GEONOMICS,
an ethical way to
democratize globalization
Jeffery J. Smith
President, the Geonomy Society
www.geonomics.org
Geonomist@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 'sacredness' 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 binLadens, 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 bestknown 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 Association 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. Confucius: "When the Great Way prevailed, natural resources were fully
used for the benefit of all and not
appropriated for selfish ends... This
was the Age of the Great Commonwealth 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.