A great insight to developing political allegiances.

Could it be that the West is suffering a hangover from the financialization of land prices?

Liberalism and the Social Problem

….. See how this evil process strikes at every form of industrial activity. The municipality, wishing for broader streets, better houses, more healthy, decent, scientifically planned towns, is made to pay, and is made to pay in exact proportion, or to a very great extent in proportion as it has exerted itself in the past to make improvements. The more it has im­proved the town, the more it has increased the land value, and the more it will have to pay for any land it may wish to acquire.

The manufacturer proposing to start a new in­dustry, proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs round the neck of his whole business, hamper­ing his competitive power in every market, clogging him far more than any foreign tariff in his export competition, and the land values strike down through the profits of the manufacturer on to the wages of the workman.

It does not matter where you look or what examples you select, you will see that every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream off for himself, and everywhere today the man or the public body that wishes to put land to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an in­ferior use, and in some cases to no use at all. All comes back to the land value, and its owner for the time being is able to levy his toll upon all other forms of wealth and upon every form of industry.

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Churchill went on to advocate the taxation of land values to remedy this condition.

The land tax component in Lloyd George’s “People’s Budget” of 1909 was defeated in the House of Lords. (Funny about that!)

Thus the way was paved for the early 1920s mad speculative bubble which developed across the world, bursting into the Great Depression and WWII.

Any similarity to today?

Despite the heartache of failing small businesses there’s a lot of money around at the moment. If ever we needed to understand the Georgist principle that land without a serious land tax sucks up available money like a sponge, we’re witnessing it now.

House prices have gone troppo again.

Here’s the ABC’s “The Economists”, Gigi Foster and Peter Martin, discussing the escalating property markets with their guests.

https://www.abc.net.au/radionational/programs/the-economists/why-are-home-prices-soaring/13494582

And I should let you know, Peter Tulip, that we had land booms and bubbles ever before we had zoning controls!

Absolutely nothing?

Not on your Nellie! It’s used by ‘smart’ political leaders locked into serving the ruling elite and its financial model, instead of addressing essential economic reform.

The need for war is basically a “Look over there!” tactic to unite countries bifurcated into haves and have-nots as in the imperial WWI obscenity whose terms of settlement resulted directly in WWII. Resistance to the idea is simply painted as ‘communist’, so that war becomes a test of patriotism. It’s therefore a win/win tactic for corrupt political leaders and is virtually impossible to resist.

Look around. Do you see the middle class dissolving as the nation divides into a uber-wealthy 0.1% and the 99.9% indebted and poor? Let’s just forget trying to repair the political division developing over who gets what! OK? So, wealth distribution needs fixing with a big diversion.

Look at what China’s been doing! “Belt and road” indeed! It’s getting its fingers into too many pies! It may not have waged wars against countries other than those on its borders—Japan, Tibet and India—but is there any doubt at all that it’s aiming to replace the United States of America as the world’s leading economy! Pax America to become Pax Sinae? No way! This is obviously a fight between democracy and communism – and any treasonous resister will receive a white feather!

But look, we won’t go to war just yet. Let’s start things happening with a little trade war?

That seems to be our future, unfortunately.

The logic is irresistible, isn’t it?

I’d better get ready to wave my flag.

and–>https://www.bmj.com/content/373/bmj.n747/rr-12

[That’s another “Shhhh …”]

The pandemic has shown how much we rely on the producers and distributors of food and essential supplies, along with other basic services such as health, teaching, cleaning and banking.

We are led to wonder about the enormous disparity between the incomes earned by people in these necessary occupations and the astounding incomes of the rent-grabbers who feed at the top off the financialisation the economy, like bankers, fund managers, mining or other monopoly company executives such as at Microsoft, Apple, Google, Facebook, Amazon, &c.

It’s obvious we’ve not been able to get to grips with those people who create wealth and those who mercilessly extract it.

A switch from taxing productivity, wages and good and services onto the taxing of land and natural resource values would go a long way towards remedying this anomaly and repairing faltering economies.

It would also prove to be sufficient to provide a living wage universal income and to abolish poverty.

The response of big rent-seekers: “No! You too can do this!” may appeal to so-called ‘libertarians’ but it really isn’t good enough.

You produced a magnificent Olympic Games under the most adverse of conditions.

And what a great effort, Oz!

Onto Paris!

A 2018 PowerPoint presentation showing the influence of the real estate market on Australian political and economic performance. (It downloads below.)

Acknowledge that land values are created by public investment, not by anything done by title holders.

Therefore, for the public good we need to tax land values, not earned incomes nor goods and services, because unlike charges on land values these taxes simply cascade into the price of all goods and services. (So, it is the price of all goods and services that are impossibly high, not wages.)

Stop repeating “There’s not enough land rent!” to be taxed out of the system because in accordance with Joseph Stiglitz’s Henry George Theorem there is always enough rent. Viz, Production minus rent leaves wages and profits untaxed. (P – R = W + I)

Then, we should spend the surplus product/economic rent generated by these reforms, some $30,000+ pa or 34% of the economy, as a universal income to (a) abolish poverty (b) assist women who are usually ill-served by superannuation (c) reduce the tax-inflated price of all goods and services, and (d) reduce the cost of wages for businesses. i.e. Businesses will only have to pay a wage additional to the universal income to be able to attract or retain employees.

Ergo, No taxes and a pension for everybody: what’s wrong with that? Nothing? OK, let’s go! And a universal income is certainly more efficient than “Job Keeper” and all existing pensions.

Anybody out there looking for fiscal logic …………..?

The following chart is based on that in “Trickle-Up Economics” and explains the workable rationale:-