Won’t Somebody Think Of The Family Farmer?

My father’s side of the family were peanut farmers and Angus ranchers in west Texas and east New Mexico. I grew up riding horses, and was active in both 4-H and Future Farmers of America. I even took part in junior bull riding. I thought that Willie Nelson was just about the greatest guy ever. Ok, let’s admit it, Willie Nelson is an amazing person, both as a musician and in his desire to help people and animals alike. The kinds of people Willie really intends to help with his farmer benefit concerts are the type of people I would like to see helped.

Billions of taxpayer dollars go toward subsidizing crop production each year. So often, the supposedly vulnerable members of the agriculture community are held up as an example of why this is a necessary and compassionate policy. Not only is this perception false, but the very image of the struggling, cash-strapped family farmer is one that doesn’t really hold true in the 21st century. In the 1930s, about 20 percent of the U.S. population were actively working in agriculture. Today, it’s only one percent and the rate of new farmers entering the workforce is dropping dramatically.

When we imagine a family farm, we think of the painting American Gothic, Charlotte’s Webb, Babe, and the Hidden Valley Ranch Dressing label. It’s a reminder of how things supposedly ought to be, an idyllic country fantasy of modest people working and often struggling to provide the rest of us with food.

Photo: David Reece Gathering the Hay via photopin (license)

Everyone seems very concerned about the plight of family farmers these days. But, what does the term “family farmer” really mean? Pretty much everyone has a family. What I really want to know is: who are these farmers who don’t have families? They are the ones who really need help!

The USDA claims that 97 percent of farms are family farms. However, this classification relates to the ownership structure and the top-level management rather than who actually works the land. Just 59 percent of farm laborers and supervisors are U.S. citizens. Half of the hired labor on crop farms, according to the USDA, is people not even legally allowed to work in the United States. They are mostly Mexican migrants making abysmally low wages. Farming subsidies surely don’t go to these ‘family farmers’. Many probably miss their families desperately.

‘Small family farms’ as the USDA defines them, operate 48 percent of all farmland and own 47 percent of the value of farm real estate including land and buildings. In 2012, they held 40 percent of U.S. cattle, 89 percent of the horse inventory, and “grew 64 percent of all acres in forage production”. Yet, despite owning so much, they only produce 20 percent of agriculture sales and five percent of the country’s net farm income. Almost half of small farms are “off-farm occupation farms” which means that the operator’s primary occupation is not farming.

Farmers soak up about $20 billion in subsidies each year. Despite the rhetoric of “preserving the family farm,” the vast majority of farmers do not benefit from federal farm subsidy programs. According to Environmental Working Group president Ken Cook, most subsidies go to the largest and most financially secure farm operations.

The first thing to keep in mind is that two-thirds of the farmers counted by the census of agriculture do not get farm bill subsidies. So most farmers don’t get anything… And even within the third that does get money from farm bill subsidy programs, the very large ones dominate. And it’s getting more and more concentrated all the time.

Farming subsidies largely prop up wealthy landowners who are not what we would we would intuitively agree to be real family farmers at all. In general, the concept of the nice old landowning family farmers struggling to make ends meet simply doesn’t exist on a large scale anymore. The average farm household enjoys an income about 15 percent higher than that of the average U.S. family.

Cook goes on to describe to Mother Jones how historical subsidies can be enjoyed by subsequent generations who have no involvement in production:

Absentee owners exist everywhere. Let’s say you and I are brothers. You came to town to be a journalist, I came to work at an environmental group, but we both came from a farm family in Arkansas. If mom and dad give us 5,000 acres in their will, we don’t have to go back down to Arkansas and farm. We’ll get the direct payments automatically for that rice and cotton mom and dad kept growing, and on top of that we’ll get other payments.

What we should do is not only cut off these subsidies to landowners but tax the farmland in proportion to its value. This would enable us to fund government without taxing farm equipment and labor.

Photo: David Cornwell Favored by the Sun via photopin (license)

This would actually help small farmers, whose major startup cost is purchasing land. But wait, if you tax land, wouldn’t their costs go up? No. Unlike taxing consumer goods, which drives up prices, taxing land has the benefit of not reducing its supply. Somebody always owns it. Taxing it makes hobby ownership less attractive, thus actually lowering the purchasing price.

If you’re an economics wonk, here’s an explanation of taxes on inelastic supply:

If the taxes on labor and equipment were reduced while the cost to purchase land went down too, this would be a boon for families purchasing small plots of land to grow food. Their holding costs for land would be higher, but that would just incentivize them to use land more efficiently, like real family farmers used to do.

We could actually see a resurgence of what we would agree is real family farming. These families could hire a lot of workers and pay them more without the burden of paying wage and sales taxes. And if all of these families were using less land and employing more people at higher wages, family farms could thrive and new farmers could enter the market.

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The Henry George Program Ep. 1 – Urban Economics Of The Asian Tigers

In this April 11, 2017 episode, Mark Mollineaux, Jacob Shwartz-Lucas, and Edward Miller discuss the land-use policies of Hong Kong, Singapore, Taiwan and more. How responsible is municipal ownership of land for the world-class infrastructure and vibrant economies of these cities?

 

Starting in 2017, EarthSharing.org has been collaborating with KZSU Stanford 90.1 FM to create a weekly hour-long radio show. The Henry George Program is a platform for interviews, roundtable discussions, and debates on economic justice and policy.

Tune in for challenging content on the housing crisis in the Bay Area and beyond, economic stagnation, widening wealth inequality, and environmental degradation ― can Henry George’s ideas offer a path forward that unfettered capitalism and incremental socialism lack?

