social order... >>> more
French historian François Aulard (1849-1928) comments that the Revolution (1789-1799) led to the emancipation of the individual, in greater division of landed property, the abolition of the privileges of noble birth, the establishment of equality, the simplification of life. Arthur Tilley, ed. (1922), Movern France: A Companion to French Studies, p.115.
See also Edmund Burke's classic text, Reflections on the Revolution in France, 1790. According to Daniel O'Neill (2016), Burke’s defense of empire was in fact ideologically consistent with his conservative opposition to the French Revolution. … and shows that Burke’s argument …prefigured later intellectual defenses of British imperialism.
... the prospect of buying one single book would consume an entire family income for four years – or in the $500k to $1M range in today’s value. Gutenberg was convinced his invention would strengthen the Church, as the ability to mass produce books from a single original would eliminate all the small copying errors invariably introduced in the manual book production process. It would therefore, he argued, improve the consistency of Christian bibles. The result was the exact opposite, through mechanisms Gutenberg did not foresee. ... ultimately setting off a century of civil war over the Power of Narrative. The Catholic church went on a rampage and a crusade against this new spread of ideas that would challenge its narrative.
Is any study simpler than Economics? A child could grasp it!Leon Mclaren
Classical Political Economic Theorists
The End of Feudalism via the "Single Tax" Many centuries of turmoil brought France to the verge of bankruptcy. Starvation, injustice and corruption were widespread. The Fall of the Bastille on July 14, 1789, marks the beginning of the French Revolution, but August 4, 1789 was The Night the Old Regime Ended – the end of feudalism, serfdom and class privileges in France, when a National Assembly resolved not to repress the revolt of the peasants but to remove the cause of inequality by changing tax laws: privileged nobles and clerics agreed to abandon their feudal rights and privileges, including tax exemption and tithe tax, bringing the feudal order to an end.
Over a hundred years ago there arose in France a school of philosophers and patriots– Quesnay, Turgot, Condorcet, Dupont– the most illustrious men of their time, who advocated, as the cure for all social ills, the impot unique, the single tax. – Henry George (1839-1897)
The need to prevent anarchy and maintain social order led to new ideas in political economy, out of which emerged a new school of economic thought, led by the Physiocrats, who took inspiration from China's 4000 year history of taxing land.
To men infected with these new ideas, China provided a powerful stimulus. For in China they saw a great civilization that had evolved quite independently of, and earlier than, their own. Although not a Christian nation, it had nevertheless developed in Confucianism a high system of morals of its own. And, unlike Europe, it had done so without permitting a priesthood to become so powerful as to challenge the state's authority. The emperor of China, furthermore, though seemingly an absolute ruler, was in actual fact limited by the teachings of Confucianism, which declared that "the people are the most important element in the state; the sovereign is the least." Particularly was China admired as a land where government did not rest in the hands of a feudal aristocracy, as in Europe. Instead, it was managed by the mandarins — a group of highly educated scholars — who gained their official positions only after proving their worth by passing a series of state-administered examinations. We know today that this highly favorable picture of China was somewhat over-painted. Yet there is little doubt that the China of the seventeenth and eighteenth centuries was, both politically and economically, in many ways ahead of Europe. (Bodde, 2005, p. 4.)
France was primarily an agricultural economy, consequently, French leaders modeled their economic 'solutions' on the laws of nature, which led P. S. DuPont de Nemours to coin the term "Physiocrats" – from the Greek: rule of Nature.
The Origin of Classical Political Economic Theorem
250 years of debate:
The Law of Rent aka Economic Rent The French Physiocrats aka "économistes" launched the first strictly scientific system of economics and preceeded the Classical Political Economists in writing about the importance of Land in terms of economic significance.
In 1758, Francois Quesnay wrote "Tableau Oeconomique" documenting the Physiocrats' precepts – that the wealth of nations was derived solely from the value of land agriculture or land development
Over the past two hundred and fifty years, many legendary philosophers and economists contributed to the advancement of the Physiocrats' ideas, now known asClassical Political Economic theorem.
Adam Smith(1723-1790) the reputed founder of Classical Political Economics, visited the Physiocrats in France while touring across Europe (1764-1766) as tutor to the young Scottish nobleman Henry Scott, 3rd Duke of Buccleuch. Smith was influenced by the Physiocrats' economic theorem: the wealth of nations was derived solely from the value of land agriculture or land development. Ten years later, Classical Political Economics theorem was formally launched with the publication of Adam Smith's The Wealth of Nations (1776).
David Ricardo (1772-1823) – "The Law of Rent" Around 1809, English Economist David Ricardo defined the income derived from the ownership of land and other free gifts of nature as "The Law of Rent" (aka Economic Rent, Ricardo's Law, Resource Rent), with collection methods referred to as Single Tax | Resource Rent | Land Value Tax | Site Value Tax, and more:A philosophy and economic theory that follows from the belief that although everyone owns what they create, land, and everything else supplied by nature, belongs equally to all humanity.
... without a knowledge [of The Law of Rent], it is impossible to understand the effect of the progress of wealth on profits and wages, or to trace satisfactorily the influence of taxation on different classes of the community. – David Ricardo
With no disrespect for Adam Smith, some still see Sir William Petty (1623-1687) as the father of modern economics and its first econometrician. In many respects, I think Petty was the true founder of classical economics because he had an even deeper understanding of the role (and the sheer extent) of rent within the economy than Adam Smith. Being both a valuer and an economist, he had a much broader picture of the economy than today’s superficial economists.
– Bryan Kavanagh, Land Valuer (Ret.), Australian Tax Office and various Australian banks.
Early contributors to classical political economic theorem include Sir William Petty (1623-1687), John Locke 1632-1704, William Penn 1644-1718, Benjamin Franklin 1706-1790, Adam Smith 1723-1790, Thomas Paine 1737-1809, Thomas Jefferson 1743-1826, David Ricardo 1772-1823, Edwin Burgess 1807-1869, John Stuart Mill 1806-1873, Patrick Edward Dove 1815-1873, Herbert Spencer 1820-1903, Alfred Russel Wallace 1823-1913, Leo Tolstoy 1828-1910, Mark Twain 1835-1910, Henry George 1839-1897, Michael Davitt 1846-1906, William Ogilvie 1846-1912, Clarence Darrow 1857-1938, Sun Yat-sen 1866-1925, Sir Winston Churchill 1874-1965, Walter Burley Griffin 1876-1937, David Lloyd George 1893-1945, and more.
It fell to 19th century American journalist Henry George (1839-1897) to popularize the theorem with the 1879 publication of the all-time best-selling book on economics, Progress and Poverty (pdf), leading to the term Georgism, or Georgist. In writing his book, Henry George's aim was to understand why economic growth, aka progress, always led to more entrenched poverty. George dedicated his book: To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment. – San Francisco, March 1879.
Influence of Vatican encyclicals In his time, Henry George became the third most famous man in the United States, behind Thomas Edison and Mark Twain, due to his success in promoting "The Law of Rent" theorem. In 1891, Pope Leo XIII was forced to constrain the growing number of priests and laity supporting Henry George's work by issuing an encyclical Rerum Novarum – "of revolutionary change" or "Rights and Duties of Capital and Labor"
Professor Mason Gaffney's 1997 lecture, updated in 2000, provides a thoroughly referenced report, and is a must-read for those wishing to understand the central role of the Vatican in shaping economic history. PDF format: Henry George, Dr. Edward McGlynn, and Pope Leo XIII
“It was a time when Dr. Edward McGlynn, the must popular Catholic priest in NYC and the nation, could dream of modernising the American Catholic Church, leading it to shake off medieval trappings and old-world control, and leading the U.S. to genuine unity.” – Mason Gaffney
According to Professor Gaffney, Rerum Novarum ... was a watershed document: It was a new venture into social theology. ...the first far-reaching formulation of Catholic teaching since the long Council of Trent in the middle of the 16th Century. ...refuting false modern doctrines advanced by George and [Father] McGlynn. ...championing private property in land against various attacks, real and imagined, and specifically against Georgist land taxes. It was the Catholic counterpart of the attacks on George led by sanctimonious Protestant laymen and academicians like John B. Clark and Richard T. Ely. (p. 6) ... [Rerum's] sequel, in 1931, Quadragesimo Anno was issued by Pius XI to steer a course between socialism and laissez faire, seeking 'social justice through social action' (p. 12)
In his 1997 article on Father Edward McGlynn, the beloved priest of the New York Irish and other Catholics, Will Lissner, economics reporter for the New York Times, reveals how ecclesiastical bureaucrats in Rome had been misled:
...forming the mistaken opinion that Henry George and Father McGlynn held doctrines which were inconsistent with those traditionally held by the Church. ... And it is interesting that in the end, Henry George and Edward McGlynn won the greatest vindication — adoption of their position by the Magisterium, the teaching authority of the Church. ... Pius Ninth’s effort to save the monarchs, of whom he himself was one, from their inevitable doom, lost to the Church millions of workingmen and intellectuals who allied themselves with the growing democratic movement around the world.
