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"Left-vs.-Right" is not the only false paradigm!

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Author Topic: "Left-vs.-Right" is not the only false paradigm!  (Read 2879 times)
Geolibertarian
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« on: August 25, 2010, 06:16:04 pm »

In the following clip Alex Jones explains how the global elite control politics through the use of the false "left-right" paradigm:

       

Thanks primarily to Alex, millions of people are now aware of that paradigm (although, since it relates primarily to the two major parties, I think a more accurate term than "left-right" would be "Democrat-Republican"), and have either broken free of it or are at least attempting to break free.

Sad to say, very few people seem to realize that there are other false paradigms in which, if one is not careful, one can easily become entrapped.

An obvious case in point is the reactionary manner in which right-wing ideologues routinely employ the use of red-baiting labels.

For instance, if (hypothetically speaking) Obama gives the lion's share of federal outlays to the poor, he's called a "socialist"; if, on the other hand, he does the opposite and gives it instead to the parasitic war machine and to his filthy rich cronies on Wall Street -- which is actually what he's doing! -- he's still called a "socialist."

-------------------------------------

http://www.globalresearch.ca/index.php?context=va&aid=12517

America's Fiscal Collapse

by Michel Chossudovsky
Global Research
March 2, 2009



    “We will rebuild, we will recover, and the United States of America will emerge stronger" (President Barack Obama, State of the Union Address 24 Feb 2009)

    "Those of us who manage the public's dollars will be held to account—to spend wisely, reform bad habits, and do our business in the light of day—because only then can we restore the vital trust between a people and their government." (President Barack Obama, A New Era of Responsibility, the 2010 Budget)


"Strong economic medicine" with a "human face"

“Promise amid peril.” The stated priorities of the Obama economic package are health, education, renewable energy, investment in infrastructure and transportation. "Quality education" is at the forefront. Obama has also promised to "make health care more affordable and accessible", for every American.

At first sight, the budget proposal has all the appearances of an expansionary program, a demand oriented "Second New Deal" geared towards creating employment, rebuilding shattered social programs and reviving the real economy.

The realities are otherwise. Obama's promise is based on a mammoth austerity program. The entire fiscal structure is shattered, turned upside down.

To reach these stated objectives, a significant hike in public spending on social programs (health, education, housing, social security) would be required as well as the implementation of a large scale public investment program. Major shifts in the composition of public expenditure would also be required: i.e. a move out of a war economy, requiring a movement out of military related spending in favour of civilian programs.

In actuality, what we are dealing with is the most drastic curtailment in public spending in American history, leading to social havoc and the potential impoverishment of millions of people.

The Obama promise largely serves the interests of Wall Street, the defence contractors and the oil conglomerates. In turn, the Bush-Obama bank "bailouts" are leading America into a spiralling public debt crisis. The economic and social dislocations are potentially devastating.

[Continued...]


http://www.globalresearch.ca/index.php?context=va&aid=16181

The Pentagon Budget: Largest Ever and Growing

by Sara Flounders

Global Research, November 19, 2009
International Action Center - 2009-11-07

On Oct. 28, President Barack Obama signed the 2010 Defense Authorization Act, the largest military budget in U.S. history.

It is not only the world's largest military budget but is larger than the military expenditures of the whole rest of the world combined. And it is growing nonstop. The 2010 military budget--which doesn't even cover many war-related expenditures--is listed as $680 billion. In 2009 it was $651 billion and in 2000 was $280 billion. It has more than doubled in 10 years.

[Continued…]


http://www.globalresearch.ca/index.php?context=va&aid=16488

Obama's Big Sellout
The president has packed his economic team with Wall Street insiders

by Matt Taibbi



Global Research, December 10, 2009
Rolling Stone - 2009-12-09

The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway

Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans."

Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.

Then he got elected.

What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy.

What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.

[Continued…]

-------------------------------------

In light of the above, most readers will likely realize just how spot on Webster Tarpley is when he explains, in the following clip, why attacking Obama from his "right" serves only to strengthen Obama politically by giving him the "left cover" he needs to implement what in reality is a pro-Wall Street/corporate fascist agenda:

       

Now, at this point the question arises: if accusing Obama of being a "socialist" and of wanting to redistribute wealth to the undeserving poor is the very thing that Obama's public relations experts and media ****s thrive upon, then why do so many conservatives and libertarians continually play right into their hands?

For the same reason they so often scapegoat the poor for the crimes of the rich: because they bought into the lie that the only alternative to Austrian School "capitalism" is either Marxist "socialism" or some Keynesian variant of it.

Consequently, their minds and intellects are literally enslaved within the ridiculously narrow and self-defeating confines of one or both of the following overlapping paradigms:

       * The false anarcho-capitalist-vs.-Marxist paradigm.

       * The false Austrian School-vs.-Keynesian School paradigm.

Now, I'll be the first to agree that socialism, particularly as defined by Karl Marx, simply does not work.

The most masterful refutation of Marxist socialism I know of is the following book (which can be downloaded for free in PDF form) by Single Tax advocate, Max Hirsch:

       http://books.google.com/books?id=D5QWAAAAYAAJ

As for Keynesian economics, while arguably not as bad as Marxism, it is nevertheless inherenty and fatally flawed in its own right, due primarily to its reliance upon (a) an anti-labor/pro-land speculation tax system and (b) a debt-based money system.

Unfortunately, due to the overlapping paradigms mentioned above, many if not most within the so-called "liberty movement" have been duped into believing that the only "alternative" to those two horribly flawed ideologies is the equally flawed Austrian School.

There's a reason for this.

What is that reason?

I'll adress that question in my next post.
« Last Edit: May 25, 2011, 03:03:44 pm by Geolibertarian » Report Spam   Logged

"For the first years of [Ludwig von] Mises’s life in the United States...he was almost totally dependent on annual research grants from the Rockefeller Foundation.” -- Richard M. Ebeling

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« Reply #1 on: August 25, 2010, 06:17:29 pm »

There are an alarming number of Austrian School cultists who routinely suggest or imply that anyone who supports having any sort of social safety net is, by definition, either a Marxist or neo-Marxist.

Although they'll never admit to this openly, the real reason said cultists are so morally and self-righteously offended by the very idea of a social safety net is not because they love "liberty" so much, but because their cult was founded by privileged, parasitic aristocrats who had a deep-rooted disdain for the poor -- a disdain matched only by the deep-rooted love they had for their own elevated socioeconomic status.

There's nothing these aristocrats hated more than the sight of millions upon millions of what once were poverty-stricken, working class peasants transforming into a relatively healthy, happy and prosperous middle class. So they silently funded a propaganda campaign to counteract this trend:

----------------------------------

http://www.scoop.co.nz/stories/print.html?path=HL0812/S00378.htm

Mr. Anonymous and the Not-So-Spontaneous Birth of the Libertarian Movement

William S. Volker (1859-1947)
Mr. Anonymous

William Volker, alias "Mr. Anonymous," alias the "First Citizen" of Kansas City, Missouri, "was an extremely modest, enormously wealthy home-furnishings tycoon. He became the unrecognized donor of thousands of gifts, large and small."

Volker was born on April 1, 1859 into a prosperous household in Hanover, Germany. At age 12, Volker's family immigrated to Chicago. At 17 he went to work for a picture frame manufacturer. With the death of his employer in 1882, Volker bought out the company and moved the enterprise to Kansas City. From there, his "little window shade business" grew into a national giant.

In 1911, 52 year old William Volker married. Returning from his honeymoon, he announced he had put one million dollars in his wife's name and, he said, intended to give the rest of his enormous fortune away. Over the next 36 years, he donated millions of dollars, much of it anonymously. When Volker died at age 88 on November 4, 1947, many schools, parks, and public spaces were named for the furnishings tycoon.

So why pick on this guy?

The answer is that the overwhelming priority of Volker's "philanthropy" was focused, not on public spaces but on reactionary ideology. Dismayed by the rise of Socialism in America and doubly dismayed by what he saw as the evolution of government and political thinking towards accommodation and a "new liberalism", eventually personified by the widespread adoption of the economic views of John Maynard Keynes and the New Deal policies of Franklin Roosevelt, Volker set out to create a new and much more reactionary "mainstream" ideology based loosely around his own ideas of "laissez-faire" capitalism (i.e. a largely unregulated economy) and social Darwinism (the pseudo-scientific notion that in society, unhindered competition would allow the "cream to rise to the top").

In truth, Volker was no great scholar or thinker. The ideology he set out to create was built upside down, starting only with a set of foggy conclusions for which he had a predisposition. From these conclusions, it was the task of Volker's considerable fortune to find a set of justifications, then an enabling ideology or "theory" that gave it all perspective and unity and, eventually, a true philosophical platform from which to launch the whole. But if this task was analogous to building the Great Pyramid, starting from the top, Volker was undaunted. He may not have had a brain but he had money... and he had a personal connection to one of the most reactionary sections of that most reactionary of organizations - the National Association of Manufacturers. Volker's "associates", who would all participate closely, included Jasper Crane of DuPont, B. E. Hutchinson of Chrysler, Henry Weaver of General Electric, Pierre Goodrich of B.F. Goodrich, and Richard Earhart of White Star Oil (which through many mergers and acquisitions would eventually become Mobil Oil). Moreover, Volker had "influence" at the leading scholarly institution in his home town: The University of Chicago was founded by none other than John D. Rockefeller and created with a certain ideological "bent".

In 1932 Volker established the William Volker Fund and, with that, started on the road to becoming perhaps the most significant anonymous a-hole of our times. In every way, William S. Volker was the true "father" of Libertarianism and Modern Conservatism.

For the first dozen years, the fund largely floundered. There is some evidence that Volker may have flirted with Fascism. That ideology though, which attracted such celebrities as Henry Ford and Charles Lindbergh, was thought to have a limited future in America. In the face of Keynesian economics, widespread social spending, and the CIO, what was really required was a return to pre-New Deal economic policy and an anti-communist/anti-union social policy.

Eureka!

The breakthrough came in 1944, when Volker's nephew, Harold Luhnow, took over, first the business and then the Fund. In the same year, Friedrich Hayek's The Road to Serfdom was published. The book was a product of the "Austrian School" of economists, originating at the University of Vienna and first coming to modest prominence at the end of the 19th century in its attacks on Marxist and Socialist economics. Hayek's book was an almost mystical (and hysterical) defense of laissez-faire capitalism and the "free market". According to Hayek, market prices created a "spontaneous order, or what is referred to as 'that which is the result of human action but not of human design'. Thus, Hayek put the price mechanism on the same level as, for example, language." In turn, any attempt at regulation would inevitably lead to "totalitarianism" and in this, both Marxist and New Deal "socialism" were essentially similar. The theory was perfect. Volker and Luhnow had found their ideology. The cash began to flow.

In short order, the Volker Fund and its larger network arranged for the re-publication of Hayek's book by the University of Chicago (a recurring and important connection) despite the fact that it had been almost universally rejected by the Economics establishment. A year later, the book was published in serial form by the ultra-reactionary Readers Digest not withstanding the fact that it was supposed to be a "scholarly text", ordinarily inappropriate for the readership of the Digest, and despite the fact that it had also had been panned by literary critics. In 1950, the Fund arranged for Hayek to secure a position at the University of Chicago and when the University only granted an unpaid position, they arranged for the Earhart Foundation to pay him a salary. Hayek was only the first of a veritable flood of émigré, "scholars".

Recruiting the Homeless

Hayek's teacher in Vienna had been one Ludwig von Mises who, in turn, had been the student of Eugen von Boehm-Bawerk (who had gained fame for his attack on Marxist Economics) and who, in his turn, had been the student of Carl Menger, the founder of the Austrian school. Each of these had published several books that were virulent attacks on Socialism and defended "pure capitalism". It was all very good. Von Mises book was called Socialism: An Economic and Sociological Analysis and it too had been received with yawns when it was published in English in 1936.

While von Mises really had "taught" at the University of Vienna, his was an unpaid position. The University had turned him down on four separate occasions for a paid position. Not surprisingly, in 1940 the nearly destitute von Mises had emigrated to the United States. In 1945, an unpaid "visiting professorship" was obtained for him at NYU while his salary was paid by "businessmen such as Lawrence Fertig". Fertig was an associate of the Volker Fund and a friend of Henry Hazlitt, the Fund's friendliest journalist. In all, they would fund von Mises for 25 years and von Mises never would need a "real job".

In fact, this was typical of the Fund's "bait and switch" tactic for developing resumes. In the United States, von Mises was the "famed economics professor from the University of Vienna". In Europe, he would become the "famous American economist from NYU".

