GEONOMICS,an ethical way to

democratize globalization

Jeffery J. SmithPresident, the Geonomy Society

www.geonomics.orgGeonomist@juno.com

2004 March 28

Politics from economics

Globalizers have politicians legislate unfair rules regarding

employee safety, the environment, public spending,

and local currency devaluation.

As they say, it’s for gain.

Unabashedly, managers of corporations do it for shareholders,

for profit above all else.

They have yet to learn that what’s most profitable is profit for all.

People turn against profit.

Overlooking privilege, people want to capture government for themselves, then manage their economies as they see fit. While their intent may be noble, it is yet another example of humans wanting to control others in order to get what they want.

Opponents miss sharing

Not all profit, not the individual’s, but society’s is what economists call “rents” or the politically-minded call the commonwealth. Would-be beneficiaries overlook our social surplus because we have lost from our worldview a major part of reality.

Perspective new and old

Earth as the commons is a view found in religions and indigenous cultures. The Native American Indian Chief Seattle two centuries ago said, “How can you buy or sell the sky – the warmth of the land? The idea is strange to us... Every part of this earth is sacred to us.”

John Locke (1632-1704)

While Seattle found Earth sacred, moderns found property so. An English philosopher and darling of apologists for current globalization, reminded them, "When the 'sacred-ness' of property is talked of, it should be remembered that any such sacredness does not belong in the same degree to landed property."

Owning Earth differs 4 ways

• We make stuff; nobody made land.

• Nobody bought from God. (And what would God need with our money?)

• What's here is all, so prices rise over time more so than prices of output.

• Hoarding land and resources keeps others from meeting their needs.

Winston Churchill:

“Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed geographical position – land, I say, differs from all other forms of property in these primary and fundamental conditions."

Owning is a dilemma.

Tho’ Earth is here for all of us, we need some Earth to ourselves. Accepting ownership, we accept both the “oiligarchy” of the Rockefellers and Bushes and bin-Ladens, and the curse of resource wealth, as in Nigeria and Venezuela.

Accept or bequeath?

By accepting titles, we delay the day when as Jesus said, "The meek shall inherit the earth." To which Jean Paul Getty, one of the original oil tycoons, appended, "but not the mineral rights." Perhaps inheritors can be meek as long as their parents declare that Earth is here to share.

R.C. Pope John Paul II

In Brazil in 1991: "The high concentration of land ownership demands a just agrarian reform. It has no justification whatsoever." In Brussels in 1985: "It is only fair to revise the distribution of income and to control the revenues from speculations and investments which do not proceed from labor."

To resolve this absurdity

Treat Earth as commons. The word “common” comes from Latin and means “share with”. The way to treat Earth as commons is to share not her surface, which is impossible, but share her annual rental value, the money we spend for the sites and resources we use, trillions each year.

To share this natural rent

Members of society could use “geonomics”: (a) pay in land-dues

and (b) get back rent-dividends.

Kuwait used to pay citizens an oil dividend. Alaska still pays residents an oil dividend. Many, even some in the US Government, propose an oil dividend for Iraqis.

What not to tax

We own ourselves. Confiscation and slavery are wrong. Taxes on our efforts – businesses, buildings, and, yes, wages and income – are wrong. Nor are they necessary. We can replace immoral taxes with moral dues, with these rents for claiming portions of nature here for everyone.

William Penn, Quaker leader

One of the few to compensate Indians for their land:"If all men were so far tenants to the public that the superfluities of grain and expense were applied to the exigencies thereof, it would put an end to taxes". Philadelphia’s first levy was upon the value of land exclusively.

Taxes create 4 problems:

Not only are taxes not ethical and not necessary, they are also not very good for economies and economic actors. Besides (1) reinforcing hierarchy and (2) violating quid pro quo, taxes (3) distort price, distorting the choices of consumers and producers, and (4) increase cost, hobbling the economy.

Hong Kong, voted #1

Indeed, one of the healthiest economies is that of Hong Kong, famed for low taxes and low prices, high investments and high incomes – all made possible by existing on public land and thereby recovering substantial amounts of rent, funding about 4/5ths of the city’s budget.

Mencius in ancient China

“In the market places, charge land-rent, but don't tax the goods; or make concise regulations and don't even charge rent. Do this, and all the merchants in the realm will be pleased and will want to set up shop in your markets. At the borders, make inspections but don't charge tariffs, then all the travelers in the realm will be pleased and will want to traverse your highways."

Subsidies, too: 4 problems

(a) decrease apparent costs for some, addicting them to the state; (b) distort price, so people choose waste over efficiency; (c) require costly administrative bureaucracies; and (d) benefit most the people who need them the least, unless you really needed that last SCUD missile.

Geonomics in practice

While no jurisdiction today uses geonomics in its entirety, some places do use parts of geonomics. To the degree used, geonomics has always worked: In 1790s, physiocratic France funded its first republic with ground rent, then an enlightened Danish king did, too.

