According to The Times, ‘One man is offering you the chance and all you have to do is answer one simple question: how do you manage a country’s orderly exit from the euro?’
In a separate article, Lord Wolfson, the chief executive of the Next clothing chain, explained why he had set up the prize: ’Just as man can be dwarfed by the power of nature, so might governments be humbled by the force of markets. There is a possibility that the structural flaws at the heart of European economic and monetary union pose such a challenge and that the euro could break up in a disorderly rout.
‘The economist Joseph Stiglitz described such a collapse as a “death spiral”. This is not overly dramatic. The unplanned disintegration of the euro would endanger the financial stability of sovereign states and the world’s banking system, along with the savings and jobs of millions. The damage could take a generation to repair.’
The main article reports that the ‘Wolfson prize will be the second-biggest cash prize to be awarded to an academic economist after the Nobel and asks potential applicants to submit an article of up to 25,000 words considering how transition from the euro to a new national currency could be achieved’.
In what appears to be a reference to the prize, the following day The Times carried another article which begins with the question ‘be brutally honest: do you have any idea how the world got itself into its present financial mess, or how it might get out of it? …No? Perhaps you console yourself with the thought that it doesn’t matter … because there are plenty of smart economists out there who do … Yes, those smart economists do indeed have a shrewd prescription … The bad news is, they’re not all the same … We snigger at fortune-tellers yet continue to take seriously the word of economists, a profession definable as ”people who have found a way to retain professional tenure even when their predictions turn out to be entirely wrong”’.
In The Corruption of Economics the authors document how the integrity of economics as a discipline was deliberately compromised towards the end of the 19th century. One result of this perversion of economics was that economists were unable to answer the Queen’s question. Shortly after the collapse of Lehman Bros, the Queen visited the London School of Economics to open a new building. Entertaining her, the professors spoke of the magnitude of the financial collapse. After listening to them, the Queen posed a simple question: ‘if it is so big, why did no one see it coming?’ This was a question the economists could not answer.
The answer, however is given on the first page of the Prologue in Boom Bust which may be viewed on this link.
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On the 30th of September 2011 a mock Ecocide Trial was held in the UK Supreme Court. It took just 50 minutes for the jury to return with two unanimous guilty convictions of ecocide against the CEO’s of oil companies operating in the Athabasca Tar Sands.
What is Ecocide? The United Nations is considering a petition to make Ecocide the 5th Crime Against Peace to protect the Earth’s right to life by making it a crime under international law to destroy or seriously damage the Earth’s ecosystems.
To read more about the trial, please visit the Eradicating Ecocide website.
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Economists pronounce with great confidence in the media and blind us with maths and jargon so that most of us switch off and leave it to the ‘experts’—but are we wise to do so when the evidence of the last four years suggests they do not know what they are doing? The voter who votes in ignorance forges the chains that bind him.
There have been, however, some brave voices calling into question the fitness of economists to guide policy-making.
As long ago as 1994, Paul Ormerod, in the preface to his book, The Death of Economics, wrote: “Good economists know … that the foundations of their subject are virtually non-existent” and explained that “the obstacles facing academic economists [seeking an alternative, scientific approach] are formidable, for tenure and professional advancement still depend to a large extent on a willingness to comply with and to work within the tenets of orthodox theory.”
Continue reading the full article by Anthony Werner on the IEET website.
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Recently The Sunday Times reported that the ‘Lib Dems want a land tax on rich’, arguing that ‘proposals aimed primarily at wealthy landowners, property magnates and foreign millionaires are likely to hit middle class landowners’. After this misleading and emotive opening, the article mentioned that Nick Clegg was in favour of a tax shift and that Vince Cable recognised the need for a ‘proper examination about how a land tax could be made to work’.
Clegg and Cable are harking back to a policy of the Liberal Government which won a landslide victory in 1906 and sought to bring in a Land-Value Tax (LVT) in the famous People’s Budget of 1909. This is not so much a tax on the rich, as implied in the article, but a different way of raising taxation – this is the shift referred to by Clegg.
Taxes as currently levied fall on economic activity and impede growth – a recent example being the Chancellor’s windfall tax on the oil and gas industry on which he had to back track to some extent because of the damage to investment in the North Sea it would have caused. An infamous example from earlier time is the window tax which led to the bricking up of windows. One of the great advantages of LVT is that it does not have that negative effect.