Local Reinforcements

The economist Milton Friedman, during his fifteen minutes of fame, took the opportunity of the publication of his opus, Capitalism and Freedom to decry the shabby treatment that the likes of Hayek and Mises had received from the Economics "establishment". On his own similar reception, he wrote in the 1982 preface of his book:

    "Those of us who were deeply concerned about the danger to freedom and prosperity from the growth of government, from the triumph of welfare-state and Keynesian ideas, were a small beleaguered minority regarded as eccentrics by the great majority of our fellow intellectuals.

    "Even seven years later, when this book was first published, its views were so far out of the mainstream that it was not reviewed by any major national publication--not by the New York Times or the Herald Tribune (then still being published in New York) or the Chicago Tribune, or by Time or Newsweek or even the Saturday Review--though it was reviewed by the London Economist and by the major professional journals. And this for a book directed at the general public, written by a professor at a major U.S. university, and destined to sell more than 400,000 copies in the next eighteen years."

It is attractive to believe that Friedman was really this foolish and that his expertise in the "politics of fame" was similar to his expertise in Monetary Policy. In fact, his separate acknowledgements of the importance of the Volker Fund belie this possibility. In truth, the Fund and its progeny identified Friedman early on, shepherded his career at the University of Chicago, subsidized him through a paid lecture series (which eventually were combined into Capitalism and Freedom), paid his way to Mont Pelerin, arranged for the serialization of his book by Reader's Digest, and bought a significant number of the books that Friedman was so proud of "selling".

Friedman was only one of dozens of such local "scholars" who were suddenly "discovered" through the efforts of the Fund.

The Fund also now began to recruit friendly young "future-scholars" and subsidize their development. Not only was the cause thus advanced, but a modest intelligence network became a part of the "Libertarian Movement". One such early recruit was Murray Rothbard, later to become famous as the "father" of "Left Libertarianism", "Libertarian anarchism", and "anarco-capitalism". Later much castigated for his "sellout to the Right-wing Republicans", Rothbard had, from the first, been intimately wrapped up in Anti-Communism, McCarthyism, the "Old Right", and the right-wing ideology of the Volker Fund. It was through the Fund that he became an associate of Ayn Rand and a student of Mises.

Rothbard began his consulting work for the Volker Fund in 1951. This relationship lasted until 1962, when the VF was dissolved. A major part of Rothbard's work for the VF consisted of reading and evaluating books, journal articles, and other materials. On the basis of written reports by Rothbard and another reader - Rose Wilder Lane - the VF's directors would decide whether to undertake massive distribution of particular works to public libraries.

The VF also asked Rothbard to submit reports on particular questions, such as how to rank sundry economists in terms of friendliness to the free market, surveys of the literature on monopoly, Soviet wage structures, etc., etc. Rothbard's memos number several hundred, covering works in economics, history, philosophy, and political science. The memos, which range in length from one page to seventy pages, provide a window into the scholarship of the period - and Rothbard's views on that scholarship. They thereby shed much light on Rothbard's emerging worldview and his systematic defense of "liberty."

They also shed "much light" on how the Fund decided which "scholars" to promote, and which to attack. Rothbard later called his work with the Volker Fund, "the best job I've ever had in my life".

Multiplying Like Rabbits

In support of the imported scholars and the new ideology, the Volker Fund also pioneered a process which would become the hallmark of the "Libertarian Movement". The Fund started to spin-off organizations by the boatload, each intended, not just to serve specific purposes but to give the appearance of many "independent" efforts spawned by a "mass" appeal. The list of "begats" is too numerous to chronicle but the first set are illuminating.

Among the very first "front organizations" of the Volker Fund was the "National Book Foundation". While the Foundation's affiliation to the Volker Fund was not hidden, it was circumspect enough to suggest, even to most "Libertarians", that it was independent. The fund began modestly enough by distributing free copies Eugene Böhm-Bawerk's works to thousands of libraries and universities across the country. As the Volker efforts geared up, the Foundation began to distribute millions of books from dozens of authors, all coming from the Fund's stables. Many educational "incentives" were initiated such as "teach a course on Hayek, get 10 (or 100) textbooks for free"...

The Foundation for Economic Education was spun out in 1946, under the leadership of Leonard Read, a leading figure in the Chambers of Commerce. The grand-daddy of all libertarian "think-tanks", the FEE initiated the original Mont Pelerin Society meetings. Its own publication, The Freeman, became the founding journal of "Libertarianism". The rent was paid by Volker.

The Institute for Humane Studies was created by Floyd "Baldy" Harper, the "ace recruiter" of the Volker Fund, in 1961. The IHS identified and subsidized "bright young students" and "promising scholars" friendly to the new "Libertarian" doctrine. Not only did the IHS fund thousands of "students", but it spawned dozens of similar organizations throughout the world. After the Volker Fund was finally closed, subsidies for the IHS shifted to some of the most reactionary organizations in America: The Scaife Foundation, Koch Family Foundations, The Bradley Foundation, and the Carthage Foundation.

The Intercollegiate Studies Institute was founded in 1953 to combat what they would eventually call "political correctness" and "'left-bias" in colleges and universities. The organization now consists of 50,000 college students and faculty and through its lavish subsidies, sponsors dozens of programs representing the entire spectrum of right-wing "Libertarian" causes. The first president of the ISI was a young William F. Buckley Jr.

The Earhart Foundation was created by and named for Richard Earhart of White Star Oil, one of Volker's original collaborators in the National Association of Manufacturers. This foundation was used to subsidize various émigrés and not only financed Hayek but also Eric Voegelin, yet another "Austrian". Through Voeglin, the Earhardt Foundation became connected with the infamous Leo Strauss and, since then, various "projects" of not just a "libertarian" but of a "neo-conservative" perspective have been beneficiaries of the Foundation. In addition, The Earhart Foundation helped to pioneer still another use of the newly-emergent Libertarian think-tanks. As the network of these think-tanks grew, they undertook not only to promote ideology but also specific points of policy, particularly in support of private corporations. The culmination of the Foundation's efforts in this direction came with the founding of the George C. Marshall Institute in 1984. The Institute was initially a foremost proponent of the Strategic Defense Initiative (SDI), heavily promoted by the Defense Industry....The CEO of the Institute is currently a registered lobbyist for ExxonMobil.

Through the list of organizations, above, the Volker Fund's near-biblical "begats" encompass nearly every single prominent individual and organization of the "Libertarian" and "New Conservative" movements of today.

The Not-So-Secret Society

"In 1947, 39 scholars, mostly economists, with some historians and philosophers, were invited by Professor Friedrich Hayek to meet at Mont Pelerin, Switzerland, and discuss the state, and possible fate of classical liberalism and to combat the "state ascendancy and Marxist or Keynesian planning [that was] sweeping the globe". Invitees included Henry Simons (who would later train Milton Friedman, a future president of the society, at the University of Chicago); the American former-Fabian socialist Walter Lippmann; Viennese Aristotelian Society leader Karl Popper; fellow Austrian School economist Ludwig von Mises; Sir John Clapham, a senior official of the Bank of England who from 1940-6 was the president of the British Royal Society; Otto von Habsburg, the heir to the Austro-Hungarian throne; and Max von Thurn und Taxis, Bavaria-based head of the 400-year-old Venetian Thurn und Taxis family."

If the above rings of "Bohemian Grove" and similar fodder for conspiracies, it is because informal "retreats" at out-of-the-way resorts are one of the favorite methods by which the wealthy of many countries formulate a common international policy. What distinguishes the Mont Pelerin Society, however, is that it did not consist primarily of the wealthy. Instead, it was comprised of a majority of marginal, thread-bare "scholars", united only by their common hatred of "socialism" and Keynesianism (which were one and the same for most of them) and sprinkled with only a handful of rich patrons and journalists. In fact the Mount Pelerin Society was organized as much by the Volker Fund as by Hayek himself and the Foundation paid the way for all 10 of the American "participants".

Once in Switzerland, the "scholars" agreed on their hatred of "socialism" but on little else except to meet yearly to "facilitate an exchange of ideas between like-minded scholars in the hope of strengthening the principles and practice of a free society and to study the workings, virtues, and defects of market-oriented economic systems."

From this not-so-secret-but-thoroughly-right-wing society's more than humble beginnings, the phoenix of laissez-faire capitalism would rise, propelled skyward by unlimited funds. Over a dozen of the scholars who could not previously get a job, a review, or a book deal would go on to win the "Nobel Prize in Economics" (this "epic" story will be told separately). More importantly, the Mont Pelerin Society would itself beget 500 foundations and organizations in nearly 80 countries... again with strategic contributions from Mr. Anonymous. Once transformed into an "international movement", there was no end to what was possible. One example tells the story.

Initiated at Mont Pelerin and copying the FEE, the Institute of Economic Affairs (IEA) was created in London in 1955. Serving as a conduit for both cash and "ideas", the IEA set about the task of "rejuvenating" the dead and decaying British Tories. By 1985, the "Iron Lady", Margaret Thatcher, would positively gush on the occasion of the Institute's 30th Anniversary: "You created the atmosphere which made our victory possible... May I say how thankful we are to those who joined your great endeavor. They were the few, but they were right, and they saved Britain." With that, the IEA begat the Atlas Economic Research Foundation, which in turn created a network of over 50 "think-tanks" in more than 30 countries.

[Continued...]

----------------------------------

Note: In my view, a more accurate title for the above essay would be, "Mr. Anonymous and the Not-So-Spontaneous Birth of the Royal Libertarian Movement."

Also, notice how it dovetails with the following four-part interview of Webster Tarpley:

       

       

       

       
« Last Edit: November 18, 2010, 02:40:26 pm by Geolibertarian » Report Spam   Logged

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« Reply #2 on: August 25, 2010, 06:19:27 pm »

Although I strongly disagree with him on several key issues -- e.g., gun control, compulsory schooling, the rose-colored glasses through which he views Keynesian economics and debt-based money, etc. -- I nevertheless generally agree with much (though far from all) of what Steve Kangas has to say in critique of the Austrian School.

Below are two criticisms I particularly agree with:

----------------------------------

http://www.huppi.com/kangaroo/L-gold.htm

Myth: The gold standard is a better monetary system.

Fact: The gold standard causes deflation and depressions.

. . . .Gold bugs argue that we don't need to adjust the size of the money supply to match the level of economic activity -- the value of money will automatically adjust itself to the level of economic activity. Here's how it works. Suppose three people live in a village, and they have 100 gold coins among them. And suppose this covers 100 units of work. A loaf of bread may require five units of work, and therefore cost five gold coins. Now suppose that their economy grows to 120 units of work. There are two ways for the money supply to adjust to this new activity. The villagers could simply add 20 more coins to their money supply, so they now have 120 coins. Or they could let the value of the coins increase.

How would that work? Well, suppose the extra 20 units of work is being produced by just one of the three villagers. Obviously, he is eager to sell his product, just as the other two are eager to buy it. But no one can afford the sale, because there is insufficient money. So they artificially "create" money by lowering their prices for all their other goods, to increase their savings so they can buy it. For example, a loaf of bread still requires five units of work, but they may lower its price from five to four gold coins. The extra gold coin can now be used towards the purchase of the new product. This process is called deflation.

Prices do indeed inflate and deflate in this way. The problem is that this process is terribly inefficient. In real economies, prices tend to be "sticky" -- that is, enormously resistant to change. (At least in a downward direction. In an upward direction, they climb easily. This is good if you want to fight inflation, bad if you want to fight unemployment and recessions.)

There are several reasons for price stickiness. One is psychological -- people hate to cut their prices and wages. Another is that salaries and wages are often locked into contracts, the average of which is three years. And for many, raising prices incurs certain costs (reprinting, recalculating, reprogramming, etc., not to mention a dip in business) that may not make the price change seem worth it. Even if they do decide to change prices, it takes many companies quite some time to put them into effect. Sears, for example, has to reprint and remail all its catalogues. But perhaps the most important reason is that in a big and complex economy, people just don't realize at first when goods start becoming excessive on the market, and the glut may have to reach severe proportions before people notice it and take action.

Price stickiness means that the value of money is slow to adapt to changing economic conditions. Economists have found it much faster and simpler just to expand the money supply and cut the recession short. The Great Depression, for example, dragged on for ten years, with the natural deflation of money proceeding at a glacial pace. It wasn't until World War II that the government was forced to conduct a massive monetary expansion (to fund its defense spending). The result was such explosive economic growth that the U.S. economy doubled in size between 1940 and 1945, the fastest period of growth in U.S. history. Another example is Japan in the 1990s. Its economy has stagnated for five years now, and many economists have criticized its government for not doing enough to expand the money supply. But whatever the solution, the important point is that Japan's government has done very little, and its economy has not deflated or adjusted itself -- Japan's economic pain continues five years later. . . .

