How Optimal Taxation Can Create a Better World

optimal taxation panel 2016

Earthsharing.org organized BIL: Oakland 2016 Recession Generation on July 9th in Oakland, California. The Optimal Taxation Panel participants were Yoram Bauman, Joshua Vincent, Fred Foldvary, Robin Hanson, and Kris Nelson. The panel moderator was Edward Miller (bios below).

The discussion revolved around the essential role that natural phenomena play in all economic activity and how to fairly treat these resources vis a vis taxation. Resources like land, minerals, access rights, the electromagnetic spectrum, domain names, and atmospheric carbon were discussed.

Optimal Taxation Panelists:

Yoram Bauman: PhD environmental economist and “stand-up economist.” Bauman is the founder of the revenue-neutral carbon tax proposal (I-732) that will be on the ballot in Washington State in November 2016. He has been working on environmental tax reform since his 1998 co-authorship of Tax Shift, which helped inspire the revenue-neutral carbon tax in British Columbia. Bauman also co-authored the Cartoon Introduction to Climate Change and the two-volume Cartoon Introduction to Economics. He lives in Seattle with his wife Laura and their two-year-old daughter.

Joshua Vincent: Executive Director at the Center for the Study of Economics since 1997. Vincent has consulted for more than 75 municipalities, counties, NGOs and national governments. He works with tax departments and elected officials to restructure taxation to a land-based system, and has testified as an expert witness on the impact of land value taxation. Vincent is the editor and publisher of Incentive Taxation, a journal on land value taxation.

Fred Foldvary: Board member at Robert Schalkenbach Foundation (RSF), a non-profit organization established in 1925 to spread the ideas of the social and economic philosopher Henry George (1839-1897). Foldvary received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at the Latvian University of Agriculture, Virginia Tech, John F. Kennedy University, California State University East Bay, the University of California at Berkeley Extension, Santa Clara University, and currently teaches at San Jose State University. Foldvary is the author of The Soul of Liberty, Public Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary’s areas of research include public finance, governance, ethical philosophy, and land economics.

Robin Hanson: Associate Professor of Economics at George Mason University and a research associate at the Future of Humanity Institute of Oxford University. Hanson is known as an expert on idea futures and markets, and he was involved in the creation of the Foresight Institute Foresight Exchange and DARPA FutureMAP project. He invented market scoring rules like LMSR (Logarithmic Market Scoring Rule) used by prediction markets such as Consensus Point (where Hanson is Chief Scientist), and has conducted research on signalling.

Kris Nelson: Principal at Phoenix Finance, which provides access to capital without collateral to small businesses and startups. Nelson also serves as Legislative Director of Common Ground OR-WA, a non-profit organization that promotes a more democratic treatment of land and natural resources. Previously, Nelson worked as a Principal at Genomics Consulting, where he helped launch a clean technology venture capital firm. He holds a Master’s degree in Business Administration from Willamette University and a Bachelor’s degree in Journalism from Evergreen State College.

Edward Miller: Co-organizer of the Recession Generation event. Miller is the Administrative Director of the Henry George School of Chicago, a non-profit educational organization which provides educational opportunities to the public on the topic of classical political economy. He serves as a board member for the Center for the Study of Economics. Previously, he has worked with the Institute for Ethics and Emerging Technologies.

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Uranium Mining Continues to Threaten Grand Canyon

The Grand Canyon is remarkable for its awe-inspiring scenery, precious geological value, and diverse flora and fauna. It is a natural wonder recognized by UNESCO, and also happens to be the site of significant underground uranium deposits.

These deposits have made it a prime target for energy companies seeking to privatize the public commons that the uranium represents. Unfortunately, natural resource extraction can have devastating consequences for public health and the natural environment. President Barack Obama is now considering designating the area a national monument, to add new protections to the lands and waters of the Grand Canyon, and prevent potential environmental disaster.

Arizona has a long history of traditional mining. In 2014, the state reported 303 active mining operations employing a total of 25,660 people. The entire industry generates a staggering $12 billion of the state’s GDP. Due to market fluctuations and government restrictions, there are no active uranium mining operations in the state at this time, but between 1918 and the early 21st century, traditional uranium mining in Arizona yielded tens of millions of pounds of uranium, valued at approximately $65 per pound.

While the mining industry benefits Arizona by contributing substantially to the state’s GDP, it is often accused of hoarding publicly-owned natural resources. Such speculative hoarding is common in unregulated or under-regulated industries. The vast majority of mining operations occur on public land, which accounts for 82% of Arizona’s total landmass. Federal law, through the General Mining Act of 1872, permits US citizens to stake a natural resource claim on public land and subsequently extract that resource. While mining operations are subject to state and federal taxes, they are not required to share revenue from their operations. Natural resources, as a public commons, comprise a large share of a nation’s wealth and, as such, ought to generate substantial economic rents. An excellent example of this in action comes from Norway and the management of its oil.

photo credit: wolfgang.mller54 View via photopin (license)
photo credit: wolfgang.mller54 View via photopin (license)

The consequence of ignoring this potentially substantial source of tax revenue is that the government must turn to taxing human productive work via income and sales taxes. Consequently, economists have long argued that governments and their constituents would be best-served if public revenue was instead derived from natural resource extraction, regulated, and utilized for the common good.

