A Brief History of Economics’s Crisis of Philosophy

Philosophers’ Corner 2013

cybe

r

The branch of knowledge that records and analyzes past events

Crisis Danger Risk Opportunity Crucial Point

Philosophy Study of the general

& fundamental Returning to

universal principles

The phenomenon of economics

Parable: The Explorer & His Map

Back to Basics: How To Get What You Need Produce It; DIY Trade/Buy Borrow Beg Steal

Philosophical History

Religion Philosop

hy

Government

Political Economy/Economics

Equality in Citizenry

Equal Rights

Joint Rights

Resource & Property Conflict:

Individual, Group & Society

Natural Resources

Human

Effort

Commodities & Knowledge

Freedoms Limit States

State Limits Freedoms

Survival

Innovation & Technology

Cooperation & Organization

Society/ Civilization

Sciences & Math

Inequality in Nature

War Trade

Henry Georg

e

Henry Owen

Friedrich Raifeisse

n

COOPERATIVE

Sun Yat Sen

Mao Ze

Dong

V. I. Lenin

ASIAN DRAGONS

Deng Xiaopin

gCOOPERATIVE MOVEMENTS

Revisiting the

Factors of Production Capital: resources

not consumes & used for further production combined with labour

Labour: the potential exertion of human work

Land: all natural space & resources produced by nature & free of human intervention

What Is Due ...

Capital: Produce of One’s Labour

Labour: Produce of One’s Energy/Enterprise

Land: Produce of Nature Over Time

The Fruits

Yield of Capital: Interest/Returns

Yield of Labour: Salaries/Wages

Yield of Land: Appreciation/Site Rent

Labour & Land

If property were nothing more than a bundle of rights, then no property means no rights & more property means more rights.

Labour & Capital

If working is dependent on someone hiring you if you don’t have the capital, is there such a thing as the “right to work”?

Land, Labour & Capital to Money

Who owns money? Who manages it?

For whose purpose & end?

Back to Basics• Capital is Owned By

Capitalists, produced by the exertion of Labour

• Labour is Owned By Labourers by Virtue of their Freedom

• Land is owned by Landlords ... On what basis?

• Can natural resources be owned the same way?

What are the chokepoints of the flow?• Resources– Land– Labour– Capital

• Factor Payments– Rent/Appreciation– Wages– Interest

• Produce should be– Community– Services– Goods

The First Crucial Point Production Factors

Are Reduced to Two: Capital & Labour

Land Is Considered Capital, Despite Not Having Been

Produced By Labour Yielding Site Rent as

Manifested by terms like “Appreciation” & “Capital Gains”

The Second Crucial Point Businesses Produce,

Households Consume Workers Become Factor

Inputs & Wages Are “Claims on Capital”

Profits from Business & Site Appreciation Are Success Factors Valued Homogenously

Unemployment Is Surplus Labour Supply viz. Capital & Desirable

The Third Crucial Point Government is Taking

Its “Fair Share” of Incomes & Transactions

Taxation doesn’t comply with its own principles, makes too many exceptions & encourages avoidance

Taxation erodes its very own base, discouraging economic activity

The Fourth Crucial Point The Economic Rent of

the Land Is Private Property of the Landowner

Land Value Appreciates Due to Social Activity/

Community Cooperation To Scarcity from

Speculation Subject to Speculative

Attacks Impulse buying & selling

The Fifth Crucial Point Despite the Nature of

Currency as a Public Good, It is Entrusted in the Hands of Independent Experts

There is No Political Independence when Financial Institutions recommend experts for political selection

Conflict of Interest Between Business & Public Interests

The Sixth Crucial Point The Rich Are

Responsible for the Economic Upswings Because They Contribute More Than the Rest of Society

Lopsided tax incentives

Laws & regulations are relaxed to the point of imprudence & crisis

The Seventh Crucial Point Economic Downswings

Are the Fault of Poor/ Households for Not Contributing Enough to the Economy, If At All

If true, then the economy should have always been in crisis

The fact that they can be victims is diminished

A Wrong Map Gets Us Lost• Households =

Consumers– Provide Labour, Live on

Land & Receive Wages• Businesses =

Producers– Provide Capital & Land

& Receive Interest & Profits

• Governments– Provide Public Works &

Charge Taxes Financial System

Provide currency & regulation

Who Holds the Map Controls the People

• Households– Media, education &

credit• Businesses– Regulation & financial

markets• Governments– Campaign, lobbying &

fiscal management Currency System– Specialized expertise

& monetary control

Accepting Such a Paradigm ...

Those who work labour & own their own homes are “middle class”

Those who provide capital & own more land than they can use are “upper class”

Those with no work & no homes are “lower class”

Government serves to preserve this status quo

More Problems with the Model

Un-hired, Volunteer Labour is UNPAID & UNVALUED Natural Resources, once part of land that is owned

exclusively, becomes EVERYONE’S responsibility Benefits of site rent are privatized but the costs of land

degradation are DEMOCRATIZED

This Is What the Current Model Delivers

Is THIS How the Market Should Work?

Justice: Achieving Balance Individual vs. Society Rights vs. Duties Equity vs. Efficiency

Applied Georgism: Paradigm Shift

Right Wing

Left Wing

Centrist Georgist

A New Circular Economy

Land

Labour

Capital

Site Rent

Public Works

Services

Goods

Appreciates

Just Wages

Pride of Workmanship

Market Interest

Real Savings

End of Oppressive Taxation

Land

Labour

Capital

Public Works

Services

Goods

Appreciates

Just Wages

Pride of Workmanship

Market Interest

Real Savings

Site Rent

Occupies

Common Goods

Democratized Money

Land

Labour

Capital

Money &

Treasury

Services

Goods

Appreciates

Work Choices

Human Dignity

Market Guarantee

Sustainability

Site Rent

Occupies

Common Wealth

Trade System: Free Because It is Fair

Land

Labour

Capital

Money &

Treasury

Services

Goods

Appreciates

Monetized Site Rent

Pays Site Rent

Other Countries

Trade: if it’s

cheaper to buy/

exchange than

to make our own

Monetized

Common Wealth

Money Returned to People’s Hands Monetary economy is

the fourth branch of government

A citizen’s dividend that responds to the basic human needs in society are prioritized

Citizens are free from poverty & to work voluntarily or for wages

What About the Environment?

Environment Site Rent

Damages

Restorative Justice Pollution/Damages

Global Commons

Site Rent Common Funds

Recognition & Sustainability

Environmental Preserves

Currency Exchanges

Tobin Tax

Global Common Wealth Monetized Global Rents

Simple Rules The Scout Rule:

Leave a place better than you left it looking like you were never there.

Pay as You Go Clean As You Go If You Break It, Pay

for It Or Don’t Do It

Conclusion: Please Know the Difference Be An Explorer &

Draw Your Own Map Not an Expert of

Someone Else’s Map