An archive of the Henry George Program can be found here.

Featured photo: Castelaze_Studio Lost in Hong Kong via photopin (license)

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Aqua-Imperialism And The Failed Environmentalist

Our public reverence for nature has done little to stop its overwhelming degradation by private interests. Ascribing a sacred quality to water has not helped to guide water management policy in any meaningful way, and so we are left with an environment in which businesses can accumulate the ownership of water, forests, land, and minerals.

Economist Mason Gaffney published an illuminating piece of writing late last year, in the November issue of the American Journal of Economics and Sociology. In it, he makes the claims that economists have dropped the ball on protecting the environment by osmosis, and that the fundamental assumptions about efficiency and ownership are wrong. In ignoring value created by nature from the outset, the legitimacy of inherited ownership and natural resource exploitation has never been questioned. “As a result,” Gaffney writes, “those economists have developed sophisticated strategies to deny the existence of gross inequities in society and extensive environmental damage.

When the allocation of natural resources is left to the market, the markets are usually inefficient, because few owners or license holders want to part with what they have been granted. Gaffney claims that in policy on water, forestry, mining and urban development, prices and taxes to discourage expansionism is the first place to start.

Often lauded is the transparency and supremacy of emissions trading schemes, but these tend to be flawed from the outset on account of the large allocations of credit essentially gifted to organizations already polluting the most. Gaffney relates this idea to all property rights throughout Sacred Water, pointing out that no system of resource allocation can arise in a vacuum and must be based on historical entitlements. Such entitlements must be completely turned on their heads.

In the case of water allocation rights, history shows us that allocation of water in agriculture has been granted first to those industries that have minimal capital investment and a fast production cycle. This made sense in an era of pioneers, but Gaffney explains that as a result, farmers with a high per-acre capital investment have been shut out from acquiring senior water rights, even though they tend to have higher marginal productivity.

“Appropriative rights now deny water to the farmers who are most productive. This is ironic, since the original purpose of the doctrine was to ensure that water was put to use productively on farms and not left ‘idle’.”

Photo: clogette Polytunnes via photopin (license)

By charging the users of water and introducing a concept of reciprocity, the public can effectively reassert its claim on water as a part of the commons. The entitlement that is the use of a gift from nature must be countered by a reciprocal obligation. Gaffney highlights the Wright Act as a water pricing example, adopted in California in 1887, and says that it “led directly to the breakup of large landholdings, a feat never before or after achieved through any coercive land reform program.”.

The Wright Act allowed collectives of farmers in a region to form irrigation districts, legal entities that allowed them to pool their resources and get water. Gaffney includes an extract from the Stanislaus County Weekly News, dated 1907, which illustrates what happened when the Act was adopted:

The great wheat fields have been gradually diminishing for several years, but the last year was marked by a wonderful change. Like magic the wheat fields of a year ago have been transformed into great vineyards and orchards of fruit of all kinds…The past year has been one of great activity in land division; many large tracts have been subdivided and populated by new people.

The pragmatic policy instruments used in the Wright Act must be integrated into a new framework for thinking about natural resources. Ultimately, Gaffney advocates the common sense egalitarian philosophy that nature must not only be cherished but must be shared equitably.

Governments, lawyers, economists, and even NGOs purporting to fight the environmental fight have acquiesced to the status quo corporate schemes – convoluted systems of credits and permits that create opportunities for profiteering on polluting behavior and past emissions. Gaffney says most environmentalist groups “have upper-middle-class constituencies and seldom propose policies that might contribute to a realignment of wealth and power.”

Environmentalists tend to fall into one of two camps, neither of which is doing anything to address to core ownership issues in environmental policy. Gaffney defines these camps as “accommodationists, whose policies would serve to perpetuate the status quo outside of a narrow band of technical solutions to environmental problem” and “sacralists, whose reverence for nature and for the downtrodden members of society would lead to policies disruptive of the existing social and economic order.”

By rejecting the system outright, the utopian sacralists turn to protest and flag-waving, which Gaffney calls a strategy that “may make for effective fund-raising appeals by NGOs, but it does very little to protect the natural values they profess to hold sacred.”

Photo: reillyandrew RESIST via photopin (license)

Unfortunately, making noise about specific harmful projects only created an opportunity for the thousands more to continue unnoticed. The blanket dismissal of potentially useful economic tools is as dangerous as direct complicity in destructive industries.

Accommodationists are complicit in the creation and maintenance of entitlement systems, many of which are presented as protections for the environment. These people see no benefit in a pricing structure that gives every company or individual a level playing field. As happened with the Wright Act, diseconomies of scale would see many large businesses suddenly at a disadvantage if the current balance was upset.

In California today, Gaffney says there is a system of aqua-imperialism: “the growth of an empire based on long-distance transportation of water at great expense to people who will not directly benefit”.

The enormous farms wasting nearby water are in effect subsidized by the lack of a water price, this wastage necessitates a new industry of water transportation, and businesses operating them are then subsidized as well due to the importance of keeping demand satisfied. For as long as no-one is charged for the water, everyone is paying for it.

Gaffney gives this example:

Consider the lower Colorado River, which runs through Arizona, Nevada, California, and Mexico. Every major user is subsidized, mostly by Congress. No one pays for water at the source, but everyone gets paid to pump it up and take it home. No wonder there is a shortage. No wonder there are 82 golf courses operating in the Coachella Valley, a Sonoran desert, and 50 more planned.