Uranium mining in Arizona has a history of disastrous environmental and public health consequences. Following World War II, the United States increased uranium production in order to produce more nuclear weapons, and mining companies hired large numbers of Navajo people to work the mines. Incidence of diseases caused by excessive radiation exposure increased sharply because companies failed to adequately protect those workers. Uranium mining has polluted 15 springs and five wells in the Grand Canyon watershed with toxic levels of uranium, requiring multi-million dollar government-funded cleanup measures.

It is clear from this history that uranium mining companies have proven themselves incapable, under current regulations, of operating without jeopardising people or damaging the critical lands and waters of the Grand Canyon watershed. Introducing royalties for uranium mining would fund implementation and enforcement of regulations that would lead to greener mining.

As uranium prices increased in the early 21st century, mining companies increasingly pursued access to the vast uranium deposits surrounding the Grand Canyon. In 2012, the federal government, recognizing the need to protect “natural, cultural and social resources in the Grand Canyon watershed,” issued a 20-year moratorium on new mining operations in lands surrounding the Grand Canyon. The order applies to all mining but is primarily aimed at uranium mining. The reaction from Arizona and the mining industry was swift, citing the order as an example of federal overreach and petitioning for it to be overturned. This case has now been challenged in federal court.

Photo: CEBImagery.com A New Day via photopin (license)
Photo: CEBImagery.com A New Day via photopin (license)

Many Arizona citizens have applauded the federal government, citing the enormous importance of the Grand Canyon for Arizona’s cultural heritage and economy. To many, permitting uranium mining on this stunning landscape would not only jeopardize the massive tourist activity driven by the Canyon, but would irreparably degrade a monument that is held close to the heart of Arizonans.

The federal government is now trying to make its moratorium permanent by declaring the lands surrounding the Grand Canyon as the Greater Grand Canyon Heritage National Monument. The monument was first proposed in 2015 and has support from 80% of Arizona voters, the Navajo Nation, and other key Native American tribes. The plan has stalled in Congress due to Republican opposition, but President Obama has the singular authority to bypass Congress and designate the area a monument by invoking the Antiquities Act.

An alternative approach would be to regulate the uranium mining more stringently, with the additional regulation and mining oversight financed by uranium royalties. While that may well require congressional approval, it would permit the mining to take place and that it be done under careful stewardship.

It is not yet clear which action President Obama will take, but support for the monument is a profound example of citizens recognizing the importance of their natural inheritance and taking steps to protect it.  Concerned citizens can write to President Barack Obama at 1600 Pennsylvania Ave NW, Washington, DC 20500  or call the White House at (202) 456-1111.

Featured Image: Photo: TheMorganBurke via photopin (license)

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The Norwegian Model: Managing Resource Wealth for the Common Good

Natural resources play a foundational role in a country’s economic development. As natural commons, they provide economic assets via space, raw materials, and energy that can be used to create other assets and opportunities in the form of industry and wealth. But because these commons are finite, their mismanagement often leads to a boom and bust pattern of economic development. Norway, however, has set a solid example for how to properly manage natural resources, including one of the most sought after – fossil fuels.

In the 1950’s, European countries began to speculate that vast oil and natural gas deposits lay under the North Sea. This theory was confirmed in 1959, when the largest natural gas field in Europe was discovered in the Netherlands. Excitement grew around potential future discoveries, particularly in the area of Norway’s continental shelf. Anticipating the discovery of reserves, the Norwegian government passed legislation in 1963 stating that the State owns all natural resources. The legislation also stated that the government is the only authority that can grant licenses for exploration and production. This legislation put Norway’s natural commons firmly into the hands of its citizens.

This turned out to be smart planning. In 1969, oil was discovered in Norway’s continental shelf. Oftentimes, nations turn to free-market economics, an approach that consistently fails to allocate the wealth derived from natural resources efficiently. Instead, Norway sought a different strategy to ensure that this natural commons provided long-term wealth to the entire country.

Initially, the Norwegian government gave private energy companies limited licenses to explore and tap Norway’s reserves. These companies can be credited with developing the country’s first oil and gas fields. However, in an effort to maximize national revenue, in 1972, the government moved quickly to create a government-owned petroleum company called Statoil. From that point forward, any foreign energy company granted a license was required to split 50% of the work with Statoil.

photo credit: L.C.Nøttaasen Yme platform via photopin (license)
photo credit: L.C.Nøttaasen Yme platform via photopin (license)

Norway’s fast action prevented the privatization of its natural commons and secured its oil wealth for its citizens. The government credits oil wealth with the creation and sustainability of their welfare state and support of macroeconomic development during downturns in the petroleum industry.

