Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Privileges

by Geonomist Mon Mar 5th, 2007 at 05:15:22 AM EST

From the diaries. Geonomist's introduction to ET and most of the text posted below the fold. -- Jérôme

The neo-liberal, so-called "free market " philosophy utterly permeates, and dominates, the U.S. political-economic discourse.  To listen to almost any U.S. news or current events show, particularly dealing with economic issues is to engage with a specially created language designed to force the listener to reach certain conclusions.  In this corrupted language (and accompanying world-view) several stock truths just always present themselves as obvious.

1)    Government in service to ordinary people is evil and incompetent.
2)    "Lower taxes", or lower wages, or possibly both can solve all economic problems.
3)    "Investment" is a magic elixir and must always have first priority for public policy.
4)    The poor are to blame for systematic poverty and nothing can really be done about poverty.
5)    Everything would be fine if government would just leave "industry" alone.
6)    "Private Property" is so obviously sacred that even asking for a definition makes the asker deeply suspect.
7)    People who don't accept 1-6 might be well intended, but they are really just stupid and making things worse.

The corruption of our language is no accident.


This is my first posting on the European Tribune.  My post comes at Jerome's request regarding comments I made to one of his diaries on Daily Kos.  It will require a series of several diaries to cover my subject completely so this one will be the first of several that will build on each other.   I believe that most what I write is applicable to Europe, although I admit to writing from the perspective of being an American and so it is possible that some examples I use may not apply in quite the same degree in Europe as in the USA.  I will cross-post this on Daily Kos but without this opening paragraph.

Those interested in how this happened can find an excellent read in Mason Gaffney's The Corruption of Economics.

Gaffney takes you back to the original sources, in their own sick words.   There is no need for "conspiracy theories" here just go read what these maniacs said and wrote. John D. Rockefeller led the "deep lobbying" effort by founding the University of Chicago with the explicit purpose of creating a language of economics guaranteed to make it almost impossible to think certain thoughts.  What follows is an exploration of those thoughts, which according to "free market" theorists you aren't supposed to be having.

As progressive/left activists we must create a counter narrative to the prevailing "free market" religion.   To be powerful our new narrative must be morally compelling, consistent, and do-able.  I believe that the first step to creating our narrative lies with one very special word:  Privilege.

It is a telling detail that in the English language today the word privilege has lost its clear original meaning with no other word providing a clear alternative.  People speak casually about how "It's a privilege to be here" or some other vague notion of something they like or enjoy while they might not even be able to provide the original meaning of the word.  The word privilege comes from the Latin words for "Private Law."  The Romans were very clear about what "Private Laws" meant.  Laws were passed that allowed one person, or group of persons rights not granted to everyone else.  Privileges didn't stop existing just because we stopped thinking clearly about them. We must resurrect the concept of privilege and own its re-born definition.  

Economic privileges include "ownership" of broadcast spectrum, corporate immunity, land, minerals, tax favors, patents, aircraft landing rights, fishing rights, access to courts, and many others.  It is not much of an exaggeration to say that the main activity of governments is to create, regulate, and maintain privileges.  What do all of these privileges have in common?  

  1. They are created by government and are thus their treatment is a matter of public policy, not any "natural" or "inevitable" condition.  Every privilege created represents a loss of freedom for everyone not included in the privilege.
  2. They alter the distribution wealth in a manner that enriches those holding the privileges, without their having to actually produce anything to enjoy their riches.  That is, privileges are not wealth directly, but create a legally enforceable claim on wealth that someone else produces.  Through privileges governments force some people to work for others and also force workers to work for less than they might otherwise.
  3. Privileges can be taxed annually up to their full rentable value without interfering, even in the slightest, with the net production of wealth.  This non-shift-ability of taxes on privileges is probably the most important truth in economics yet you will never hear it even whispered on a news show dealing with taxes or economic issues.   And oddly, no competent economist from the left or the right would even dispute the truth of the statement although almost all will vigorously ignore it.  (This single point is so important that it will be the subject of a future diary by itself.)
  4. The combination of taxing privileges more while abolishing taxes on labor would bring about a natural buoyancy to wages, while greatly leveling incomes generally.  (Ricardo was right.)  Conversely, the combination of taxes on labor with little (or no) charges for privilege creates a downward pressure on wages.  It is a perverse fact that people are so accustomed to this downward pressure that they think it is normal, when in fact, it is the result of brutal policy choices.

We on the left desperately need to categorize and value all privileges in a systematic way.  We need to know how much each privilege is worth and be able to put the quantitative smackdown to glib right-wing sophistry dominating the media.  To speak of "freedom" when privileged people are stomping all over labor is absurd in the extreme.  We need to architect a grand "tax-shift" ideology.  The theme might be summarized by something like: "Abolish taxation on labor, and charge the full value of privileges as compensation for the harm done."  