Bitter controversy over the gold standard was a hallmark of the Gilded Age. It was widely regarded as a tool of the rich. Democratic presidential candidate William Jennings Bryan spoke for the poor when he charged, famously, that "You shall not crucify mankind upon a cross of gold." The U.S. suffered three depressions during the Gilded Age, and the gold standard and its bank panics were often held to blame.

Throughout this era, the value of gold was fixed at a certain price. One U.S. dollar, for example, was defined as 23.22 grains of pure gold. A British pound sterling was defined as 113.00 grains of pure gold. This meant that the total value of a nation's money supply was determined by the size of its gold reserves. Furthermore, fixed rates meant that international exchange rates were also fixed. In other words, the world operated under a single, unified monetary system. One British pound always equaled 4.8665 U.S. dollars (113.00/23.22), at least according to the official rate. The actual rates might fluctuate, due to the shifting supply and demand of international trade, but the nations set up a system to make sure that they never fluctuated too far from the official rate. This system was rather complex, but basically it kept exchange rates stable and close to the official rate by making sure that nations with trade deficits paid their bills quickly and directly in gold.

But there were economic consequences to such a system. Suppose Britain ran up a trade deficit with the U.S., and promptly paid in gold. The U.S. money supply would expand, and its economy would experience a mixture of inflation and growth. Conversely, the British money supply would shrink. Theoretically, this should have resulted in deflation, but in practice it resulted in widespread unemployment, due to price stickiness. Therefore, outflows of gold from a country were often very painful to its economy. And when people learned that gold was leaving the country, they often conducted bank runs, trying to withdraw their gold before it ran out. Thus, the Gilded Age was replete with bank panics and failures.

The Gilded Age was brief, lasting from the 1870s to 1914, when World War I broke out. During the war, nearly all nations either placed restrictions on gold convertibility or issued non-convertible paper money. But one of their top priorities after the war was the recreation of the full gold standard. It took several years before they succeeded. Britain restored its gold standard in 1925, but in an act of folly, made the pound worth $4.86 again in U.S. dollars -- its old, pre-war parity. Unfortunately, the pound was overvalued at this price now, due to changes in the price of gold, and Britain subsequently experienced a drastic outflow of gold. Again, severe unemployment was the result, not the expected deflation. Britain would struggle with unemployment for the rest of the decade.

By 1928, all the major currencies and most of the minor ones had returned to the gold standard. But the coming Great Depression would lay bare all its disadvantages. A unified monetary system meant that no nation could protect itself from a disaster that occurred in another nation. When the depression struck in the U.S., it quickly ricocheted across the Atlantic. In the U.S., two gigantic bank runs caused over 10,000 bank failures. So many people were left holding worthless banknotes that the money supply shrank by about a third -- a catastrophic reduction.

When Roosevelt took office in 1933, unemployment had soared to nearly 25 percent. His inauguration took place literally in the middle of a third bank panic. Roosevelt stopped it in its tracks by doing something novel: he intervened. He declared a "banking holiday" that closed banks to the public for eight days, to prevent further withdrawals. During that time, the banking system was reorganized. When banks finally reopened, banks deposits actually exceeded bank withdrawals. It was a tremendous political success for Roosevelt, and America's last bank run. Later under the New Deal, bank deposits would become insured by the federal government.

After the Great Depression struck, the world wasted little time severing its ties to gold. Britain left the gold standard in 1931, as did the U.S. in 1933. By 1937, not a single country remained on the gold standard. After World War II, the U.S. partially restored the gold standard for international trade. And to prevent citizens from bank panics, it made its currency inconvertible at home. In 1971, a diminishing gold supply and growing deficits caused the U.S. to suspend the gold standard even for international trade. Ever since, international trade has been based solely on the dollar and other paper currencies. Today, there are no mainstream economists who call for a return to the gold standard; it is widely regarded as a fringe idea of the radical right.

[Continued...]


http://www.huppi.com/kangaroo/L-ausmon.htm

MONOPOLIES

Austrians believe that the government destroys the market process for several reasons. Rockwell writes:

    "One obvious example… takes place at the Justice Department's antitrust division. There the bureaucrats pretend to know the proper structure of industry, what kind of mergers and acquisitions harm the economy, who has too much market share or too little, and what the relevant market is. This represents what Hayek called the pretense of knowledge.

    "The correct relationship between competitors can only be worked out through buying and selling, not bureaucratic fiat. Austrian economists, in particular Rothbard, argue that the only real monopolies are created by government. Markets are too competitive to allow any monopolies to be sustained."

The claim that governments cause monopolies defies the historical evidence. History actually shows the opposite: the more unregulated the market is, the worse the problem of monopolies.

However, the Austrian claim is not wholly without merit. Utilities are examples of monopolies run or regulated by the government (although they are natural monopolies, and privatizing them doesn't work, as Britain found out in the 80s). Often companies persuade governments to erect barriers of market entry to potential competitors. Sometimes government subsidies allow one company to overpower its competitors. But such cases are usually the result of money-based lobbying, which is a corruption of the system. Corruption in the public sector no more "refutes" its central principle than does corruption in the private sector. The solution to corruption is to eliminate it by enforcing better laws. European democracies offer broad practical evidence that this sort of corruption can be greatly reduced.

But this Austrian critique completely ignores another, more common type of monopoly: that which forms naturally on the unregulated market. There are many reasons for this tendency, ranging from "it takes money to make money" to the greater efficiency of large corporations. Without antitrust laws or some other countervailing market force, growing companies will not stop until they become monopolies or oligopolies.

The height of monopoly growth and abuse in the U.S. coincided with its greatest period of laissez-faire, or government nonintervention in the market. Known as the Gilded Age (the period between the Civil War and World War I), this period saw the phenomenal rise of the Robber Barons and their great trusts (monopolies). John D. Rockefeller monopolized oil under his Standard Oil Company; J.P. Morgan dominated finance; Andrew Carnegie, steel; James Hill, railroads. Historians have well chronicled the ruthlessness of these men -- Morgan once remarked that "I don't know as I want a lawyer to tell me what I cannot do. I hire him to tell me how to do what I want to do." Rockefeller's father once boasted that "I cheat my boys every chance I get, I want to make 'em sharp." These men lived for market conquest, and plotted takeovers like military strategy.

In the late 19th century, trusts formed also in wheat, fruit, meat, salt, sugar refining, lumber, electrical power, rubber, nickel, paper, lead, gypsum, iron, cottonseed oil, linseed oil, whiskey distilling, cord manufacture -- and many others. Once a trust emerged, it would raise its prices and drop its quality of service, as well as engage in unfair trading practices that drove other firms out of business. The abuses of these monopolies became so great that they became a national scandal. So deep was antitrust sentiment that when both houses of Congress passed the Sherman Antitrust Act in 1890, there was only a single dissenting vote! But U.S. presidents did not bother to enforce it, and the monopoly problem continued to worsen.

The worst period of monopoly formation was between 1898 and 1902. Prior to this, there was an average of 46 major industrial mergers a year. But after 1898, this soared to 531 a year. By 1904, the top 4 percent of American businesses produced 57 percent of America's total industrial production, and a single firm would dominate at least 60 percent of production in 50 different industries. The power of these monopolies easily dwarfed the governments that oversaw them. As early as 1888, a Boston railroad company had gross receipts of $40 million, whereas the entire Commonwealth of Massachusetts had receipts of only $7 million. And when Rockefeller, Carnegie and Morgan united in 1901 to create U.S. Steel, the result was an international sensation. Cosmopolitan magazine wrote:

    "The world, on the 3rd day of March, 1901, ceased to be ruled by… so-called statesmen. True, there were marionettes still figuring in Congress and as kings. But they were in place simply to carry out the orders of the world's real rulers -- those who controlled the concentrated portion of the money supply."

The role of government in all this was to stand back and let this market process happen. It wasn't until Teddy Roosevelt launched his great "trust-busting" campaign in 1902 that this process was reversed. Actual enforcement of the Sherman Act reduced monopolies until the Roaring 20s, when laissez-faire policies again returned to Washington. Over that decade, about 1,200 mergers swallowed up more than 6,000 previously independent companies; by 1929, only 200 corporations controlled over half of all American industry. The New Deal era ushered in yet another era of antitrust policy, again reducing the percentage of monopolies. This was followed by the Reagan era, a period which saw both massive deregulation and another frenzy of mergers and takeovers. In 1988, Federal Trade Commissioner Andrew Strenio remarked:

    "Since Fiscal Year 1980, there has been a drop of more than 40 percent in the work years allocated to antitrust enforcement. In the same period, merger filings skyrocketed to more than 320 percent of their Fiscal Year 1980 level."

Two objections are possible here. The first is that these growing corporations may have captured government and then used it as a tool to capture the market. Those familiar with the Golden Age and Roaring 20s know, however, that governments were basically bribed to stand back and do nothing. They passed very little legislation that actively prevented any firms from entering the market and competing. The Reagan era was different, in that corporate lobbyists began using government as a proactive agent to discourage competition. Nonetheless, the periods of government trust-busting show the proper role of government, and its effectiveness in restoring market competition.

The second objection is that a wave of mergers may result in a more natural and efficient equilibrium of larger players, and this could be beneficial for the economy. The result doesn't have to be a monopoly -- perhaps just an oligopoly. The problem is that at the top end, mergers become increasingly harmful to the economy, with monopolies merely representing the worst result. Even oligopolies engage in price-gouging and collaboration. A natural equilibrium hardly represents the best equilibrium -- as recessions and depressions show.

How do Austrians deal with the historical correlation between laissez-faire and monopolies? By denying it, of course. The presence of any government at all proves that their conditions of a free market were not met, so the entire correlation is rejected. This is like someone attempting to argue that not watering a plant will result in the fastest growth. And when you point out to him that there is a correlation between the amount of water given to a plant and its rate of growth, he dismisses these experiments on the basis that they all used water.

----------------------------------
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« Reply #3 on: August 25, 2010, 06:20:54 pm »

So, if Marxist, Keynesian, and Austrian School economics, respectively, are not the only options, then what else is there?

There are several other options from which to choose. Webster Tarpley, for instance, advocates the so-called "American School" of economics (which I partly agree with).

I, on the other hand, advocate Georgism:

-----------------------------------

http://www.politicaleconomy.org/gaffney.htm

Excerpts from The Corruption of Economics

by Mason Gaffney

Neo-classical Economics as a Stratagem against Henry George

Neoclassical economics is the idiom of most economic discourse today. It is the paradigm that bends the twigs of young minds. Then it confines the florescence of older ones, like chicken-wire shaping a topiary. It took form about a hundred years ago, when Henry George and his reform proposals were a clear and present political danger and challenge to the landed and intellectual establishments of the world. Few people realize to what a degree the founders of Neoclassical economics changed the discipline for the express purpose of deflecting George and frustrating future students seeking to follow his arguments. The stratagem was semantic: to destroy the very words in which he expressed himself. Simon Patten expounded it succinctly. "Nothing pleases a ... single taxer better than ... to use the well-known economic theories ... [therefore] economic doctrine must be recast" (Patten 1908: 219; Collier, 1979: 270).

George believed economists were recasting the discipline to refute him. He states so...in his posthumously published book, The Science of Political Economy (George, 1898: 200-209). George's self-importance was immodest, it is true. However, immodesty may be objectivity, as many great talents from Frank Lloyd Wright to Muhammad Ali and Frank Sinatra have displayed. George had good reasons, which we are to demonstrate. George's view may even strike some as paranoid. That was this writer's first impression, many years ago. I have changed my view, however, after learning more about the period, the literature, and later events.

Having taken shape in the 1880-1890s, Neo-Classical Economics (henceforth NCE) remained remarkably static. Major texts by Alfred Marshall, E.R.A. Seligman and Richard T. Ely, written in the 1890s, went through many reprintings each over a period of 40 years with few if any changes….

Not until 1936 was there another major "revolution," and that was hived off into a separate compartment, macro-economics, and contained there so as not to disturb basic tenets of NCE. Compartmentalization, we will see in several instances, is the common NCE defense against discordant data and reasoning. After that came another 40 years of Paul Samuelson’s “neoclassical synthesis.” J.B. Clark’s treatment of rent, dating originally from his obvious efforts to refute Henry George (see below), “has been followed by an admiring Paul Samuelson in all of the many editions of his Economics” (Dewey, 1987: 430).

Clark's capital theory "... gives the appearance of being specially tailored to lead to arguments for use against George" (Collier, 1979: 270). "The probable source from which immediate stimulation came to Clark was the contemporary single tax discussion" (Fetter, 1927: 142). "To date, capital theory in the Clark tradition has provided the basis for virtually all empirical work on wealth and income" (Dewey, 1987: 429; cf. Tobin, 1985). Later writers have added fretworks, curlicues and arabesques beyond counting, and achieved more isolation from history, and from the ground under their feet, than in Patten's dreams, but all without disturbing the basic strategy arrived at by 1899, tailored to lead to arguments against Henry George.