In the 1990’s, the government created the Government Pension Fund – Global (GPFG), informally known as the Norwegian Oil Fund, as a place to deposit all excess oil profits. The value of the fund stands at a staggering $850bn, and officials estimate that sum will surpass $1 trillion by the end of 2019.

So what has Norway been doing with all this money? Well, not much. And that is the point. The government capped annual withdrawals at 4% in order to prevent hyperinflation and to secure a surplus of money to survive in a looming post-fossil fuel world. This decision has proven wise recently as a drop in oil prices has moved Norway to declare its petroleum industry in crisis.

Norway’s natural commons management is a shining example of the prosperity that results when revenue from national resources is shared by all citizens. Norway has used this wealth to create social and economic programs that help each citizen. This wealth has also built a massive pension fund that can support the country during periods of economic hardship. It is a powerful equalizing tool not often seen in nations rich in oil and other natural resources.

photo credit: Jean-Paul Navarro The Grand Harbor via photopin (license)
photo credit: Jean-Paul Navarro The Grand Harbor via photopin (license)

Some economic scholars draw comparisons between Norway’s approach to natural commons (referred to as “petro populism”) and the theories of Henry George. Henry George, an American economist and political theorist from the 19th century, postulated that land is social commons, and that the profits drawn from land should be shared by all citizens via the use of land value taxation (LVT). In the case of Norway, they have taxed the revenue drawn from oil rich land at the very high rate of 78% and both redistributed and saved that revenue. In addition, they have carried over such sustainable thinking towards other natural resources, such as lumber and fisheries, and seen the same successes as with petroleum.

Resource-rich nations should take lessons from Norway on how to fully profit from and intelligently invest revenues from the utilization of our natural commons. The discovery of lucrative resources can inevitably lead to a boom and bust economy. Avoiding that requires managing those resources appropriately and wisely, as the Norwegians have, by using wealth derived from them to create an equitable and healthy society for all.

But all nations, whether “resource-rich” or not, have at least one socially-created resource of enormous value which can be tapped: the rental value of land.

Audio podcast on Norway and it’s oil management system. Courtesy of NPR online.

Featured Image: photo credit: arbyreed  via photopin

Facebooktwittergoogle_plusredditpinterestlinkedinmail

EarthSharing.org on Stanford Radio KZSU 90.1 FM Promoting the Recession Generation Event

WKZSU 90.1 FM Stanford University Radio Interviews EarthSharing.org

 

July 5th, 2016, Edward Miller and Jacob Shwartz-Lucas were invited onto Stanford University Radio to discuss an event they would organize in Oakland a few days later. The event was titled BIL Oakland 2016: The Recession Generation.

14365289_870977433164_151705472_n

The discussion revolved around the event’s aim of helping young adults to navigate the challenges of living in our harsh economic climate and rapid technological disruption.

Jacob and Edward discussed their motivations for putting on the conference. This included explaining their backgrounds, and what changes they want to see in the world.

photo credit: Jane Says via photopin (license)
photo credit: Jane Says via photopin (license)
Facebooktwittergoogle_plusredditpinterestlinkedinmail

Chinese Investment in US Real Estate Tops $110bn

The lessons of the 2008 financial crisis are quickly being forgotten. That market collapse was precipitated by an extraordinary rise of US land values, which was driven by the emergence of subprime lending on a mass scale.

Prices of residential and commercial real estate are once again on the rise. A major driver of this astounding rebound has been Chinese real estate investment. Chinese investors, seeking promising investments and a way to move their money out of the slowing Chinese economy, have poured $110 billion dollars into US real estate in the past five years. By contrast, the Chinese real estate market, which is putting a drag on the Chinese economy, has been called by many the largest land bubble in history. Chinese investments in the US market are inflating housing prices across the country and placing home ownership further out of reach of many Americans.

Over the past several years, Chinese investment in commercial properties has captured headlines. For example, in 2015, the Anbang Insurance Group purchased the Waldorf Astoria Hotel for $2bn and attempted to purchase Starwood Hotels for $14bn. However, the vast majority of Chinese speculative investment has been in the residential market, to the tune of over $93bn. Cities with the most rapidly rising housing costs–San Francisco, New York, Los Angeles, and Seattle–are popular markets with Chinese buyers. But as housing stock across the country continues to gain value, buyers are now turning their speculative intents to Chicago, Miami, and regions of middle America.

Chinese buyers are eager to speculate in the US real estate market. Not only because they see a lucrative investment opportunity, but because of concerns about the slowing Chinese economy. As the economy continues to slow and the value of the Yuan falls, citizens are eager to move wealth abroad and into dollar-backed assets, particularly in the form of land speculation. Despite efforts by the Chinese government to encourage domestic investments, speculation in US real estate by Chinese nationals is expected to exceed $200bn over the next 5 years.

photo credit: IMG_0953 via photopin (license)
photo credit: IMG_0953 via photopin (license)

When people speak of rising real estate prices, they certainly aren’t talking about bricks, they are talking about land. As a consequence of all this land speculation, Americans are finding it harder to obtain affordable housing and commercial space, and not only because of rising prices. Close to 70% of Chinese buyers pay cash, which is more appealing to sellers because deals can close much faster. This puts US residential buyers who require a mortgage at a disadvantage. Bidding wars with deep-pocketed foreign speculators also has the effect of pressuring US buyers with more limited liquid assets to sign off on larger mortgages than they can financially handle.