Consider the power and truth of the following statements and how they might form the beginning of a powerful new narrative.

  1. Charges for privilege are compensation for the loss of freedom inflicted on others by the creation of privilege in the first place.  Revenue structured around privileges increases everyone's economic freedom while furthermore the absence of charges on privileges simply uses government power to help a privilege "owner" levy taxes on labor while giving nothing in return.  When the Republicans say they favor "tax relief" what they are really saying is that they want to privatize for themselves the right to levy taxes on labor.  Without charges that neutralize the power of privilege labor will never benefit from "tax reductions".
  2. Charges on privileges are necessary for a freely functioning economy, not a "burden" to be reluctantly borne.  
  3. Charges for privileges can provide all the revenue we need for public services.  They might even provide an excess over necessities, which could be rebated to the citizens as a dividend representing their ownership in their own countries.

No Progressive/Left politician should ever be bashful about demanding payment for the full value of privileges.  In fact they are remiss for not demanding payment for privileges.  But as soon as our Liberal/Left politician agrees to talk within the right-wing frame of "tax relief" without consideration of privileges he/she has pretty much conceded defeat.  Let's force the right-wingers to talk about privileges, where they come from, who owns them, and what effect they have on everyone else.   Forcing the economic conversation to center on privileges will always be sound strategy for us but we must be prepared to have that conversation.  

I have been writing here of privileges in the sense of legal/economic privileges but I am also drawn to the idea because of its broader philosophical coherency and consistency.   The idea of privilege provides a framework for thinking about a wide range of issues.  In all circumstances we can envision some form of reciprocity attached to a privilege, even in personal situations.   We allow elected officials in a democracy to wield exceptional powers but we demand a quid pro quo in the form of elections in which we can (theoretically) remove them.   We give police exceptional powers but demand certain reciprocal control over them.  On more personal levels, if we are in a conversation only one person can talk at any one moment.  A small "local privilege" is created when one person speaks.  What is required in return?   In normal polite conversation we might reasonably expect a more or less equal sharing and we might expect the speaker to pay us the respect of saying something worth listening to.  When the privileges of conversation are not respected we recognize the imbalance and probably end the conversation.  Inter-generational justice issues also fit within the framework of privilege.  In the span of a little more than one century the humans alive at this time will consume all of the petroleum contained in the earth for billions of years, thus denying all future generations of people the possibility of using these resources.  What do we owe them for this privilege of denying them use of this amazing resource?   (I find the question to be staggering in its implications.)  There are still privileges in America associated with being white.  I am not sure just what reciprocity is required to restore justice but at least we have a way to frame the question.   The concept of privilege bears on the relationships between the sexes.  My wife and I have children and the process of bearing children does not fall evenly on the sexes.  What do we owe each other?

I don't bring up these last issues just for philosophical amusement.  If we are to create a compelling new Liberal/Left narrative we will serve ourselves well strategically if our new narrative comprehends a large chunk of the human experience.  A powerful narrative will allow the user to think through a wide range of issues with a small number of key concepts.  The particular features of any given situation may require a great deal of nuance but the broad contour of the situation should be quickly recognizable.    I submit to you the concept of privilege as the first key idea for building a new narrative.

Display:
A very interesting diary. I'll have to come back to it tonight for commentary. I normally stand aside and just learn when the denizens of ET get into their (to me) arcane arguments about economics.

But you have opened a new door to the basement of economics - a concept which appears fundamental to understanding how economics fits into the larger gestalt of why we have society.

And welcome!

You can't be me, I'm taken

by Sven Triloqvist on Mon Mar 5th, 2007 at 03:40:10 AM EST
I have come across Geonomist before and welcome him to ET.

The concepts he eloquently sets out are entirely embedded in the work that I have been doing.

When I talk about the principle that those who have exclusive rights to a Commons should compensate those they exclude then it is "privilege" aka property rights I am addressing.

What I am adding to the whole body of thought of which Geonomist is a leading light is an entirely new - consensual and, to refer to the post, "two way" or RECIPROCAL - take on the legal protocols which may be used to actually "bound" the whole body of privileges and obligations which bind us a Society.

This gives rise to what is literally a new form of tenure (neither Freehold nor Leasehold) of INDEFINITE duration - for as long as you have the Privilege you compensate Society.

This is in turn based upon an entirely new set of Metaphysical assumptions - Robert Pirsig's "Metaphysics of Quality" - in the evolution of which the Rockefeller-funded University of Chicago (unwittingly) played such a key role.

