In their global risks report the World Economic Forum listed five environmental issues as the top risks to the global economy in 2020, overshadowing all other risks, including economic, and called for a new “growth paradigm” that addresses the interconnectedness of socio-economic factors with climate change.
In her speech at the Tory Party Conference in 1988 Margaret Thatcher was quoted by The Economist as stating that ‘No generation has a freehold on this earth. All we have is a life tenancy – with a full repairing lease’. Perhaps unwittingly, she pointed to a practical way in which environmental and economic issues could be harmonised. If all we have is a life tenancy, then who gets the rent? Currently it is the landowner, which leads to the present economic inequality, but if it were paid to the government, not as owner, which would be land nationalisation, but as trustee for the nation, then there would be no need for taxation. Environmental concerns could be covered in the terms of the lease which could impose a duty of care for the environment on the tenant.
The significance of economic rent as a source of taxation was first noted by David Ricardo in his Principles of Political Economy and Taxation. More recently, the Nobel laureate, Joseph Stiglitz, at an event billed as ‘Celebrity Economists’ debating ‘What causes inequality?’ organized by the Institute for New Economic Thinking in Paris in 2015, stated in his concluding remarks:
‘The underlying problem is the whole structure of our economy, which has been oriented more at increasing rents than increasing productivity and real economic growth that would be widely shared in our society. There are actually a lot of policies one should think about, but one has always to think about issues of shifting so that, for instance, just a tax on capital might be shifted, and a lot of the models have shown this would happen, but a tax on land, rents, would actually address some of the underlying problems. This is the idea that Henry George had more than a hundred years ago, but this analysis that I have done, goes one step beyond Henry George. He argued that a land tax was non-distortionary, but this analysis says that a land tax actually improves productivity of the economy because you encourage people to invest in productive capital rather than into rent generating. Well, the result of the shift in the composition of the savings towards more productive investment leads to a more productive economy, and in the end leads to a more equal society.’
Michael Hawes states that: ‘Sharing the excess is the key to establishing a fair and just society based on equal rights and equal opportunity.’ At the moment public revenue is increased by taxing wages, services and goods – this results in less production and leaving less money available for the average earner to spend. Around 3 000 000 families live in poverty and need to rely on the benefits paid for by taxation.
How can we encourage people to focus on climate action when they are worried about where their next meal will come from?
Are the leaders of our future forgetting about the importance of economic health and that it is linked to climate action?
The first United Nations Sustainable Development Goal is to ‘End poverty in all its forms everywhere’, and yet regardless of whether there is a left wing, right wing or centrist government in power, the gap between rich and poor continues to increase, suggesting some common cause that is being overlooked.read more
So often, the debate about public ownership is based on a narrative that sets the public interest against the private interest. In this debate in western democracies, one can characterise the period since the Second World War as having been a game of two halves. In Britain during the war, a social democratic narrative emerged, where the interests of society would be put first, in part to reward the collective effort to defeat the Nazi dictatorship, but also perhaps, to defuse the attraction of the alternative collective ownership experiment in the Soviet Union. This social welfare model was presented in the UK with the publication of the Beveridge Report in 1944, and its main recommendations were introduced during the following three decades. Living standards rose dramatically, and public service provision of housing, healthcare, and education among others became the normal expectation. We had ‘never had it so good’.read more
Economists have long asserted that three factors of production, land, labour and capital, lie at the root of their subject. Yet in the development of the subject into theories and practical applications there has been a thorough analysis of labour and capital but a grievous omission of the factor of land. This is reflected in the minimal place it holds in modern textbooks, in popular discussion and political debate. Much of the argument about major issues, like industrial policy, the distribution of wealth and income and government policy reverts to a polarised struggle between two antagonists, labour and capital. The third factor, land, hides in the background unacknowledged yet exerting a major influence on the outcome of the whole economic process.read more
A legal duty of care for the Earth Fifteen years ago Polly Higgins abandoned her career as a barrister to campaign for an international crime of ecocide. Sadly she died of cancer on Easter Sunday at the early age of 50.read more
“You can become wealthy by creating wealth or by appropriating the wealth created by other people. When the appropriation of the wealth is illegal it is called theft or fraud. When it is legal economists call it rent-seeking”
John Kay, Financial Times 27th Dec 2009
“If a free society cannot help the many who are poor, they cannot save the few who are rich.”
John F Kennedy, Inaugural Speech, Jan 1961
“If science is defined by its ability to forecast the future, the failure of much of the economics profession to see the crisis coming should be a cause for great concern”
“Today we live in a world that is divided. A world in which we have made great progress and advances in science and technology. But it is also a world where millions of children die because they have no access to medicines… It is a world of great promise and hope. It is also a world of despair, disease and hunger”
How Our Economy Really Works
– Why are so many trapped in poverty, when others are grossly well-off?
– Why are house prices continuously rising faster than inflation?
– Why do people so often find themselves in jobs that give them little sense of fulfilment?
– Why is a multi-national coffee shop franchise not actually making its money from coffee?
These questions have confronted the UK economy for decades without resolution by governments of the right or left. It is the failure of economics, the author argues.
ISBN 9780856835292 | Price: £9.95