The Land Value Tax (LVT) is a “radical” form of taxation first proposed by Henry George in his 1879 Progress and Poverty (see What If Marx Got it Wrong?). What George proposes is to replace taxes on wages, purchases, and investments with a tax on unimproved land and natural resources. Fred Harrison’s The Traumatised Society: How to Outlaw Cheating and Save Our Civilisation provides an exhaustive update of George’s original work.
As Winston Churchill famously observed, “History is written by the victors.” Nearly all history books written in the last 400 years were written by or on behalf of the ruling elite. The Traumatised Society is unique in that it recounts the history of the industrial revolution from the perspective of the 99%. Harrison also presents a simple, but elegant prescription for taking back power from the corporate oligarchy, ending economic inequality and the debt crisis, staving off ecological disaster, and preventing World War III. On the surface these claims appear extravagant and somewhat grandiose. Yet, in my view, Harrison makes his case very convincingly.
Adam Smith was the first prominent economist to propose the LVT as the most “moral” and least economically harmful tax in his classic Wealth of Nations. Neoconservative icon Milton Friedman also considered it the “least bad” kind of tax. The most famous contemporary Georgist is former World Bank Economist and Nobel Prize winner Joseph Stiglitz.
Basically the argument for an LVT goes as follows: click here to read more.
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In an article in the Guardian George Monbiot posed the question: ‘Why do we ignore the most blatant transfer of money from the poor to the rich?’
He explained that on the very same day that the Chancellor announced cuts in benefits for the very poor in Parliament, another minister in Luxemburg thwarted an EU attempt to cut benefits for the very rich through the Common Agriculture Policy. The Government justifies the latter, saying ‘we must help the farmers’, but it is in fact the big landowners who benefit as the main subsidy is paid on a per hectare basis as Duncan Pickard documents in Lie of the Land.
But it is not only in the agricultural sector that the poor taxpayer subsidises the rich. As Fred Harrison points out in Ricardo’s Law wealthier property owners in the South-East enjoy far more benefits from taxpayer funded infrastructure and amenities than those in the North, the unrecognised cause of the ‘north-south divide’.
It is the silence about this that puzzles Monbiot. He suggests three possible reasons, the third of which is that ‘after being brutally evicted from the land through centuries of enclosure, we have learnt not to go there, even in our minds’. This is the trauma to which Fred Harrison refers in the title of The Traumatised Society. Monbiot goes on: ‘Whatever the reason may be, it’s time we overcame these inhibitions and confronted this unembarrassed robbery of the poor by the rich.’ It is this rent-seeking Harrison advocates we outlaw. To read full article click here.
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At the Eastern Economic Conference in New York, Alanna Hartzok, Founder and Co-Director, Earth Rights Institute, delivered a presentation entitled, “A Tribute to the New Economics of James Robertson”. He challenges the protagonists of the status quo, arguing that they compound their own incredibility by their refusal or their inability to confront 10 fundamental challenges:
1. That specific increases in output in any economy no longer necessarily create corresponding increases in employment;
2. That in an age of permanently high unemployment, it is neither efficient nor equitable to attempt to distribute a nation’s wealth predominantly through the labour market;
3. That our present standard of living can only be maintained at the expense of denying the basic necessities of life to millions in the Third World;
4. That our present standard of living can only be maintained through the continuing exploitation and degradation of the biosphere;
5. That the social, environmental and spiritual costs of pursuing a policy of permanent industrial expansionism already outweigh the advantages to be derived from it;
6. That ‘GNP’, ‘productivity’, ‘progress’ and many other notional concepts of contemporary economics are incapable of evaluating or expressing real wealth or people’s real standards of living;
7. That neither laissez-faire market economics nor state-dominated socialism is capable of defining the appropriate balance between individual freedom and collective responsibility;
8. That to think in terms of ‘jobs at all costs’ is quite inadequate, in as much as all work should be fulfilling both to the individual and to the community, and should not be destructive of the environment;
9. That the international banking system is on the verge of collapse;
10. That centralised top-down government spending has failed to create sustainable patterns of employment or to promote those structural changes in the economy that are so overdue.