Unfortunately I have yet to find more than a couple of US citizens - and certainly none from Geonomists' colleagues - who "grok" what I am talking about.

I suspect this is because they, like most people, remain bounded by conventional assumptions of Property as an object - and of absolute property rights - as opposed to a property as the relationship it actually is - ie "Property" is a Thing/ Object which is "proper" to the Man/Subject.

I look forward keenly to reading more!

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 5th, 2007 at 04:23:49 AM EST
Thanks for the reference to Robert Pirsig who I will put on my reading list.  If you have any other handy links to this line of thinking please send them.  To my knowledge what I have written is original although it is inevitable that others have had similar thoughts.  I am delighted to make contact and share ideas.  (Also, I don't mean to impugn the work of the present-day U of Chicago just because its origins.)

I too am particularly drawn to framing taxes as consensual.  If taxes are based on privileges (correctly valued) then at the margin there would be no taxes.  The least favorable land, EM spectrum, or minerals would be free.  If a person didn't think the advantages from his privileges were worth the cost to himself then he could move and release the privilege to someone who did value the benefits.  But of course, as soon as the "non-taxpayer" came to town (left marginal land) he would start paying indirectly.  

While the US is farily rigid in our thinking about property rights there are signs of hope, here and there.  Your last paragraph is on the mark regarding the typical American view of property.  Part of what I am doing is searcing for a new language that has the power to "unhook" the American mind from where it gets stuck.  In my local "market testing" I am having considerable success with getting people to see property differently.  

by Geonomist on Mon Mar 5th, 2007 at 11:55:22 AM EST
[ Parent ]
Welcome to ET, Geonomist!
It's a very interesting and promising diary.

Property rights and transaction costs are two basic concepts of the current system, but whereas transaction costs have been widely discussed, property rights are very seldom questioned. If we look at property rights, as  a relationship (as Chris puts it) sanctioned by society (I.e; a privilege), therefore the concept of privilege is a powerful tool to analyse the economic system and promote new approaches.

But then, we should also discuss the mechanisms by which creation of privileges occurs and how they can be governed/regulated. Furthermore, we must discuss by which processes unacceptable existing privileges (such as the privilege of being white) can be reduced and eliminated.

 

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Mon Mar 5th, 2007 at 06:33:03 AM EST
Feed them this back: Freedom is not free. You have to pay taxes for your priveleges!
by das monde on Mon Mar 5th, 2007 at 07:17:58 AM EST
Okay...I would like to use this concept:

No more taxes!  Unless you're rich!

Now, the standard answer would be: "Well, that won't raise enough money."

So: Is it possible to raise some numbers as follows?

ITEM OF SPECIFIC PRIVILEGE --> Charge For Having Specific Privilege --> Money that would be raised on today's figures (from charging those who have the specific privilege)

Then add it all up...to see how many privileges will need to be charged for in order to cover...what...basic living allowance, basic pension, basic healthcare for all--plus no taxes for...those not benefiting from the specific privilege?

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Mon Mar 5th, 2007 at 08:07:41 AM EST
In my view the quesiton of valuation of privileges is the key technical challenge (as opposed to the linquistic challenge).  I don't have links handy but I plan to go into this in a future diary.  Rough estimates in the USA indicate that the annual rent from the obvious privileges are 35-40% of GDP.  There is enought money in privilege to run the government.  (I would also point out that the expenses of operating government are likely to fall if we collect for privileges.)

But the challenge is more complicated that just taking a shapshot of values at a moment in time.  We need models based on a generalizable set of factors such that we can perform dynamic modeling.  As soon as we start shifting taxes onto privilege the value of privileges will change (and quickly).  For example, core urban land will probably become more valuable while the the far edge suburbs will lose value.  If US cities become more compact and livable, the rent of oil bearing lands might decrease.  

by Geonomist on Mon Mar 5th, 2007 at 12:18:25 PM EST
[ Parent ]
If we want to use privilege as a tool to analyse socio-economic systems, I think it is important not to confuse the concept of privilege as (if I understand correctly) is proposed by Geonomist and the mundane meaning of privilege as in "the privileged class".

In the first case it is a concept that applies to every member of the society (even if some have more privileges than others), especially if we consider property as a privilege.

In the second case, it is a rhetorical figure which can be used in a political narrative.

 

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Mon Mar 5th, 2007 at 01:07:12 PM EST
[ Parent ]
I like very much how you tie in the notion of reciprocity with your idea of privilege.

However, I am unclear as to how you apply the notion of privilege to labor, in particular, what privilege has to do with taxes and labor.