When Leo XIII became Pope one of his first concerns was to undo the damage. In furtherance of this campaign he issued the encyclical letter, Rerum Novarum (On the Condition of Labor), on May 15, 1891. This document did much to update the antedeluvian thinking of Catholic conservatism. But it was muddled on radical land reform; it left the impression that there was a private right to possess land which superseded the common right of all men to the use of the earth — that common right that had been asserted by the Latin and Greek Fathers of the Church from the Apostolic Age onward. Henry George read the Pope a lesson in the history of economic doctrines and in the relations between economics and ethics in his The Condition of Labor, an Open Letter to Pope Leo XIII. This work of George’s had a profound influence upon Catholic social thinking in Europe and America.
When Father McGlynn was invited to write out a memorandum of his beliefs, it was fortunate that he had at his elbow Father Richard Burtsell. Like McGlynn he was a product of the Roman seminaries — a very quiet man who believed with McGlynn in the things he spoke about and in his right to say them. What they did was to set out that there are two rights: the common right to the use of land and the private right to possess it, and that an ethical land policy reconciled the two rights. On this basis the theologians judged that there was in McGlynn’s belief nothing contrary to Catholic doctrine, and he was restored to his full offices.
But there is an aspect of the McGlynn case that is often overlooked. The position for which McGlynn was condemned was not the one held by George which admitted the necessity for private possession of land, but rather the view [suggested] in Progress and Poverty, that land was common property. Indeed, McGlynn went further than George and held that private possession of land was immoral. >>> more
(See also Will Lessner 1937 report on Franco's Spain)
In his 2007 lecture, Going My Way? Winding Through the Stumbling Blocks Between Georgism and Catholicism, Professor Gaffney states: This essay surveys the issues between Georgists and Roman Catholics in three classes: issues that are not peculiarly Roman Catholic (RC) but play out across faiths and denominations, issues that are peculiarly RC, and points of similarity and agreement. Addressed in this fashion are the tensions that arise between the social gospel and individual salvation, between specifics and glittering generalities, between noblesse oblige and governmental reform, between the doctrine of original sin and tabula rasa, between the rich and the poor, between the dignity of labor and the honor of predation, between democracy and authority, between the regulatory emphasis rooted in the philosophy of Aquinas and free markets, and between plain talk and gobbledegook.
His conclusion is optimistic:
I was pleasantly surprised, as I worked along, how few of the stumbling blocks I had listed are peculiar to Catholicism; and how many are passable. The ones listed in “B” may remain, but I am optimistic that with good will on both sides we may find pathways through them, or over or around or even under them, to work together towards our common goals. I have not minced words to avoid tough problems, but tried to define issues clearly as a prelude to resolving them. Catholics of good will will not take offense, but detect the search for reconciliation beneath my frank words. I look to Catholic Georgists like Kelly, Kromkowski, and Dwyer to carry this resolution further. >>> more
“The intelligence required for the solving of social problems is not a thing of the mere intellect. It must be animated with the religious sentiment and warm with sympathy for human suffering. It must stretch out beyond self interest, whether it be the self interest of the few or of the many. It must seek justice. For at the bottom of every social problem we will find a social wrong.”- Henry George, Social Problems, 1883, (Ch.1/20)
Capitilization of land is the basis of our current economic system: Inflation followed by deflation in roughly 18-year Real Estate Boom-Bust Cycles, whereby speculators and financial institutions capitalize on property sales.
The Delusion: If nothing suppresses competition, progress will continue forever. –John Bates Clark (1847 – 1938), academic originator of Neo-Classical Economic 'concept "Land" = capital, and first Professor of Economics at Columbia University (1926).
TWO SCHOOLS OF ECONOMIC THOUGHT
1. Classical Political Economics The Law of Rent: Economic Rent, Resource Rent
Classical Political Economists developed the theorem that land is distinct from capital: "land, labor, and capital" were the three basic classical "factors of production" and were considered mutually exclusive.
Classical Political Economists recommend tax reform: Collect a "Single Tax" and eliminate all other taxes. (i) collect Economic Rent aka Resource Rent on all private access to land and natural resources.
(ii) provide a social wage or citizen dividend to all citizens.
(iii) remove all taxes on productivity – no income, business and sales taxes, etc.
Mason Gaffney, Professor of Economics at University of California, Riverside since 1976, co-authored (with Fred Harrison and Kris Feder) the authorative documentation of The Corruption of Economics (1994) – a detailed history of the suppression of Classical Political Economic theorem in favour of the current neo-classical speculative system.
See excerpt here.
In The Corruption of Economics the precise manner in which Classical Political Economic theorem was 'neutralized' is clearly explained:
In short, (i) economic modelling became fundamentally corrupted via blurring of the traditional distinction between capital and land and hence between earned and unearned income, (ii) by glossing this blurred distinction with jargon and abstract models, and (iii) by recasting economics generally to make free-riding by landowners seem just and moral.
Neo-classical economists changed the definitions of factors of production from "land, labor and capital" to capital and labor.
Neo-classical economic theorem, which promotes real-estate speculation and land capitalization, was first introduced as an academic economic theorem in 1926, when Columbia University launched the first Chair of Economics, funded by land speculators. John Bates Clark became popular with speculators when he developed the neo-classical economic theorem and, hence, became the first Professor of Economics at Columbia University.
Neo-classical economic theorem is promoted by the American Economics Association which annually awards the John Bates Clark Medal to an economist under age 40.
Part 4 The Vision:
A Stronger Form of CAPITALISM Georgism & Marxism are opposites
Karl Marx (1818-1883), who died four years after "Progress & Poverty" was published in 1879, was vocally opposed to the ideas of Henry George (1839-1897), and the reason is clear to anyone who reads their philosophies: Marx wanted both land and capital to become public property. George recognised private property in capital but wanted the community to recover the full Economic Rent value of all unimproved land from landowners. The idea is to turn "landowners," a position of contrived privilege, into people who, like everyone else, simply rent the land from the community via elected government.
In Progress and Poverty (1879), Henry George explained how collection of Economic Rent via a "Single Tax" (Land or Site Value Tax, or Resource Rent) on all private use of The Commons could replace all taxes on productivity - all income, pay-roll, business and sales taxes.
Free Market Holistic Thinking
– freedom from oversight and dictation by centralist, monopolistic, authoritarian administration.
It is possibile to enjoy the benefits of a genuinely FREE market as well as economic justice and ecological sustainability. While Kaynes and Friedman, and Hayek too, were familiar with ideas around the value of Economic Rent, they made the mistake of treating "Land" as Capital. The same can be said for Marx.
But not so for Henry George.
Professor Mason Gaffney, inThe Corruption of Economics (1994): To most modern readers, probably George seems too minor a figure to have warranted such an extreme reaction. This impression is a measure of the neo-classicals' success: it is what they sought to make of him. It took a generation, but by 1930 they had succeeded in reducing him in the public mind. In the process of succeeding, however, they emasculated the discipline, impoverished economic thought, muddled the minds of countless students, rationalized free-riding by landowners, took dignity from labor, rationalized chronic unemployment, hobbled us with today's counterproductive tax tangle, marginalized the obvious alternative system of public finance, shattered our sense of community, subverted a rising economic democracy for the benefit of rent-takers, and led us into becoming an increasingly nasty and dangerously divided plutocracy. >>> more
[Henry] George's theme was that the fundamental reason for the maldistribution of wealth in a free enterprise society was the private ownership of natural resources. He did not advocate the nationalisation of land as did some of his socialist contemporaries but a concentration of revenue-raising, or a single tax as it came to be known, upon the value of land, so that its yearly worth or economic rent would be taken into the public treasury in lieu of taxes on labour and production. He regarded the economic rent or annual value of raw land as society's natural income, increasing as the need for revenue grew with expanding population and social progress. These were not original ideas for they followed the track blazed by the French Physiocrats and later by political economists such as Adam Smith, David Ricardo, JS Mill and Herbert Spencer. But George carried their implications further than his predecessors and expressed them in unsurpassed prose and with compelling logic.