Photo: Giuseppe Milo (www.pixael.com) Horseshoe Bend – Page, United States – Landscape photography via photopin (license)

Gaffney’s intention with Sacred Water, Profane Markets is to illustrate that equity and reciprocity at the micro level can have benefits at the macro-level. If ecological and economic limits are treated as the same, and water is treated first and foremost as owned by humanity, the trickle of incentives will fundamentally alter the way water is used.

Featured photo: Pete Souza for the White House.

 

Sacred Water, Profane Markets

To foster an ongoing public dialogue on Sacred Water, Profane Markets, the Robert Schalkenbach Foundation is co-sponsoring an event in New York on May 19, with the International Union for Land Value Taxation, a United Nations ECOSOC NGO, the Center for the Study of Economics and The American Journal of Economics and Sociology.

Register on Eventbrite to attend in person or watch via live stream.

Friday, May 19th, 9:00 am – Noon
22 East 30th Street, New York, NY 10016

American Journal of Economics and Sociology editor Frederic S. Lee says that by recognizing the tendencies toward capital accumulation inherent in laissez-faire capitalism and enshrining the sanctity of nature at the forefront of any policy discussion, Gaffney has produced “principles of universal relevance”.

This event will explore how a just system of charging for nature’s services can not only protect nature from excessive use but also make the market for produced goods and services healthier by preventing the development of monopolies that impede economic efficiency and destroy social harmony.

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Virtual Meet And Greet: January

Georgist literature, nonprofit strategies, and economic theories were among the topics of discussion in January’s EarthSharing.org Social Call. We were joined by Edward Miller, Lawrence Bosek, Frank Ortiz, and Andrew Winters for this iteration of our monthly free-for-all conversation. You can listen to the audio below.

Interested in talking with us about Georgism and economic justice? Earthsharing.org hosts a monthly social call for anyone who would like to get more involved, ask questions, or simply meet friendly people interested in similar issues. Space is limited to 5 people. Sign up now to hold your spot for this event. If you can’t make a particular call, sign up for the next one and tell us your availability.

Follow this link to sign up to the current social call. We will call you at the scheduled time. The call is free, no matter where you are in the world.

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Land Value Tax Now A Mainstream Policy In Scotland

Significant strides toward a fairer tax system have been made in Scotland, where the establishment of a dedicated commission on land reform has cemented the policy direction of the leading Scottish National Party.

SNP, Scotland’s governing party, held its annual conference in March, and attendees were jubilant at the commitment made to some form of land taxation. An amended motion stated that as the government works through its land reform program it “must include exploring all fiscal options including ways of taxing the value of undeveloped land”.

Back in 2015, grassroots SNP members rejected the party’s proposed land reform policy, on the basis that it didn’t go far enough and was thought to be a watered-down version of the ideal policy. This was considered significant then because it is rare for a party’s membership to overturn a policy on its own and send its representatives back to the drawing board.

Writing for Bella Caledonia, Jen Stout explains that growing pressure for land reform in Scotland was bolstered by debate during the nation’s independence referendum in 2014.

“The stark inequalities that damage Scottish society so much were a frequent topic, and few statistics hit you so hard as ‘432:50’ – around 432 interests own half the private land in Scotland. That private land, incidentally, makes up 89 percent of our 19 million acres. Community ownership accounts for two percent. Just one man, the 10th Duke of Buccleuch, owns one percent of Scotland.”

Adding to the chorus of Land Value Tax advocates is the Scottish Green Party, one member of which has prepared a manifesto on implementing Land Value Tax. Andy Wightman writes that the only major barrier to achieving this is the establishment of a land register, which currently does not exist for Scotland.

“Land Value Taxation is no longer the preserve of advocates and lobby groups on the margins of public debate. It is now a mainstream part of contemporary debates over the future of public finances, local revenues and public infrastructure.”

“There are signs that the public is becoming weary of the house price escalator. For one thing, young people (and by that I mean almost anyone under the age of 30) are being impoverished through the high cost of accessing property. For another, the credit crunch has exposed the weakness of an asset-based debt model. Combined with pressure for just rewards, fairness and greater equality, the arguments for LVT suggest its time may at last have come.”

Photo: Rob McDougall via Crofting Law Blog.

For all the progress being made in setting the priorities of major political parties, significant misunderstanding of the Land Value Tax policy remains. Public opinion regularly equates a land tax with explicit “community ownership”, which is a failure to grasp the concept of returning the value of public goods to communities.

Wightman writes that while some industries, like forestry and agriculture, and the owners of buildings on high-value land would be resistant to the new system, serious effort should be expended to educate low and middle-income families and the business, retail and industrial sectors on their potential cost savings.

Support for Land Value Taxation in Scotland is now a force to be reckoned with, and its proponents are numerous and well-respected. EarthSharing.org will be continuing to observe and encourage this debate as it develops.

Featured photo: J McSporran Drink and Drive via photopin (license)

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Event Monday in Queens, NY

Henry George and the Crisis of Inequality
Speaker: 
Professor Edward T. O’Donnell

College of the Holy Cross

Professor O’Donnell’s presentation will be based on his book on the topic, published by the Columbia University Press in 2015. Henry George played a key role in popularizing some of the foundational ideas of progressivism that shaped U.S. social and economic policy in the 20th century. This topic has tremendous relevance for contemporary U.S. society as it confronts similar questions about poverty, inequality, corporate power, etc in what some have taken to calling a Second Gilded Age. In addition to several books and articles, Professor O’Donnell has lectured widely and has been the featured presenter of several history programs in the widely acclaimed The Great Courses.

