If all the earnest essays ever posted on The Daily Blog have anything in common it is that they express a yearning for something better And most, regardless of the writers’ politics or prejudices, promote ideas which, in their view, we would all be better off for embracing.
And that’s a good thing. But the question is; when has it ever not been so, and where has it all actually gotten us?
Of the countless social equity debates that have gone on since forever, few seem to have produced the goods. At best writers’ gets some dirty water off their chests and readers get to argue what’s potable.
And still we’re no closer to Nirvana. The one thing that would make the sea-change that’s needed, and on which we can all agree, still eludes us. For all our supposed sophistication, we remain locked into the boom-bust cycle that bedevils all Capitalist economies, with no end in sight.
Ubiquitous to the Capitalist system, and at the core of the problem, is the inability of those who create society’s improved living standards, to afford the ever-increasing cost of the progress their endeavours produce. And critical to that conundrum is land.
Capitalism is a system that “capitalises” on improving living standards by producing more products to absorb the surplus, which, to work, requires more land on which to build the enterprises producing the new goods.
And inevitably this is where speculators, “banking” on the inevitability of that progress, buy up the land in advance of the progress, not only making a killing once it happens, but thereby pushing up the price of all land as a consequence.
Our system of Capitalism requires that those whose labours produce the progress, must then buy the bounty of their own sweat – the increased value of land – just to maintain Capitalism’s momentum.
And so we get the crazy house/land price situation we’re in right now.
Producing not one iota of productive enterprise, land-banking or land speculation, is not entrepreneurial Capitalism at work, but just venal opportunism.
Not only does it induce a gross waste of capital that could be used to fund job/wealth creation, it fuels a ballooning social equity imbalance, such as we‘re currently experiencing, which ultimately produces the boom/bust cycle that plagues us!
That’s not right – that’s not kind – that’s crazy!
The good news is the answer to the problem was solved 150 years ago. And, because speculators are not Capitalists, but “venal opportunists,” we don’t have to take “left” or “right” positions to embrace it.
This might be a good time to suggest that nobody is more acutely aware of the part land plays in the securing and maintenance of community prosperity, than Maori.
Maori had no concept of private ownership of land, which to them, since, you couldn’t physically take it home, made no sense and was just silly. In Maori society land was/is regarded as a communal good and its development, like establishing a pah site or a vegetable garden, was/is the responsibility of everyone, from which everyone profited.
And haven’t they paid a price for their naivety.
Colonial governments treated the purchase of land from Maori as a cash cow they could milk as they on-sold it to new immigrants, to fund yet more immigration. And so land values increased exponentially, and totally out of all proportion to the price paid for it.
The price paid Maori for land was never fair. The very act of its transfer from a communal system to a Capitalist system immediately changed its value out sight. And when finally the penny dropped, literally, Maori went to war.
And so should we now!
Just as Maori, in recognition of the material and social harm done to them, had huge areas of land returned, so we too should demand that the land which our endeavours have made flower, be returned to common ownership, or some equivalent.
And before you dismiss such an idea as Utopian navel gazing, it’s something we already do, but only in the public sector. We build roads and railways, for instance, on land we don’t have to buy because we already own it in common. But if the land was owned by speculators, the cost of those developments would be prohibitive – like the cost of houses today!
All of which brings me to American economist and social thinker Henry George, and the book he wrote on the subject, “Progress and Poverty” which at the time of its publication exceeded the sale of all other books but the bible.
Wikipedia describes “Progress and Poverty” as; “a treatise on the questions of why poverty accompanies economic and technological progress and why economies exhibit a tendency toward cyclical boom and bust.” in which; “George uses history and deductive logic to argue for a radical solution focusing on the capture of economic rent from natural resources and land titles.”
“Progress and Poverty” helped spark the Progressive Era and a worldwide social reform movement around an ideology now known as ‘Georgism‘. Danish-American social reformer Jacob Riis, for example, explicitly marks the beginning of the Progressive Era awakening as 1879 because it coincides with the date of Henry George’s book.[
Wikipedia records that Progress and Poverty had perhaps even a larger impact around the world, in places such as Denmark, the United Kingdom, Australia, and New Zealand, where George’s influence was enormous. Contemporary sources and historians claim that in the United Kingdom, a vast majority of both socialist and classical liberal activists could trace their ideological development to Henry George.
And George’s popularity was more than a passing phase; even by 1906, a survey of British parliamentarians revealed that the American author’s writing was more popular than Walter Scott, John Stuart Mill, and William Shakespeare. In 1933, John Dewey estimated that Progress and Poverty “had a wider distribution than almost all other books on political economy put together.”
And over the years the idea of taxing land, as a political policy, has attracted supporters from across the political spectrum, from Winston Churchill and Milton Friedman to Clarence Darrow.
Of course nothing as seemingly radical as Henry George’s ideas are ever as simple as might be imagined. But it is significant that in March 2015, the Obama administration discussed them in a Bloomberg op-ed titled “To Fight Inequality, Tax Land,” which was followed by a similar piece in The Economist titled’ “Why Henry George Had a Point” – the case for making landowners pay for the benefits which location gives them. And both articles sprang from a paper given by Joseph Stiglitz, the Nobel Prize–winning economist, arguing for a land-value tax.
There – I’m glad I’ve got that off my chest.
Original Source: https://thedailyblog.co.nz/2022/02/05/progress-and-poverty/