Nor is it a tax on the rich, but it is true that the rich would pay more LVT because they own the most valuable properties. It is therefore a much more progressive tax than income tax with its wide bands and poverty trap at the bottom. It also has the advantage, to which Cable alluded, that it cannot be shifted offshore – i.e. cuts out tax avoidance. The idea of the shift is to replace the present harmful taxes with LVT, this is the shift to which Clegg was referring.
Cable was suggesting a way in which the principle of LVT could be introduced with a minimum of disruption, the shift of Business Rates and Council Tax from a rateable value based on land and buildings to one on the land alone. This would give a boost to the building industry since improvements would not attract higher taxes as they do now. It would also make housing more affordable.
This reform was not confined to the Liberal Party. It also played a major part in the Labour Party, and Phillip Snowden introduced the reform in his Budget of 1931.
In his novel, Prime Minister, John Stewart explores how LVT could be introduced in Britain.
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A lucid exposition of the merits of Land-Value Taxation and the contribution of Henry George to the science of political economy by Edward Miller has appeared on the website of the Institute for Ethics and Emerging Technologies.
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Voted the people’s favourite, Eradicating Ecocide by Polly Higgins is this year’s winner of The People’s Book Prize for non-fiction. The winner is chosen by popular vote rather than by a panel of judges.
Speaking from the People’s Book Prize Awards Ceremony, held at the The Worshipful Company of Stationers and Newspaper Makers in London, Polly Higgins said:
“This is such an honour. To have the support of the public for my work to make Ecocide the 5th Crime Against Peace is proof that we the people are finding voice and saying it is time to change the rules of the game. The People’s Book Prize is also about changing the rules of the game – by having the public vote for the books they believe in, means that we can hear from the people, people who would not normally be heard. For me this is very important. This is all about empowering the public to speak up for what they want to happen – and for their voice to be heard.To be voted by the people for my book has changed my life. I will remember this day as the day when we said that ‘We the people will eradicate ecocide.”
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Buy this book:
Polly Higgins sets out to demonstrate how our planet is fast being destroyed by the activities of corporations and governments, facilitated by ‘compromise’ laws that offer insufficient deterrence. Polly offers a solution that is radical, but absolutely necessary: the recent Mexican Gulf oil spill is a compelling reminder of the consequences of un-checked ecocide.
‘Eradicating Ecocide highlights the need for enforceable, legally binding mechanisms in national and international law to hold to account perpetrators of long term severe damage to the environment. At this critical juncture in history it is vital that we set global standards of accountability for corporations, in order to put an end to the culture of impunity and double standards that pervade the international legal system. Polly Higgins illustrates how this can be achieved in her invaluable new book.’ Bianca Jagger, Founder and Chair of Bianca Jagger Human Rights Foundation, Advocate for Crimes Against Present and Future Generations
‘The beauty of this proposal is how it uses what is already there – the UN framework, the international criminal law as it has developed since World War II, and the trusteeship concept. Ecocide as a fifth crime against peace would be easily administered by the International Criminal Court without creating new structures or administrative bodies. A simple expedient, yet how revolutionary! A global standard of care would reconfigure the entire edifice of international justice on the foundation of Earth Jurisprudence… Eradicating Ecocide brims with hope and reads like a mystery novel.’ Ana Simeon, Sierra Club, BC
‘Eradicating Ecocide… lays the framework for us to lobby our leaders for real environmental laws and contains tips on taking action… it outlines the steps you can take towards becoming an Erin Brockovich in your own right.’ The Observer Magazine
‘Big shifts in international law can happen… [Higgins] makes a good moral and logical argument that the only way we are going to truly stop ecocide is to make it a serious crime.’ Matt McDermott, treehugger.com
‘Eradicating Ecocide gives you all the answers you need, and it does so in a measured and well argued way… the book isn’t another wild diatribe against business – rather it is an examination of international law and how environmental protection has somehow been left by the wayside… The clock to ensure the Earth remains healthy enough to support humankind is already ticking. This book asks everyone to re-examine the legal framework within which we are attempting to accomplish this, and provides business leaders with a golden opportunity of making it happen.’ Chris Milton, corporate-eye.com
Higgins advocates the introduction of a new international law, Ecocide: ‘damage, destruction to or loss of ecosystems’, as the 5th Crime Against Peace. This would hold to account heads of corporate bodies that are found guilty of damaging the environment; it would present corporations with a new choice: they could choose to be part of the solution, part of the salvation of the planet’s future, by complying with the new law of Ecocide. The opportunity to implement this law represents a crossroads in the fate of humanity; we can accept the change, or we can continue to allow its destruction, risking future brutal war over disappearing natural resources.
This is the first book to explain that we all have a commanding voice and the power to call upon all our governments to change the existing rules of the game.