Monday, April 24, 2017
1:50-3:15 pm
The Little Theater (next to Carnesecca Arena)

St. John’s University, Queens Campus
8000 Utopia Pkwy, Jamaica, NY 11439

This lecture is partially funded by a grant from the
Robert Shalkenbach Foundation.
For additional information, contact Dr. Joseph A. Giacalone, Henry George Chair.

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Monthly News Digest – April

EVENT: Register now!

Friday, May 19th, 9:00 am – Noon
22 East 30th Street, New York, NY 10016

We would like to invite you to an exciting event in New York City on how natural resource policy has created enormous environmental and social problems. Don’t miss the chance to be a part of this vital ethical and economic debate that will shape policy dialogue for years to come. You can also register to join the event via livestream. For further information email: alanna@centurylink.net


EARTH SHARING CLASSIC

Economic History Timeline

EarthSharing.org has compiled an interactive record of economic thought over the course of the past 500 years, from John Locke to Jeffrey Sachs on sharing the value of the earth.


IN THE NEWS

SNP conference backs call for land taxation to transform Scotland #SNP17

“In a historic step forward for the land reform movement in Scotland, the party’s spring conference unanimously backed calls for a tax on ownership to end the feudal ownership system that has endured in the country for centuries.”

“The amended motion said the government “must include exploring all fiscal options including ways of taxing the value of undeveloped land” in its gradual land reform programme.”

Mainstream Economics Has Become a Celebration of the Wealthy Rentier Class

“These views largely depend on whether they view the One Percent as innovative, smart and creative, making wealth by helping the rest of society – or whether, as the great classical economists wrote, the wealthiest layer of the population consist of rentiers, mak
ing their income and wealth off the 99 Percent as idle landlords, monopolists and predatory bankers.”

“A case in point is the Scottish economist Angus Deaton, author of The Great Escape: Health, Wealth, and the Origins of Inequality. (2013). Elected President of the AEA in 2010, he was given the Nobel Economics Prize in 2015 for analyzing trends in consumption, income distribution, poverty and welfare in ways that cause no offense to the wealthy, and in fact treat the increasingly inequitable status quo as perfectly natural and in its own kind of mathematical equilibrium.”

‘Universal Basic Assets’ A new economic model that could save the other 99%

“The social instability caused by vast economic disparities is likely to only grow deeper under the pressures of climate change and automation.”

“We urgently need to design a new framework that delivers greater social and economic equity. Some economists and activists are proposing Universal Basic Income, a guaranteed minimum payment for everyone, as a way to ensure a guaranteed minimum for people to live on. We believe that a universal basic income is only the first step in making our economic system more equitable.”

“In designing Universal Basic Assets we take into account access to traditional physical and financial assets like land and money, as well as the growing pools of digital assets (data, digital currencies, reputations, etc.). We also recognize and assign value to exchanges we engage in as a part of maintaining the social fabric of our society but that do not currently carry with them monetary value (caring, creative output, knowledge generation, etc.).”

How to Fix San Francisco’s Housing Market

“The real problem is an emasculated housing market unable to absorb the new arrivals without shedding older residents. The only solution is to take supply off its leash and finally let it chase after demand.”

“Discretionary permitting limits how quickly the housing stock can grow. Land use restrictions can increase the price of housing by as much as 140% over construction costs. Relaxing–if not abolishing–these types of restrictions would be hugely beneficial.”

“The most realistic plan would be to retire San Francisco’s property tax in favor of a land tax and
make the change revenue-neutral. Considering the city’s property tax rate is barely over 1%, a revenue-neutral land tax probably wouldn’t deliver the sun, the stars, and the moon like it would at much higher levels. That said, it would still be an improvement over the existing property tax.”


Economist Josh Ryan-Collins: How Land Disappeared from Economic Theory

“Anyone who has studied economics will be familiar with the ‘factors of production’. The best known ‘are ‘capital’ (machinery, tools, computers) and ‘labour’ (physical effort, knowledge, skills). The standard neoclassical production function is a combination of these two, with capital typically substituting for labour as firms maximize their productivity via technological innovation.”

“But there has always been a third ‘factor’: Land. Neglected, obfuscated but never quite completely forgotten, the story of Land’s marginalization from mainstream economic theory is little known. But it has important implications. Putting it back in to economics, we argue in a new book, ‘Rethinking the Economics of Land and Housing’, could help us better understand many of today’s most pressing social and economic problems, including excessive property prices, rising wealth inequality and stagnant productivity.”

“Today’s economics textbooks – in particular microeconomics – slavishly follow the tenets of marginal productivity theory. Even progressive economists such as Thomas Piketty have fallen in to this trap. Once you strip out capital gains (mainly on housing), Piketty’s spectacular rise in the wealth-to-income ratio recorded in advanced economics in the last 30 years starts to look very ordinary.”


Utopian thinking: to ‘take back control’ of England, we must find out who owns it

“Understanding who owns this country has been a utopian project for at least a century and a half. In 1872, in an effort to disprove radicals’ claims that only a tiny elite dominated the landed wealth of the nation, Lord Derby – a major landowner himself – asked the government to undertake a proper survey. The Return of Owners of Land – or “Modern Domesday”, as it became known – was the first comprehensive assessment of land ownership in Britain since William the Conqueror’s swag list after the Norman conquest. But far from dousing the demands of the radical land reformers, the survey lit a fire under the issue.”

“So if the answer to who owns England isn’t available from existing public data, how to find out? Well, the Victorian land reformers did leave us one other legacy: the Land Registry, whose job it is to gradually register who owns all land in England and Wales. Yet 150 years after it was founded, it’s still not completed its task – around a fifth of all land remains unregistered. And though the Land Registry has thankfully just survived a government attempt to privatise it, it remains a very closed public service: you have to pay £3 just to find out who owns a single field. Paying to find out who owns the whole country would cost a fortune.”