– MD Herps, FAIV, DipLaw (BAB), FSLE: The Walsh Memorial Bequest Address delivered at Macquarie University School of Economics 27 May 1988 (See complete lecture transcript here). Doug Herps was Deputy Valuer-General, New South Wales, and consultant to the Commonwealth Grants Commission in connection with Australia's land values.
If you don't tax that value that attaches to land, arising from the general wealth of the economy, the banks get it.– Professor Michael Hudson
Why do we pay DOUBLE? – 1. bank mortgage for access to land plus interest rates up to triple property value.
– 2. taxes to fund government.
Only one payment would be required under the Land Value Tax (LVT) system: aka a "Single Tax" on the value of land and resources can fund government, including a basic income, replacing welfare, social security, and unemployment payments.
Housing is a cost of living to wage earners Land only has a value (price) because the full economic rent is not being collected. The more economic rent (or land tax) that is collected the lower the price of the land. If the whole economic rent is collected the price of the land would be zero. – Raymond Makewell, The Science of Economics (2013)
To understand the mechanism that drove the global economy into depression, substitute 'land' for 'housing'. All the analyses refer to housing crises around the world, and the related financial symptoms like the sub-prime mortgage racket. But these terms are intended to disguise the site of the problem – the way in which we make money out of land without adding value to the wealth of our nations. – Fred Harrison
“If land value is taxed, the land will not flee, shrink or hide.”
– Professor Fred Foldvary, San Jose State University
When you've paid your rent, you've paid your taxes. If governments would collect their necessary revenue in the form of site rents, resource rents, monopoly rents and licence rents —all of which, by reason of their origin, accrue preferentially to the rich — they would not find it necessary
to impose 'progressive' taxes on earned income. – Dr Gavin Putland, Director, Land Values Research Group
Alternative public revenue sources defined See complete analysis here. Economic rent is the difference between a fair profit and a windfall profit. It exists because of the hard work and ingenuity of the community and should therefore
accrue back to the community, as represented by the government.
Alternative Revenue Sources: Frank de Jong demonstrates how the Canadian government could eliminate all taxes on incomes, business and consumption, by replacing them with collection of the following:
Resource rent accrue to land and natural resources;
Infrastructure rents from privileged access to community assets;
Pigouvian taxes on pollution, resource depletion, and currency speculation.
Excerpt from Phil Anderson's BLOG:
Economists delight in recalling the Dutch tulip mania of 1636, the South Sea bubble of the 1720's, and in current times the internet investment bubble of the 1990's, because it involved colourful characters in what turned out to be awesome booms that turned quickly to bust. These were random events, responses to either luck (such as the alleged discovery of gold) or invention (money-making schemes of fertile imaginations). They could not have been predicted using the standard tools of the economist.
The financial crisis that broke in 2007 is different. This crisis was pre-determined by the structure of the economy. The present crash is NOT a market failure: it is actually proof that the monopoly capitalist system is working, and working well.
The instability of the system is inbuilt into the DNA of the economy. The process is underpinned by the enclosure of the economic rent, a concept first formalised by English economist, David Ricardo. Ricardo's Law of Rent states, simply, that the economic rent is not a cost of production. A house costs pretty much the same to build, wherever you build it – wages are the same, and materials costs are the same. But the selling price will depend on the location. >>> more
In the interest of absolutely accurate prophecy
Seeing what sort of political leadership the common man invariably chose to follow, and the kind of issue that invariably attracted him, [George] ended the argument of Progress and Poverty with a clear warning, too long to be quoted here, against the wholesale corruption of the common man by the government which the common man himself sets up. It is well worth reading now, whether one finds the root of this corruption in the common man’s weakness of mind and character, or whether one finds it, as George did, in the unequal distribution of wealth. Whatever one may think about that, there is no possible doubt that George’s warning has the interest of absolutely accurate prophecy. – A. B. Nock, Henry George: An Essay(1939), William Morrow & Company:
If you wanted to reduce the unpopularity of the property tax,
the way to do it would simply be to provide
for an effective method whereby it could be withheld
at source, in small payments and that would eliminate
a large part of the objection to it. Milton Friedman
Part 7 Solution 1
Collect Economic Rent on all natural resources
Eliminate taxes on everything – except land (all natural resources). Immediate social and economic benefits:
Removal of taxes on productivity will encourage innovation.
Removing land from speculative growth cycles will provide affordable land (and homes).
Provision of a "Citizen Dividend" will end involuntary poverty.
Immediate benefits of collection and distribution of Economic Rent
no more tax reporting: no income, business, and sales taxes.
no need to take out a bank mortgage for private access to land.
a social wage for everyone, aka a citizen dividend, which would put an end to involuntary poverty.
Collection of Economic Rent could provide funding for all public services and infrastructure, and a Citizen Dividend – a Social Wage for all citizens, which would provide basic economic security.
An immediate outcome would be the restoration of sustainable economic practices, ending inhumane, unhealthy, unsafe, ecologically damaging work conditions.
Sustainable clean energy solutions are waiting for permission to emerge. There are many creative solutions for provision of additional public services, aka the "dirty work" could easily be managed via various National Service programs.
A Cambridge, UK group are offering a viable option: Location Value Covenants (LVC) Exemption from other taxes – that's the proposition –
An extremely clever choice and very Georgist. – Bryan Kavanagh It's an option to switch from paying income taxes to signing a "Covenant" on the locational value of your land, - a Covenant which remains on the property's title.
See a quick overview here
With a mortgage, the money is created out of nothing by the banking system.
With an LVC, the money is created out of nothing by the government.>>> more
Systemic Fiscal Reform is a process of reform moving from the current tax, welfare and monetary system to one based on based on economic, financial and moral integrity. The endpoint of this process is a much more stable and productive society with the following features:
No Income or Corporation Taxes – Replaced by payments pledged by property owners
Income Tax and Corporation Tax are to be phased out (along with all payroll taxes, National Insurance payments and Gains taxes). In their place, government will be funded by payments pledged by landowners through covenants established on a voluntary basis. These pledges are called Location Value Covenants (LVCs), and are inspired by or using the English legal instrument of land covenants.
No Value Added or Sales Taxes – Replaced by a Carbon Tax
VAT and sales taxes are to be abolished. In their place, a uniform Carbon Tax is levied on all extraction and importation of fossil fuels. This Carbon Tax is in proportion to the pollution and climate change potential of the fuel when used in the normal way.
No Estate (Inheritance), Gift, Transfer or Stamp Taxes
Estate taxes such as Inheritance Tax and Accession Taxes are to be abolished. All Stamp Duties are to be abolished, including those on share and real-estate transfers.No means-tested welfare benefits – Replaced by a Citizens' Dividend
Welfare benefits based on poverty, joblessness tests or housing costs are to be abolished. Any welfare payments based on disability are retained.>>> more
The essential concept
The private-investment community land trust is an alternative system for private land-holding, for generating community revenues, and for encouraging better land use. Essentially, land users lease the land, rather than purchase it, from a land trust. The trust then uses lease revenues to pay investors, to provide community services, to rebate taxes levied against occupants of trust land by larger taxing bodies, and to acquire additional land. It has many advantages over our traditional land tenure system, and particularly over urban-renewal projects, to the occupants, the investors, and the communities in which they are located. Current Occupants Can Stay
People often complain that urban redevelopment projects create "gentrification," by which they mean pushing poorer people out in order to entice richer people to move in. The land trust approach attracts richer people and more dynamic businesses with little or no displacement of those already living or doing business in the community. Studies show that when a community gradually improves, it actually loses fewer residents than similar communities that stagnate or continue to decline. The real cause of displacement is the urban renewal project that is undertaken to trigger gentrification. Indeed, the original term for "urban renewal" was "slum clearance." >>> more
TOO BIG TO FAIL Heads, I win.
Tails, tax payers lose.
According to conventional wisdom, the global financial crisis happened because markets were out of control — they were too free. But what if the real cause was because they weren’t free enough?