Higgins presents examples of laws in other countries which have succeeded in curtailing the power of governments, corporations and banks and made a quick and effective change, demonstrating that her proposal is not impossible. Eradicating Ecocide is a crash course on what laws work, what doesn’t and what else is needed to prevent the imminent disaster of global collapse.
Eradicating Ecocide provides a comprehensive overview of what needs to be done in order to prevent ecocide. It is a book providing a template of a body of laws for all governments to implement, which applies equally to smaller communities and anyone who is involved in decision-making.
It’s now six years since Shepheard-Walwyn published my book, The Possibility of Progress. A good time, perhaps, to evaluate what, if any, progress has been made in the intervening years.
Certainly a great deal has happened: we’ve had the biggest financial crisis since the 1930s, leading to a global recession more severe than most people thought possible. In the process, the inherent failings of the banking system have been laid bare. Ideal conditions, you might think, for a successful strike at the shortcomings of the current economic system and the root causes of injustice.
But no: instead, the aftermath of the crash has been dominated by a remarkably successful campaign by supporters of the current order to deflect attention from the real causes of the crisis through a depressingly familiar process of petty political point scoring.
Politicians of all parties are to blame for the current crisis: all of them supported, and continue to support, the economic arrangements that delivered us to this point. And most economists are similarly culpable. In response to the most severe test of their theories in a generation, practitioners of the dismal science have offered only the miserable spectacle of a debate between out-of-fashion Keynesians and unabashed supporters of the thoroughly discredited neo-classical model; neither of which group acknowledges the structural failings of the current economic order, or the underlying causes of the crisis.
‘If one were to set out with a specific, stated objective of designing a tax system which would penalise and deter thrift, energy and success, it would be almost impossible to do better than the one which we have in this country today.’ Lord Soames, House of Lords
‘There is a sense in which all taxes are antagonistic to enterprise – yet we need taxes … so the question is, which are the least bad taxes? In my opinion, the least bad tax [note the switch to singular] is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.’ Milton Friedman, American Education League
To appreciate Milton Friedman’s point we need to realise that the term ‘property’ covers two distinct elements: the land on which buildings stand and the bricks and mortar with which they are built. Land is the free provision of nature – nobody made it – while buildings are the product of human effort.
The classical economists recognised this distinction, calling the former land and the latter capital. Unfortunately, modern economists conflate them and treat them both as capital. The effect is to conceal a natural source of public revenue. To illustrate the importance of this distinction, take house prices. When we talk of house prices rising and falling we are in fact talking of the land component. What gives value to land is either its natural endowment of fertility or mineral deposits, or location – move No1 Hyde Park to the middle of Wales and the price of the apartments will plummet.
So how may this economic fact of life be turned to advantage to encourage ‘thrift, energy and success’, to quote Lord Soames again? If we recognise land as the gift of nature to all humanity, then surely it is wrong to permit private property in land. However, no one is going to sow a crop or build a house, factory or office without secure tenure. So how do we square this?
If all land is held as leasehold on payment of a market rent, but the buildings and improvements remain private property, then the question arises as to who is to get the rent. If the government gets the rent, it will not need to tax ‘thrift, energy and success’ as at present.
The wisdom of this was recognised by Adam Smith: ‘Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth of the great body of the people, might be the same after such a tax as before. Ground rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax upon them.’
As Henry George might have put it, a land value tax creates no disincentive to economic activity, on the contrary, it encourages it. Hong Kong and Singapore are evidence of this.
The Liberal Democrats’ Action for Land Taxation and Economic Reform (ALTER) policy has been formulated with a view to its being part of a more sustainable and just resource based economic system. Their justification for Land Value Taxation is that land value is created by the efforts of the community at large and not the land holder. Land values rise because settlements are created and developed. With agriculture, land value is also a reflection of the natural advantages of a locality such as favourable climate or soils, which no land holder can claim to have created. Land Value Taxation regards land value as a public resource and hence the natural fund out of which public expenditure should be drawn.
In his Foreword to The Case for a New People’s Budget Vince Cable states: ‘Land Value Taxation has far-reaching effects on breaking down monopoly land-holdings, on encouraging new enterprises and raising the levels of earnings, on recovering the cost of major and minor public works, on supporting small-scale farming and the cultivation of marginal land, on stabilising house prices and, perhaps most importantly, reducing the disparity between the rich and the poor.
‘These are large claims but they spring from a fundamental view that the wealth produced over the centuries by the efforts of the community is reflected in land values and is therefore a proper target for taxation.’
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