Through privileges governments force some people to work for others and also force workers to work for less than they might otherwise.

Could you give an example?

... the combination of taxes on labor with little (or no) charges for privilege creates a downward pressure on wages. ... Without charges that neutralize the power of privilege labor will never benefit from "tax reductions".

What specific privilege are your juxtaposing to labor here?  The privilege to employ labor?

Suppose I hire a web developer to build a website for me (or a salsa teacher to teach me how to dance, or a translator to translate a document for me, etc.)  Per our agreement, the resulting website becomes my property, to which she has no claim.  In return for her time and labor, I pay her a fee to which she agrees.  We both come out "winners" in this relationship: I have a new website, she has more money.

It is not clear to me that one party has more "privilege" than the other in this picture:  Do I have the privilege of hiring her to build a website for me, or does she have the privilege of receiving payment from me for her work?  In this case, and probably many others, who the person having the "privilege" is must certainly be a matter of point of view and circumstance:  I am grateful to the developer for her specialized skills and efforts (i.e. I am privileged to be able to have her work for me), while she is grateful to me for the opportunity to earn a living through her work (i.e. she is privileged to work for me).*

And in terms of "taxes on labor", I don't see how privilege comes into play at all.  Which one of us is to be taxed for our privilege:  me for the privilege of hiring the web developer, or the web developer for the privilege of working for me and getting paid for it?

Truth unfolds in time through a communal process.

by marco on Mon Mar 5th, 2007 at 08:18:53 AM EST
The first point can best be understood by considering the privilege of holding a portion of the earth's surface (land privileges).  In a large city practically all the land is privately owned or otherwise off limits for commercial use (parks and other public lands.)  What options does a person with only their labor have?  Whatever their business, they have to be somewhere and that means paying someone who already "owns" space in the city.  

Sure they can bargain with several privilege holders but the power arrangements are extraordinary unequal.  Consider the effects of the passage of time on each party.  Failure to reach a deal costs the privilege holder only his opportunity cost and in a growing city the increase in privilege value is probably even greater than any such loss.  For the laborer failure to strike a deal will likely result in immediate personal hardship.  Who has the stronger bargaining position?  Throw in the possibility that there are several laborers bargaining against each other and there will be no mystery in the direction of wages.

But now let's re-run the film with the assumption that the privilege holder must pay annually for his privilege regardless of other circumstances.  How eager will privilege holder be to strike a deal?  Time is no longer his friend.  Each party will be eager to strike a deal, with probably the privilege holder being slightly more eager.  Which way do wages tend now?  

The two bargaining environments outlined are the result of policy choices, not anything inherent to the situation.

While it is easy to imaginge the three-dimensional space of a city, the same sort of bargaining process plays out for minerals, pollution rights, driving rights, etc, althought they may be a bit more comlex to visualize.

Regarding your web-designer example, I don't see where privilege even comes into play as long as there are no un-due licensing laws preventing either of you from practicing your chosen occupations.  The two of you are just a couple of people trading your labor.  The only place privileges would come into play is that under a system of privilege taxation both of you would have a broader range of locations to choose from and so might work more efficiently, and did I mention that both of you would also be releived of taxes on your labor?

The issue of how privileges interplay with wage rates is a complex subject, which I am trying to answer compactly.  Please accept my appologies if I have not been clear.

by Geonomist on Mon Mar 5th, 2007 at 12:52:17 PM EST
[ Parent ]
The first point can best be understood by considering the privilege of holding a portion of the earth's surface (land privileges).  In a large city practically all the land is privately owned or otherwise off limits for commercial use (parks and other public lands.)  What options does a person with only their labor have?  Whatever their business, they have to be somewhere and that means paying someone who already "owns" space in the city.

As opposed to? What would be the alternative - private ownership, public ownership, cooperative ownership - whether or not we call it ownership someone has control over the property or enterprise. If you want to find a place to live or work you need to get those people to let you live/work there. In other words, there is no doing away with these 'privileges', just the possibility of shifting who controls them. So if you want to argue against private land ownership, for example, you also need to explain how it will be controlled, and why such an alternate scheme would be better for your average individual.  

by MarekNYC on Mon Mar 5th, 2007 at 01:39:28 PM EST
[ Parent ]
Property rights in natural resources such as land would still remain within our historic notion of private property.  But just considering land, it really consists of two distinctly different concepts.  

First, the exclusive right to use and control a given piece of the earth, subject to not breaking other laws or harming anyone else.  It is absolutely necessary to preserve these sorts of rights if we want people to use land intensively.  Who would construct a building without being assured of rights of control?