19th century popularizer

After the physiocrats, the best-known proponent of this shift of taxes from what we produce to what was created for all of us was the American Henry George (1839-1897). He was son of a Philadelphia lay preacher and author of the classic Progress and Poverty (1879).

Leo Tolstoy (1828-1910)

He kept a photo of George on his desk. He told the Russian Czar: "people do not argue with the teachings of George, they simply do not know it. And it is impossible to do otherwise with his teaching, for he who becomes acquainted with it cannot but agree.” His dying words:

Nicholas Murray Butler

President of Columbia U, winner of the Nobel in peace: "Consider Georgist economics with a just sense of their permanent importance and with regard to the soundness of their underlying principles. Sound economists in every land accept and support economic opportunity as fundamental."

Another Nobel laureate

Albert Einstein (1879-1955) said, "Men like Henry George are rare, unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form, and fervent love of justice."

The Reverend J.H. Holmes

John Haynes Holmes (1879-1964), co-founder of the National Associa-tion for the Advancement of Colored People: "Progress and Poverty was the most closely knit, fascinating and convincing specimen of argumentation that, I believe, ever sprang from the mind of man."

Georgist Colonies, 1900s

George’s followers founded: Free Acres (New Jersey), Arden (Delaware), and Fairhope (Alabama). Compared to nearby towns, they are cleaner, enjoy more services (parks, libraries, and schools), and make decisions together. To avoid war, Fairhope’s Quakers resettled in Monte Verde, Costa Rica.

Australia

A Georgist designed Canberra, the capitol, which exists on public land. The biggest city, Sydney, levies only land. In Victoria, towns taxing site values have 50% more built value per acre than those that tax land and buildings. From 1974 to 1984 in Victoria, factories fell 20%; in the land tax towns they increased 10%.

New Zealand

By 1982, 90% of municipalities had chosen, usually by popular election, to tax land. The levy raised 80% of local government revenue. For a while, the federal government also levied land. Employment averaged 99% from 1966 until 1975. When the oil shock hit, employment dropped to a true (not fudged) 94%.

De-railed by war

In England, Georgist Ebenezer Howard began the Garden Cities. Lloyd George got a land tax passed but not implemented. In Mexico, Francisco I. Madero proposed it. In Russia, Kerensky did. In Vienna and Budapest, Georgists won briefly. In China, Sun yat-sen tried then Chiang Kai Shek who finally did on Taiwan.

The "Four Tigers"

Singapore reached a tax rate on land of 16%. Hong Kong metro takes no subsidy; its suburbs grows much of their food. Taiwan broke up large plantations and ended hunger. From 1950 to 1970, population growth dropped 40%. It set world records with growth rates of 10% p.a. in GDP and 20% p.a. in industry.

Denmark

In 1957, the Georgist Justice Party won a few seats and a role in the ruling coalition. Investors switched from real estate to real enterprise. One year later, inflation had gone from 5% to under 1%; bank interest from 6.25% to 5%. By 1960, 100,000 had found jobs; workers received the biggest pay raise in Danish history.

Pennsylvania, USA

Pittsburgh renewed its urban core without subsidy; housing costs and crime rate were far below the US average; won “America's Most Livable City”. Harrisburg, the state capital, went from the second most distressed city to an All-American City. Property value rose from $212 million to over $880 million.

Revenue reform spreads.

• Third World: Ethiopia, against the advice of the IMF, did it in Addis Ababa. Mexicali, Mexico, did, too; landowners did not complain.

• In the Second World, Estonia did it.• In the First World, Virginia did;

Philadelphia and London and Scotland consider proposals.

Reducing lending rates

If people rent land, they borrow less. If they (not corporations) get rent, they borrow less. As the South cuts licensing costs and recovers rents, they spur development and trade and draw more private investment, so businesses borrow less. Lending rates would attain the religious ideal.

Religions tolerate others

A four-part harmony: no taxes, no subsidies pleases self; recover and disburse rents pleases society. Con-fucius: "When the Great Way pre-vailed, natural resources were fully used for the benefit of all and not appropriated for selfish ends... This was the Age of the Great Common-wealth of peace and prosperity."

So people accept others.

What we make is ours; what was made for us all is ours to share. Such balance of property rights, along with prosperity, let people feel secure. Besides respecting property – both private and public – secure people respect other rights too; e.g., the right to practice a different religion.

Finding God in geonomics

Asking people to share Earth reconnects us to something larger than ourselves. To believe Mother Earth is bountiful enough for all requires faith in a generous Creator. To believe that the economy can operate without intervention implies faith in a wise Creator and echoes the Buddhist virtue of “letting go”.

A solution is included.

More than just oppose globalization, geonomics makes planetary trade and the worldwide market work right for everyone. Based on near universal ethical tenets, geonomics shows how suffering is not necessary. It is a divine plan left for humanity to find and follow.