Land and natural resources can no longer be treated as private commodities – because the price society pays for this lunacy is excessive.

If we wish to ensure our natural resources can no longer be withheld for private profit, we must apply a fee for their use equal to their annual rent, instead of drawing public revenues from taxes on work and enterprise. It should becoming increasingly obvious that current tax regimes favouring resource rent-seeking over productive activity largely explain the parlous state of world economies.

We’ve been paying a devastating price, but mainstream economic analysis can’t yet bring itself to admit it. In this pathological scenario, heterodox economists of the ilk of Mason Gaffney, Michael Hudson and Steve Keen provide shining beacons of reason and hope.

But isn’t US employment already showing signs of improvement? Isn’t most economic strife is behind us?  Unfortunately not: our misguided high priests of the economy, Bernanke, Stevens et al, try to instill this false confidence as a desperate substitute for structural reform. We’ve had bogus ‘latent recovery’, ‘green shoots’, ‘turned the corner’ and ‘risk off’ fed to us multiple times since the outset of this depression and need no further econtrickery.

A land and resource fee, alone, would get the world’s economies into gear and the world’s unemployed back to work quickly, but Australia’s Ken Henry has been a lone voice in suggesting as much in “Australia’s Future Tax System”.

Released from taxes on them, labour and capital would at last be rewarded for combining to generate national wealth instead being fined for so doing. Additionally, we would more readily be able to see the relationship between worker and boss is a complementary one, not the antagonistic one promoted by the media, and finally expose the parasitic rentier for the destructive role he has played in world economies.

We’re still in denial, however, and can’t yet see the need to publicly capture the public’s resource rents. This delay will compound social and economic distress.

http://www.guardian.co.uk/commentisfree/2013/jan/21/i-agree-with-churchill-shirkers-tax

Many great personalities, including Leo Tolstoy,* have noted the case for a Georgist economy is unanswerable, and arguments put against it are either based upon ignorance of what Henry George actually said or otherwise fallacious.

So, if the case for the public capture of land and resource rents is logical, and Georgists are not simply tilting at windmills, why have countries suffering so badly under the deadweight of taxation failed to put it into practice?

The only possible answer is that political power has so far been able to defeat reason on the issue – and this comes through in a resigned fashion in discussion with intelligent people:

“Oh, the argument is fine, but powerful vested interests will resist it!”

“It’s impossible to break through the existing mindset.”

“It’s a big issue, and people can’t accept such far-reaching change, even if it does correct many of the ills we face today.”

Of course, this tragic situation has parallels. Just as an enormous taxation industry now feeds off an economic system tailored to the whims of the big rent-seekers in banking, mining and real estate (the 0.01%) the pharmaceutical industry feeds off illnesses and ailments we may not experience had we taken greater care of our diet and exercise.

The big difference is the pharmaceutical industry won’t tell you a good dietary regime and healthy exercise is bad for you.

So, the question becomes: How do we tackle the wealthy corporate entities who steal the public’s resource rents, in order that we may free ourselves from the parasite which not only preys upon our personal wealth and health but also drives nations into the depression and penury we’re witnessing?

It’s a riddle we need to solve urgently, because the usual rotation from this point is: currency wars; trade wars; world war.

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* “People do not argue with the teachings of George, they simply do not know it. … He who becomes acquainted with it cannot but agree.”  – Leo Tolstoy

The Christmas- New Year “silly season” in Australia: endless summer holidays; the beach; catching up with friends and relatives; the Aussie Open tennis …. nothing much by the way of routine stuff getting done; politicians and the law taking a break from disjunctive activity; newspapers becoming thinner.

I like it.

Things seem to start working better.

‘Taint silly at all.

But now it’s back to the grind: the fight to get yourself and your family somewhere; the competition between local government, the states and feds and their public bodies to find funding for necessary infrastructure, health, safety and education; the misdirected fight with labour and capital at each other’s throats whilst the big rent-seekers continue to rob them both blind.