To most modern readers, probably George seems too minor a figure to have warranted such an extreme reaction. This impression is a measure of the neo-classicals' success: it is what they sought to make of him. It took a generation, but by 1930 they had succeeded in reducing him in the public mind. In the process of succeeding, however, they emasculated the discipline, impoverished economic thought, muddled the minds of countless students, rationalized free-riding by landowners, took dignity from labor, rationalized chronic unemployment, hobbled us with today's counterproductive tax tangle, marginalized the obvious alternative system of public finance, shattered our sense of community, subverted a rising economic democracy for the benefit of rent-takers, and led us into becoming an increasingly nasty and dangerously divided plutocracy.

The Imperative to Put Down Henry George

Neo-classical economics makes an ideal of "choice." That sounds good, and liberating, and positive. In practice, however, it has become a new dismal science, a science of choice where most of the choices are bad. "TANSTAAFL" (There Ain't No Such Thing As A Free Lunch) is the slogan and shibboleth. Whatever you want, you must give up something good. As an overtone there is even a hint that what one person gains he must take from another. The theory of gains from trade has it otherwise, but that is a heritage from the older classical economists.

Henry George, in contrast, had a genius for reconciling-by-synthesizing. Reconciling is far better than merely compromising. He had a way of taking two problems and composing them into one solution, as we lay out in detail below.

[Continued...]


http://www.monetary.org/henrygeorgeconceptofmoney.htm

HENRY GEORGE’S CONCEPT OF MONEY
And Its Implications For 21st Century Reform

by Stephen Zarlenga
American Monetary Institute
2001

Preface and Synopsis:

Attesting to the importance of Henry George’s life and work are his 5 million books in print; the active Henry George organizations and schools around the globe with thousands of supporters and uncountable others who still respond to his name with “Oh yes - the single tax”. A man considered important enough to require the attention of one of the political establishment’s most potent operators to derail his 1886 campaign for Mayor of New York City. George was influential enough to merit that POPE LEO XIII direct a section of a Papal encyclical at his work in 1891.

This kind of effect, I’d suggest, was not generated by the economic theorizing or theoretical observations of any individual or school, but has resulted from what was really a great moral crusade for economic justice.

To George, the land question was the key means to that end, and his name is rightfully associated with land tax reform -- with the “single tax”, described below. But although that was his main focus, there was a lot more to George than that. As Ken Wenzer pointed out “An important element of Georgism was reform of the banking and monetary system”  That’s the main focus of this paper.

My task has been to find and present George’s monetary views, within the context of his own times and values; and to evaluate their relevance to present day questions. A task made more complex by the confusion and misinformation in which the monetary subject has traditionally been shrouded. For this reason it was necessary to organize the paper into several steps. Step one describes George’s major views and values; step two describes the real monetary context of his time, separating out the monetary myths. George’s explicit monetary views are presented in step three. Step four draws some “Georgist” conclusions on monetary reform today and offers suggestions for consideration.

This study was proposed because several years ago on first reading George, I found indications that his monetary views might have been quite advanced and potentially relevant to present day arguments over the proper monetary role of government. This research has confirmed that -- to a much larger and clearer extent than I had imagined.

His monetary viewpoint may be especially important to the divergent monetary prescriptions advocated from participants within the present day Georgist movement. Some prominent Georgists advocate a move to “free banking”; a quite radical change from our present monetary system. Other prominent Georgists advocate the establishment of a gold standard. Some support establishing forms of locally circulating moneys often referred to as LETS (Local Exchange Trading Systems). An awareness of George’s viewpoint could be an important factor in such discussions.

The conclusion of AMI’s monetary research to date is that such monetary systems cannot be reconciled with two of George’s overriding requirements: that social institutions be consistent with individual self-determination; and with the principle of equal rights.

True monetary reform must take a better path. AMI’s research indicates that money, properly defined, is a legal institution of society and government, not a commodity or economic good of the markets; that if money is a legal institution, then the control of monetary systems can be rightfully viewed as a proper function of government; much as the law courts are. This broad definition or attribute of money leads directly to conclusions on what is needed for a monetary system to operate justly; not favoring one or another group through the establishment of special monetary privileges. This study finds (repeatedly in his own words) that Henry George in large part shared this view.

This viewpoint does go counter to the current idolization of free markets, and the faith being placed in them to automatically create optimum results for mankind. But the overwhelming body of historical evidence that we’ve studied indicates that while some things can and should be left to free markets, a society’s monetary system is emphatically not one of them.

This was the reason suggested by AMI to the Schalkenbach Foundation, that we do this study rather than just requesting others much better versed in Henry George’s work to simply look up what he wrote about money. His monetary views need to be examined in the light of their implications for present day questions. The local currency advocates would find some very limited support from George’s actions. The free bankers and the gold advocates would probably both tend to characterize George’s monetary position as primitive. But according to AMI’s research, this is a misreading -- perhaps not so much of George’s views, but of monetary theory -- of the nature of money.

GEORGE’S WORLD VIEW

We now step back a bit from our monetary topic to note the major aspects of George’s work which will later help place his monetary ideas into context. Bear with me -- those of you who know George like the back of your hand. This paper does not assume the reader is well versed in his work.

THE MORAL CRUSADER

“(Political Economy) may be argued in a great many different ways, but I prefer the ground that its opponents have taken, the ground of justice. I believe that justice is the supreme law of the universe”, wrote Henry George

One of George’s important accomplishments was the re-introduction of moral issues into economic thought. From Adam Smith’s Wealth Of Nations (1776) and earlier, there had been a tendency for moral questions -- evaluation of the right or wrong -- the good or evil of economic policies to be largely ignored or shunted aside and replaced by a questionable utilitarianism which generally ended up supporting the status quo of the power structure.

Thus Ingram wrote of Adam Smith that “He does not keep in view the moral destination of our race, nor regard wealth as a means to the higher ends of life.”

One of Smith’s contemporaries -- economist Reverend Thomas Malthus -- twisted morality to preach that the poor must choose between what he called “vice” -- having children and therefore engaging in sex -- or starvation. Economics rightly earned the title of “the dismal science”.

In The Scholastic Tradition

But there is nothing dismal about George’s writings, which can be seen as in the much older tradition of the Catholic “Scholastics” or “Bookmen” -- the church scholars of about 1100 to 1500 AD who were very familiar with the existing written works available in the west. The Scholastics made the first attempt at a science of economics to build a rationally based moral code of business behavior and determine what should be, rather than what was. To their credit, they were much more influenced by Aristotle than by the bible, and many of them such as Albert the Great of Cologne and his student Thomas Acquinas were later canonized as saints.

Though George was generally well read, I didn’t find indications that he was aware of this body of work which has become better known in the English speaking world since the 1940’s.  When George uses the term “Scholastic” it is to refer negatively to the university economists of his day.

While the content of George’s work differed greatly from that of the Scholastics, their form was very similar. George did not focus on the issues of concern to the Scholastics -- mainly usury, and the “just price” -- but he would have probably felt very much at home with their method, and especially with their deep concern for justice. Their method -- a reliance largely on theoretical reasoning -- is useful for investigating questions of morality, but not as useful in determining questions of fact or of utility. Interestingly, most 19th and 20th century economists continued using the Scholastics theoretical method, but ignored the moral questions and inappropriately applied it to other matters. George, concentrating on moral issues, generally avoided this error.

GEORGE’S GUIDING PRINCIPLES

Also diverging from the Scholastics was the manner in which George’s guiding principles were framed. The great goal of justice was shared by both, but the Scholastic’s aims were more socially oriented -- a just order of society, in conformity with reason, observation, tradition and law -- natural, human, and sacred law. George’s primary guidelines on the other hand, are framed in a much more individualistic fashion.

The two core principles which are George’s anchors, are evident -- and explicit -- throughout his writings:  The principle of equal rights, and of individual self determination. George expresses this as “The law of human progress…the moral law…the equality of right between man and man …(and) the perfect liberty which is bounded only by the liberty of every other…” (P&P, 526).

[Continued...]

-----------------------------------
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« Reply #4 on: August 25, 2010, 06:23:18 pm »

If I had to pick a label other than "geolibertarian" with which to describe myself ideologically, it would be progressive libertarian -- "libertarian" in the sense that I advocate limited government on both personal and economic issues, "progressive" in the sense that I believe efforts to reduce government spending should be directed at programs designed to assist the poor only to the extent that the tax, monetary and regulatory policies that created the apparent need for such programs in the first place are either abolished outright or structurally reformed.

If I were a Congressman, for instance, I would oppose efforts to repeal the minimum wage so long as Congress insisted on taxing wages to death. I would oppose cutting Medicare spending so long as Congress refused to relegalize alternative medicine (including medical ****) and revoke overextended drug patents (particularly those granted for "me-too" drugs and for drugs developed primarily at taxpayer expense). I would oppose cutting individual welfare so long as Congress insisted on wasting nearly $100 billion a year on corporate welfare. I would oppose cutting tax-funded job training programs so long as state governments refused to reduce occupational licensing barriers (see this and this).

The underlying principle of my approach to economic issues in general is crystallized in the following quote:

    "Social injustice, therefore, prevails, not on account, nor in spite, of Individualism, but through the absence of Individualism, through the active and passive disregard of equal individual freedom by the State. The removal of social injustice, therefore, is not to be obtained by still further interference with equal individual freedom, and still less by the abolition of individual freedom which Socialism contemplates; it can be obtained only by the removal of all interferences with individual freedom which exceeds that necessary for the maintenance of equal freedom for all.

    "This conclusion is not invalidated by the admission that remedial measures involving further restrictions of individual freedoms...may have had beneficial results. For if State limitations of individual and equal freedom have deprived the majority of the people of independence and power to resist capitalistic oppression, as they have done and are still doing, restrictions placed upon the oppressors, otherwise unnecessary, may to some extent alleviate the oppression. Nevertheless, it is clear that such consequential interferences would be unnecessary if, through the removal of the original interferences, the balance of power were restored. At their best, moreover, they are merely attempts to alleviate symptoms without touching the cause of social disease."

-- Max Hirsch, Democracy vs. Socialism, pp. 254-5


Now, to fully understand and appreciate the progressive libertarian approach to public policy reform, one must understand the issue of privilege:

---------------------------------------

http://savingcommunities.org/issues/

Privilege

Behind all issues lies the problem of privilege -- legal mechanisms that give some people artificial advantages over others, enabling them to enrich themselves at the expense of others. Political privileges give leverage in the political system, ultimately conferring a political monopoly over others. Economic privileges are similarly leveraged over time into economic monopoly.

Three privileges stand out. The core political privilege is the way we choose leaders. What was supposed to be citizens deliberating and choosing officials to serve them has degenerated into a competition by those who want more and more political power over a largely passive electorate. The economic privileges are a land tenure system that allows some people to monopolize the earth and its resources and a monetary system that lets private institutions lend money that was created out of nothing into circulation.

Other economic privileges include privately owned public utilities, monopoly franchises, over-extended intellectual property laws, subsidies, artificial restrictions on competition, and policies that benefit established businesses to the detriment of potential new competitors.

They tie together because people with economic privileges help those in office keep their political privileges and those in office reciprocate.

[Continued...]

---------------------------------------

Royal libertarians (of which Austrian Schoolers are a subset) are fond of railing against the "welfare state" that was instituted by FDR and then expanded by LBJ. Yet what they refuse to acknowledge is what created in the minds of the masses the apparent need for a welfare state in the first place.

It was the original layer of economic privileges that had been bestowed to the rich -- and the horrid economic conditions to which that original layer had, in turn, given rise -- that created the widespread demand for all of these additional layers of compensatory and/or offsetting privileges for the poor.

---------------------------------------

"This imperfect policy of non-intervention, or laissez-faire, led straight to a most hideous and dreadful economic exploitation; starvation wages, slum dwelling, killing hours, pauperism, coffin-ships, child-labour -- nothing like it had ever been seen in modern times....People began to say, perhaps naturally, if this is what State absentation comes to, let us have some State intervention.

"But the State had intervened; that was the whole trouble. The State had established one monopoly, -- the landlord's monopoly of economic rent, -- thereby shutting off great hordes of people from free access to the only source of human subsistence, and driving them into the factories to work for whatever Mr. Gradgrind and Mr. Bottles chose to give them. The land of England, while by no means nearly all actually occupied, was all legally occupied; and this State-created monopoly enabled landlords to satisfy their needs and desires with little exertion or none, but it also removed the land from competition with industry in the labour market, thus creating a huge, constant and exigent labour-surplus." [Emphasis original]

-- Albert Jay Nock, Free Speech and Plain Language, pp. 320-1

---------------------------------------

As they say, a picture speaks a thousand words. And although I generally support limited government and free enterprise (I'm a Georgist on economic matters, not a Marxist), I nevertheless think the following image accurately reflects both the corporate monstrosity that laughingly passes for "capitalism" these days and the plutocracy that laughingly passes for "democracy."



