THE “ASSET ECONOMY”

A great program yesterday on the ABC’s “Big Ideas” program about Australia’s ‘Asset Economy’.

https://www.abc.net.au/radionational/programs/bigideas/a-life-long-renter-not-a-home-owner/12675538

The question needs to be put: If ‘rentier capitalism’ has been financialising land price bubbles, maybe that’s why today’s workers are deeply in debt, unlike in 15th century England when they were able to save more than half their income after food, clothing and shelter?

Maybe that the land rent was collected, instead of taxes, had something to do with why workers didn’t have to service land prices in the 15th century?

TAXATION

What does taxation do?

First, it’s a challenging proposition, but taxation does not ‘fund’ government spending. It assists to manage inflation and to protect fiat currencies. However, it’s an extraordinarily damaging way of doing this.

That taxes must be spread equally between income, sales and ‘property’ taxes is a misguided belief put about by people ignorant of the destructive influence of taxing productivity. This includes driving cycles of boom and bust.

From biblical times (“The land shall not be sold”) to John Locke, and down to Mason Gaffney, many philosophers and economists have seen that “all taxes come out of rent” (ATCOR). Gaffney noted also that the excess burden of taxation–some twice the amount of taxes levied–also comes out of land rent (EBCOR). So why don’t we put it there in the first instance?

Although it’s impossible to avoid the incidence of publicly collected land rent, those working on ‘tax reform’ manage to skirt around this fundamental point, preferring to concentrate their efforts on the impossibility of putting an end to income and company tax avoidance.

Although an economy of abundance must flow from abolishing taxation, and taxing away publicly-generated, thereby unearned, land rent instead, the rent-grabbing and powerful 0.1% are formidable opponents. They have a great number of ‘educated’ people serving their interests. Perhaps Upton Sinclair explained it well: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

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Everyone KNOWS …..

….. that private capture of land rent is extractive. It doesn’t create real wealth; it just inflates land prices.

Although it’s a form of greed, central banks and governments around the world are committed to keeping inflated land values pumped up ….. or else!

It’s akin to trying to defy the Law of Gravity.

Never mind that public capture of land rent is the glue that might recognise and bind our interconnectedness; and so we have the bifurcation and social fracture.

Therefore, the descent into yet another terrible economic depression continues apace.

On the other hand, maybe this COVID19 pause does offer an opportunity for genuine economic reform?