I reckon it’s the rest of the year that’s the silly season.

Victoria in technical recession. (David Collyer)

Also see Philip Soos’ “A Plague on Aussie Housing“.

This site continues to make the case that land and other natural resource rents constitute between 30% and 50% of any economy and ought to be publicly captured instead of taxing labour and capital – any excess to be distributed equally to all citizens as an annual dividend.

This publicly-generated economic rent is currently permitted to be largely privatised by 0.01% of the population in each country but–due to ignorance of the central fact that rent is a public surplus–the 99.99% have managed to avert their gaze on the matter.

Accordingly, by skirting around the issue of who owns natural resources rents, all socio-political explanations of the developing world economic depression fall short. Once the enormous quantum of rent is understood, most analyses become risible.

As we’ve seen, Norway makes no bones about the issue. In that country, who owns the economic rent has become a dead letter. More clumsily, Chavez has endeavoured to make the point in Venezuela, and big rent-seekers point to his regime as “no model for the free world.”

The privatisation of the public’s rent by the few remains the world’s greatest corruption.

Eurozone unemployment hits 11.8%.

Spain 26.6%. (Yep, that’s right, more than a quarter of work-able Spaniards out of work.)

C’mon guys, wakey wakey!

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Take now… some hard-headed business man, who has no theories, but knows how to make money. Say to him: “Here is a little village; in ten years it will be a great city – in ten years the railroad will have taken the place of the stage coach, the electric light of the candle; it will abound with all the machinery and improvements that so enormously multiply the effective power of labor. Will in ten years, interest be any higher?” He will tell you, “No!” Will the wages of the common labor be any higher…?” He will tell you, “No the wages of common labor will not be any higher…” “What, then, will be higher?” “Rent, the value of land. Go, get yourself a piece of ground, and hold possession.” And if, under such circumstances, you take his advice, you need do nothing more. You may sit down and smoke your pipe; you may lie around like the lazzaroni of Naples or the leperos of Mexico; you may go up in a balloon or down a hole in the ground; and without doing one stroke of work, without adding one iota of wealth to the community, in ten years you will be rich! In the new city you may have a luxurious mansion, but among its public buildings will be an almshouse. – Henry George

1.  An economy whereby the 0.01% rips its citizens off, gets them into debt with taxation and land price, pillages natural resources and infrastructure, then totally kills off productive business activity every 18 years.

2.  Georgism, which does none of these.

Why, then, do we choose Option 1?

Maybe it’s less boring having our earnings and leisure time stolen? Just the same, I’d still vote for Option 2, to retain more of my earnings and to have much more time for leisure.

But it seems I remain in a minority.

What if giving people the illusion that buying and owning their own piece of land represents freedom instead acts to put them behind the 8 ball financially?

What if taking on a mortgage with a high land component is like putting your head into a noose?

What if such mortgages put people into a form of wage-slavery as it generates unsustainable bank profits?

What if this is THE systemic fault in the economic system?

How do you address it?

(a)         Ignore it, and hope it goes away, as we do repetitively (each eighteen years in fact)?

(b)         Look at redressing it by charging the land rent, instead of taxation, as in the case of the formation of Australia’s capital city, Canberra?

2103 is the centenary of the founding of Canberra whose land rent system once led the world before it was eventually subverted by real estate interests.

What if a study of Canberra offers a practical response to the global financial crisis?

Michael Hudson and Jeffrey Sommers explain here why Latvia is clearly no model for the world to follow, but we are doing so because the neo-classical economists have been allowed to remain in control of the levers.

Changing from taxing labour and capital to a charge on resource rents is now the only way out of this depression, but no politician, anywhere, has the guts to say so.

That would be a very serious change of the status quo, you see?

But don’t we need a serious change –  instead of continually kicking the can down the road to calamity?

Further from Hudson at Truth-Out.