Second, comes the right to collect the value created by the privilege.  My theory of charging for privileges splits these two concepts apart.  As the privilege charge is phased in the selling price of land (and other privileges) would fall to 0.

Of course, in the bargain we would phase out taxes that fall on specific activities carried out by the owner such as sales taxes, building taxes, income taxes from income generated on the property.  

The tax shift I propose essentially strengthens property rights having to do with privacy, and production while eliminating private interest in profit from privilege directly.  There would be no change to the core property structures although common practice and expectations would change considerably.

by Geonomist on Mon Mar 5th, 2007 at 06:34:18 PM EST
[ Parent ]
There is a rhetorical problem here: A 'privilege' etymologically refers to a special law applicable to an individual or a restricted group. In modern usage a 'privilege' is commonly contrasted to a 'right', whether a general right or a specific property right, and unlike a 'right', a privilege may be revoked.

Referring to a property right as a privilege therefore sounds odd and suggests that it is apt to be revoked. This, of course, stimulates associations with nationalisation and classical socialism.

It may be that the ideas you describe can be expressed in different terms, or in a way that uses the term 'privilege', but minimises this problem. I can see the political attractiveness of building on the negative connotations of 'privilege', but I'm concerned about the net effect.

In advancing a political idea, it's important both to motivate a block of supporters and to reduce the motivation of potential opposition groups. The latter becomes more important later in the game, and I'd think expect that an emphasis on cutting (present) taxes and fostering economic growth would be a strength.

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Wed Mar 7th, 2007 at 02:58:53 PM EST
[ Parent ]
Your Henry George petticoat is showing (wink!).


Policies not Politics
---- Daily Landscape
by rdf (robert.feinman@gmail.com) on Mon Mar 5th, 2007 at 02:22:43 PM EST
[ Parent ]
It seems to me that three concepts are being mixed together.

The first, is that the use of certain resources is not compensated for by the user. The obvious example is depletion of non-renewable natural resources. The other side of the coin is the ability to pollute without paying for the costs to the global ecology. These two are the "externalities" that many ecological economists have been talking about for the past few decades. It is true that until recently their ideas didn't get much notice, this has started to change (slightly).

The second, is the need of governments to finance operations by raising revenue. From an abstract point of view it doesn't much matter how this is accomplished. Some societies tax labor, some tax purchases, some tax profits, some tax fixed assets (like real estate), most tax all of them to some degree. If taxes on a sector make the costs go up then what that sector will demand in terms of fees gets increased to compensate.

To make a somewhat artificial example: taxes on earnings go up, making it harder for workers to support themselves, so they demand high wages. The higher wages cause the firms to raise prices thus putting the final cost on consumers. If instead the taxes on labor were kept low and the tax was imposed as a VAT then the effect on the final price would be the same.

Third, taxes are used to control social policy. Governments believe that it is easier to influence behavior via the pocketbook then via other means. So if it felt wise to discourage alcohol or cigarette use then put a tax on them. If it is felt desirable to increase drilling off shore then give a tax credit for the activity. This technique is open to abuse and is frequently abused as a result. The changes to the tax laws are easily buried in arcane legislation and the quid pro quos to the legislators are hard to discover. Ideally in a democracy such special purpose policies wouldn't exist, but no one even contemplates such a world.

Right now the tax policies which favor the super wealthy are causing a distortion in social policies and this has led to a revival of discussions of Populism. But, correcting the most outrageous offenses won't solve the underlying problems of society. As long as the goals of industrialized society are focused on a capitalist/consumerist model taxes will continue to be used for social policy purposes.


Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon Mar 5th, 2007 at 09:17:36 AM EST
I stand completely guilty as charged!  I am trying desperately to unify the three concepts (actually several more) into one unified linguistic frame.  

I will respond to your points in the order you raise them.  

Regarding pollution, the earth has some carrying capacity for absorbing pollution.  If I pollute the air in pursuit of my own gain I exercise a privilege in that I use the air in a manner that prohibits you from using it (or requires you to use it in a diminished capacity).  That is a privilege of limited duration and payment should go to the injured parties for the duration of the loss.  For non-renewables, such as oil. the privilege is of unlimited duration.  Admitedly, valuation of this privilege is difficult because the wronged parties are not here to bargain for themselves, but I will go out on a limb for my great-grandchildren and say that oil is grotesquely underpriced.  If the worst case scenarios about global warming are correct then our generation is executing the ultimate privilege by denying life completely to all future generations beyond the not too distant future.

Regarding your second point, I note that the very existence of government is a privilege.  Through the bargain of government we empower the occupiers of government privileges to exercise great power over our lives.  We have every right to demand reciprocity in the form of periodic elections, and standards of behavior different from the citizens at large.  Regarding your revenue point:  

...From an abstract point of view it doesn't much matter how this is accomplished....