And as Max Hirsch correctly points out, if the "original" privileges were simply eliminated, then socioeconomic conditions would so improve that there would soon thereafter cease to be a widely perceived need for all of the bureaucracy-ridden additional ones -- at which point they could be easily and gracefully phased out of existence and replaced with a Guaranteed Income (see this).

Thus, the difference between progressive libertarians and royal libertarians is that the latter want to start abolishing privileges at the bottom of the power pyramid and work their way upward (and even then only to a point), whereas the former want to start at the top and work their way downward.
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« Reply #5 on: August 25, 2010, 06:25:18 pm »

Below are two excellent essays, both written from a progressive libertarian angle:

------------------------------------

http://www.cooperativeindividualism.org/omara-mike_ethics-beyond-left-and-right.html

Ethics Beyond Left and Right: Progressive Freedom-oriented Policies

by Mike O'Mara

Many prominent advocates of rationalism and freethought have gone beyond "left" and "right," by promoting progressive, freedom-oriented policies as rational, practical alternatives to bureaucratic governments controlled by special interests. Governments dominated by special interests are typically inefficient and wasteful, and tend to enact counterproductive laws favoring the few while harming most citizens, resulting in poverty and extreme inequality.

Among those who have advocated such alternative policies are Thomas Paine, Thomas Jefferson, and John Stuart Mill. Other more recent rationalists and freethinkers have endorsed similar progressive, freedom-oriented policies as a more practical, humane alternative to the failed policies of "left" and "right."

This essay will discuss two wings of the movement promoting freedom: progressive advocates of freedom and conservative advocates of freedom. Another term that could be used to describe progressive advocates of freedom might be "progressive libertarians," but use of the term "libertarian" is problematic. From about the 1950s, many people who are fundamentally economic conservatives have been claiming the term "libertarian," although they distort the original meaning of the word. While such conservative "libertarians" do tend to support civil liberties, they confuse economic freedom with economic conservatism, an outlook based on very different principles. As will be shown, genuine economic freedom requires freedom from corporate welfare (subsidies and other favoritism to corporations), freedom from policies that cause concentrated ownership of land and natural resources, and freedom from other policies that involve favoritism to special interests, leading to poverty for the many and to extreme inequality between the rich and the poor.

Many people are surprised to hear that the word "liberal" originally meant the same as "libertarian." Both come from the word "liberty." "Liberals" used to emphasize the need to limit the power of government, because, as the old and wise saying goes, "power corrupts." Liberals used to recognize that we need to limit the amount of power we give to politicians and government. The kind of liberals in that original tradition are now called "classical liberals." But too many of today's liberals seem to have forgotten the point that power corrupts, resulting in a modern liberalism that bears little resemblance to classical liberalism and its emphasis on liberty and suspicion of authority.

Although the terms "progressive libertarian" or "progressive classical liberal" might come close to describing the tradition of liberty as advocated by such progressive advocates of freedom as Paine and Mill, the common misuse of the words "libertarian" and "liberal" requires correction. This article will avoid these terms and will focus on the main points that distinguish progressive advocates of freedom from conservative advocates of freedom.

The Ethics of Government Power

Liberty is neither "left-wing" nor "right-wing." Instead of talking about "left" or "right," advocates of liberty have found it helpful to understand liberty in terms of "up" or "down, where "up" is toward individual liberty, and "down" is toward authoritarianism. Advocates of liberty base their ethics on the principle that no person should have the right to violate another person's freedom by initiating force against them or dealing fraudulently with them. Liberty is the opposite of authoritarianism.

The Bill of Rights was written by advocates of the ethics of individual liberty, and that document reflects the recognition that the form of government most likely to protect liberty is a constitutional democracy, a type of constitutional republic which places limits on the power of government. These limits are specified in the Bill of Rights.

Advocates of liberty insist that power corrupts, which is why governmental powers must be limited. George Washington expressed this view by observing that "Government is not beauty, it is not eloquence -- it is force. Like fire, it is a dangerous servant, and a fearful master." Every law made by government is ultimately backed or enforced by police power -- the use of government force. We should therefore be very careful how far we go in handing over power to politicians and government. Governments lacking proper limitations on their power can and do use the force of law and police power to make people do what the government decides they need to do or refrain from doing, including what they are allowed to say, publish, drink, smoke, believe, choose for entertainment, and how they may spend their money and live their lives.

Progressive advocates of freedom have pointed out that seeking to maximize liberty is the most practical approach to social issues. Liberty is like a truce: an agreement to allow people to have the right to freedom of religion, belief, and lifestyle, the right to keep the products of their own labor, the right to have access to the earth's natural resources (more about that in a moment), and the right to freely exercise one's values and preferences as long as one does not violate the same freedoms which others should also have. A progressive system of liberty is the most benevolent system because it not only prohibits violent forms of oppression and persecution, it also prevents economic oppression that arises from the concentration of economic power in special interests that seek governmental support for policies inconsistent both with liberty and efficiency.

No nation currently comes close to being consistent about upholding liberty, although some countries at least have more freedom than others. For example, the U.S. has usually tended to have more civil liberties than most other countries, but on the other hand, it still has many violations of civil liberties and many policies that violate economic freedom by favoring special interests.

The Two Wings of the Freedom Movement

As mentioned earlier, since about the 1950s, the word "libertarian" has been increasingly used by people who are really economic conservatives. Although they support the civil liberties specified in the Bill of Rights, they promote a distorted version of economic liberty. Many conservative advocates of freedom are unconcerned with cutting corporate welfare or avoiding favoritism to special interests, although some of them do speak out against such favoritism as a violation of economic freedom. The biggest difference between conservative advocates of freedom and progressive advocates of freedom is over the question of concentrated ownership of land and natural resources, including oil, mineral deposits, valuable urban land, and TV and radio airwaves, which are also natural resources.

Progressive advocates of freedom have emphasized that economic freedom requires limitations on the concentrated ownership of land and natural resources, since such concentrated ownership results in concentrated control over the rest of the economy. These ideas are found in the writings of Paine, Jefferson and Mill, and can also be found in the writings of Benjamin Franklin, Henry George, and Leo Tolstoy. More recently, eight Nobel Prize winning economists have advocated similar policies. Current organizations promoting a progressive idea of freedom include the Democratic Freedom Caucus and the Banneker Center for Economic Justice.

Conservative advocates of freedom include the Cato Institute and the Libertarian Party, which have both long avoided the basic issue of concentrated ownership of land and natural resources. The University of Chicago has also long been a center for the conservative wing of the freedom movement, and most Chicago School economists avoid these crucial issues. Later in this article, I'll have more to say about the differences between the two wings of the freedom movement.

[Continued...]


http://geolib.com/essays/sullivan.dan/greenlibertarians.html

Greens and Libertarians

The yin and yang of our political future

by Dan Sullivan
(originally appearing in Green Revolution, Volume 49, No. 2, summer, 1992)

Over the past three decades, people have become dissatisfied with both major parties, and two new minor parties are showing promise of growth and success. They are the Libertarian Party and the Green Party. These are not the only new parties, but they are the only ones that promise to attract people from across the political spectrum. Most other small parties are either clearly to the left of the Democrats or to the right of the Republicans. Such parties would have a place in a system that accommodates multiple parties, but are doomed to failure in a two-party system.

The Libertarian Party is made up mostly of former conservatives who object to the Republican Party's penchant for militarism and its use of government to entrench powerful interests and shield them from market forces. The Green Party is made up mostly of former liberals who object to the Democratic Party's penchant for centralized bureaucracy and its frequent hypocritical disregard for natural systems of ecological balance, ranging from the human metabolism and the family unit to the ecology of the planet.

Both minor parties attempt to adhere to guidelines that are much clearer than those of either major party. Libertarians focus on rights of individuals to control their own lives, limited only by the prohibition against interference with the rights of others. These rights include their right to the fruits of their labor and the right to freely associate and form contracts. They advocate limiting government to protecting those basic rights.

Greens advocate ten key values (ecological wisdom, grass roots democracy, social justice, non-violence, decentralization, community-based economics, post-patriarchal values, respect for diversity, personal and global responsibility, and sustainable future focus as a guide for government as well as for their own party organization.)

These different guidelines underscore basic differences between the approaches of the two parties and their members. Libertarians tend to be logical and analytical. They are confident that their principles will create an ideal society, even though they have no consensus of what that society would be like. Greens, on the other hand, tend to be more intuitive and imaginative. They have clear images of what kind of society they want, but are fuzzy about the principles on which that society would be based.

Ironically, Libertarians tend to be more utopian and uncompromising about their political positions, and are often unable to focus on politically winnable proposals to make the system more consistent with their overall goals. Greens on the other hand, embrace immediate proposals with ease, but are often unable to show how those proposals fit in to their ultimate goals.

The most difficult differences to reconcile, however, stem from baggage that members of each party have brought with them from their former political affiliations. Most Libertarians are overly hostile to government and cling to the fiction that virtually all private fortunes are legitimately earned. Most Greens are overly hostile to free enterprise and cling to the fiction that harmony and balance can be achieved through increased government intervention.

Republicans and Democrats will never reconcile these differences, for whatever philosophical underpinnings they have are overwhelmed by vested interests that dominate their internal political processes. These vested interests thrive on keeping the distorted hostilities alive and suppressing any philosophical perspectives that might lead to rational resolution of conflict.

But because minor parties have no real power, they are still primarily guided by values and principles. Committed to pursuing truth above power, they should be more willing to challenge prejudices and expose flaws in their current positions.

There is nothing mutually exclusive between the ten key values of the Greens and the principles of the Libertarians. By reconciling these values and principles, we can bring together people whose allegiance to truth is stronger than their biases.

This could be of great value to both parties, partly because any new party that wants to break into a two-party system has to appeal to a broad spectrum of voters. But even more importantly, each party needs attributes the other has to offer. Libertarians need the intuitive awareness of the Greens to keep them from losing touch with people's real values, and Greens need the analytical prowess of the Libertarians to keep them from indulging in emotional self-deception. Libertarians can teach Greens about the spirit of enterprise and the wonders of economic freedom, and Greens can teach Libertarians about the spirit of compassion and the wonders of community cohesion.

Reconciliation is absolutely necessary. Even if one of the parties could rise to power, it could do great harm by implementing its current agenda in disregard for the perspective of the other. Moreover, proposals that violate values and principles of one party often violate those of the other. If members of both groups come together to discuss each other's proposals, they are likely not only to find areas of agreement, but to find conflicts between each group's proposals and its own principles. If this happens, and the two parties work in concert, they stand a real chance of overtaking one of the major parties and drastically altering the political power structure.

Many third parties have had important impacts on American politics, but the last time a political party was dislodged was when the Republicans knocked the ailing Whig party out of contention over 130 years ago. It should be noted that the Republicans were a coalition of several minor parties with seemingly differing agendas, including the Abolitionist Party, the Free-Soil Party, the American (or Know-Nothing) Party, disaffected northern Democrats, and most of the members of the dying Whig Party. A similar coalition of parties has a much better chance of repeating this success today.

Anyone who looks at current national platforms of Greens and Libertarians will conclude that bringing these groups together is no easy task. For example, the Libertarian platform states dogmatically that they "oppose any and all increases in the rate of taxation or categories of taxpayers, including the elimination of deductions, exemptions, or credits in the name of 'fairness,' 'simplicity,' or 'neutrality to the free market.' No tax can ever be fair, simple, or neutral to the free market." On the other hand, the national platform of the Greens leaves one with the impression that they never met a tax they didn't like.

Yet the historical roots of the Greens and the Libertarians are quite similar. That is, early movements for alternative, intentional communities that live in harmony with nature greatly influenced, and were influenced by, anarcho-syndicalists who advanced principles now embraced by the Libertarian Party. This essay will attempt to show that the differences that have emerged are due less to stated principles and values of either group than to the baggage members have brought to each party from their liberal and conservative backgrounds.

On Conservatism and Liberalism

It is said that Libertarians have a conservative philosophy and Greens have a liberal philosophy. In reality, conservatism and liberalism are mere proclivities, and do not deserve to have the name "philosophy" attached to them. People who have more power than others are inclined to conserve it, and people who have less are inclined to liberate it. In Russia, as in feudal England, conservatives wanted more government control, as government was at the root of their power. Liberals wanted more private discretion.

In the United States today, where power has been vested in private institutions, conservatives want less government and liberals want more. What passes for conservative and liberal "philosophies" is merely a set of rationalizations that power-mongers hide behind.

