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Further Reading: The Corruption of Economics by Mason Gaffney and Fred Harrison Mason Gaffney is Professor of Economics at the University of California, Riverside. He has written extensively on various aspects of resource economics, urban economics, tax policy, and capital theory. Boom Bust by Fred Harrison After a career as an investigative journalist, he was advisor to a number of Russian academic and political bodies, including the Duma (parliament), in their efforts to implement a more equitable transition to a market economy. Recently he has turned his attention to the failure of economic analysis and public policies in the market economies. 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...

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The Only Economic Reform Worth Talking About

Further Reading: Progress and Poverty by Henry George The Science of Political Economy by Henry George 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...

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Small businesses put off hiring staff due to PAYE

Further Reading: Public Revenue Without Taxation by Ronald Burgess Re-Solving the Economic Puzzle by Walter Rybeck According to a survey by the software provider Inuit, two-thirds of small businesses are hesitant to hire new employees due to the burden of PAYE. In the 18th century governments taxed windows and we still have examples of bricked up windows from that time. Today we tax employment, so we have unemployment! In Public Revenue without Taxation the author makes the point that “the development of Keynes’ general theory of employment leads to the conclusion that an open trading economy is likely to be most competitive, and therefore most prosperous, only when all taxation is abolished”. The author could have added “ and would have the highest level of employment”. Yet government must be funded. So what is the answer? The book is an examination of how government could be more efficiently funded by shifting taxes off employment (PAYE and NIC are employment taxes) onto the value of the land under buildings. From the government’s point of view no one could avoid the rent and from the firm’s point of view, the rent could be paid by a standing order or direct debit. In Re-solving the Economic Puzzle, Walter Rybeck describes how some town councils in Pennsylvania have adopted this approach and found that it has spurred economic activity and...

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Tax Property, not people, for a fairer society

Further Reading: Boom Bust by Fred Harrison Ricardo’s Law by Fred Harrison In a recent article in the Guardian Phillip Inman argued: ‘Amid all the talk of rebalancing the economy, there is little mention of the most powerful lever the government could pull to generate growth, which involves a switch from taxing income to taxing wealth’. He explains that ‘levies on land values do not depress wealth creation and are easy to assess, cheap to collect and hard to avoid’. In his article he acknowledges Fred Harrison as ‘the doyen of LVT proponents’ and refers to his book, Boom and Bust, a sign of the growing recognition of Harrison’s efforts to draw attention to the unfairness of our present tax system, called ‘progressive taxation’, which in fact transfers wealth from the poor to the rich – see his Ricardo’s Law. For a Scandinavian example of this wealth transfer follow this link...

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Why should MPs be exempt from new law to block tax avoidance?

Further Reading: Public Revenue Without Taxation by Ronald Burgess Dr Burgess, a member of the Royal Economic Society with a special interest in taxation, was Director of the Economic Study Association till his death. In his Budget, the Chancellor of the Exchequer promised to create a more level playing field by tackling tax avoidance, something the rich are much better at than the poor. To implement this, his Finance Bill contains complex and at times draconian legislation which could impact on any employee or employer in the UK, but, as Ian Cowie in the Daily Telegraph points out, in an obscure clause of the bill MPs are specifically exempted from these new restrictions. Why, he asks, should that be? Surely, What is good for the goose is good for the gander? If the Chancellor is so anxious to cut tax avoidance, why does he not abolish taxes and collect the rent? Rent as a tax base has the great advantage that it cannot be avoided – you can’t hide it or take it off-shore and it is irrelevant whether the owner of the property is a British citizen or a non-dom. Whoever owns the site pays the market determined ground rent. Such a fundamental change in the way government is funded would need to be introduced gradually, but it would give the Treasury a much more secure and predictable source...

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Inside Job

Further Reading: The Corruption of Economics Edited by Fred Harrison and Mason Gaffney Progress and Poverty by Henry George A New Model of the Economy by Brian Hodgkinson In a review of the film Inside Job in the Guardian, Peter Bradshaw wrote: ‘Perhaps the most sensational aspect of this film is Ferguson’s contention that the crash corrupted the discipline of economics itself.’ As Prof Mason Gaffney and Fred Harrison point out in The Corruption of Economics this happened much earlier. Towards the end of the 19th century the ‘Robber Barons’ in America got together and endowed five chairs of economics at some of the top US universities and appointed the first professors with the specific task of ‘changing the language of economics’. The purpose was political, to thwart the growth of support for the reform of Henry George which was couched in the language of the classical economists. Neo-classical economics was recast in Britain by Alfred Marshall and his pupil, John Maynard Keynes. The effect, as Paul Ormerod described it in his Death of Economics, is that economists ‘have erected around the discipline a barrier of jargon and mathematics which makes it difficult to penetrate for the uninitiated’. At the end of his review in the Guardian, Peter Bradshaw asks: ‘What can be done about all this?’ and points out that the film ‘has no answers’. It is precisely to...

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Property tax in China

Further Reading: Boom Bust by Fred Harrison The Power in the Land by Fred Harrison Public Revenue without Taxation by Dr Ronald Burgess As Europe and, America struggle to avoid a double-dip recession while they grapple with reducing fiscal deficits, China is trying to head off a property boom without precipitating a bust that could tip it into a financial crisis. The Chinese authorities have already resorted to the orthodox capitalist method for curbing speculation and inflation, raising interest rates several times, but appear to have recognised the inadequacy of a purely monetary approach. Perhaps inspired by Sun Yat-sen, the ‘father’ of modern China, they have turned to property taxes. According Gulf News, ‘Beijing is to introduce a property tax in two Chinese cities, the latest measure aimed at preventing a housing market bubble. The State Council said that the long-awaited tax would be introduced as a trial in Shanghai, the country’s business capital, and in Chongqing, a large city in the centre-west of the country.’ Other measures to cool the market have also been announced: restrictions on the number of dwellings that can be purchased and higher down-payments. See full article. The Economist comments: ‘One aim of the property tax is to provide local governments with a steady new income that will help wean them off their dependence on one-off land deals. Jia Kang, a government researcher who helped devise the tax, says...

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2011 People’s Book Prize

Further Reading: The Predator Culture by Fred Harrison Fred Harrison is Research Director of Land Research Trust, London. Recently he has turned his attention to the failure of economic analysis and public policies in the market economies. John Clare: Voice of Freedom by R S Attack R S ATTACK, a poet herself, found in John Clare a kindred spirit with a poet’s perception of the beauty of nature and a clear vision of the injustice wrought by the enclosure movement. We are pleased to announce that Fred Harrison’s The Predator Culture has won a place as a finalist in the 2011 People’s Book prize. Voting re-opens for finalists in June 2011. Rosemary Attack’s John Clare: Voice of Freedom is included in the Winter selection and voting is open till the end of February 2011. To vote go to...

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Winston Churchill & Henry George

With the possible exceptions of Pitt the Younger and Gladstone, few Prime Ministers have received such detailed biographical attention as Winston Churchill. Every facet of his life has been analysed, yet his vigorous support of the 1909 land value levy appears to have been generally forgotten.

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The opportunity for a genuine alternative

The outcome of the Labour leadership contest, while perhaps shocking and disappointing for some, provides the party’s new helmsman with a unique opportunity. Ed Milliband should not be afraid to come out in favour of a radical alternative.

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A New Model of the Economy

This book offers a radical revision of modern economic theory. Its starting point is the existing body of both micro and macro economics, as developed in such textbooks as Economics by Begg, Fischer and Dornbusch and Positive Economics by Lipsey and Chrystal.

ISBN 9780856832796 | Price: £19.95

Buy: A New Model of the Economy

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