Prospective home buyers are not the only ones feeling the crunch. As homeownership becomes more unaffordable, the number of people in the rental market increases, driving up rents across the country. In 2016, rent increases are expected to outpace wage increases by about one percentage point. Faster than the general rate of inflation.

The periodic bubbles in real estate markets are a symptom of this rush to pocket the rising value of land, whether by foreigners or citizens. So far, the United States is not taking steps to curb either domestic or foreign speculation in real estate. Instead, Congress is going in the opposite direction by encouraging foreign “investment” in US property.

However, other countries are taking a stand. Hong Kong and Singapore have instituted a 15% tax on properties purchased by foreign buyers, a move that has slowed the rise in housing costs. Citing decreasing affordability of homes, Australia has instituted a similar tax. The Australian government also used legal means to intercede in the attempt by Chinese investment group Dakang Holdings to purchase the Kidman Farm empire, which controls 1.3% of the Australian landmass.

photo credit: Lavender Valley 2407 via photopin (license)
photo credit: Lavender Valley 2407 via photopin (license)

An alternative to such measures, which numerous eminent economists recommend, is a tax on land values. Land value taxation (LVT) is a twist on conventional property taxation, whereby improvements to the land are not taxed, but the land itself is taxed. Proponents argue that we ought to shift as much taxes as possible away from productive activity and onto land values. While other strategies would serve to limit foreign land purchases, taxing land values would actually halt idle landholding in general by making the speculative ownership of raw or underdeveloped real estate unprofitable.

When markets are operating correctly, profits are simply a return for productive activity, not a windfall that is achieved by excluding others as with the landed gentry in the feudal era. With LVT in place, Chinese or other foreign investors who wanted to make money by purchasing land would have to actually develop that land. They would need to attract residential or commercial tenants by providing desirable amenities and reasonable rents, and shouldering the risks involved in any sort of productive activity.

This would result in a growth of construction activity and an increase in US housing supply. Increased construction activity and decreased cost for commercial and residential real estate would stimulate the rest of the US economy, simultaneously decreasing unemployment and raising wages.  In effect, taxation of land values would convert the current Chinese desire for US land into a sustainable means of growth for the US economy.

Featured image photo credit: Light River via photopin (license)

Facebooktwittergoogle_plusredditpinterestlinkedinmail

LA’s Homeless Homeowners

Logan Boettcher

Gale Holland, writing for the LA Times, describes how homeless people in LA were given tiny homes. The homes were ingeniously built and distributed by Elvis Summers, who used to be homeless himself.  His actions were in response to failed promises from the city to create permanent housing for the homeless. However, unlike the city’s slow response to provide housing, it quickly confiscated the homes and plans to destroy them.

Apparently, just because you own a home doesn’t mean you have any right to it. This is a heartless move by a city government that does not have any plan in place to ameliorate the growing homeless population in the city, estimated to be 30,000 people according to the article. The city classified the tiny houses as “bulky items” that could be impounded by the city immediately. While it would seem reasonable to want to keep sidewalks clear, it speaks to an inherent inequality of property rights; in this case -land.

Think about it: everyone who owns a home is in possession of a “bulky item” as defined by the city ordinance. But the city does not tell them to clear off because they are on their own private area of land. But the homeless do not have a private area of land because they cannot afford to rent or buy one. And since they cannot afford to buy or rent a piece of land, their private property is not guaranteed to be protected in the same way that those who can afford land. In other words, the sanctity of all private property is, in practice, conditional on owning land.

tents

The tiny houses that were given to the homeless were the result of voluntary donations of money, time and construction. Once given, these houses are the private property of these people. But without land to call their own, their private property is subject to confiscation and control in ways that people who own land are not subjected. Without the ability to control any private possession, this means that the very existence of the landless is subject to the permission of those who own land.

One commenter on the story suggested that the city government allow these landless people to put their tiny houses on city-owned property that was not a sidewalk. At present, the homes are awaiting being stored on a public lot while the homeless sleep on the street. Letting them live on the lot or elsewhere sounds like a good idea, as it balances the needs of the landless owners of tiny houses with the needs of residents who would like to use the sidewalk relatively unimpeded. But the same commenter also said that their houses should be subject to random searches and seizures, for drugs and weapons, apparently because society needs to monitor the landless like we would a prisoner in their cell. Yet, the same items could be, and often are, stored in homes on privately owned land.

Once again, a person who can afford an area of land would be getting more rights than someone who could not afford land, namely Fourth Amendment rights against unreasonable searches and seizures. Given that any solution will necessarily involve the landless to be on public property, they will have to give up rights that are afforded to other members of the population for the “crime” of being too poor.