Conservative support for traditional approaches and liberal support for new ways of doing things also follows from the desire for power. Traditional approaches have supported those now in power, and change threatens to disrupt that power. Changes are often embraced by conservatives once they prove unable to disrupt the underpinnings of power.

For Greens and Libertarians to rise above the power-based proclivities of liberalism and conservatism, they must focus on their roots and reconcile their positions with their philosophical underpinnings.

On the Roots of the Greens

In The Green Alternative, a popular book among American Greens, author Brian Tokar states that "the real origin of the Green movement is the great social and political upheavals that swept the United States and the entire Western world during the 1960's." As part of that upheaval, I remember the charge by elders that we acted as though "we had invented sex." Mr. Tokar acts as though we had invented Green values.

Actually, all the innovative and vital features of the Greens stem from an earlier Green movement. The influx of disaffected liberals to the movement since the sixties has actually imbued that movement with many features early Greens would find offensive.

This periodical, for example, has been published more or less regularly since 1943, calling for intentional communities based on holistic living, decentralism, sharing natural bounty, freedom of trade, government by consensus, privately-generated honest monetary systems and a host of other societal reforms. Yet the founder, Ralph Borsodi, wrote extensively about the evils of the state, and would clearly oppose most of the interventionist policies brought to the Green Party by disaffected liberals and socialists. The same can be said of more famous proponents of Green values, such as Emerson and Thoreau.

The Green movement grew slowly and steadily and quite apart from mainstream liberalism throughout the sixties and seventies. In the eighties, however, it became clear that the liberal ship, and even more clear that the socialist ship, was headed for the political rocks. The left had simply lost credibility, even among those who felt oppressed by the current system. Gradually at first, discouraged leftists discovered the Green movement provided a more credible platform for their positions.

Because of their excellent communications network, additional members of the left quickly discovered the Greens, embraced their values (at least superficially), joined their ranks and proceeded to drastically alter the Green agenda. For example, early Greens pushed for keeping economies more diverse and decentralized by promoting alternative, voluntary systems, and by criticizing lavish government expenditures on interstate highways, international airports, irrigation projects, and centralized bureaucracies that discriminated against small, independent entrepreneurs.

Today the National Platform of the Green Party calls for "municipalization" of industry (that is, decentralized socialism), limits on foreign trade to save American jobs (which they insist is not protectionism), and other devices to create artificial decentralization under the guiding hand of some benevolent central authority.

The influence of Greens who are fond of government intervention (referred to as "Watermelons" by more libertarian Greens) seems to be strongest at the national level and weakest within most Green local organizations. Despite the National Green Platform's resemblance to a new face on the old left, many people who are genuinely attracted to Green principles are either undermining or abandoning the left-dominated Green Party USA. Specifically, the principle of decentralism is being used to challenge the right of a national committee to dictate positions to local Greens. This is fortunate for those of us interested in a coalition of Greens and Libertarians, as reconciliation between the Green Left and libertarianism is clearly impossible.

On the Roots of the Libertarianism

The Libertarian Party was born in 1971. Like the Green Party, it has philosophical roots that extend far back into history. It emerged, however, at a time when conservatism was in decline. Just as Greens attract liberals today and are strongly influenced by the liberal agenda, Libertarians attracted conservatives and were influenced by their agenda. However, as Libertarians are more analytically rigorous, there are fewer blatant inconsistencies between their positions and their principles.

Libertarian bias tends to show up more in prioritization of issues than in any particular issue. For example, Libertarians are far more prone to complain about the capital gains tax than about many other taxes, even though there is nothing uniquely un-libertarian about that particular tax.

Many Libertarians ignore classic libertarian writings and dwell on the works of Ayn Rand, Murray Rothbard and Ludwig von Mises. The classical libertarians get mere superficial attention. For example, few have read Tragedy of the Commons, but many quote the title. Specifically, they are unwilling to recognize that the ecological mishaps like those referred to in that work had been absent for centuries when almost all land was common. As with the tragedy of the reservations, commons were abused because so many people had to share access to so little land. All this was a result of government sanction, allowing vast tracts of commonly held land to be appropriated by individuals without proper compensation to those who were dispossessed of access to the earth. These facts are ignored because they cannot be reconciled with pseudo-libertarian conservatism.

Just as contemporary Greens have fondness for government and contempt for private property that their forebears did not share, Libertarians take an extreme position on private property and have hostility to all forms of government that their philosophical predecessors did not share.

Their refusal to acknowledge natural limits to private property and their insistence of unlimited protection of property by the state is their one great departure from their predecessors and their principles. For example, they dismiss the following statement by John Locke, known as the father of private property:

    God gave the world in common to all mankind. Whenever, in any country, the proprietor ceases to be the improver, political economy has nothing to say in defense of landed property. When the "sacredness" of property is talked of, it should be remembered that any such sacredness does not belong in the same degree to landed property.

They similarly ignore Adam Smith's statement that:

    Ground rents are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Ground rents are, therefore, perhaps a species of revenue which can best bear to have a peculiar tax imposed upon them.

Private ownership of the earth and its resources is the one area where Libertarians depart from their own philosophy. After all, their justification of property is in the right of individuals to the fruits of their labor. Because the earth is not a labor product, land value is not the fruit of its owner's labor. Indeed, all land titles are state-granted privileges, and Libertarians deny the right of the state to grant privileges.

Even here, Libertarians are on solid ground when they argue that freedom could not survive in a society where land tenure depended on bureaucratic discretion. They are split, however, over devices like land value taxation that would, with a minimum of bureaucracy, put the landless in a more tenable position with respect to land monopolists. Just as liberals dominate the National Greens, conservatives dominate the Libertarian position on this issue, though many Libertarians, including Karl Hess, former editor of the Libertarian Times, do not share that conservative position.

Again, this is a key issue for reconciliation. The Green tradition cannot be reconciled with pseudo-libertarian claims that a subset of the people can claim unlimited title to the planet.

The Magic of Honest Compromise

Compromise is too often a process whereby people on each side give up what they know to be right in order to gain a supposed advantage for their interest group. What I am proposing is that each side give up supposed advantages in order to harmonize with what is right. It takes an open mind and a great deal of courage, but the results can be magnificent.

[Continued...]

------------------------------------
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« Reply #6 on: August 25, 2010, 06:37:07 pm »

From http://www.henrygeorge.org/isms.htm:



"Left-wing" proposals call for society to achieve equity by redistributing most of the wealth. No distinction is made between the sources of income (land, labor or capital), and individuals control only a small portion of the wealth. In most cases this entails a large measure of social control, and a "planned economy."


"Right-wing" proposals hold that efficiency requires more wealth to remain in private hands (also making no distinction between rent, wages and interest), and that society, or government, should only get the minimum it needs for necessary services, e.g., the role of "traffic cop." This implies leaving the running of the economy to private interests.


"Middle-of-the-road" proposals seek a "balanced system" in the distribution of wealth and power between individuals and society - but make insufficient distinctions between earned and unearned incomes, and do not carefully define the proper spheres of society and the individual. The result is a hodgepodge in which efficiency and equity always appear to be at odds.


The Georgist proposal is different from all these ideologies in that it makes a distinction between the unearned income of land (rent) and the earned incomes of labor and capital (wages and interest). Rent to society, wages and interest to the individuals who earned them.

The proper spheres of society and the individual are clarified. The Georgist proposal achieves the goal of "left-wingers" for security and social action, but without restrictions on liberty. It achieves the goal of "right-wingers" to attain freedom, but without privilege and monopoly. And it achieves a balanced system sought by "middle-of-the-roaders," but in a just rather than arbitrary way.
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« Reply #7 on: August 26, 2010, 04:57:18 am »

Geolib:

(I'm the former William Rausch, if you remember that handle from PPF.)

An excellent piece!  I, myself, come from a working-class background, specifically from the highly Socialist city of Milwaukee.

I definitely agree with the idea of a social safety net, and even more with the idea of a living wage that allows the common working man to live a life sufficient to reflect the respectability which his labor has earned him, and to allow him sufficient leisure time to develop his intellectual, artistic, and/or craftsmanship skills to the utter extent of his talent.  Such should absolutely allow him to participate in public affairs as a significant and important citizen.  (Unlike the famous XIX-Century Boston fire chief John Damrell whose proposals for fire safety were rejected out of hand by the city fathers on the basis of his being the son of a mere mechanic, ineligible to suggest policy to the high-born Boston Brahmans (who are, in truth, descended from Channel Island serfs who lost a rebellion in the 1600's, but who managed to pass themselves off as upper-class folk in early Boston on the basis of their command of the French language and their Norman surnames (ee.gg.: Cabot, Lowell, Lodge)).) 

In particular, I believe that there is definitely a place for a fiat currency, as I believe that fiat currency, carefully apportioned to allow economic growth without any undue inflationary effect, is, in fact, commodity-based, with the commodity being faith in the issuing society's economic future, which I believe to be as quantifiable and accountable a commodity as goodwill on a business balance sheet.  (In fact, it's really very easy to calculate: in times of economic growth, just issue enough fiat currency to prevent deflation (see the economic history of Colonial America, with particular reference to Queen Anne's monetary reform).

The problem that this creates: how to prevent a deflationary tailspin in times of economic stagnation or downturn, when faith in the society's economic future (i.e., the commodity basis of carefully apportioned fiat currency) will have disappeared.  At this point, civic investment funded by debt instruments may restore faith in the future, and, thus, kill the deflationary monster.

I'm working out the math for this now, but, like every ultimate solution to economic problems, my own idea appears to me to be a total crapshoot.

Cheers!
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« Reply #8 on: August 30, 2010, 11:25:39 am »

An excellent piece!

Thanks! 

Quote
I definitely agree with the idea of a social safety net,

I wouldn’t say I agree with the average “liberal’s” idea of a social safety net, but I definitely support a guranteed income, partly because it achieves the basic underlying goal of a social safety net without all of the ridiculously wasteful bureaucratic paper-shuffling we have now.

Quote
and even more with the idea of a living wage that allows the common working man to live a life sufficient to reflect the respectability which his labor has earned him, and to allow him sufficient leisure time to develop his intellectual, artistic, and/or craftsmanship skills to the utter extent of his talent.

What annoys me to no end is that so many of the establishment liberal types who presume to speak on behalf of the “common working man,” and who promote the idea of a “living wage,” almost always insist on taxing wages to death. Ever notice how Michael Moore, for instance, never speaks out against the horribly regressive payroll tax?

As to the few establishment liberals who do speak out against that tax, they always insist on replacing it with the horrendous carbon tax, even though that is itself a job-destroying tax on labor:

       http://globalgulag.freesmfhosting.com/index.php/topic,333.msg984.html#msg984

Quote
Such should absolutely allow him to participate in public affairs as a significant and important citizen.

And that, of course, would undoubtedly offend countless right-wing ideologues, because I often hear them peddle the aristocratic notion that only landowners should be allowed to vote. Then they wonder why so few take them seriously when they parrot empty slogans about “liberty.”

Quote
In particular, I believe that there is definitely a place for a fiat currency,

Well, that depends on the type of fiat currency one is talking about, because there’s a world of difference between the debt-free fiat currency that I and others propose and the debt-based fiat currency we have now:

       http://globalgulag.freesmfhosting.com/index.php/topic,379.0.html

Quote
as I believe that fiat currency, carefully apportioned to allow economic growth without any undue inflationary effect, is, in fact, commodity-based,

Actually, by definition, a currency is “backed” by a given commodity only if it’s “redeemable” in that commodity. To “redeem” money means to destroy it, and hence permanently remove it from circulation. The only thing for which debt-free Greenbacks would be redeemable is the payment of taxes, so in that sense they would be backed by the same thing that currently backs U.S. bonds -- the Constitutional taxing power of the U.S. government.

Quote
with the commodity being faith in the issuing society's economic future, which I believe to be as quantifiable and accountable a commodity as goodwill on a business balance sheet.

I’m not sure it would be wise to define “faith” in something as a “commodity,” because for most people the term commodity implies something tangible that one can actually see and touch. The key is to not fall into the Austrian School trap of defining money as a commodity to begin with:

       http://www.monetary.org/refute.htm
       http://www.monetary.org/goldnewsletter.htm

Quote
The problem that this creates: how to prevent a deflationary tailspin in times of economic stagnation or downturn, when faith in the society's economic future (i.e., the commodity basis of carefully apportioned fiat currency) will have disappeared.  At this point, civic investment funded by debt instruments may restore faith in the future, and, thus, kill the deflationary monster.

