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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Leon MacLaren (1910–1994) was a barrister, politician, philosopher and the founder of the School of Economic Science. He considered the true goal of Economics to be the discovery of the conditions which allow every individual to find a fulfilling life. In his view, science was a study of laws that exist in nature, whilst economics was a study of the humanities, with the interaction of human nature and the natural universe at its heart.
MacLaren defined economics as ‘the study of the natural laws which govern the relationships between people in society’.
This book is based on a three-year course prepared by MacLaren for the School of Economic Science in London in the late 1960s. The editor, Raymond Makewell, presents the original subject matter revised with more recent examples and statistics from Australia, Canada, New Zealand, UK and USA.
Instead of making supply and demand the starting point, it 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. From this starting point the major characteristics of the modern economy such as banking, companies or corporations, international trade, taxation and trade cycles are examined in terms of the conditions that govern how and why they evolved and how they operate today.
The framework in which the economy operates is examined in terms of how 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 people 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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The new internet magazine Justice carries a review of The Fair Tax stating ‘This slim volume argues for a tax which could do more to bring about social and economic justice than any other step a government could take.’
Unfortunately Finance Minister, Michael Noonan, ignored the advice in his Budget statement last week. To read the full review click here and turn to page 39.
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This message is from the Irish Site Value Tax campaign, which started the petition “Finance Minister, Michael Noonan: Stop the government imposing an unfair residential property tax in the 2013 Budget.”:
The 5th of December is budget day and all the leaks from the government would indicate that the government went against their own best advice and opted for a value based, residential, property tax instead of a Site Value Tax. This petition is an attempt to hold the government to account for their actions or lack there of, on this issue. If we must have some sort of property tax we want the government to know that a Site Value Tax is a much better option for all involved. To find our more about SVT click here.
Send this to as many people as you can by email, facebook and twitter today! If we just get two people each and they get two people each, we will have a couple of thousand signatures by Friday, the 7th of December.
Thank you very much for your support on the important issue of property tax.
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The launch of our latest book, The Traumatised Society: How to Outlaw Cheating and Save our Civilisation was held in St James’s Church, Piccadilly on 28th October. The author, Fred Harrison, explained the threat to Western civilisation from rent-seeking, which he identified as the cause of the collapse of great civilisations in the past.
The opening paragraph of an article by John Kay in the Financial Times (27th Dec 2009) gives a succinct explanation of rent-seeking: ‘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.’
Harrison identifies rent-seeking as cheating and shows how it may be outlawed so that our civilisation need not suffer the same fate as others. To avoid the unpleasant consequences of that fate, he advocates a great awakening because we cannot rely on politicians, policy-makers and economists to lead us out of danger. We have to take our future into our own hands.
‘Many people are all too aware that there is something badly wrong with our current economic system, but they are less clear about how it got so bad, what an alternative might look like, and how we can make the change. This profound book admirably fills that gap.’ Bernadette Meaden in Ekklesia
The launch was the first in a series of events to help stimulate the great awakening. Future events already scheduled are:
January 26th 2013 School of Economic Science, 11 Mandeville Place, London W1U 3AJ
April 6th 2013 St Mary Aldermary, City of London
May 4th 2013 Christ Church Blackfriars Rd. London SE1
June 1st 2013, St James, Piccadilly, London W1
Extracts from the Traumatised Society were read by the actors, Jemma Redgrave, Jennifer Wiltsie and Carlo Nero (Vanessa Redgrave’s son).
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‘One of the few benign consequences of last year’s financial crisis’, wrote Anatole Kaletsky in The Times (28/10/2009), ‘was the exposure of modern economics as an emperor with no clothes.’ If this is true, to what can we turn in our search for a new economic paradigm?
If we look back to the classical economists, we find that they too were addressing the same question for their time – it is not a new question. Their approach differed from modern economists in that they started from the premise that there are natural laws or principles which pre-exist man, which man may discover and apply in the economic sphere. The title of Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations reveals this approach.
Likewise, in The Principles of Political Economy and Taxation David Ricardo sought the principles which govern economics, but he considered ‘the principal problem of Political Economy’ not to be the creation of wealth, as Adam Smith and modern economists do, but to determine the laws which regulate its distribution.
Henry George’s Progress and Poverty sought the cause of growing wealth in the 19th century side by side with dire poverty, again addressing the issue of the distribution of wealth.
These same problems face us to today. The attached paper, A Principled Approach to Economics, explores whether the approach and insights of the classical economists offer us any help in our present predicament.
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The Fair Tax was launched in Dublin on 18th September and will be discussed at an event at Trinity College, Dublin on 24th September at 7.30 pm. After the event, the Frontline team (a popular current affairs programme on RTE 1) have agreed to allow time on their programme to discuss SVT in the wider context of the Irish government not discussing or engaging with the public on important issues. The programme starts at 10.30 pm.
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To those who know and love Land Value Tax (LVT) the case for it seems self-explanatory, compelling and unanswerable. Yet strangely it all too often turns out to be a very hard sell. Present economic theory rests on false assumptions established so long ago that people have forgotten what they are. So the difficulty in explaining the immediate relevance of LVT is that one has to clarify first principles at the same time. This is not so easy. An audience waiting to hear how to revive the economy will not want to be asked to revise basic concepts they think they already know.
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The author was the first to forecast (in 1997) the events that ruptured the global economy in 2008 by applying an analysis that exposes the fault lines in the structure of the market economy. Having correctly forecast the timing of the global crisis, the author now extends that same analysis to the future of the West, to evaluate fears from distinguished commentators who claim that European civilisation is in danger of being eclipsed. He concludes that the West is at a dangerous tipping point and provides empirical and theoretical evidence to warrant such an alarming conclusion. But he also explains why it is not too late to prevent the looming social catastrophe.
‘…Such prescience is strikingly impressive, and demands that the author be taken very seriously.’ Bernadette Meaden for Ekklesia
Attributing the present crisis to a social process of cheating, he develops a synthesis of the social and natural sciences to show how the market system can be reformed. He introduces the concept of organic finance, which prescribes reforms capable of delivering both sustainable growth, with a more equitable distribution of wealth, and respect for other life forms.
To explain the persistent failure to resolve protracted social and environmental crises, the author introduces a theory of social trauma. Populations have been destabilised by the coercive loss of land to the point where they have lost their traditional reference points. No longer able to live by the laws of nature, they are forced to conform to laws that consolidate the privileges of those who had cheated them of their birthright: access to nature’s resources. Many pathological consequences flow from this tearing of people from their social and ecological habitats. To recover from this state of trauma, the author argues, people need to use the new tools of communication, such as social media, to regain control over their future destiny through a kind of collective psychosocial therapy.
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