I could not disagree more completely.  Taxes on privileges do not make the "sector prices go up."  The privilege holder will not be able to charge more.  This is a crucial point regarding privileges.  Charging for privileges in no way alters any supply/demand relationship.  That is precisely the economic efficiency argument for taxing privileges. The moral argument is that government must not favor some at the expense of others.  Part of the beauty of a grand tax shift onto privileges is that the most economically efficient policy is also the most moral.  One of the most vile poisons (of the many vile poisons) spewed by the right is the notion that economic justice and equality must be sacrificed for economic efficiency.  It is one of the most brutal lies ever successfully propogated.  It is one of my personal goals in life to crush it.

Your third paragraph touches on an important point that would be worthy of a complete diary.  Some taxes such as income taxes and VAT do (if properly structured) tend to collect considerable privilege income but they do so quite ineffectively.  The original American income tax was, for practical purposes, a tax on economic rent.  But it has been debased over time such that is is now becoming a tax on wages.  But to your point there is a complex interplay in how taxes are shifted, but only when they fall on labor or productive capital (not privileges).

Regarding your last point, my view is that "sin" taxes fit very neatly within the framework of privilege.  If someone is to smoke then they are depriving others of use of the adjacent air.  Payment is in order.  In a civilized society people have to take care of each other when sick, and smokers are going to get sick with greater frequency than non-smokers with grinding mathematical certainty.  Paymemt is in order.

Drinking often involves some suspension of normal civic/social responsibilities, which is to say that others (non-drinkers) pick up the slack.  Reciprocal payment is in order in proportion to the level of loss in responsibility.  If we all get drunk together we have a uniquely burdensome loss of responsibility that reasonably might require an even greater reciprocal charge to pay for the predictable costs incurred.  

(I actually do like to party-hearty despite the dry description above....just sayin')

If you want to relly put the super rich (allmost all from privilege) on their heels, just start taxing their privileges directly.  At that point you will have their undivided attention.

by Geonomist on Mon Mar 5th, 2007 at 02:00:56 PM EST
[ Parent ]
I look forward to more essays from you on this topic. I find that the more one tries to explain one's own thoughts to others the more clear they become to one's own self.

This is the case with privilege, you are mixing together special rights which are granted undemocratically with simple use.

In the case of government (at least a democratic one) the presumption is that it acts on behalf of the people (or at least a majority). That this turns out not to be entirely true in practice does not change the theoretical ideal. Now if you want to argue that this ideal can never be realized in practice so that we really should adopt another form of government I'm open to fresh ideas.

As to using taxes to control unwanted behavior, there is nothing special about alcohol or tobacco. The fact that they produce bad side effects is incidental. We could just as easily impose a meat tax since it is associated with heart disease and requires an excessive amount of resources to produce compared to eating plant materials ourselves. That one is taxed and not the other is a function of our Puritanical social underpinnings.

I'm afraid that much of your objection to privilege is based upon a similar moral stance. This is admirable, and I agree with it, but it can't be the basis for public policy - the moral axioms differ from society to society. We need a more "objective" measure to decide when someone is getting more of their fair share of the pie.

John Rawls tried to do this with regard to legal standing. After a lifetime of work his ideas really just boil down to the golden rule, not a bad principle, but not very original.

Many societies have had little in the way of privilege. Look at the subsistence tribal societies for example. People owned little more than their clothing, tools and shelter. The concept of having an excess to hoard made no sense and the land was not something that was "owned" at all.

I'm going to go out on a limb and say the reason for the rise of greed is because people aren't assured that they will be taken care of by society. That is the social services for health care, child care and old age care are not assured. If they were would there be any need to save for retirement?

Sorry to ramble on, but what needs to be clarified is: is this instance of government just failing us or is the basic organization inherently defective?

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon Mar 5th, 2007 at 02:44:29 PM EST
[ Parent ]
Good points - all of them. I especially like the idea of achieving greater clarity of thought by sharing; surely the very essence of what ET is about?

is this instance of government just failing us or is the basic organization inherently defective?

It would be extremely worthwhile at some point to bring together all the discussions we have had on Open Capital, Cooperatives, Self-Organizing Systems, fiat money, privilege, Peak Oil (even copyright!) etc etc into some kind of platform for change. All these regularly occuring subjects seem to me, at least, closely connected windows looking in at the same problems.