What if well-meaning but flawed attempts by governments to manage capitalism’s ups and downs actually did more harm than good? What if politicians and central bankers actually caused the crisis they tried to prevent? –Stephanie Flanders >>> more
Kaynes and Friedman believed that government could steer the economy, supply money - print money, and socialize the cost of bailing out the banks. They offered government a way to champion Free Markets and hold on to power.
On the other hand, Hayek thought that by freeing the market you could prevent power from concentrating in the hands of politicians. Hayek also believed almost any government intervention in the market, like propping up failing businesses, setting trade tariffs, or manipulating interest rates, risk disaster.
Masters of Money (2:3). Friedrich Hayek and the Free Market
BBC September 2012
Read a transcript here
In the second episode of the BBC documentary series, The Masters of Money, Frederick Hayek and the Free Market, BBC economics editor Stephanie Flanders turned her attention to the radical free-market economist and Nobeloriate Friedrich Hayek (1899-1992), who believed in the primacy of the market and that all attempts to regulate and control it were misguided and would end in failure. Hayek believed free markets would deliver prosperity without policy intervention. He also argued that it was dangerous to treat economics as a science.
Hayek: Governments that try to control the economy ultimately enslave its people.
The Urge to Meddle Stephanie Flanders, (2012) BBC Economics Editor: ...no government has ever dared to implement Hayek's vision of a market free from the State's intervention, and when capitalism faced its biggest test since the 1930s, politicians rushed to save the market from itself. But the biggest debate in Britain today is not about whether the Government is doing too much to prop up the economy but whether it's doing enough. ... Today Hayek's advice seems harder to take than ever. You've got the global economy still struggling to put the financial crisis behind it, if it is behind it. Hayek would say government should just step back, take a cool look at the historical record, dismantle most of the machinery they've constructed for guiding the economy, take a deep breath, and let it go... These leaders might pay lip service to liberalising the economy and setting markets free, but in practice it has been difficult for them truly to give up the urge to meddle, even when they are convinced of the intellectual case for doing so. >>> more
Mrs. Thatcher’s mean-spirited legacy The Queen Mother of Global Austerity and Financialization By Professor Michael Hudson and
Associate Professor Jeffrey Sommers
We typically honor the convention to refrain from speaking ill of the recently departed. But Margaret Thatcher probably would not object to an epitaph focusing on how her political legacy was to achieve her professed aim of “irreversibly” dismantling Britain’s public sector. Attacking central planning by government, she shifted it into much more centralized financial hands – the City of London, unopposed by any economic back bench of financial regulation and “free” of meaningful anti-monopoly price regulation. >>> more
If you wanted to reduce the unpopularity of the property tax, the way to do it would simply be to provide for an effective method whereby it could be withheld at source,
in small payments and that would eliminate
a large part of the objection to it. – Milton Friedman
Here's what Milton Friedman said... Excerpt from this film clip (1:00) >>>
– The least bad tax is a property tax on the unimproved value of land.
– The Henry George argument from many, many years ago.
– The next least bad tax a flat-rate tax on income above an exemption.
So, in answer to your question, if I could design my ideal tax system, it would contain an income tax but it would not be the kind of monstrosity we have now. It would be a flat-rate tax on all income, from whatever source derived, less (unclear at 1:44) a personal deduction and strict occupational expense. And that kind of an income tax I think would be the least inconsistent with a strong free enterprise system.You know why, it's an interesting thing, if you 're talking about taxes, about why it is that the property tax is so unpopular. It's not unpopular for good economic reasons. It's unpopular, in my opinion, for one simple reason: It's the only tax left on the books for which people have to write a big check. The income tax is a far worse tax. But, and I have to admit that I have some part of the guilt in this process because during WW2 I worked at the Treasury and helped to design the withholding system.(2:34)
2:40) But with respect to the income tax, we've arranged it so it's taken off bit by bit and it's almost painless. With respect to the sales tax, we pay a little bit of it each time. With respect to the corporate tax, and excise taxes, they're hidden in the price of things we buy, we don't even know we're paying them. But with respect to the property tax, that remains a tax that we as individuals have to pay and we have to write a big check for. That's the fundamental reason, in my opinion, why it's so unpopular. And, in fact, I think and I hate to say this because it's giving hostages to fortune, but if you wanted to reduce the unpopularity of the property tax, the way to do it would simply be to provide for an effective method whereby it could be withheld at source, in small payments and that would eliminate a large part of the objection to it.
Sir Winston Churchill tried:
Land monopoly is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly. Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public.
Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property.
Nothing is more amusing than to watch the efforts of land monopolists to claim that other forms of property and increment are similar in all respects to land and the unearned increment on land. – Winston Churchill
U.S. history in context: New Deal Reference Library, edited by Allison McNeill, et al., vol. 1:
Almanac, UXL, 2003, pp. 1-20.
What happened at the beginning of the 20th century? Causes of the Great Depression
Excerpt: When the stock market began to spiral downward, many looked on in disbelief. However, others recognized that the plummeting prices were a confirmation of severe economic problems long in the making. For much of the 1920s the United States seemed prosperous. Many Americans were employed, and goods such as automobiles, appliances, and furniture flowed out of factories. Yet an undercurrent of unhealthy factors ran through the American economy— factors that all came together and surfaced in late 1929.
During the 1920s there was no national economic planning or any significant watchdog agency to monitor the U.S. economy. The Republican administrations of Presidents Warren G. Harding (1865–1923; served 1921–23), Calvin Coolidge (1872–1933; served 1923–29), and Herbert Hoover (1874–1964; served 1929–33) followed a laissez-faire approach. Laissez-faire refers to the deliberate absence of government regulation. None of these presidents attempted to regulate the buying or selling of stocks and bonds; they exercised no controls over banking, manufacturing, or agricultural production. Likewise, no attempt was made to gather or analyze statistics that would have pointed to increasing problems in stock investing and overproduction of agricultural products and consumer goods. This approach to government was a major contributing factor in the Great Depression.
Another general factor that contributed to the Depression was the "get rich quick" mentality that developed during the 1920s. Many Americans believed their fortune was just around the corner. This belief was fueled by the mass production of consumer goods, mass advertising in magazines and newspapers, and exotic silent movies telling tales of riches and success. With this "get rich quick" attitude, many Americans began to recklessly spend what little money they had. Hoping to look like glamorous movie stars, they bought a vast array of beauty products. On a larger scale many Americans purchased, sight unseen, parcels of land in Florida and southern California. When some investors went to visit the lots that had been purchased, they found swamps or desert. Realizing they had made a poor investment, many turned to the roaring stock market to overcome their losses. Focused on their own individual situations, these people did not recognize that their actions would soon combine with a number of other factors to produce the Great Depression.
Historians at the beginning of the 21st century recognize a number of causes for the Great Depression, including the following:
- Chronic agricultural overproduction and low prices for farm products
- Overproduction of consumer goods by manufacturing industries
- Concentration of wealth in the hands of a few (often referred to as maldistribution or unequal distribution of wealth; mal- means bad)
- The structure of American business and industry itself, which included several large holding companies
- Investors' speculation (buying stocks with the assumption that they can always be sold at a profit)
- The lack of action by the Federal Reserve System
- An unsound banking system
What happened 30 years ago?
"The Reagan Revolution, that’s what. In the name of creating a “free market,” the Revolution created exactly the opposite. By cutting taxes on the rich and on corporations while raising payroll taxes, the Revolution tipped the policy balance in favor of the one percent and against small business. By cutting regulation and anti-trust enforcement, the revolution set off a wave of mergers and takeovers unparalleled since the era of robber barons." – Dr. Polly Cleveland
So my question is ... with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker.– Professor Elizabeth Warren
In March 2013, Senator Elizabeth Warren (D-Mass.) made a case for increasing the USD$7.25 minimum wage during a US Senate Committee Health, Education, Labor and Pensions hearing, in which she cited a study showing that wages have not kept up with increasing rates in worker productivity. In other words, the consequences of the lack of an equivalent Enterprise Bargaining system in the USA is only now being questioned. >>> more
They are super greedy. They are pig-rich! The Honourable Paul Keating,
Prime Minister of Australia, 1991–1996
Federal Treasurer, 1983-1991
Member of the Australian Parliament, 1969–1996.
NOTE: Paul Keating subscribes to the Free Market philosophy of Kaynes and Freedman: "The recession we had to have" is Keating's legendary response to the last boom-bust cycle, late 1987-1992. Paul Keating is also remembered for his attempt to combat global trends by drafting economic policies based on Enterprise Bargaining: "A kindly social wage."