“The government’s recent housing white paper heralded some welcome steps in this direction – announcing that the Land Registry would soon make freely available its datasets on land owned by UK companies and offshore firms. But that’s only a fraction of the total. Aristocratic families, who almost certainly still own the great majority of England, will be exempt – since their huge estates are invariably registered in an individual’s name, if they’re registered at all.”

Tax land, not labour – Dominic Frisby

“Each parcel of land in the UK is assessed for its potential annual rental value. Remote, rural farmland will have a low rental value. Prime city centre real estate will have a much higher rental value. A tax is then levied based as a percentage of the annual rental value of that land (in its unimproved state).”


GLOBAL EVENTS

Sacred Water, Profane Markets

Friday, May 19th, 9:00 am – Noon
22 East 30th Street, New York, NY 10016

Sponsored by the Robert Schalkenbach Foundation, the International Union for Land Value Taxation, & the American Journal of Economics and Sociology

This is an exciting event in New York City on how water and other resources have been poorly managed. Don’t miss the chance to be a part of this vital ethical and economic debate that will shape policy dialogue for years to come.

Seminar: Dog-Eat-Dog is Overvalued: Debunking the Wages Fund and Malthusian Theories

April 18 6:30pm
Henry George School of Social Science
5 W 19th Street Suite 2C
Organized by the Henry George School of New York

Bridging the Right-Left Divide

Thursday, July 27 to Monday, July 31, 2017
Hilton Garden Inn, O’Fallon, Illinois
Organized by the Council of Georgist Organizations

The 37th Conference of the Council of Georgist Organizations is sure to be an unmissable event. The conference is focused on networking, meeting old friends, recharging and enriching understanding. Speakers include Don Killoren, Andrew Theising, Erich Jacoby-Hawkins, Ted Gwartney, Gordon Abiama, Jeff Graubart, Nic Tideman, Karl Widerquist, Vitnarae Kang, Anthony Werner, Bill Batt, Brendan Hennigan, Dan Sullivan, John Kelly, Mike Curtis, Josh Vincent and Lindy Davies.

Housing Markets and the Fiscal Health of US Central Cities

April 17, 2017
2100 M Street NW, Washington D.C.
Organized by the Lincoln Land Institute

Cosponsored with the Urban Institute, this event will offer insights from two recent research projects funded by the John D. and Catherine T. MacArthur Foundation that explore the links between shocks to urban housing markets and central cities’ finances.

2017 Urban Economics and Public Finance Conference

May 5, 2017
Lincoln Institute of Land Policy
113 Brattle Street, Cambridge, MA

The economic growth and development of urban areas are closely linked to their revenue sufficiency and fiscal prospects. This research seminar offers a forum for new academic work on the interaction of these two fields.

Walking tour: Land, villains, and revolutionaries: a social movement history

Saturdays 9:00pm  
American Youth Hostel, 312 Mason Street 
Organized by the Henry George School of San Francisco

EVERY MONTH, SECOND TUESDAY

May 9: Illinois Is Not Broke
Organized by the Henry George School of Social Science Chicago


Join our Facebook discussion group.

To start discussing Land Value Tax (LVT), and other ways of making a difference in the world, join our discussion group on Facebook. Here, you can ask questions about Earth Sharing, LVT, ending poverty, and protecting the environment. You will be able to talk with professors and regular people in the larger Earth Sharing community. It is also a gateway to other discussion groups, a market place of ideas for making the world a better place.

We don’t necessarily endorse any of the viewpoints in these discussions on Facebook, but they are sure to make you think.


PROGRESS IN MARCH

EarthSharing.org website hits in March
32,235

Total email subscribers to date:
20,722

Dear Earth Sharers,

We hope you’ve enjoyed all of the content we’ve been producing. It’s truly a labor of love. We’re making a lot of progress, with 600-700 new newsletter subscribers each month. More than 20,000 of you have graciously allowed us into your lives.

Next month, we will be including links to our new segment on Stanford University Radio, KZSU, entitled The Henry George Program. We look forward to getting your reactions to the show and increasing your involvement in the cause to give everyone equal rights to the bounty of nature, something we believe is fundamental to ending poverty, saving the environment, and unleashing human progress.

Sincerely,

Jacob Shwartz-Lucas
EarthSharing.org
Robert Schalkenbach Foundation

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EVENT: Sacred Water, Profane Markets

We would like to invite you to an exciting event in New York City on how natural resource policy has gone so wrong. Don’t miss the chance to be a part of this vital ethical and economic debate that will shape policy dialogue for years to come.

Register on Eventbrite to attend in person or watch via live stream.

Sacred Water, Profane Markets

Friday, May 19th, 9:00 am – Noon
22 East 30th Street, New York, NY 10016

For further information and/or to attend email: alanna@centurylink.net

“To make the economy work on behalf of citizens and nature, the special privileges of the past will have to be terminated.” The words of Frederic S. Lee, editor of the American Journal of Economics and Sociology, elucidate the powerful implications of a new piece of writing from Georgist economist Mason Gaffney.

Gaffney’s Nature, Economy, and Equity: Sacred Water, Profane Markets appears in the November 2016 edition of AJES and challenges the fundamental assumptions of even the most liberal economic dogmas of the past century. Lee says that by recognizing the tendencies toward capital accumulation inherent in laissez-faire capitalism and enshrining the sanctity of nature at the forefront of any policy discussion, Gaffney has produced “principles of universal relevance”.