You can't be me, I'm taken

by Sven Triloqvist on Mon Mar 5th, 2007 at 03:38:19 PM EST
[ Parent ]
 the most economically efficient policy is also the most moral

This is a close analogy to the proposition I am putting forward in relation to the new partnership-based new legal and financial structure or "enterprise model" (based upon new legal "wrappers" such as UK LLP's and US LLC's) now emerging.

It is no coincidence that these structures are Islamically sound at a very deep level.

I believe that like all emergent phenomena this "Open" Corporate is emerging (the number of UK LLP's has more than doubled in 2 years) because it is superior to existing company forms and therefore those enterprises which do not use it will be at a disadvantage to those who do.

The generic use of such non-hierarchical and networked structures will IMHO lead to new possibilities in terms of risk and revenue sharing which put into practice new "privilege rental" capture possibilities.

Land value rental may come about since the "Land Partnership" model I advocate comprises BOTH an optimal form of Equity Release AND an optimal form of REIT and it is simple for a Community then to agree to include a land rental element in addition to the rental of the capital invested in the land.

See

http://www.opencapital.net/papers/Zakcoownership.doc

Corporate taxation of "profits" becomes irrelevant because LLC's and LLP's are tax transparent or "pass through". But I would add that the privilege of Limitation of Liability should nevertheless be taxed by applying a levy on GROSS corporate income at the clearing level.

This in turn becomes possible because generic clearing - not requiring banks as credit/payment intermediaries - allows simple application of a levy or tithe at the clearing level.

So we collect a $20/barrel levy on all oil sales, pool it and use it to invest in renewables globally with an "energy dividend" to all.

And so on.

It is the existence of new consensual "Open Corporate" legal protocols which enable everything else, I believe.

But to get this message across, the right language - the "narrative" - is crucial, and here I like to refer to "asset-based" financing (through investment via non-toxic legal wrappers - NOT corporations) as an alternative to "deficit-based" but "asset-backed" (eg mortgages).

 

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 5th, 2007 at 03:03:34 PM EST
[ Parent ]
You said:

So we collect a $20/barrel levy on all oil sales, pool it and use it to invest in renewables globally with an "energy dividend" to all.

Sign me up with this idea but I think you are missing a "0".  Americans need $250/barrel oil to get through our skulls that we have to change.  I know my people.

by Geonomist on Mon Mar 5th, 2007 at 06:46:18 PM EST
[ Parent ]
Americans need $250/barrel oil to get through our skulls that we have to change

Maybe after Bush bombs Iran in April...

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Mon Mar 5th, 2007 at 06:58:29 PM EST
[ Parent ]
Very interesting reframing.

I agree with Bruno-Ken that the concept of privilege needs to be defined more accurately. I think you mean 'freedoms that rich people have that poor people don't' but it's not completely clear if that's correct.

Also, the roots of 'privilege' as a word imply private law - effectively being exempt from the usual rule of law. This is something else that could maybe be emphasised usefully.

But in general I think attacking assumptions of privilege is a wonderful angle to take.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Mar 5th, 2007 at 10:38:39 AM EST
I openly invite refinement of this idea by others.  For now, my working definition of a privilege is:  A set of rights (or obligations) given to a person, or group of persons, that is not given to others.

My work on this idea comes out of my own experiences.  I grew up hearing about the economic theories of Henry George and always thought his ideas were compelling both in their sense of justice as well as economic efficiency.  But in the USA there is something in the American mind that just freezes up like a Windows '95 operating system when you talk about taxing land.  Some years back I started tinkering with alternatives for discussing the idea of "economic rent."  

As part of my efforts I posed the question to myself: "What uniqueness in my Countrymen's heads could be harnessed to better understand economic rent?"  We may have cultural/linguistic pecularities that block the acceptance of the classic economic terms but surely there must be an opening somewhere using different language.  It is a peculiar feature of the American psyche that the word "privilege" in the context of political economy has the connotation of something slightly suspect, or even completely wrong.  In practice, this is ridiculous because we are wrapped in as many privileges as you are in Europe.  But nonetheless I have been finding that this terminology seems to work.  It pulls at the typical American mind in such a way that the listener can entertain a new idea, especially if you don't start with privileges in land.  It would not surprise me if Europeans respond differently to these terms.

by Geonomist on Mon Mar 5th, 2007 at 02:32:15 PM EST
[ Parent ]
Besides welcoming you... I want to follow up/hijack Brit as always.. trying to detail and insist on his frame (it is almost an habit now Brit... but I love to agree or disagree about your frame.. I dunno way...:).

I will try to say very clearly what Brit "could" imply: since we are talking here about narratives and its transformation (or intention) to transform it in mythical foundations in the US, it is vital to clarify the language and the history behind your new proposal.