John Faine: What do you think of the Occupy Wall St. movement?
I’m surprised it hasn’t happened earlier. You look at what’s happened in America since the advent of movement conservatism, which happened in the Reagan years, the American prosperity compact was torn up. This is a compact that began with Roosevelt, supported by Truman, and adopted by Eisenhower the new Republican President in 1950/1. Then you had Kennedy and Johnson, and Nixon, who was a Republican, all subscribed to it. And what was it? Basically, that you shared the productivity between wages and profits. This all stopped with Reagan, with the rise of Conservatism. And it got into full modality with George W. Bush’s administration. The end result is that Americans have had no increase in real wages since 1990. Where as, in Australia, under the policies of the government I led, — and Bob Hawk led, and since, of course, in the meantime, with Howard — the wages system I established, Enterprise Bargaining, Australians have had a 36% real increase in wages since 1991. The Americans have had zero. People are 1/3 wealthier here, after inflation. Whereas all of the productivity in America — big surge in the late '90s and the early naughties, say '97 to '04, — massive, like 9% a year, all of it went to profits. None of it went to wages. So, you just wonder why American working people, and working poor would take this. Occupy Wall St. is finally people saying: Hang on! This is shocking! We’ve had enough of this. Is it any wonder the top 1% have had a huge increase — a massive increase in wealth. Philanthropy is one of the things in America now. You know, you give away the money. But a much better idea is that you don’t get the money in the first place. It goes to ordinary working people.
John Fain: Do you think the rich are greedy?
They are super greedy. They are pig-rich.
The wealth here [in Australia] has never accumulated like that. See, this is the point about the compact I tried to put together with the ACTU [Australian Council of Trade Unions]. That is, an Open Market economy, flexible exchange rates, flexible wage system, zero tariffs, etc. but grafted on to a kindly social wage. Full universal health protection with medicare. A retirement income with Superannuation. Access and equity in education. When I began in '83, three kids in ten completed year twelve. When I finished in '96, it was nine in ten. So we trebled year twelve retention rates. And then, of course, 40% of kids left year twelve and went to university. That meant, if we had three times as many kids finishing year twelve, we had to treble university places. So we took university places from 250 thousand to 750 thousand. These big social wage things are what makes Australia a better place than the United States. And why the Labor government — the model of the Labor government, what Tony Blair, 15 years later called “The Third Way” — I said to Tony, in a couple of conversations, it was the only way. That is why the excesses of wealth were never really created here. This economy grows about 3.5% to 4% a year. And anything that does that means there is a lot of wealth spinning off.
Q: When did the American Dream – "Government of, by, and for the people" – turn into a nightmare for the entire world?
A: As soon as the Articles of Confederation were replaced with the Constitution! According to the eloquent Albert Jay Nock, natural law still exists and is still a respectable force," as applied to Gresham's law and the law of diminishing returns: So, in what the journalists call "these hectic days," a suggestion that natural law is still at work, and that there is really not much that one can do about it, may be somewhat of a time-saver and trouble-saver to minds of the simpler sort, like my own; and to such, and such only, I offer it. >>> more
In addition, these two events sealed the deal:
The founding of the Federal Reserve in 1913— and when elected officials bankrupted the country and gutted the US economy in the 1930s.
How did this happen?
After previous attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President. He had committed to sign this act. In 1913, a Senator, Nelson Aldrich, maternal grandfather to the Rockefellers, pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation (Reference 3, 4, 5). When elected, Wilson passed the FED. Later, Wilson remorsefully replied (referring to the FED), 'I have unwittingly ruined my country'
(Reference 17, P. 31: "Repeal the Federal Reserve Banks" (1983)
Father Casimir F. Gierut (1919-2007) (Author bio),
Chairman, National Committee Repeal Federal Reserve Act, from 1972.
President Woodrow Wilson's great sorrow We are at the parting of the ways. We have, not one or two or three, but many, established and formidable monopolies in the United States. We have, not one or two, but many, fields of endeavor into which it is difficult, if not impossible, for the independent man to enter. We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world–no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.
President Woodrow Wilson (1856-1924),
28th President of the United States, 1913 to 1921: "New Freedom: A Call for the Emancipation of the Generous Energies of a People"Doubleday, 1913, CH 8.
Available FREE @ Gutenberg.org Note: his book was published the year the FED Act was signed.
"Trickle-down Economics" Oxford English Dictionary: Trickle-down, adj., of or based on the theory that economic benefits to particular groups will inevitably be passed on to those less well off; orig. and chiefly U.S. Trickle down theory: the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows. – John Kenneth Galbraith
"Trickle-down economics" and the "trickle-down theory" are terms in United States politics to refer to the idea that tax breaks or other economic benefits provided by government to businesses and upper income levels will benefit poorer members of society by improving the economy as a whole. The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy. – Giangreco, D. M. & Moore, K. (1999), Dear Harry: Truman's Mailroom, 1945-1953
Häring and Douglas show that the economics discipline did not get this way by accident. ...they provide a wealth of references tracing how economics was turned into a propaganda exercise for financiers, landlords, monopolists, insiders, fraudsters and other rent-seeking predators whom classical economists sought to tax and regulate out of existence. – Professor Michael Hudson
“Whom the gods would destroy, they first make mad.”And if they would destroy economies, they first create a wealthy class on top, and let human nature do the rest. The acquisition of power soon leads to its abuse, to economic and social hubris. By seeking to protect its gains, perpetuate itself and make its wealth hereditary, power elites lock in their position in ways that exclude and injure those below. Turning government into an oligarchy, the wealthy indebt them and shift the tax burden onto the less powerful.
It is an ancient tale. The Greeks got matters right in seeing how power leads to hubris, bringing about its own downfall. Hubris is the addiction to wealth and power, an arrogant over-reaching that involves injury to others. By impoverishing economies it destroys the source of profits, interest, capital gains, and even recovery of the original savings and debt principal.
This abusive character of wealth and power is not what mainstream economic models describe. That is why economic theory is broken. The concept of diminishing marginal utility implies that the rich will become more satiated as they become wealthier, and hence less addicted to power. This idea of progressive satiation returns gets the direction of change wrong, denying the basic thrust of the past ten thousand years of human technology and civilization.
Today’s supply and demand approach treats the economy as a “market” in a crudely abstract way, as quantities of goods (already produced), labor (with a given productivity) and capital (already accumulated, no questions asked) are swapped and bartered with each other. This approach does not inquire deeply into how some people get the capital to “swap” for “labor.” To top matters, this approach gets the direction of technological growth and basic business experience wrong, by assuming conditions of diminishing returns and diminishing marginal utility. The intellectual result is a parallel universe, whose criterion for economic excellence is merely the internal consistency of its abstract assumptions, not their realism. >>> more
2nd book review: In their new book, ‘Economists and the Powerful,’ Norbert Häring and Niall Douglas trace how the most powerful of all the social sciences became a doctrine for helping the rich – with the aid of huge sums from business. You may be familiar with a version of this critique, thanks to the film Inside Job, which described how some of the best-known economists practising today are in the pay of Wall Street. But the history unearthed by Häring and Douglas is far more disturbing – because they argue that vested interests have slanted some of economics’ most fundamental ideas. – Aditya Chakrabortty, Big business has corrupted economics, TheGuardian, 27 November 2012
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.– Henry Ford, 1922.
Following the Money: Who’s in Control?
December 12, 2012 by Arjun Walia Political, media, food, education, health, energy and financial industries are now under intense scrutiny as people continue to let go of fear, speak up and ask more questions. Can we really separate these industries if they are all operated by the same people? How can we separate the medical, food and pharmaceutical industries when they are all funded and headed by the same families and multinational organizations? How can we disregard comments and research conducted from insiders that have turned to the side of truth? >>> more
Orwellian Economics How Euphemisms Have Turned Economics from a Science to a Propaganda Device by Dan Sullivan
Excerpt: The Precision of Scientific Language Scientific analysis requires precise language, and the "hard" sciences rely on such language. In aerodynamics, for example, the factors of flight are lift, thrust and drag. Each of these factors is rigorously defined, and each is distinct from the other two. ...