To foster an ongoing public dialogue on Sacred Water, Profane Markets, the Robert Schalkenbach Foundation is co-sponsoring an event in New York on May 19, with the International Union for Land Value Taxation, a United Nations ECOSOC NGO, the Center for the Study of Economics and The American Journal of Economics and Sociology.

This event will explore how a just system of charging for nature’s services can not only protect nature from excessive use but also make the market for produced goods and services healthier by preventing the development of monopolies that impede economic efficiency and destroy social harmony.

FROM THE ORGANIZERS

Sacred Water, Profane Markets should be of particular interest and provide ground-breaking insights to any professional, NGO, or others with an interest in or responsibility for managing, funding, using or caring for substantial bodies of water for municipal, domestic, commercial, agricultural, industrial, amenity, leisure or hydropower purposes.

Two of our speakers, David Triggs and Mary Cleveland, will address the economics and management of water. They will describe how a just system of charging for nature’s services can not only protect nature from excessive use but also make the market for produced goods and services healthier by preventing the development of monopolies that impede economic efficiency and destroy social harmony.

Drawing upon many years of practical experience in both developed and developing countries and extensive academic research they will show how a healthy balance of demand management and market forces may be used to ensure both safe drinking water for all in water scarce cities and the optimum sharing of water between agricultural, industrial and commercial users of water. They will provide fresh thinking with regard to how the cost benefit analyses that underpin major water related capital projects throughout the world may be improved to avoid unnecessary waste of natural, human and financial resources. The principles underpinning this approach apply to wider economic and public revenue issues.

Our third speaker, David Michel, has researched and written about transboundary water governance, maritime resources management, and water conflict and cooperation. He is co-author of Toward Global Water Security: US Strategy for a Twenty-First-Century Challenge. He will share his views about the water ethics and policy presented by the first two speakers and how these might make a valuable contribution to a global water grand strategy formulation. The intention of Dr. Michel’s current work on global water security is to maximize the potential for civil society and the private sector to speak with a cohesive voice on water ethics and policy.

Following the three main speakers several designated respondents will draw on their own insights and experiences in water ethics and management in giving their input to the proposed reconciliation of Sacred Water and Profane Markets. The main speakers and the respondents will then participate in a plenary round table discussion on a number of key points and questions raised by forum attendees.

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The Cause of Global Inequality: Comparing Jared Diamond and Henry George

Can inequality within and between societies be explained in terms of merit and intelligence, or are the most important determinants of inequality beyond individual control? Both economist Henry George and geographer Jared Diamond essentially asked this same question, examining the fundamental forces that have shaped human history. They come to startlingly similar conclusions. These similarities have not, until now, been connected and compared so directly.

Henry George, as an economist, had a view of history which emphasized the importance of the privatization of the economic value of land. Jared Diamond emphasizes the importance of the orientation of large land masses along an east-west axis in shaping history. What is common to both theses is the importance of land – the petri dish which supports human cultures.

Diamond’s Pulitzer Prize-winning Guns, Germs and Steel is probably the most popular book ever written about the role of agriculture in the evolution of human societies. George’s magnum opus Progress and Poverty was likely the best-selling book in the world, after the Bible, when it was published in 1879. Princeton historian Eric F. Goldman described a society in which enormous numbers of people found that their “whole thinking had been redirected by reading Progress and Poverty in their formative years. In this respect, no other book came anywhere near comparable influence.”

Both books tackle such large questions that they are frequently attacked for being deterministic and for broad-stroking details. While the details are contentious, the core theses are straightforward and robust. Postmodernism has made many scholars afraid to distil general forces and has turned ‘generalization’ into a pejorative term.  But among those seeking useful answers for the current state of the world, Diamond and George are responsible for paradigm shifts within many fields of inquiry. It is not my goal with this piece to defend all of these thinkers’ ideas with an exhaustive list of historical examples, but merely to compare their most defining ideas.

Land Determines Human Progress

Diamond’s thesis is that Eurasia had ideal conditions for agriculture and the success of its people was not due to intelligence or merit. Essentially, crops that flourished in the fertile crescent (self-pollinating hermaphrodites) could move east and west much easier than they could move north and south. Globally, those who controlled land on this east-west axis were able to grow huge food surpluses and advance rapidly, inheriting selectively bred food crops, technology, and ideas at a much faster rate than areas not on this physical and intellectual jet stream.

Diamond writes that effective agriculture and food storage were “prerequisite for the development of settled, politically centralized, socially stratified, economically complex, technologically innovative societies. Hence the availability of domestic plants and animals ultimately explains why empires, literacy, and steel weapons developed earliest in Eurasia and later, or not at all, on other continents.”

Photo: Stuck in Customs The Infinity of China via photopin (license)

Food surpluses freed people’s time and energy for innovative pursuits, supported dense hubs where people could exchange ideas, and supported large militaries to exact tribute and rent from traders and inhabitants. In other words, it was principally differences in access to well-located land that made it possible for some societies to advance to the point of being effective at conquest and colonization.

If George were aware of Diamond’s thesis, he might remark that there is a global privilege, or economic rent, associated with controlling land on this east-west axis. George mostly goes about describing this within societies – as opposed to Diamond’s sole focus on comparing civilizations – arguing that those who control the best locations and can charge rent for them have a return far beyond that which is justified by their individual merit. On the collapse of societies, both thinkers boil it down to sprawling and wasteful land use.