Funding things with debt instruments is the very thing that got us into this mess in the first place. That’s why Greenbackers such as myself advocate financing the construction and renovation of public infrastucture with debt-free money instead:

       http://www.wealthmoney.org/articles/What-Would-Happen.html
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« Reply #9 on: August 30, 2010, 06:49:07 pm »

Lest anyone think I'm overly hostile to any and all things having to do with the Austrian School, I should probably clarify by saying that -- despite my harsh criticism of Austrian School dogma -- I actually agree with that school's adherents on quite a few issues. Like them, I oppose all of the following:

     * occupational licensing barriers;

     * both wage and sales taxes;

     * corporatist trade agreements that, as such, are neither "free" nor "fair";

     * interventionist foreign policies;

     * compulsory schooling;

     * victim disarmament (otherwise known as "gun control"); and

     * governmental assaults on civil liberties.

And even on the issue of monetary reform, once fractional reserve banking has been outlawed and the current debt-based money system completely replaced with a debt-free "Greenback" system, I would at least be open (particularly if certain election reforms remained unimplemented) to reforming the legal tender law so that U.S. currency is good merely for the payment of all public debts (as opposed to both public and private), since this would allow for an assortment of competing private currencies to rise up alongside the national currency, thereby keeping those in charge of the latter in check.

However, there are four key issues on which I passionately disagree with the Austrian School:

(a) the idea that the only way to have "sound" money is to institute a gold-based money system;

(b) the idea that the only way to get out of the current depression is to let everything collapse first -- i.e., to let the financial terrorists who caused this crisis in the first place foreclose on everyone (even though they gave no lawful consideration for any of the collateral-backed IOUs they accepted in exchange for the non-existent "money" they loaned), and to add insult to injury by euphemistically characterizing this patently unjust and totally unnecessary looting of the economy as a mere case of "market forces" imposing a just and necessary "correction" on the economy;

(c) this cartoonish notion that all government regulations (not just most) are bad and evil by definition, and the consequent reluctance of Austrian School ideologues to even mention the word "derivatives" (let alone acknowledge the primary causative role they played in the financial meltdown of 2008), presumably since doing so would draw attention to the fact that the quadrillion-dollar derivatives bubble could never have been created to begin with had the Glass-Steagall Act -- a form of (gasp!) "government intervention" -- not been repealed in 1999; and

(d) the notion that there's no fundamental difference between commodity speculation and land speculation (see this and this).

I tend to distinguish between the well-meaning patriots who've fallen prey to euphemism-laced Austrian School propaganda, on the one hand, and the paid propagandists who sit atop the Austrian School hierarchy, on the other.

In a certain sense, these propagandists are the ideological equivalent of Glenn Beck: like Beck, they'll express a lot of truths to lure people to their side, then poison the minds of their followers by mixing those truths with half-truths and outright falsehoods. For instance, they'll rightly criticize how ridiculously bureaucratized and self-perpetuating the federal welfare system is, then falsely conclude from this that the "solution" is to have no social safety net at all.

They'll correctly expose the unintended consequences of rent control, but conveniently ignore or, worse, rationalize the privilege-induced rack-renting that created the apparent need for rent control in the first place.

They'll rightly criticize the quasi-private Federal Reserve System, then falsely conclude from this that the "solution" is to make money creation even more privatized than it already is.

Perhaps worst of all, however, is the tendency of Austrian School propagandists to suggest or imply that a total collapse of the entire U.S. economy (and hence of America itself) is not only inevitable, but desirable; and that any governmental policy or program that interferes with this collapse -- an example of such interference being Webster Tarpley’s proposal to “stop all foreclosures on primary residences, businesses, and farms for five years or the duration of the depression” -- is therefore a bad thing, not a good thing.

Why is it a "bad" thing?

Simple. Because, just as socialists perceive "the State" as a mystical, God-like entity existing independently of the people who compose it, Austrian Schoolers have a similar conception of the "free market," as evidenced by this quasi-religious notion they incessantly promote that, following said collapse, a mystical, God-like entity falsely known as the "free market" will magically rise like a phoenix from the ashes of our destroyed nation, give birth to a “sound” (read: gold-based) money system, and all will be well with the world.

In that sense, these do-nothing/let-everything-collapse Austrian Schoolers are eerily similar to “rapture” cultists:

       http://globalgulag.freesmfhosting.com/index.php/topic,519.0.html

Bottom line: just as the NWO promotes "order" out of chaos, the Austrian School promotes economic revival and stability out of chaos. Either way you're dealing with a glorified cult that tries to sell people on the insane idea that "chaos" is a legitimate and effective means of achieving a desirable socioeconomic goal.

It is for this reason that I respectfully call on all thinking members of the anti-NWO/pro-America movement to stop letting Austrian School propagandists portray themselves as the divine gatekeepers of any and all things having to do with "liberty," "property" and "free enterprise."

Just as we must defend America from those who would destroy it in the name of the NWO, we must defend it against those who would -- by deliberate act of omission, and in the name of “liberty” and the "free market" -- knowingly allow America to be destroyed by an otherwise solvable economic and political crisis.
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« Reply #10 on: August 31, 2010, 03:17:38 am »

GeoLib:

I think you have me wrong.

I'm not really an Austrian-Schooler; when it comes to fiat currency, I'm pretty much of a Lincoln Greebacker, while I keep in mind the crippling deflation here in the American Colonies which prompted Queen Anne's monetary reforms (overseen by none other than the great Sir Christoper Wren, Surveyor-General to the Crown at the time).  The gold sovereign (nominally 1 pound, actually  he e closer to one guinea) was, essentially, worth one pound sterling, which, in turn, being roughly 90% of 1/2 troy oz Au, is roughly tquivalent of a current US Au bullion round of US$10 face value).  My point is, the money supply has to remain FLEXIBLE: just enough fiat currency generated to counter growth-limiting deflation of asset-backed currencies during periods of economic growth, and just enough debt instruments to generate effective deflation (as, in a properly managed economy, money pledged against the future is removed from current circulation) when faith in the future gives way to uncertainty and fear, and something needs to pull all those fiat notes out of circulation (so, let's make those fiat notes redeemable at par, not only in satisfaction of taxes, but for purchase of debt instruments, while metal-backed notes are redeemable for the same only at a drastic discount).  (Ouch!  All this thinking is making my little head hurt!!!)  How to make sure that the debt instruments do not, themselves, become currency?  Give them super-low interest rates, enough to turn them into reasonably certain guarantors of principal repayment (at or near the scheduled redemption date), without enough income potential to make them attractive to speculators, nor to maintain their principal value until the scheduled redemption date (what I call the "Vintage Bond Syndrome").  Obviously, the vintage bond syndrome doesn't happen absent some degree of inflation, but, sometimes, a little bit of inflation can foster economic growth.  What I'm talking (actually writing) about there is a tightly managed monetary policy, fine-tuned to economic reality, without need for recourse to major fiscal policy adjustments (like WARS!!!!!).

As far as taxes are concerned, my statement concerning the standard of living earned by the working class by means of the sale of their labor on the market stands by itself, and, although I obviously believe that any level of taxation levied against working class wages should never be allowed to infringe upon the standard of living as I have described it, I do believe that a modicum of taxation against working class wages gives the working class the tremendous advantage of being able to state, in any public forum: "I'm a tax-paying citizen!!!"  (Let's allow the taxation of wages, BY STATES AND MUNICIPALITIES, NOT BY THE US FEDERAL GOVERNMENT, PROHIBITED BY THE US CONSTITUTION!!!) within the strict limits which I have proposed.) So far as concerns the land-owning reactionaries, what does land ownership mean in this day of tiny little suburban house-lots as opposed to the marketable skills of the working class?  And what is the value of a little lot owned by some office worker as opposed to the obvious estate of the small businessman, who rents both his store and his apartment, but who sacrifices any hope of leisure time in order to properly run his small business?  I'm a lawyer: what do I know of the absolutely necessary profession of coal mining?  In a city where I once lived, I once taught inner-city school children in a school whose pediment bore the legend: "He who hath a trade hath an estate.".  (This being well into the process of the de-industrialization of the US, this school was no longer a trade school.)  (Hey: I once took the US Public Broadcasting System's "60's Radical Quiz", which predicted (actually, post-dicted) that I would one day teach in an inner-city school system!)  So, I would adopt the idea that the skills of the working class (known as "mechanics" in the laws of my own state of Rhode Island) constitutes a propertied estate sufficient to allow, not only suffrage, but the fullest possible participation of the working class in the political life of the Republic.  Considering the guaranteed income, I agree with the basic idea, although I would allow differential treatment between "delinquent public charges" (i.e., those who are public charges by choice), and "non-delinquent public charges" (i.e., the disabled, the elderly, widows and widowers with children, and other sad cases).  The latter should be granted the franchise and all that goes with it, the former should be granted a clear and specified pathway by means of which they might gain the franchise, but not automatic franchise.

Here, I must say that I misspoke when I made my statement concerning the "living wage": I should have said:  "I definitely agree with the idea of a social safety net, and even more with the idea of a living wage that allows the common working man to live a life sufficient to reflect the social respect which he has earned by means of the civic responsibility he has borne through his labor, and to allow him sufficient leisure time to develop his intellectual, artistic, and/or craftsmanship skills to the utter extent of his talent."

Finally, the "social safety net", so far as the US still has one, must be seen within the total US context of desire on the part of the state to destroy the family and to romanticize the criminal lifestyle (which enriches the prison-industrial complex while guaranteeing sales of government-imported drugs), which definitely involves the "poverty pimps" of the government bureaucracy, whose jobs would disappear without the micro-management of the lives of the poor, which, in combination with the romanticizing  of the underclass lifestyle through the media, prepares the entire population for state invasion of every aspect of their personal lives.  So, I, too, support the idea of the guaranteed income, which would kick in before the person or family has slid into irrecoverable poverty (as is currently the case with the US system), and would allow the recipient to spend his money on the necessities of life, or on his addictions.

Cheers!
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« Reply #11 on: September 03, 2010, 09:28:47 am »

I think you have me wrong. I'm not really an Austrian-Schooler;

I know you’re not (I knew that the moment you said there is “definitely a place for fiat currency,” heheh). I was merely responding -- for clarification purposes -- to the scathing critiques of the Austrian School that I had posted earlier, not to anything you had posted.

Quote
when it comes to fiat currency, I'm pretty much of a Lincoln Greebacker

The same holds true for me obviously.

Quote
My point is, the money supply has to remain FLEXIBLE: just enough fiat currency generated to counter growth-limiting deflation of asset-backed currencies during periods of economic growth, and just enough debt instruments to generate effective deflation (as, in a properly managed economy, money pledged against the future is removed from current circulation)

The moment you allow money creation to be linked even partially to the creation of debt, you’ve sown a seed that will inevitably germinate into fractional reserve banking, and then we’ll be right back where we started. Thus, the only solution is to completely and permanently divorce the creation of money from the lending of it.

As to the question of “flexibility,” if you read my thread on monetary reform, you’ll see that the debt-free system I call for is flexible by its very design, because

(a) any decrease in the general price level will automatically trigger an offsetting increase in the money supply expansion rate, while any increase in the general price level will trigger an offsetting decrease; and

(b) banks will be allowed to loan out “existing funds” that are obtained via the sale of “negotiable CDs” (although, unlike now, “banks would not be allowed to lend the funds so obtained for a longer period of time than those funds were available to them”), and in that way maintain a “continuous flow of funds” to those areas of the market that most need it, but without overextending themselves -- and hence exposing themselves to a potential “liquidity crisis” -- in the process.

Quote
I do believe that a modicum of taxation against working class wages gives the working class the tremendous advantage of being able to state, in any public forum: "I'm a tax-paying citizen!!!"

If you read my thread on land value taxation, then perhaps you’ll understand why I firmly believe that the only thing any able-bodied person should ever have to say to morally justify his or her participation in public affairs is: “I pay for the benefits I receive!”

Taxing wages instead of land values ultimately results in landless wage-earners being forced to pay twice for the same benefits -- all so that politically-connected titleholders can enjoy those same benefits without paying even once:

       

Quote
(Let's allow the taxation of wages, BY STATES AND MUNICIPALITIES, NOT BY THE US FEDERAL GOVERNMENT, PROHIBITED BY THE US CONSTITUTION!!!) within the strict limits which I have proposed.)

I’m afraid we’ll have to agree to disagree on that point, because I’m convinced that wages should be exempt from taxation at all levels of government (as should the value of capital goods).

Quote
So far as concerns the land-owning reactionaries, what does land ownership mean in this day of tiny little suburban house-lots as opposed to the marketable skills of the working class?

If you read the following web site, you’ll see that – under the current system -- it means more for modern-day aristocrats than what most people have been led to believe. A lot more:

       http://www.whoownstheworld.com

Quote
Considering the guaranteed income, I agree with the basic idea, although I would allow differential treatment between "delinquent public charges" (i.e., those who are public charges by choice), and "non-delinquent public charges" (i.e., the disabled, the elderly, widows and widowers with children, and other sad cases).  The latter should be granted the franchise and all that goes with it, the former should be granted a clear and specified pathway by means of which they might gain the franchise, but not automatic franchise.