The Ambiguity of Modern Economic Terminology Modern economics is riddled with influence from political factions, each focused on its own interests, each vigorously defending its own privileges and less vigorously decrying the privileges of others, and each trying to manipulate economics to support its agenda. The result is a pseudo-science based on terms with multiple meanings, with expediency masquerading as utility, and rationalization masquerading as logic. As we get into the history of how economics has become degraded, we will examine some of the euphemisms now in vogue and show how they lead to illogical conclusions.
"Macroeconomics" for "Political Economy"
Economics was originally called "political economy." Its explicit purpose was to analyze public policy alternatives and to advise kings and lords as to the effects of proposed policies. The moral purpose of political economy was ostensibly aligned with the moral purpose of government itself - to maintain order and to promote the general welfare. Modern economics, pretending to be a "pure" science, has stripped away terms that imply a moral purpose. However, we shall see that hidden agendas of interest groups have replaced the overt agendas of kings and of the people, and that these hidden agendas are served by obscuring the political purpose of "macroeconomics."
In many ways, the new economic thinking we have to work out has some close affinities with very old economic thinking, because what I think we need to do is to find a way to reconnect economic reasoning with moral reasoning. The classical economists understood their subject in this way, from Adam Smith, to Karl Marx, to John Stuart Mill - despite their ideological differences - the classical economists did not view economics as a value-neutral science, or even as an autonomous discipline. They all understood it to be a subfield of moral and political philosophy, and I think that we will succeed in recasting, in reinventing economics, when we reconnect it with this long, but largely forgotten tradition.
- INET presentation by Michael Sandell, Harvard professor of government and producer/host of the internet course, Justice.
"Normative" for "moral"
Modern economists use the term "normative economics" for arguments about what should be, and "positive economics" for arguments about how things are and what "works." It is often insisted that positive economics must come first - that what is and what works must come before what should be. However, this begs the question, "works for whom?" Often, when there is no explicit moral agenda as to whom economic policy should serve, it serves an implicit agenda, as Elizabeth Warren observed in 2004:
What Alan Greenspan focuses on when he talks about the American family is whether or not they'll be able to continue to make the payments on those outstanding credit cards and outstanding loans, because if they can keep making the payments - if they can keep a shoulder to the wheel - then the banks are safe. Ultimately, Alan Greenspan's constituency is just the banks. Just keep those banks safe, and that means everything is happy.
This is the result of macroeconomics having divorced itself of political economy's explicit moral purpose, and it renders "positive economics" positively absurd. If you haven't defined who is supposed to benefit from a policy, how can you define whether that policy 'works'? None the less, substituting "normative economics" for "moral economics" avoids calling attention to how amoral, if not immoral, most economics is.
"Maximization of Wealth" for "Satisfaction of Desires"
Although the terminology of classical economics was generally more logical than today's terminology, it defined the whole point of economics in a monarchial context, and that mis-definition has remained with economics to this day. The first economists were employed by kings and high nobles, whose desires were, in fact, the maximization of wealth under their dominion. ...
John Ralston Saul: The Cult of Neoliberalism Interviewer, Chris Hedges
Toronto, Oct. 29, 2015
(28 min.) EXCERPT: Neoliberalism as a utopian ideology (00:57) …neoliberalism has nothing to do with 19c liberalism. In other countries, the same thing is called neoconservatism which has absolutely nothing to do with conservatism. In both cases it's stealing –going behind the curtains and pretending you are something you are not in order to calm people down. We're just a new kind of liberal, we're just a new kind of conservative – when in fact, they're neither. (1:23) … When people come forward with rather simplistic 'truths' you already know you're in trouble when they say they've got the truth. and they say, This is what must happen. This is how things must work. This is what dominates society. It's an ideology. We have thousands of years of experience. We know what an ideology is. A declaration of inevitability and a declaration of truth are two characteristics of an ideology. It's a form of religion.
CH: You talk about how the marketplace in modern society has replaced the worship of god.
JRS: What's fascinating is it happens very slowly. It creeps up from underneath the rational movement with the idea that what we require is specialisation. The idea that we need a lot of specialists, which we do, but that these specialists will have 'the truth' and once you have the field covered with 'the specialists' then all you need is a kind of heroic leadership to tell them what direction to go in, in the sense of the 'Bonaparte' version of life. In a way, what that does is it empties out the field of the idea that you and I can sit down and talk about things. That there are many possibilities and if we make a mistake we have to change our minds. All of that disappears –the idea of politics as a debate among people who disagree in order to find out what to do.
CH: In all of your books you focus on language –and how the technocrat essential creates, or the specialist essentially creates a system of language that is unintelligible to the outsider –to lock them out.
JRS: Essentially, you end up with these silos where, you now have millions –thousands and thousands and thousands of silos of impenetrable language controlled by small interest groups.
CH: Economics would be…
JRS: Well economists is the most classic example because economy is an area of speculative discussion. What you've seen, particularly since the second WW is gradually: its a class system, with an aristocracy, a middle class and a working class –a "lumpenprolitariat"– and the aristocracy were the economic historians because they understood the shape of the debate –what had already been done; where might we go? And then we had the, you know, solid middle class –those were the macro-economists who could 'do stuff' and micro-economists, who were 'slaves' or whatever, 'get me some numbers!' and what they did, at most universities was they did an intellectual cleansing of the economic historians to remove the possibility of 'doubt' –the possibility of speculation on ideas –leaving these sort of hapless –mainly hapless macro-economists who fell quite easily, frankly, into the hands of the ideologues –the neoliberals, neoconservatives. Let's face it, what is this ideology? An ideology of inevitability. An ideology based on self-interest. An ideology in which there is no real memory. At the end of the day, it's about power and money. (5:00)
CH: It's about making every aspect of society conform to the dictates of the market place. Which, as you point out, there's nothing, I think you say something like two or five thousand years of human history, to justify the absurdity that you should run a society based on the market place. (5:24)
JHS: Let me just take a tiny step back, as a historical marker, the day that I realised that the 'neos' were claiming that Edmund Burke was their godfather or whatever, I realised that we were into both lunacy and the denial of history. Because, of course, inspite of his rather crazy things about Maria Antoinette and the French Revolution, most of his career was about Inclusion, standing against slavery, standing for the American revolution, and of course, leading a fight for anti-racism and anti-imperialism in India – amazing democratic (?) –a liberal, in the terms of the early 19c, so when you see that these guys were trying to claim him, it's like lunatics today claiming Christ or Mohammad to do the unacceptable things. I think the fascinating thing is once you get rid of history, you get rid of 'memory' which they've done with economics, you suddenly start presenting economics as something that it isn't. You start saying, "The market will lead," and these theoretically "sophisticated" experts are quoting the "invisible hand" which is, of course, an entirely low-level religious image.
The "invisible hand of god" right - running the universe. As soon as you hear tham say, "Oh, that's what Adam Smith said," but when you talk to them, they haven't read Adam Smith. Adam Smith isn't taught in the departments of economics. You get quotes from Adam Smith - even when you're doing an MA or whatever, they don't know Adam Smith. They don't know that he actually was a great voice for fairness –incredibly distrustful of businessmen– and powerful businessmen. He said never allow them to be alone in a room together –they'll combine and falsify the market, and so on. So, what we've seen in the last half-century is this remarkable thing of big, sophisticated societies allowing the market-place to be pushed from say 3rd or 4th spot of importance to #1. And saying that the whole of society must be, in a sense, structured and judged, and put together through the eyes of the market-place and the rules of the market-place. Nobody's ever done this before.
CH: How did it happen? (7:53)
Rachel Lomax – the very model of UK 'establishment': "Where is the revolutionary thinking?" Big business has corrupted economics by
Aditya Chakrabortty Excerpt: You know the country is in a financial mess when even establishment figures such as Rachel Lomax are calling for revolutionary thinking.
Rachel Lomax is practically the definition of establishment: Cheltenham Ladies' College followed by Cambridge and the LSE; principal private secretary to then-chancellor Nigel Lawson; deputy governor of the Bank of England for five years until 2008. Which makes what she said on Friday evening all the more startling.… The former Treasury mandarin made no bones about admitting that she had been part of a project of "dismantling a version of capitalism" and replacing it with "Anglo-American neo-liberalism". You'd struggle to get scholars of Thatcherism to speak with such straightforwardness, but here it was coming from one of the era's key backroom players.