For those with the money and the credit up front, they will receive large tax breaks and other government granted benefits, while working class renters and homeless people receive no such tax benefits.

people-844213_960_720

What is the solution to this problem? There must be a remedy that establishes a right to land for all people, and thus a multitude of other rights that accompany it. The solution is to not give special financial benefits to those with the money to own land. Instead, landowners should pay a fee for the value of their land, a value that exists because of public investment in infrastructure and maintenance services. The value of the land should then be distributed evenly as a Citizen’s Dividend, or a “basic income”  as some call it. This will enable those who are landless to purchase a small piece of property.  This will insure that everyone has a right to a space where their person and property will be protected.

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Oregon Wildlife Refuge Occupation Leads to One Death, 11 Arrests

Malheur National Wildlife Refufe in Oregon

Ammon Bundy and his cohort of armed protesters began their occupation of the Malheur National Wildlife Refuge in Burns, Oregon, one month ago. Eleven people have been arrested and one killed in connection with the occupation. At a roadblock stop on the evening of January 26, Oregon State Police arrested eight members of the armed group, including Ammon Bundy, his brother Ryan Bundy, Brian Cavalier, Shawna Cox, and Ryan Payne. Robert “LaVoy” Finicum was shot and killed. Some say that Finicum had his hands up when shot; authorities claim he reached down for the loaded pistol he was carrying on hip. Shawna Cox, who was in the vehicle with Finicum, confirmed he was carrying the weapon. She has also confirmed witness reports that Finicum shouted “just shoot me” in the moments before he was killed.

The roadblock had been set up on Highway 395 between Burns and John Day, Oregon. Authorities said they decided to make arrests after trying to end the standoff peacefully for 25 days. According to FBI special agent Greg Bretzing, the Oregon protesters “have chosen to threaten and intimidate the America they profess to love, and, through criminal actions, bring these consequences upon themselves.” Upon arrest, Bundy issued a statement to the remaining protesters urging them to abandon the refuge. “Let us take this fight from here,” Bundy pleaded. “Please stand down. Go home and hug your families.”

Oregon State Police
Photo: Matthew Zalewski

Finicum was a 56-year-old rancher from Northern Arizona. He was known as a soft-spoken person and was an active participant in the foster care system, reportedly opening his home to more than 50 boys in a years-long partnership with Catholic Charities Community Services. He was also known as a defiant co-leader of Bundy’s protest against the overreach of federal government, having his own brief history of conflict with the Bureau of Land Management. Inspired by rancher Cliven Bundy’s infamous standoff with federal officials in 2014 over BLM land rights, Finicum announced he would no longer abide by federal rules restricting the use of BLM lands. In 2015, BLM accused him of trespassing on federal land that was restricted to allow adequate recovery from cattle grazing.

Following Bundy’s lead, Finicum refused to pay the grazing fees levied by the US Bureau of Land Management. He joined the protest in Burns, Oregon, before that matter was resolved. Upon his joining  the occupation at the wildlife reserve, a social worker removed the remaining foster boys from his ranch.

Finicum's ranch was a home for foster children
Ranch via photopin (license)

Despite Ammon Bundy’s pleas, several protesters remain at the compound and continue to defy the authorities. Jason Patrick, one of the protesters who remains on the refuge, expressed a combination of uncertainty and anger upon learning of Finicum’s death. “It’s hard to decide what to do,” he told a reporter in a phone interview. Finicum’s death, which Patrick described  as “disheartening,” seems to resonate with the same complaints of government overreach that brought the protesters to Burns in the first place. The roadblock, he explained, was an example of the government’s “violent and coercive force.” He concluded, “A peaceful resolution is not dead people.”

As of Monday, four remained at the Malheur Wildlife Refuge. Funeral services for Robert Finicum will be held in Utah on Friday, February 5, according to family, and will be open to the public.

Cover Image: via photopin (license)

Facebooktwittergoogle_plusredditpinterestlinkedinmail

In Oregon, Ranchers Assert Rights to Public Land

Ranch cattle grazing

Coming from a family of West Texas and Eastern New Mexico cattle ranchers, I empathize deeply with the need to treat farmers and ranchers well. I also believe in the need for policies that create prosperity for all citizens.

Last weekend, Ammon Bundy, son of Nevada rancher Cliven Bundy, led armed demonstrators into a federal wildlife refuge in Oregon, where they began an occupation of a small federally-owned building. The ostensible reason was the imminent incarceration of two ranchers convicted of setting fires to public lands in 2001 and 2006. However, this extraordinary measure on the part of Bundy’s group is rooted in a much larger and complex dispute over the government’s right to regulate use of public lands.

Ammon Bundy justifies the takeover as “a protest of the unconstitutional transactions of land rights and water rights.” In 1993, the federal Bureau of Land Management (BLM) declined to renew the elder Bundy’s grazing permit, as the land had been declared a reserve for the threatened desert tortoise. Bundy disputed the legitimacy of the BLM’s ownership and right to regulation of grazing on the land. Bundy, without a grazing permit, continued to graze his cattle in the area, then refused to pay the resulting fines in excess of a million dollars.