I think that would unnecessarily complicate the system. Better to simply pay out the Dividend equally to all legally-recognized citizens, and leave it at that. The whole point is to get away from bureaucratic paper-shuffling and all of the waste, fraud and abuse that go with it. Attaching unnecessary qualifications and conditionalities to the Dividend would keep us mired in it instead.
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« Reply #12 on: September 09, 2010, 05:09:30 am »

Geolib:

I've read your responses and I stand by my statements, with one exception: as I quoted: "He who hath a trade hath an estate", self-employed tradesmen do generate "income" within the proper lawful meaning for the purposes of lawful taxation of income (and I do NOT include by this the XVI Amendment to the US Constitution, which the US Supreme Court has rules establishes no new tax).  But I now see that taxation of wages, in the context of taxation of corporate profits, constitutes double taxation upon the same income stream, and further constitutes taxation as income of funds received in the course of an equivalent exchange, rather than a profitable enterprise.  Were the taxation levied against corporations on the basis of their land ownership, then corporations could simply avoid taxation by concealing their ownership of land.
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« Reply #13 on: September 09, 2010, 08:56:57 am »

Were the taxation levied against corporations on the basis of their land ownership, then corporations could simply avoid taxation by concealing their ownership of land.

Actually you've got it backwards: one of the many advantages of taxing land values instead of wages and/or returns on capital goods is that -- unlike cash holdings, checking deposits, personal property or other potential objects of taxation -- "land cannot be hidden, removed to a tax haven or concealed in an electronic data system."

So it again appears that we'll simply have to agree to disagree.
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« Reply #14 on: September 10, 2010, 05:23:30 am »

Geolib:

Actually, we don't have to agree t disagree on this one: I've handled bankruptcy and divorce cases, and I heard of civil cases versus organized crime figures (with particular attention to the late Mr. Raymond Loreda Salvatore Patriarca, who spent the 1930's as a local small-time crook in my area while his family grew inexplicably rich (including his brother's apple orchard which is now a major toxic clean-up site), and the late Mr. Frank Peter Balistrieri, who, with a couple of years of law school under his belt, became a master of setting of front men to purchase Las Vagas casinos with his money (as Balistrieri himself had been banned from business dealings with casinos)), which show how interests in realty can be concealed by individuals, and just as easily by corporations using the corporate veil and a shell0game of subsidiary corporations owned by partnerships and individuals acting at the behest of unscrupulous corporations.  That's why I say, for corporations, income taxation, and LIMITED LIFESPAN (say, 50 years).

Waddya tink?

***

Edit:

I have NOT, in the course of my legal practice, nor in any other activity in which I've engaged in my life, EVER concealed nor assisted in the concealment nor advocated nor encouraged nor counseled the concealment of any assets from any court of law, taxation agency, nor any other official body of any nature whatsoever, whether or not duly constituted in my professional and/or political opinion.
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« Reply #15 on: September 10, 2010, 09:44:08 am »

Actually, we don't have to agree t disagree on this one: I've handled bankruptcy and divorce cases, and I heard of civil cases versus organized crime figures (with particular attention to the late Mr. Raymond Loreda Salvatore Patriarca, who spent the 1930's as a local small-time crook in my area while his family grew inexplicably rich (including his brother's apple orchard which is now a major toxic clean-up site), and the late Mr. Frank Peter Balistrieri, who, with a couple of years of law school under his belt, became a master of setting of front men to purchase Las Vagas casinos with his money (as Balistrieri himself had been banned from business dealings with casinos)), which show how interests in realty can be concealed by individuals, and just as easily by corporations using the corporate veil and a shell0game of subsidiary corporations owned by partnerships and individuals acting at the behest of unscrupulous corporations.  That's why I say, for corporations, income taxation, and LIMITED LIFESPAN (say, 50 years).

Waddya tink?

Although "interests" in real estate can perhaps be "concealed," real estate itself cannot be concealed from local taxing authorities as most other things can. And I assume you would agree that, the more the tax burden is shifted off the private created values of labor and capital and onto the publicly created value of land, the less incentive anyone would have to "conceal" their "interests" in a particular land title to begin with.

As for corporations, I think the first order of business is to abolish corporate personhood. Once that is done, then we can argue about whether or not we should tax their "income" (as opposed to the value of their landholdings) or impose some sort of "life span."
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« Reply #16 on: September 12, 2010, 04:24:44 am »

Geolib:

I agree absolutely that corporate personhood must be abolished.  However, interests in realty can be hidden (I mean, do you think that a bankrupt signing his house and/or business property over to his wife or his senile grandma is the least bit unusual?), and land taxation fails to distinguish between highly profitable corporations and less profitable ones.  A corporate income tax (and I favor calling it a "Business Profits Excise" to prevent anyone ever using the term "income" (which properly refers to bond interest, taxable dividends from stock holdings, and other unearned "Trust Find Baby"-type income) to refer to wages, child support, alimony up to 150% of Federal poverty level for the household so supported, pensions paid for with after-tax income, etc.) would recognize and tax this difference.
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« Reply #17 on: September 13, 2010, 03:50:47 pm »

I agree absolutely that corporate personhood must be abolished.  However, interests in realty can be hidden

Yes, but as I've already explained -- unlike cash holdings, personal property and countless other things of value -- real estate itself cannot be hidden. And the only reason why anyone would want to hide his "interest" in a particular land title in the first place is that the current tax system allows him to profit from whatever the people who compose the surrounding community do to increase the value of that title:

-------------------------------------

http://www.progress.org/fold43.htm

Land Speculation: What Is It Bad For?

by Fred E. Foldvary, Senior Editor

The cause of every major business-cycle depression is land speculation. This fact was discovered by the American economist Henry George 120 years ago.

Speculators buy land because they expect the price to go up in the future. While waiting for the price to go up, speculators do different things with land.

Some land speculators buy raw or underdeveloped land and just let it sit until they think the time is ripe for development. When many speculators are doing this in some area at the fringe of a city, often developers skip around them to areas further away from the city. That creates land-wasting urban sprawl, which then requires more roads and longer water pipers and makes it uneconomical to have public transportation. In other cases, when speculators are buying land within a city they expect to be developed soon, development instead shifts to other, less expensive, areas, and the speculators lose out. Society also loses, since that area can stay relatively undeveloped even though it is within the city.

Other land speculators buy land in order to develop, expecting the rise in land value to be a big chunk of their profits. That works out well for the first ones to do it, but at the end of the land boom, when many developers are building and hoping to cash in on the land bonanza, the land value stops rising. Those who bought near the top don't get the land gain profit, and even worse, when the real-estate market crashes, the developers end up with empty houses and office buildings, and shopping centers they where they built but folks aren't coming. The go broke, can't pay back their loans, and the banks fail, making the economy fall even more.

So the reason land speculation causes depressions is that it raises the land price too high for those wanting land for actual use. Speculation adds to the demand for land, making prices go even higher. Land becomes priced for future use, not present-day use. So those wanting sites for residences, offices, hotels, factories, and shopping centers, slow down their investing. Also, during the boom, interest rates that were low start going higher as the central bank (in the US, the Federal Reserve System) reduces the growth of the money supply, increasing interest rates. With costs rising and investment in machinery and construction down, the economy grinds to a halt. Workers get laid off, which then decreases demand, and the economy falls into a recession.

So what causes the depression is the reduction in investment in real estate and other capital goods, caused by rising interest rates and land prices. When the economy falls into the depression, real estate prices and interest rates fall, and now investment becomes profitable, and the recovery starts. For this to happen, the old bad debts have to be cleared, otherwise the financial system is clogged with bad debts, as it is now in Japan, and the new enterprises can't get the credit they need to get going. It also helps a lot if the barriers to new investment are taken down - that means eliminating restrictions and taxes on enterprise.

What makes land speculation dysfunctional - a cause of economic trouble - is not really the speculation itself, but the tax system in which it takes place. The tax systems in the world today mainly tax labor and profits. Some of the tax money goes to build public works, such as subways, freeways, streets, roads, public utilities, parks, security, fire protection, and schooling. These push up land values. So landowners get a government subsidy in the form of increased rent due to infrastructure that workers and businesses, not the landowners, are paying for. So land speculators profit from this forced transfer of wealth from workers to landowners, if they guess right on where new development will go.

[Continued...]

-------------------------------------

If, on the other hand, the bulk of all land values is used as the sole or primary source of public revenue (as would be the case under a Georgist tax system), then the tax would have to be paid by someone -- even if that someone is paying the tax (for whatever reason) on behalf of his spouse, sibling or offspring.

Quote
and land taxation fails to distinguish between highly profitable corporations and less profitable ones.

If that's a "failure" in the eyes of certain people, it's only because they themselves "fail to distinguish" between the earned incomes of labor and capital and the unearned income of land. But in the eyes of those who do make this critical distinction, land value taxation actually succeeds where all other taxes fail.

It's obvious your opinion on this will remain contrary to mine, so it appears once again that we'll have to agree to disagree.
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« Reply #18 on: September 18, 2010, 05:39:46 am »



If, on the other hand, the bulk of all land values is used as the sole or primary source of public revenue (as would be the case under a Georgist tax system), then the tax would have to be paid by someone -- even if that someone is paying the tax (for whatever reason) on behalf of his spouse, sibling or offspring.

If that's a "failure" in the eyes of certain people, it's only because they themselves "fail to distinguish" between the earned incomes of labor and capital and the unearned income of land. But in the eyes of those who do make this critical distinction, land value taxation actually succeeds where all other taxes fail.

So, are you proposing to tax income from land, or the value of land?
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« Reply #19 on: September 18, 2010, 06:30:41 am »

OK, so let me put it this way:

Let's say this guy (let's call him guy #1):




owns 40 acres of hardscrabble land from which he barely earns a living by growing crops on his land.

And let's say this guy (let's call him guy #2):



buys the 40 acres of equally hardscrabble land immediately adjoining.

Guy #2 builds a casino/hotel complex on his 40 acres, complete with gambling, free booze for losers, pure oxygen pumped into the gambling spaces to keep the suckers awake and somewhat free of the physical debilitation consequent to alcohol abuse, piped-in music (not live music: that might make people stop gambling and watch), and a luscious crew of young and pretty Ukrainian slave girls that he bought from the local strip club.  Let's say a gambler manages to win big, so guy #2 sends one of his girls to suddenly get "interested" in him, and beg the winner to take her to his hotel room.  Guy #2 waits until his girl has the winner's trousers around his ankles, and then bursts in to blow the winner's brains out and take back his chips.

How does your plan (should it, in fact, consist of an ad valorem tax upon realty) recognize the differential income potential between these two pieces of realty connected with their use?
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« Reply #20 on: September 18, 2010, 09:31:10 am »

So, are you proposing to tax income from land, or the value of land?

The value of land.

If you read the following, it may save you the trouble of having to type out a bunch more questions:

       http://globalgulag.freesmfhosting.com/index.php/topic,333.0.html
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« Reply #21 on: September 18, 2010, 09:49:35 am »

OK, so let me put it this way:

Let's say this guy (let's call him guy #1): owns 40 acres of hardscrabble land from which he barely earns a living by growing crops on his land.

And let's say this guy (let's call him guy #2): buys the 40 acres of equally hardscrabble land immediately adjoining.

Guy #2 builds a casino/hotel complex on his 40 acres, complete with gambling, free booze for losers, pure oxygen pumped into the gambling spaces to keep the suckers awake and somewhat free of the physical debilitation consequent to alcohol abuse, piped-in music (not live music: that might make people stop gambling and watch), and a luscious crew of young and pretty Ukrainian slave girls that he bought from the local strip club.  Let's say a gambler manages to win big, so guy #2 sends one of his girls to suddenly get "interested" in him, and beg the winner to take her to his hotel room.  Guy #2 waits until his girl has the winner's trousers around his ankles, and then bursts in to blow the winner's brains out and take back his chips.

How does your plan (should it, in fact, consist of an ad valorem tax upon realty) recognize the differential income potential between these two pieces of realty connected with their use?

What you seem unwilling to grasp is that the land value tax is not based on the "ability to pay" principle, but on the "benefits received" principle.

As long as you pay for the benefits (e.g., nearby schools, hospitals, parks, shopping malls, etc.) that give your land location value in the first place, then, as long as you aren't doing things like selling kiddie **** or dumping nuclear waste in your backyard, it is simply nobody's business (including the government's) either what you do on that land to earn money, or how much money you earn in doing so.

If you still have questions or concerns, please post them in my thread on land value taxation, not here.

Thanks.
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