THEY THINK YOU’RE STUPID AND WILL WEAR IT.

DEMAND VIMMLBUTT!

It was a relatively small group of people who forecast the 2008 Global Financial Crisis. To those supporters of Henry George nominated by the late great Mason Gaffney, I would certainly add the name of Philip J Anderson.

Have you noticed on this occasion, however, that many people have emerged from the woodwork to forecast the upcoming economic collapse? It’s becoming obvious, even to Austrians, libertarians and some neoclassical economists who entertain the belief that the upcoming financial collapse is the result of government spending, or of “too much money chasing too few goods”.

Wrong! It’s the same old, same old collapse of land prices that has been pumped over centuries by banking, real estate and media interests.

Although Catherine Cashmore’s excellent paper for Prosper Australia explains the 18-year cycle in land prices, powerful interests would have us believe these crashes are the result of “too much money”.

Well, yes: Too much money spent on land prices and on arbitrary taxation!

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Economists may dispute that economic rent constitutes one half of the economy, but research by Australian polymath Dr Gavin Putland confirms that massive share (ATCOR & EBCOR).

(Treasuries take note!)

• by AI

THAT neoliberalism encourages “rent-seeking” rather than true wealth creation is a core critique shared by many prominent economists and political theorists. While neoliberalism was originally conceptualised as an ideology of free markets, deregulation, and individual liberty, critics argue its real-world implementation has frequently manifested as an extraction economy. [1, 2, 3, 4]

To understand how this dynamic works, it helps to break down the economic mechanisms at play and look at both sides of the debate.

The Critique: How Neoliberalism Fuels Rent-Seeking

In economics, wealth creation means producing a new good, service, or technology that adds value to society. Rent-seeking, by contrast, is the process of manipulating public policy or economic environments to increase one’s share of existing wealth without creating anything new.

Prominent critics, including Nobel laureate economist Joseph Stiglitz, argue that neoliberal policies have inadvertently institutionalised rent-seeking in several ways: [1]

• Financialisation: Neoliberalism shifted the economic focus from manufacturing and tangible production toward finance capitalism. Success became less about building factories and more about moving capital, restructuring debt, and engineering financial instruments. [1]
• The Privatisation of Public Monopolies: When state-owned utilities, transit systems, or healthcare services are privatised, they are rarely dropped into perfectly competitive markets. Instead, private entities often inherit a monopoly. They can then hike prices or lower service quality, extracting wealth from the public rather than “innovating.” [1, 2]
• Regulatory Capture: Deregulation was intended to foster competition. In practice, massive corporations often use their resources to lobby for rules, subsidies, and tax loopholes that protect their market share. This effectively locks out smaller, more innovative competitors. [1, 2, 3]
• The “Hustle” Mentality: For the average person, stagnant wages caused by weakened labor protections have forced a cultural shift. Instead of relying on traditional employment to build wealth, individuals are pushed to view themselves as micro-corporations—monetising their homes (Airbnb), their cars (Uber), or trying to get rich quick through speculative assets like cryptocurrency. Critics view this as a trickled-down imitation of the 1%’s extractive behavior. [1, 2, 3, 4]

The Theoretical Intent vs. The Reality

Defenders of neoliberal ideas—which trace back to theorists like Friedrich Hayek and Milton Friedman—would argue that rent-seeking is actually the opposite of pure neoliberalism. [1]

That neoliberalism is inherently a project for elite wealth extraction or a good economic theory gone wrong may be a matter of debate. However, real-world outcomes over the last few decades have undeniably made it easier to generate massive fortunes through financial engineering and monopoly control than through genuine productive innovation. [1, 2, 3]

Usury rate goes to 4.6% pa.

So, we need to curtail spending, eh, RBA?

Then how about cutting spending on the bonds’ rort?

And how about all the spending on rorting our land prices? i.e. Real estate speculation. We can either have that, or productivity, and we’ve chosen property spec.

So, China makes things for the world while we speculate? That’s going to end well!

OK, so you can’t do it, RBA, because the only weapon that you’ve been given is the tweaking of interest rates. That’s a blunt instrument!

Over to you then, Treasury, and Jim Chalmers!

No?

So, we continue with the tanking of the economy then, Jim?

…. from Michael Hudson, which the pusillanimous will argue is pro-communism and anti-capitalism. It’s certainly not!

Edward Gibbon Wakefield – sociopath?

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Real estate agent Edward Wakefield was a good friend of James Mill, the father of John Stuart Mill. Both were educational philosophers, but Wakefield proved to be delinquent in respect of his son Edward Gibbon’s poor behaviour, having left most of his upbringing to his wife, Susanna (née Crash).

Unable to cope with young Edward’s tantrums, Susanna dispatched him off to her stronger-willed mother-in-law, Priscilla Wakefield, for her attention ……. to no avail, however.

When Edward was eleven in 1807, Priscilla wrote to Susanna: “my mind painfully engaged in the perverseness of dear little Edward – his obstinacy if he inclines to evil terrifies me“ (his) “pertinacious inflexible temper makes me fear for his own happiness and of those connected with him” (he) “has a mind that requires delicate handling“.

By 1811, at fifteen years of age, Edward Gibbon Wakefield had already been expelled from three schools.

When Wakefield found himself in the infamous Newgate prison from 1827 to 1830 for abducting and marrying his second heiress wife, Ellen Turner, he devised a brilliant idea to keep the plebs in their place. All the landed gentry needed to do in new countries such as Canada, the United States and Australia was to ensure that poor and middle-class people couldn’t afford the price of a block of land. Land prices must be kept sufficiently high that they could aspire to pay for a site in the longer term only. So, having virtual slaves working much of their lives to be able to pay off the cost of their own parcel of land, you didn’t need to import convicts or slaves to work for you!

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POSTSCRIPT

It works! Rather than keeping land prices at zero by capturing the annual site rent to the public purse, taxing purchases and incomes and pumping land prices to the moon continues to work wonders for private banking and real estate interests – not so much for workers, though!

However, as we’re about to find out shortly, that eventually backfires badly!