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The problem IMO is not only the low incomes. It is also the high costs of necessary goods. Here i mean mainly the housing costs. People pay a lot of money for the land where they have place to live. Also there are a lot of costs for raw-materials and oligopolistic construction business. Land costs in farming, roads etc. When economy grows, grows also land value and raw-material costs, which eat the results of capital and labour use. Zero amount of labour and capital is tied to land and raw-materials. They are not products of the markets. Land is not capital nor it is product of labour. When money goes to land and other natural resources it doesn't create any demand, labour or capital. Before this issue is addressed, i believe nothing will change, because wealth does not trickle down and improve household self-sufficiency. Wealth just moves from one land owner to another.
by kjr63 on Fri Jan 9th, 2009 at 11:08:58 AM EST
The crucial role of the "Commons" of Land in an Economy has been quietly airbrushed out of conventional Economics, in best Orwellian tradition.

Mason Gaffney and Fred Harrison documented this process in

The Corruption of Economics

Essentially Land has been conflated with Capital, and an anthropocentric assumption made (which Marx also makes) that only Labour is "productive".

This essentially allows the wealthy to exclude economic justification for taxes on wealth, and in particular the taxation of the privilege of private Property in Commons such as Land.

"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky

by ChrisCook (cojockathotmaildotcom) on Fri Jan 9th, 2009 at 12:07:39 PM EST
[ Parent ]
Thank you for the link! I read about Henry George from Arvid Järnefelt's (a finnish intellectual in the beginning of 20th century) book. I thought, these principles are completely buried in history. It is fantastic to see that is not the case!
by kjr63 on Sat Jan 10th, 2009 at 06:29:57 AM EST
[ Parent ]
Tervetuloa ET:lle!

You can't be me, I'm taken
by Sven Triloqvist on Sat Jan 10th, 2009 at 06:34:07 AM EST
[ Parent ]
Kiitoksia!
by kjr63 on Sat Jan 10th, 2009 at 07:02:51 AM EST
[ Parent ]
kjr63:
I thought, these principles are completely buried in history. It is fantastic to see that is not the case!

As you see, they were indeed buried...but fortunately they are not dead - far from it!

Indeed I see the principle underlying Georgism - ie taxation of Privilege - as informing a new generation of policies which are based upon different assumptions to the discredited assumptions now being exposed in all their worthlessness.

"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky

by ChrisCook (cojockathotmaildotcom) on Sat Jan 10th, 2009 at 07:36:56 AM EST
[ Parent ]

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