You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

Joseph Stiglitz confirms our tax regimes are rigged in favour of the 1%.

Tax systems and land speculation may sound terribly boring, but if you’re alert to exactly how they damage 99% of us, you’ll see they definitely aint boring!

They’re key to turning this thing around.

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

The Traumatised Society

How to Outlaw Cheating and Save Our Civilisation

Fred Harrison, Shepheard-Walwyn, London, October 2012

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The West faces an existentialist crisis which cannot be resolved within the current paradigm of politics and laws. This thesis, advanced by Fred Harrison, traces the pathologies of the 21st century to a culture of cheating that is too deeply embedded to be eliminated by the ruling elites. A Great Awakening is needed, to generate the power to motivate a mass movement behind reform.

The author’s “decline of the West” prognosis is grounded in a sociogenic survey of the conditions that led to the evolution of humanity. Harrison classifies the natural laws on which healthy societies rely for long-term viability. Armed with insights from anthropology, evolutionary psychology and history, the author exposes the cheating at the heart of civilisations that collapsed, in the past, a cheating which is now corroding the foundations of western civilisation.

Cheating as a social process arises when that part of a population’s income which everyone helps to create is privatised. Economists call that income economic rent. It made possible the formation of the social “commons” – all the components of what constitutes the collective consciousness of humanity. Today, the West is weakened by the sustained onslaught on the rents that measure the value of services provided by nature’s and society’s commons. So many people now want to live off rents that they cannot be supported by the people who add value to the wealth of the nation.

In the past, those who sought to live off the labours of others preserved their privileges by perverting power. The power of creativity was corrupted and diverted away from the common good. As a result, societies are not now grounded in the authentic cultures that would otherwise have emerged as expressions of the preferences of free people. The outcome is a perverse social structure whose agents are incapable of recognising the cause of problems like institutionalised poverty and environmental degradation.

The author shows that pre-literate peoples successfully created sustainable communities because they assigned property rights in nature to their deities. This tradition was maintained by the first monotheistic religion. The Old Testament elaborated the theology of land. It was a covenant with God: the gift of land in return for living a moral life that freed people to realise their human potential. The biblical stories are focused on what goes wrong when that sacred covenant is breeched. The outcome is the trauma of landlessness. The Old Testament provides one template for re-basing society on principles that would re-establish harmonious relationships between people, and between them and their natural habitats.

Secular declarations of human rights, like the UN’s Universal Declaration of Human Rights, do not reflect realities on the ground. The “rule of law”, as currently constituted, cannot lead to the realisation of each person’s freedom while society is captured by a privileged class of rent seekers. This thesis is tested against the histories of the UK, Argentina and China. The evidence demonstrates that populations are traumatised when they are violently disconnected from their natural habitats. China is a real-time study of a population being converted into that state of trauma.

Social progress in the past was driven by the re-awakening of spiritual and moral sensibilities. A new Great Awakening is needed to inspire the leadership required to rescue a globalised civilisation that many observers believe is in decline. Harrison challenges those who want the awakening to be inspired by scientific reasoning. The secular approach, he argues, needs to provide a compelling account of how the rule of law can be reconfigured to deliver the justice that is embedded in natural law.

It is not too late to rescue the West from a looming Dark Age. Harrison explains that society’s automatic stabiliser is the pricing mechanism that treats land rent as the public’s primary source of revenue. If this financial formula is adopted, it would be possible to pay off the debts that now burden nations and enhance everyone’s employment prospects. This would facilitate the transition to re-balanced communities in which people were free to enjoy healthy lives unimpeded by cheating.

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

I still chuckle at the memory of a particular cartoon strip on the back cover of a 1960s MAD magazine. [No, it wasn’t a Spy v. Spy!]

An abstract artist draws a large rectangle he labels “Self Portrait” on a concrete footpath.

He then sprints to the top of an adjoining skyscraper and proceeds to jump off, destined to complete his self-portrait.

LOL!  🙂

The guy was clearly conversant with Newton’s laws of motion.

Unfortunately, mainstream economists aren’t quite so aware of another natural law, Ricardo’s law of rent. Despite all the repetitive evidence to the contrary, they continue to believe we can ascend to the top of a gigantic land price bubble without going “splat!” at the bottom when it bursts.

Shackled to such incredible misbeliefs, maybe MAD magazine is the proper place for libertarian and neoclassical economists?

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

Although the Henry Tax Review’s federal land ‘tax’ recommendations would permit the abolition of a number of quite damaging Australian taxes, Treasurer Wayne Swan announced in May 2010 the Rudd Labor government wasn’t contemplating introducing them. Along with the one percent, errant banking and real estate industries shared a deep sigh of relief.