In Progress and Poverty, Henry George discusses how sprawl and the inequality it produced was the cause of the decay and fall of the Roman Empire:

“Rome arose from the association of independent farmers and free citizens of Italy. It gained fresh strength from conquests, which brought hostile nations into common relations. Yet the tendency to inequality hindered progress from the start, and it only increased with conquest.”

“Great estates—“latifundia”—ruined Italy. The barbarism that overwhelmed Rome came not from without, but from within. It was the inevitable product of a system that carved the provinces into estates for senatorial families. Serfs and slaves replaced independent farmers.”

George, firstly, notices that private property is a natural thing related to human production and in ancient times when the population was sparse “ownership of land merely ensures that the due reward of labor goes to the one who uses and improves it.” But over time, with the density of the population, rent increased forcing civilizational sprawl.

Conquests led to appropriation of land and slavery. The Roman armies moved outwards from Latium demanding land; victory gave more land to the farmers; excessive demands again brought exhaustion of fertility; again the armies moved outwards. Early 20th-century professor of economic history Vladimir Simkhovitch wrote: “Province after province was turned by Rome into a desert, for Rome’s exactions naturally compelled greater exploitation of the conquered soil and its more rapid exhaustion. Province after province was conquered by Rome to feed the growing proletariat with its corn and to enrich the prosperous with its loot. The devastation of war abroad and at home helped the process along.”

Photo: Jerzy Durczak Sunny fields via photopin (license)

Diamond describes the way in which Middle Eastern and Mediterranean civilizations grew crops and grazed cattle in an irresponsible and wasteful manner.  If land was plentiful for the dominant culture, who had subdued the inhabitants, they could afford to destroy the soil and move on. The only reason western Europe was able to survive similar irresponsible methods, according to Diamond, was its rainfall, unlike the drier Mediterranean and more inland areas of the Middle East, which were not always deserts.

In this way, George and Diamond agree on the importance of land and resource management in the rise and fall of civilizations, as opposed to the individual merit of those involved, but they describe very similar phenomena through unique and largely comparable lenses.

It is difficult to compare thinkers from such different times on issues like the environment. However, one possible difference between George and Diamond are their views on population. George viewed humans, unlike other species, as capable of multiplying their productivity, using fewer resources to produce more wealth. Diamond’s theory that Easter Island, for instance, was a Malthusian (population) trap might put George’s and Diamond’s philosophies at odds. George was likely more of an optimist in terms of population and technology,  if the land problem could be adequately addressed first.

Resource Distribution within Societies

To illustrate, Vikings, a popular historical drama on the History Channel (spoiler alert), features the fearless upstart Ragnar Lodbrok. Ragnar bases his legitimacy as a ruler on the idea that he can supply his people with not only new sources of loot but, most importantly, land.  He dramatically demonstrates this mid-battle in an impassioned speech to his warring countrymen. Instead of fighting each other for land, says Ragnar, they should join forces in killing other peoples. Despite historical inaccuracies common in such dramas, scholars believe the Vikings raided other parts of Europe principally out of a hunger for land.

According to George, when a society does not use its own resources well, it leapfrogs to others. He believed that the Western land tenure system creates extreme social stratification whereby the rewards of economic and technological progress go disproportionately to the owners of land. Fear of poverty and an emphasis on unearned wealth and status seeking surrounding this dynamic leads to militarization and a colonial leapfrogging mindset.

Contemporary Georgist economist Mason Gaffney referred to what causes this as ‘milking the core to feed the periphery’. The poor in the center of a society, like large cities, are paying a great deal of their earnings out as rent and those seeking to avoid this rent sprawl in a multitude of ways – from urban sprawl, to heading west during American expansion, to invading other countries for resources, as was the case with the Romans and Vikings as well.

Photo: Israel Defense Forces Artillery, Infantry & Armored Corps Exercise in the Golan via photopin (license)

Gaffney and Fred Harrison describe how land hunger drove millions of people to make the dangerous passage across the oceans to the Americas. Over the course of three centuries, those who came from the Old World gradually displaced or decimated the tribal societies of “First Americans” who occupied the continent for thousands of years. Such a huge, and resource-rich continent provided the oppressive Old World regimes with a safety-valve, or what Harrison describes as “a continental-wide bolthole to freedom.” At least for a time.

“When the land ran out in the 1890s,” writes Harrison, “the land of plenty turned into a hell of poverty.” The poverty that plagued the Old World had arisen with an equal vengeance in the New World cities established by the descendants of the first Old World migrants. Of course, the land did not actually “run out” in a literal sense; the commons was given away to the railroads, to politicians and their close friends, to land speculators, and to settlers.

After the Revolution, huge sections of land were bought up by rich speculators, including George Washington and Patrick Henry. As the veterans returned home, speculators immediately showed up to buy the land warrants given by the government. Many of the soldiers, desperate for money, sold their 160 acres for less than $50.

This kind of hoarding of land creates an artificial scarcity, and this can, in turn, be used to stoke public sentiment toward war. As was the case with Rome and other empires, George argued that this process is unsustainable; at some point, people become more focused on raiding and stealing the wealth others have produced than on creating real wealth themselves. The returns are just too low by comparison. Rent-seekers parlay their power, even if originally earned through productive means, into more rent-seeking and even buy political power to cement their positions. The social pact is destroyed as the society continuously undermines its productive base. This dynamic, which George viewed as cyclical, had happened long before the Viking raids of the Middle Ages. In Progress and Poverty, he wrote the following:

“In the history of every nation we may read the same truth: our primary social organization is a denial of justice. Allowing one person to own the land makes slaves of others. The degree, or proportion, of slavery increases as material progress goes on.