Formed in 1946 for the purpose of overseeing public land, the BLM was a consolidation of two previously existing agencies. It manages a variety of natural resources and regulates mining, logging, and fracking practices all over the country. In 2014, it managed around 18,000 ranchers’ permits, which allow livestock to graze on federal land that is leased for this purpose. The BLM grants grazing rights permits to ranchers at rates substantially lower–as little as 93%– than market rates for private land. While the lease of grazing rights for public land might seem an inexpensive and reasonable requirement, the Bundys believe they should be able to use the land for free because their ancestors worked it before the bureau was established. What about Native Americans though? They were there before the ranchers. Nearly all land in the world was taken by force at some point. So, the argument in truth seems to be that might is right, except when you are on the losing side.

 

Rancher on cattle grazing grounds
Rangeland Management Specialist via photopin (license)

 

The Bundy case is only one instance exemplifying a larger issue. Ken Ivory, a Utah state representative, has stated, “It’s so much bigger than Bundy. There are issues . . . where the federal government is exerting control over things it was never supposed to control.” The government was not supposed to own the land, he says, but rather just be a trustee of the land. According to Ivory, the ownership of the land “should be transferred back to the states.”

Eighty percent of the land in the Bundys’ home state of Nevada is owned by the federal government, as is over half the land in Oregon. The government offers rates drastically lower than those of market prices and is willing to do so if ranchers are willing to accept the aid. As it turns out, grazing rights fees on government land cover only 15% of the cost of maintaining it, with taxpayers covering the rest.

The takeover of the wildlife refuge in Oregon and the Bundys’ refusal to pay fines for letting their cattle graze on protected land are just two conflicts within a complex controversy over who really owns the land, should has the right to use it, and under what terms.

Ideally, all land would be considered as held in trust for the wellbeing of citizens and the natural environments that support them. The best way to achieve that is to continually charge those who have been given the right of exclusive use of  land the full rental value, and to protect certain areas for environmental purposes. This often goes by the moniker “Land Value Tax,” proposed by the economist Henry George. His rationale or the tax, which would equalize the benefit of natural resources is as follows:

“The equal right of all [wo]men to the use of land is as clear as their equal right to breathe the air — it is a right proclaimed by the fact of their existence. For we cannot suppose that some [wo]men have a right to be in this world, and others no right.”

 

Cover image: Oh what a beautiful evening via photopin (license)

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Economics is Easy — Once You See the Trick!

by Lindy Davies

Last week, we found ourselves in between washing machines, the old one having died before the replacement arrived. So, when the laundry piled up, I drove 20 miles into town. To be honest I wasn’t upset about this. I had some correspondence-course lessons to read and grade while I waited. I shouldered the two big bags, secure in the knowledge that the foliage along the route was breathtaking, and the next couple of hours wouldn’t overtax me. I dumped my loads in machines, found a plastic chair near the door and started in on my paperwork.

A mother and daughter came dancing in and started piling and sorting with pizazz. I felt fortunate to have the paraphernalia of my work to look busy with, as I watched them. The mom was a beauty: quite short, flamboyantly redheaded and freckled. She had a laughing, elvish air — except that her eyes seemed to belong to a wiser and older being: bright, deep grey, creased and wry. The little girl was about six, and a bit darker — auburn instead of fiery red — and clearly thought her mom was the coolest person in the entire universe.

The mother was teaching the daughter the technique of the Old Shell Game, using three bottle caps and a little red pill. She would say “Timing, honey!” and “Don’t watch your hands, punkin,” and “Fold that pinky under…” while the girl practiced with tongue-clamped diligence.

I was so busy pretending not to watch that I missed the fact that I was being watched: she appeared — Presto! at my side. “I’ve read this book.” She was holding my copy of Progress and Poverty. “Jeez, that takes me back to a weird time in my life. It was the guy who taught me sleight-of-hand, a fascinating and evil fellow. The book was on his shelf; I don’t know if he ever read it.” She shook the book a few times as if its ideas rattled with a familiar sound. “I wasn’t feeling that much need to sleep, in those days.” She laid a finger beside her nose, rolled her eyes and gave a small sniff, as if to explain. “I think I must’ve read this thing straight through. But I haven’t thought about it in a long time.”

I asked her if she were still a sleight-of-hand artist. “Not professionally, but — yeah, I can pretty much direct the eyes away from the business at hand.” I followed her eyes to the little girl, who was struggling to retrieve the little red pill from beneath one of the washing machines. “Monica! Jeez.” Monica’s mom produced a little bottle of ibuprophen from her bag and took out another pill. “Really. Take it easy, honey!”

Monica accepted the pill sheepishly and went right back to practicing. “I keep gettin on the wrong side of it.”

“My name’s Ramona.” She thrust out a hand as if to shake mine, and handed me my wallet. “There you go. My husband and I and the girl moved up here two years ago from Ohio, where we learned Henry George’s lesson the hard way.”