From 1996 to 2007 Liberal Party Prime Minister John Howard–aided and abetted by his Treasurer Peter Costello–presided over developing the greatest real estate bubble in Australia’s history, but Labor decided it wasn’t about to tame the bubble. Any such action was considered to be too close to home (so to speak). So, Australians would have to take what’s coming – and it mightn’t take place on Labor’s watch, anyway.

So much for principle.

One hundred years after introducing a federal land tax in 1910, the once great Australian Labor Party had done a volte-face, and both major parties were now on common ground, actively promoting the continued privatisation of publicly-generated land income.

What will be the practical consequences of the political parties failing to address the Australian bubble in land prices?

They ought to be obvious because we’re currently witnessing many of them overseas.

First, we need to see there’s a demonstrable counter-relationship between rapidly rising land prices and productivity. Once this is understood, the collapse of the US and European financial systems should no longer remain a mystery – although judging by the poorly chosen actions of governments and their reserve banks across the globe, the fact does appear to have escaped them.

It’s simple. A crisis in production follows close on the heels of financial collapse, and social distress will then ensue on the homefront as private debt comes home to roost and a lack of effective demand comes into play.

Half-hearted post facto attempts to capture some of the economic rent of land in the UK, Greece, Ireland, and elsewhere–even China has begun tinkering with the idea–will only bring about half-hearted results.

As Australia remains behind the curve with its still unburst property bubble, it has an unequalled vantage point to learn from the misguided political reaction of other nations.

However, with neither major political party in Australia supporting Ken Henry’s thoughtful proposals for tax reform–which would clearly unburden labour and capital and curb our gargantuan appetite for real estate speculation–we have no reason at all to believe we’ll come out of this well.

Our politicians meanwhile continue on with their nonsense and misrepresentations.

It’s not looking good.

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

The matter that labor converts into wealth comes only from land.

There must be land before labor can be exerted.

And labor must be exerted before capital can be produced.

Capital is a result of labor, a form of labor, a subdivision of the general term. It is only stored-up labor, used by labor to assist it in further production. Labor is the active and initial force.

Therefore, labor is the employer of capital, not vice versa — and it is even possible for labor to produce wealth without being aided by capital.

So the natural order is this: land, labor, capital.

Instead of using capital as our initial point, we should start from land.

–  Henry George, “PROGRESS AND POVERTY – An inquiry into the cause of industrial depressions and of increase of want with increase of wealth … The Remedy”

OK, so how is it that those who privatise our land income fare much better than those who actually create our wealth? (i.e. labor and capital)

Perhaps we’ve permitted capitalism’s distributional system to be terminally distorted by the one percent’s rent-seeking in publicly-generated land income?

That was Henry George’s conclusion, and he was THE expert on economic depression, the subject of this blogsite.  Note the sub-title of his PROGRESS AND POVERTY (above).

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

In THE CONVERSATION today.

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.

The Institute for Public Affairs (IPA) and Prosper Australia’s research body the Land Values Research Group (LVRG) both turned 70 this year.

Whilst each organisation purports to be the true voice of freedom, in reality only one is: the LVRG.

Amongst others, the IPA receives funding from Gina Rinehart, whilst the LVRG continues to struggle to find funding which might enable it to digitise the studies it has conducted over its seventy years.

It was nice for Gina Rinehart, Rupert Murdoch, Tony Abbott and Cardinal George Pell to be able to attend the IPA’s recent celebratory dinner. These luminaries are not to be found at Prosper Australia’s annual dinners. Power and privilege are not known to be close friends of Truth.

There’s a strong raison d’être for conservatism. If you want social change, you need to be certain you’re headed in the right direction. The thoughts of history’s great conservatives are often as valid as those of its notable liberal progressives.

Over the years, however, the IPA has drifted from holding socially conservative views to throwing its hat in with the big rent-seekers, the one percent.

On the occasion of its 70^th birthday, I thought I’d give the IPA the opportunity to deny the charge, so on 1^st April I put the following question via its website:-

“Does the IPA see anything wrong with the privatisation of publicly-generated economic rents? Your stance that miners ought to be able to retain them suggests you do not.

I’m giving someone at the IPA the opportunity to respond to my blog today.

BTW, I see the taxation of labour and capital as a form of theft.”

I consider the failure of the IPA to respond to my question speaks volumes about where it stands.

You say we need more funds to tackle poverty, homelessness, health, the environment, education and infrastructure? I say instituting the Henry Tax Review is a BIG step towards solving those problems.