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Fred Harrison’s latest book, The Traumatised Society, has been voted into the finals of The Non-fiction section of the People’s Book Prize and so gone through to the next round of voting. Voting to select the winner is open from 21st – 29th May. The Prize will be awarded at a gala dinner in Stationers Hall in the City of London on 29th May with Frederick Forsyth presenting the Prize. To vote again, or for the first time, click here and follow the instructions, noting the additional instruction for finalists. The Traumatised Society is 2nd from the end in the Non-fiction section. You may like to read the comments before voting.
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In an interview with Marcin Gerwin of the Permaculture Research Institute of Australia Polly Higgins, author of Eradicating Ecocide and Earth is our Business, explained why it is necessary to have an international law making it a criminal offence to damage or destroy the environment. To read the full interview, click here.
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“To discover of the conditions which allow every individual to find a fulfilling life is the true goal of Economics”
In The Science of Economics Raymond Makewell presents the three-year Economics course prepared by Leon MacLaren for the School of Economic Science in London in the late 1960s. Revised with contemporary, international examples, the core material remains the same.
MacLaren (1910–1994) was a barrister, politician, philosopher and (with the aid of his father, a Member of Parliament) founder of the School of Economic Science in 1937 when the world was struggling to emerge from the Great Depression. In 1939 he was selected to stand against Winston Churchill in the election that was cancelled by the outbreak of war.
Had the election not been cancelled, Churchill would have faced an awkward challenge as to why he had abandoned the principles he had so brilliantly expounded in support of Lloyd George’s People’s Budget in 1909 when he was a Liberal Cabinet Minister. These were the principles the School of Economic Science was founded to teach.
Rather like Adam Smith in his Inquiry into the Nature and Causes of the Wealth of Nations, MacLaren took his inquiry back to first principles. Instead of making supply and demand the starting point, he begins with the simple observation that all material wealth is ultimately derived from land, and, where goods are exchanged, the first requirement is trust, or a system of credit. The major characteristics of the modern economy are examined in terms of the conditions that govern how and why they evolved and how they operate today. Particular attention is given to the system of land tenure and the concepts of property evolved in the English-speaking world, the role of government in economic affairs, and the degree of economic freedom. This reveals how the current economic situation denies millions access to all that they need to work and produce wealth for themselves. Injustice is the inevitable result and poverty its inseparable companion.
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This thesis is not only a restatement of the social price of inequality (such as Joseph Stiglitz The Price of Inequality, or Richard Wilkinson The Spirit Level). There is something deeper: humanity has lost touch with its spiritual roots, and with the ‘covenant’ which ancient wisdom saw in the triangle of relationships between humanity, the earth and God. – Bishop David Atkinson, Church Times
For the full review click here and go to page 23.
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The Traumatised Society by Fred Harrison has been selected for the Non-fiction Spring 2013 People’s Book Prize Collection. Voting will be open until the 20th May. If Fred Harrison gets enough votes, he will go through to a second vote to determine the winner of the non-fiction prize between 20th and 29th May. To vote go to www.peoplesbookprize.co.uk.
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George Monbiot began an article in the Guardian ‘You can learn as much about a country from its silences as you can from its obsessions. The issues politicians do not discuss are as telling and decisive as those they do … the loudest silence surrounds the issue of property taxes … the simplest, fairest and least avoidable levy is one that the major parties simply will not contemplate. It’s called land value tax. The term is a misnomer. It’s not really a tax. It’s a return to the public of the benefits we have donated to the landlords. When land rises in value, the government and the people deliver a great unearned gift to those who happen to own it.’ Click here for the full article.
In 1909 Winston Churchill explained the issue in a remarkable speech which pointed out, as Adam Smith and many others have, that those who own the land skim wealth from everyone else, without exertion or enterprise.
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In the Guardian on New Year’s Eve, the economics correspondent, Phillip Inman, wrote:
Why, when the UK economy is in a dreadful state, with its core lending banks strapped for cash, would anyone in their right mind think property prices could rise? But as Fred Harrison, research director of the London-based Land Research Trust, points out in his new book, The Traumatised Society, rent-seeking by a wealthy class of people hooked on accumulating even greater wealth is the cancer that has brought down many more civilisations than the present one.
The Organisation for Economic Co-operation and Development, the International Monetary Fund and the Institute for Fiscal Studies have in the past couple of years concluded that only an annual tax on land can end the obsession with property. Once landowners face a tax, they will free up land they are sitting on, rather than wait for a rising market to make a killing.
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