And now this co-architect of Britain's economic model as good as admitted that the system she had helped create was broken. But Lomax had one question: "Where is the revolutionary thinking?" You surely couldn't ask for a better measure of the economic mess we're in, that even members of the establishment are now calling for revolution. >>> more
During his July 2014 visit to Australia, the esteemed Professor of Economics at Columbia University Joseph Stiglitz revealed why the IMF has had a change of perspective on the impacts of socio-economic inequality.
In order to understand the significance of his revelation, it is important to note that in 1926 Columbia University opened the first American economics department, funded by speculators with the express purpose of promoting John Bates Clark's Neo-Classical Economic Theorem, justifing the treatment of "Land" as Capital, against the growing wave of international public interest in Classical Political Economic Theoremre. collection and distribution of Economic Rent as a means to eliminating socio-economic inequality- aka POVERTY.
The IMF has pointed out that high inequality is associated with lower economic growth and more economic instability. This is a very big change in perspective from the way we thought about things before. We used to say, "Well, inequality is bad, but if we do anything about it, it will slow economic growth." Now we realise that inequality has reached a level where it's actually having adverse effects on countries like the United States and other advanced countries.
If you tax monopoly power, if you tax excess what we call rents of a whole variety of kinds, there are some ways in which raising taxes at the top can actually improve the efficiency of the economy. Let me give you an example. In the United States, the speculators are taxed at lower rates than those who work for a living. The result of that is more resources go into speculation. The result of that?: an economy that has an excessively large financial sector, an economy that's excessively unstable, excess activities in speculation, and, less of our scarcest resource, our most talented young people, fewer of them are going into research, into the kinds of things - transistors, lasers - all these basic research that would improve our standard of living. Why go into those low-paying research jobs if you can make a lot more money after tax in speculation?
Ask a simple question: is it better to tax bad things or good things? Is it better to tax something that's destroying the global planet or to tax work or savings? And my view is: let's tax carbon and use that revenue to enable a lowering of taxes on savings and work. To me, it's just common sense. Tax bad things rather than good things.
The Price of Inequality (2013),
by Joseph Stiglitz, professor of economics at Columbia University
Professor Stiglitz speaks to "the need for the field of economics — and the country — to come to terms with the growing gulf between haves and have-nots." Professor Stiglitz believes this division is holding the country back.
Why the Rich Are Getting Richer — and Why It Could Get Much Worse by Lynn Parramore, December 16, 2014
My paper begins with the observation that in fact, you cannot explain what has happened to the wealth/income ratio by that (Piketty's) analysis. A closer look at what has gone on suggests that a large fraction of the increase in wealth is an increase in the value of land, not in the amount of capital goods.
When you say “land,” you’re not talking about land in the Jane Austen sense, that is, agricultural land under the ownership of the lord of the manor.
Professor Joseph Stiglitz:
It’s not agricultural land, it’s the value of urban land, and I would include in that, broadly, rents associated with natural resources. It’s the value of existing assets. As a footnote, some of what has gone on, in addition to an increase in the wealth/income ratio, is a capitalization of the increase in other kinds of rents, like monopoly rents. If monopoly rents get increased, if the market power of firms relative to workers gets increased, as when you have the ability of a few, like the banks, to get government guarantees — the value of that is increased and gets capitalized. And that increases wealth but it doesn’t increase capital. So it’s that distinction between wealth and capital that turns out to be critical. >>> more
January 2, 2015 interview by Lynn Stuart Parramore: Joseph Stiglitz: Thomas Piketty gets income inequality wrong
The famed economist reveals the real reason the rich are getting richer -- and what it means for the rest of us. >>> more
Something from just beyond the horizon calls us forward,
to become who we already are, but do not know it yet.
Rainer Marie Rilke (1875-1926)
Download a free copy of his book, Letters to a Young Poet
If we could ultimately get rid of fear in our population, then basically we would put all of our reserves, all of our energy and all of our body systems into the mode of growth and maintenance, and therefore, not only would we be healthy as individuals, but then, as a community, all healthy individuals in a community would raise the level of life in that particular community so that there is the great possibility of a future of growth and peace and harmony once the concept of fear is removed from our belief system. – Bruce Lipton, Professor of Biology, Stanford University
In Ecological Economics (1999), Professor Herman Daly said that the elites
who make the decisions have figured out how to keep the benefits for themselves
while sharing the cost with the poor, the future, and other species.
Put it this way: Jazz is a good barometer of freedom…
In its beginnings, the United States of America spawned certain ideals of freedom and independence through which, eventually, jazz was evolved, and the music is so free that many people say it is the only unhampered, unhindered expression of complete freedom yet produced in this country. – Duke Ellington (1899-1974)
"A prince should have no other aim or thought
but war and its organisation and discipline." Machiavelli (1469-1527)
Roman Senator Tacitus, in Agricola (98AD),
credited Caledonian Chieftain Calgacus with the following
response to upheaval
caused by the Roman Empire:
"...Out of sight of the shores of the conquered, we could keep even our eyes unpolluted by the contagion of slavery. To us who dwell on the uttermost confines of the earth and of freedom... Robbers of the world, having by their universal plunder exhausted the land, they rifle the deep. If the enemy be rich, they are rapacious; if he be poor, they lust for dominion; neither the east nor the west has been able to satisfy them. Alone among men they covet with equal eagerness poverty and riches. To robbery, slaughter, plunder, they give the lying name of empire; they make a solitude and call it peace."
The Hidden People: The Spirit of Communication and 'The Craic' (1997)
By Maireid Sullivan
On the history of struggle over Roman Catholic Church dogma and traditional Celtic philosophy.
Excerpt: The Celtic philosopher, Pelagius (354-420 AD), believed that the Church doctrine of original sin, expounded by Augustine of Hippo, would lead to personal irresponsibility since it was based on the theory that everything is preordained and that we are all imperfect sinners because we have inherited the original sin of Adam. This theory denied people's capacity to live openly, with courage, and with free will. >>> more
LAW of the Land
At the Council of Elvira, held in Spain in the early 4th century AD, the Roman Catholic Church formally extended its new order across Western Europe. Christian theocratic domination and repression of Western European cultures, arts and science led to the European Dark Ages (500 - 1000AD). Canons enacted at the Council of Elvira, all-disciplinary, ... deal with marriage, baptism, idolatry, fasting, usury, vigils, excommunication, frequentation of Mass, the relations of Christians with pagans, Jews, heretics, etc.>>> more
The Synod of Whitby led to the liturgical and administrative unification of the Roman Catholic Church in England. Delegates from the North and the South came together to debate whether the Celtic or the Roman customs were to be followed. A decision was made to follow the Roman liturgical customs introduced by Augustine of Canterbury in place of the Celtic practices that were formerly followed. Supporters of the Celtic traditions withdrew to Scotland. St. Wilfrid of York (634-710), chief spokesman for the southern Roman church, described the Synod in his biography, written long after the events. The Venerable Bede in his Ecclesiastical History of the English People describes the proceedings in detail about seventy years after the events. >>> more
The Charter of Liberties aka The Coronation Charter, was a written proclamation by Henry I of England, issued upon his accession to the throne in 1100. It sought to bind the King to certain laws regarding the treatment of church officials and nobles. It is considered a landmark document in English legal history and a forerunner of Magna Carta.
>>> more, and pdf
The Concordat of Worms aka Pactum Calixtinum by papal historians, was an agreement between Pope Calixtus II (1119–24) and Holy Roman Emperor Henry V (reigned 1106–25) on September 23, 1122 near the city of Worms. It brought to an end the first phase of the power struggle between the Papacy and the Holy Roman Emperors and has been interpreted as containing within itself the germ of nation-based sovereignty that would one day be confirmed in the Treaty of Westphalia (1648); in part this was an unforeseen result of strategic maneuvering between the Church and the European sovereigns over political control within their domains. >>> more
Magna Carta aka Magna Carta Libertatum or The Great Charter of the Liberties of England, was the first document forced onto a King of England by a group of his subjects, the feudal barons, in an attempt to limit his powers by law and protect their privileges. The charter was an important part of the extensive historical process that led to the rule of constitutional law in the English speaking world. SOURCE: Magna Carta: a precedent for recent constitutional change.