I introduced myself, trying to stay cool as I replaced the wallet in my back pocket, and explained that I’d also just moved to the area, with wife and boy, from New York City.

“I think I could’ve liked New York,” Ramona mused, “Lots of decent magicians there. So, are you a Henry Georgist?”

I admitted that. I asked Ramona what she had meant about learning Henry George’s ideas the hard way.

“Ohh, that’s a story that old Henry George would appreciate. Do you have time for a story? I suppose you do.” She looked far away for a moment, as if the tale might be too sibylline for chance encounters in laundromats. “Ahh, well. I met my husband, Greg, when he picked me up hitch-hiking at the corner of High and Gay streets in Columbus, Ohio. I had sustained a few beatings at that point. Inside and outside. High and gay. My self-image was lower than it needed to be.”

At some point, as Ramona said on, I noticed that little Monica’s hands had stopped moving, and mine had, too.

“Our experiences could hardly have been more different, but emotionally we were in the same low place. He thought he wasn’t worth a shit, and I knew I wasn’t — but, he was in for the long haul. I went on to have love affairs with his three best friends —  before my, y’know, my personal mud settled to the bottom of the pond — who knows how, or why, people’s lives get knitted together? The five of us shared a huge adventure. You know, I said he fell for me, but I wasn’t his first love. Greg’s first love was the earth under his home town, Elmwood, Ohio. There were things to love about that town; he made me sorta love it, too. One of those things was the ancient Indian mounds they have in Central Ohio. Some of them are famous, but most aren’t. Some were plowed over by farmers before anybody knew. Anyway, one day he took me on a hike, past the golf course, through a stand of woods, over a crik, y’know, a walk like that was his favorite thing to do — but he wanted to show me this place he called Dragon Hill. So we got through to the edge of the woods, and there was a little hill, very steep, not like any of the other hills around there, with one old, gnarled maple tree on it. He said there was this shape, this effigy on the top of the hill. He said it had a long coiled tail. We climbed up; I stood there. I couldn’t see anything but grass. Greg took my hand and stooped down to make me feel this little depression in the ground on the hilltop — just a, little depression, maybe the size of a bowling ball, but smoothed-out. This meant nothing to me. But then he walked me four steps over, stooped down again and made me feel this rock — this dark red, smooth, polished rock that was like three-quarters buried in the ground, and — My God! It was the thing’s eye. And there it was, I saw the head, the legs, the coiled tail, just like it had — risen out of the ground, before my eyes! And I went and grabbed this poor guy and tackled him, just about had his clothes ripped off before I realized what I was doing.” She lifted up both her hands, palms upward. “I don’t know what it was. I don’t know — what it was. The sex thing was just — panic. I was shaking! He was too. Something. Had happened. To us. At that place. I’m shaking now, thinking about it.”

Ramona tossed her head quickly about, walked over and quickly tickled Monica’s armpit, and gestured for her to go back to practicing her shell game. “It was Greg’s idea to build a house there. Not for our little nuclear family; that came later. We decided to build a place for the five of us, we were going to make create our own kind of family. After a while, the other three started calling us ‘Mom and Dad’ — it was a kind of mean joke on Greg, and yet it was also kind of true. Somehow those years just seemed to happen, without my say-so — it was a long, sweet story, with just enough pain.”

One of her washers stopped spinning and clicked off. She spun back to her work, emptying little-girl and old-man clothes into one of the wheeled baskets. As she went on with her story, she made wordless comments, gigglingly affirmed by Monica, about the rippedness or dorkyness of various bits of clothing.

“Dragon Hill was on farm that was owned by this crumpled-up woman named Jimison. I never knew her first name. She lived by herself in a big, old farmhouse. We went and asked her if she’d sell us a little piece of land containing the hill. She kept us standing there on the porch for a long time. Finally she said, Yeah, you can have it; it’s no good to me. But I won’t take money for it. She turned this evil eye of hers toward Greg, and she said, I’ve seen you up there. Yes, I’ve seen you. You bring me the dragon’s other eye, and you can have the hill. I am like, The dragon’s other eye? Are you fucking kidding me? But I had to hand it to Greg, he kept his cool. He asked her if that was really her deal. She said yes. And you know what? It never occurred to him not to believe her. Greg started right in doing research. And then, I couldn’t leave, y’know? I mean, how could I have left, in the middle of this? He haunted the local library, he talked to all the old folks who might remember something. Somehow he managed to track down this old guy, this guy out of some weird movie. He lived in a shack beside a tobacco farm in North Carolina. The old guy had, there, in his shack, beside a tobacco field in North Carolina, a smooth dark-red stone about the size of a bowling ball. Greg suffered some broken bones getting his hands on that stone. I wasn’t along on that trip, and I never got the whole story, but — well, that October, he came back. Walking on crutches, straining to carry the stone in a vinyl bowling-ball bag. He rested and healed through the winter. As soon as the ground thawed next spring, we set the other eye back in the dragon’s head. Jimison couldn’t believe it. She acted almost as scared of us as we were of her. Looking back now, I think it was her reaction — how freaked-out she seemed — that made me suspect the whole thing was real. She said, Take it! It’s yours. And slammed the door in our face.”