The effect of invention and improvement on the production of wealth has been precisely the same as an increase in the fertility of nature. What has been the result? Simply that landowners took all the gain. The wonderful discoveries and inventions of our century have neither increased wages nor lightened toil. The effect has simply been to make the few richer — and the many more helpless!”

Conclusion

According to Diamond, people who were lucky enough to have come from land along the longest stretch of east-west land were able to parlay that ownership into more land, decimating those who got in their way. If these east-west cultures existed in environments with lots of water, they could withstand the assault of unsustainable agricultural practices and continue to conquer other parts of the world. If not, they collapsed. George thought that those lucky enough to own land within a society enjoy the same type of unearned luck and privilege. In this way, George describes the cause of poverty within societies, and Diamond describes reasons for inequality, poverty, and colonialism between societies. Both describe why this system of resource allocation and use are unsustainable and ultimately lead to social and environmental collapse, respectively. They also agree that land and location, both its geographic position and land policy, is the most important single factor in determining the fate of civilizations.

If George were alive today, he and Diamond might sit down together and decide that they liked the idea of a global system for sharing the value of land, perhaps as a citizen’s dividend (basic income), which would equalize the historically generated value of land with the descendants of conquerors and the descendants of victims of conquest alike. This would help correct at least the economic misfortunes of people disadvantaged by their geographic position. This would overwhelmingly help those in the global south, the people who not only did not benefit from being on the east-west axis but who were also colonized by those people who did benefit. If done correctly, it could eventually wipe out disadvantages due not to merit, but simply being born on the wrong side of the proverbial railroad tracks.

 

Additional references

Simkhovitch, V. G. (1916). Rome’s fall reconsidered. New York: Ginn.
Zinn, H. (2003). A people’s history of the United States: 1492-2001.

 

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Financialization Of Housing Violates Human Rights

“Housing is at the centre of an historic structural transformation in global investment and the economies of the industrialized world with profound consequences for those in need of adequate housing.”

Adequate housing is a human right, and securing it for all people is not only a moral imperative, it is one of the 17 Sustainable Development Goals that have been developed by the United Nations and targeted for achievement by 2030. All signatory member states are bound to pursue this goal in earnest.

Leilani Farha is the U.N. Special Rapporteur on adequate housing, and she has reached some unsettling conclusions about the worsening of what she terms the “financialization of housing” in a report presented to the U.N. Human Rights Council at the beginning of the month.  Prosper Australia’s (Earth Sharing Australia) Speculative Vacancies report is held up as a primary source of evidence regarding the scale of the issue, a study that EarthSharing.org is excited to replicate in the United States as well. 

Photo: Leilani Farha

After the enormous losses incurred from the 2008 global financial crisis – by homeowners, banks, and taxpayers – it seemed reasonable to expect that any legislative response would crack down on the deficiencies in the system that had made such a crisis possible. In a nutshell, the opportunities for corporate finance to turn housing debt into a commodity were left unchecked, and the practice of packaging mortgage-backed securities into enormous bundles and selling them as an investment became widespread.

According to Farha, the resulting catastrophe of mortgage defaults and foreclosures actually ended up being a huge win for corporate finance, as companies were able to sweep up billions of dollars worth of property at fire sale prices from state governments who had been forced to assume responsibility for high-risk mortgages.

“Individuals and families who were affected by the crisis were often blamed for taking on too much debt and new rules and regulations were put in place to restrict their access to mortgages. Austerity measures cut programs on which they had relied for access to housing options, and the march towards the financialization of housing continued.”

There is a need now more than ever to reclaim housing as a social commodity and to disincentivize its treatment as a cash cow, an asset for the accumulation of wealth and an easy tax haven for the world’s super-wealthy.

Farha outlines the way in which a vast amount of investment properties are being left empty and suggests that even without occupants, a property can generate significant value for the owner. In Melbourne, a full 20 percent of investor-owned properties are vacant, equating to about 82,000 homes. In London, the wealthy suburbs of Chelsea and Kensington saw a 40 percent increase in vacant properties between 2013 and 2014.

Photo: woodleywonderworks via photopin (license)

“In such markets, the value of housing is no longer based on its social use. The housing is as valuable whether it is vacant or occupied, lived in or devoid of life. Homes sit empty while homeless populations burgeon.”

Farha says there is a “gross imbalance” between the resources that governments devote to assuaging the needs of the ownership class and what is a “complete deficit” of attention paid to those who cannot meet their needs for a safe, affordable place to live. The situation is likely to worsen with the proliferation of international trade agreements, which tend to have the effect of intimidating governments out of regulating investment in property and the development of luxury rentals. A precedent has already been set by cases of treaty arbitration wherein millions of dollars in damages have been awarded to foreign investors.

The human right to adequate housing is enshrined in the 1948 Universal Declaration of Human Rights and half a dozen other international conventions and covenants. This right, under our present system, is in constant conflict with the use of land as a store of wealth and a means of capital appreciation, and governments have made the problem worse by providing tax subsidies for homeownership, tax breaks for investors, and bailouts for corporate finance.

A system of Land Value Taxation would discourage such ubiquitous property speculation and exert downward pressure on prices. Confronted with tax bills that more accurately reflect the public value of centrally-located land, speculators and other stakeholders will find it much less attractive to hold onto housing as a deposit box for wealth. The revenue generated from this tax could be used to revitalize the stock of public housing, though this would simply be a cherry on top of the more significant shifts in incentives created by the Land Value Tax.

Featured photo: byronv2 via photopin (license)

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