The Great Charter aka Carta de Foresta, sealed by young King Henry III, acting under the regency of William Marshall, 1st Earl of Pembroke, was a complementary charter to the Magna Carta, providing rights, privileges and protections for the common man against the abuses of the encroaching aristocracy. >>> more
• 1235/6 Statute of Merton This statute is the forerunner of our parliamentary legal system – the first entry in the Statute Book – consisting of eleven chapters. The term "Statute of Merton" is usually reserved for ch. 4 because of its role in forming The Commons Act 1236.This statute allowed a Lord of the Manor to enclose common land (provided that sufficient pasture remained for his tenants), and set out when and how manorial lords could assert rights over waste land, woods, and pastures against their tenants. It quickly became a basis for English common law, developing and clarifying legal concepts of ownership, and was one of the English statutes carried over into the law of the Lordship of Ireland.
Read the history–well told (pdf)
• 1279 and 1290AD
Statutes of Mortmain Two enactments by King Edward I aimed at preserving the kingdom's revenues by preventing land from passing into the possession of the Church—to re-establish the prohibition against donation of land to the Church, which was originally proscribed by the Magna Carta aka Great Charter of 1217. Magnates were asked by what warrant they claimed rights of jurisdiction and other franchises. By the Statute of Mortmain of 1279 it was provided that no more land was to be given to the church without royal license. This created much argument, which was resolved in the Statute of Quo Warranto of 1290. >>> more and more
• 1275 and 1285AD
Statutes of Westminster ...of the commons had been summoned; the other two statutes were promulgated in parliaments attended only by the great lords and councillors. The second statute (1285) has become known as De donis conditionalibus (“concerning conditional gifts”) from its first clause, which sought to restrain alienation of land and preserve entail. >>> more
De Donis "Concerning Gifts" Statute of Westminster II. Legislation at the end of the 13th century (statute De donis conditionalibus, 1285) allowed a conveyor of land to limit its inheritance to the direct descendants of the conveyee and to claim it back if the conveyee’s direct line died out. >>> more
Quia Emptores forbade subinfeudation, the process whereby one tenant granted land to another who then considered the grantor his lord. Thus, after passage of the Quia Emptores, if A granted land to B in fee simple, B's lord would not be A but A's lord. The statute prevented the growth of the feudal pyramid, and in the course of time most land came to be held from the crown and not from intermediate lords. Quia Emptores was critical to the development of the English law of real property, especially the establishment of the right of free alienation. >>> more and more (This is the law that denied land ownership to the Irish, the Quia Emptores Act of 1290 AD, is still on the Irish statute book. >>> more)
Confirmation of Charters As the most recent version of the Magna Carta, remains in legal force in England and Wales. #4. And that archbishops and bishops shall pronounce sentences of greater excommunication against all those that by word, deed, or counsel shall go against the foresaid charters, or that in any point break or go against them. And that the said curses be twice a year denounced and published by the prelates aforesaid. And if the same prelates or any of them be remiss in the denunciation of the said sentences, the Archbishops of Canterbury and York for the time being, as is fitting, shall reprove them and constrain them to make that denunciation in form aforesaid. >>> more
Statute of Uses An English Law enacted to end the practice of creating uses in real property by changing the purely equitable title of those entitled to a use into absolute ownership with the right of possession. "the statute would work to transfer into common law interests that could not have been created at common law prior to the statute." >>> more
Statute of Wills abolished primogeniture and gave landholders the right to devise their property to whomever they pleased in a written will and testament. However, Parliament did not abolish the Statute of Uses. >>> more
• 1550AD Statute of Merton was revived
to enable lords to enclose their land at their own discretion — out of keeping with the traditional Tudor anti-enclosure attitude. >>> more
• 1891AD Rerum Novarum
The impact of this 1891 Encyclical by Pope Leo XIII echoed through the 20th Century and, for Catholics, dominated it, according to Professor Mason Gaffney's 1997 lecture, updated in 2000. View in PDF format: Henry George, Dr. Edward McGlynn, and Pope Leo XIII
"Understanding the role of land in the economy was critical to classical economic analysis. Although it is even more critical today, it is ignored. Instead of surface land rent remaining near Petty’s estimation, as about 30% today, the neoclassical economist continues to promote the lie that it is now only about 1%. This Great Untruth is the main reason for the global financial collapse – and the 0.1% manage to keep it in circulation by way of the pathological study into which modern economics has degenerated. Bring back the intellectual rigour of Sir William Petty and the classicists!" Bryan Kavanagh, Land Valuer (retired) Australian Tax Office
and Measuring Economic Resilience Professor Lino Briguglio (2006)
Conceptual and methodological framework for the analysis and measurement of economic resilience. Islands and Small States Institute, University of Malta.
The working definition of economic resilience adopted in this paper is the “nurtured” ability of an economy to recover from
or adjust to the effects of adverse shocks to which it may be inherently exposed. Download the PDF here
"A great change is going on all over the civilized world similar to that infeudation which, in Europe, during the rise of the feudal system, converted free proprietors into vassals, and brought all society into subordination to a hierarchy of wealth and privilege. Whether the new aristocracy is hereditary or not makes little difference. Chance alone may determine who will get the few prizes of a lottery. But it is not the less certain that the vast majority of all who take part in it must draw blanks. The forces of the new era have not yet had time to make status hereditary, but we may clearly see that when the industrial organization compels a thousand workmen to take service under one master, the proportion of masters to men will be but as one to a thousand, though the one may come from the ranks of the thousand. "Master"! We don't like the word. It is not American! But what is the use of objecting to the word when we have the thing?"
Henry George, Social Problems, Ch. V. (PDF)
"... Seeing what sort of political leadership the common man invariably chose to follow, and the kind of issue that invariably attracted him, [George] ended the argument of Progress and Poverty with a clear warning, too long to be quoted here, against the wholesale corruption of the common man by the government which the common man himself sets up. It is well worth reading now, whether one finds the root of this corruption in the common man’s weakness of mind and character, or whether one finds it, as George did, in the unequal distribution of wealth. Whatever one may think about that, there is no possible doubt that George’s warning has the interest of absolutely accurate prophecy."
A. B. Nock's 1939 essay on Henry George.
"It's an American classic: each new generation of Monopoly players learns to love (harmlessly) indulging its cutthroat, ruthless, greedy impulses. Players begin the game as equals. Luck – and a bit of strategy – eventually enables one player to dominate all others." Source: The History of The Landlord's Game
The TRUTH about the Nobel Prize How global banks helped Sweden’s central bank usurp the REAL Nobel Prize: "many economists including those who had been awarded the Bank of Sweden Prize – actually mis-used mathematics by creating unrealistic models of social processes." "THE “NOBEL” PRIZE THAT WASN’T"
by Hazel Henderson
An unusual row erupted at the recent annual Nobel Prize awards. Peter Nobel, heir of Alfred Nobel, who endowed the Prizes added his voice to the growing outrage of many scientists at the confusion over The Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel. Over the years since this $1 million prize was set up by Sweden’s central bank in 1969, it has become conflated with the real Nobel Prizes and is now often mis-labeled as the so-called “Nobel Memorial Prize.” >>> more
Ambrose: How far, O ye rich, do you push your mad desires? Shall ye alone dwell upon the earth? Why do you cast out all the fellow sharers of nature and claim it all for yourselves? The earth was made in common for all. Why do you arrogate to yourselves, exclusive right to the soil?
St. George the Great (Pope 590 - 604) rebuked the Romans when he said: They wrongfully think they are innocent who claim for themselves the common gift of God.
Clement of Alexandria:(The functions of land) -"to be shared," "to minister to" and serve "the welfare of all"; "not for personal advantage as being entirely one's own" but "for those in need"; "to achieve autarkeia" and "to foster koinonia"
St. John Chrystostom:God in the beginning did not make one man rich and another poor; nor did he afterwards take and show to anyone treasures of gold, and deny to the others the right of searching for it; rather he left the earth free to all alike. Why then, if it is common, have you so many acres of land, while your neighbor has not a portion of it?
Augustine of Hippo: He (according to Avila's research) saw that the poor are poor because they have been deprived by the propertied few of the wealth that should belong to all. He laid the blame for this unjust situation squarely on the doorstep of an absolutist and exclusivist legal right of private ownership. He reminded his audience that they were all "made from one mud" and sustained "on one earth" under the same natural conditions, having the same essence and called to the same destiny. He rejected the legalized status quo as inappropriate for human living. Holding that legal arrangements of property rights were of human origin, he asserted that they should be changed, in theory and in practice, in function of a faith-informed ethic based on the true meaning of ownership.