I could still hear the tiny scraping of little Monica’s bottle caps on the smooth table, but every other conversation, whining kid, spin cycle, dryer alarm had gone silent, as if to give Ramona a few seconds, all she could get, with what she remembered. I was, of course, dumb; I couldn’t have spoken to claim a Megabucks prize.

“We started digging, like we never dug before! We disturbed — respectfully I hope — someone’s ancient rest. That was a crazy day. We got sore, sorely tired and sore. Our three strong men did most of the physical work. Vallorie and I were less doughty, so we took jobs, to keep our homestead stocked with tools and food. And we got an apartment — for our evil selves — with a hot shower that the guys appreciated. We spent a whole summer and a fall, ramming earth. Very, very, very slowly we built ourselves a house out of rammed earth and local timber, with a nice-drawing chimney and an airtight wood stove. And we were comfy there, for a little while. The five of us. But — before long, those three started drifting off into their own lives, as we all knew, without ever saying so, that they would. They would come over on Saturdays to Mom and Dad’s house; they’d still help get the firewood in. But the writing on the wall was — we actually did have writing on the wall, by the way, our walls were decorated with hundreds of quotes and sayings, you could spend a very happy forty minutes walking around and reading them. And then little Monica came along.”

I suddenly had a vision of this Greg fellow, helplessly smitten from the start, waiting and waiting, finally turning over one wintry morning to embrace his heart’s desire. I whispered, “You were all set.”

“It seemed that way. Yes, it did. I had old lovers who’d become my best friends, I had a husband who adored me, I had a beautiful little girl — I don’t know where this munchkin came from —”

Monica blew a big wet raspberry.

“And, are you familiar with rammed-earth construction? It’s really like nothing else. It seems like a natural rock formation. In the shape of — your house. So, you see. We had every right to that little piece of land, we’d put blood, sweat, hard work and spirit into it; we built a thing that will be there as long as that dragon will. But old Jimison taught us Henry George’s lesson the hard way. Ohh, yes, she did. One morning a gang of heavy equipment came banging up Jimison’s lane. She wasn’t there. She was nowhere to be found. Pretty slick, huh? We had never seen a ‘for sale’ sign — but she took the proceeds from her farm, and blew off to wherever the hell she blew off to. I have to admit, I kind of admired that. She was calm and cool while she played us.”

“Holy shit. So you got nothing?”

“Not quite that melodramatic. There were no legal documents of any kind, but the whole county had seen us building our house — hell, the local paper had come out to interview us. We were told that we could recover the value of the house — good thing they didn’t know how ill-prepared we were to sue anybody! But the developers settled. They gave us fifteen thousand dollars, with which we paid down on ten nice acres over on Knox Ridge. And I assure you that we have full, legal title to this bit of real estate.”

Those new-moon eyes of hers let me know, that she knew, that I could think of nothing to say; she didn’t mind, and besides, there was laundry to finish. She gave Monica a loud kiss on the head and we went back to work, she to folding, and I to distractedly staring at my lessons, as my dryer-loads finally got going.

Maybe ten minutes later, Ramona came back over to me. “You know, I just remembered something about that book, Progress and Poverty. You know what really impressed me about it? What really made me think this guy’s kind of a genius?”

“What?”

“It’s where he says that economics is easy, once you see the trick.” Ramona seized the three bottle caps from Monica, whose eyes lit up. While she spoke, she began to whip the caps around, and neither her little apprentice nor I had the slightest chance of following that pill. “The odds are definitely against you!” Ramona grinned. “But no, I’m serious. Why would I have remembered a book about economics? Feh! It’s the opposite of a sexy subject. I mean the exact opposite. Your turn, honey!”

Monica went back to her laundry-table stage, wiped her hands professionally on the front of her overalls, and said, “Follow the rent, bet you can’t!” She deftly shifted the caps around for a while, revealing the little red pill here and there, and then she gave me an opportunity to choose, while her mom, loading a dryer, watched with pride. I picked. The pill wasn’t there, of course, although I did sort of see the technique through which it came not to be. I didn’t let on, but Monica said, “Rats. My pinkies are too small!”

“Honey, how can they be too small, if they keep getting in the way?” Ramona winked at her. “You’ve almost got it!”

I ventured to comment, “She’s going to make lots of money, before long.”

“Oh, no, no, that’s not what it’s about, and she knows it. Nimble fingers are useful things, but I don’t believe in gambling, anymore.”

“I see. So, no mother and daughter streetcorner hustles, huh? Wow, the two of you could clean up in Central Park.”

“No ill-gotten gains for Monie and Monnie. In fact if I ever find out she’s extorted so much as a nickel from any other kid, she’s gonna be in truh-bull! Right, my darling?” Monica gave us a very big and sober nod, but there was a sparkle behind it.

Facebooktwittergoogle_plusredditpinterestlinkedinmail