Because any other narrative can be adapted in a different way to your own mythology if is sybolically needed (as most of the US middle class would do if presented with such a new vision).

More clearly, if you talk about privileges and taxing those privileges think that an american would understand "socialized medicine" as a privilige if he is "in the business" and as "evil delivery" if he is used to right-wing propaganda for the middle-lower classes.

So, the word privileges can boomerang you. Specially, since neolib accuse europeans of having "a lot of privileges that we can not afford" (in their own words).

If you want to produce change by changing the vision or discussing and heading a particular narrative you'd better chose it accuretly.

So.. I could not agree more with you Geonomist.. but watch out with the surface...it is all that really matters in this kind of fight.

In this sense.. the comment of Brit fits perfectly in this comment..."I think you  mean freedoms that rich people have....".. brilliant

Oh.. and another note.. changing a mythological true is almost impossible.. and in the US right-wing neconomic narrative a mumble-bubble is almost a fundational myth nowadays... you would need a revolution to change it... slow motion or fast mootion, but revolution. I firmly believe that you can change (maybe only) narratives with a dissonance (such as "the republican are the tough guys that take care of the military" with the dissonance of Walter Reed.. this is why these histores are so powerful and why media is powerful).. but a fundational mythology? I doubt it... I do not think you can... you need something stronger: revolution or indoctrination.

My opiniion. And Brit: you can hijack this comment too :)

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon Mar 5th, 2007 at 03:23:46 PM EST
[ Parent ]
And I will. :)

If you see it as a narrative or a mythology, the problem becomes one of re-engineering the mythology.

What made the Chicago school so remarkable is that they did this consciously, deliberately and successfully. Where there used to be some nominal diversity of economic narratives, now there's only the Anglo-Saxon consensus.

In linguistic terms, this explains why all of those 'policy studies' think-tanks use that name for what they do, and why the screeds in the Econo, the FT, the WSJ and the rest use the same linguistic register not only to imply social dominance, but also to eliminate competing points of view from the narrative space.

The point is really that it's a two-pronged narrative attack. Not only is the mythology exclusive and self-privileged, but the means of distribution and the social status markers in the language reinforce the message.

Deconstrucing that isn't just a case of debunking the talking points, but of constructing an alternative narrative that's equally irresistible.

Marxism used to do this. After Marxism died (with its claims of the inevitably of history) there's been nothing on the left to fill the gap.

One of the problems for the left is that narratives are defined as being against the privilege markers assumed 'naturally' by the right. This makes them weaker because we let the right define the playing field.

A major win would involve creating our own narrative inevitabilities and forcing the Right to defend its assertions of dominance on our turf.

Using the privilege frame is one very good way to do that, because it makes the assertions explicit and conscious. If they're made conscious it becomes clear they're really only pseudo-rational at best, which weakens them dramatically.

I suspect for maximum impact a successful narrative has to be partly irrational. Marxism was only pseudo-rational, and that's one of the things that gave it memorability and staying power. The Anglo-Saxon consensus is also only pseudo-rational.

So a Left-driven attack on privilege also has to have some element of pseudo-rationality about it, preferably one that stresses how inevitable it is, and how impossible it is to frame the world in different terms.

A neat trick if someone can do it. :)

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Mar 5th, 2007 at 03:55:44 PM EST
[ Parent ]
I think probably your best comment ever....

Brilliant.

You know where I come from so I would not use the pseudo-reality word since they are more real than reality (or in other words, they are real in any meaningful use of the word "real")...

But your comment about the Chicago School is spot on. You need revoluon or indoctrination. In the case of chicago it was clearly the later.

It is really one of the most incredible discovers of antrhopology as a science, you really can generate a fundational myth with indoctrination. And the studies done to uncover the method have been done this century. It is true that there are some adaptative aspects and that the Nazi method could not use exactly the same framework now since the "this is propaganda" narrative has reached the middle class... but you could see that formally there is no big difference between a close sect, a religion, Goebbles, scientific indoctrination (learning the fundational myths of science) or the Chicago school... they always use the same template... it is something very deep. And the chicago school has been a master piece...a  truly master piece.

In a way they are better than purely scientific or religious indoctriantion by wich we acquire a structure or a symbolism to see reality.. the Chicago school changed the vision we had about our close and inmediate reality. About our most basic economic need.. Really amazing!! Disgusting but amazing.

So, in some sense, they were much more brilliant than anything I have seen before..and your comment has clarified it why  regardign their master combiantion of the tools they had more than a hundred pages of research.

Brilliant.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon Mar 5th, 2007 at 04:29:18 PM EST
[ Parent ]
 
the problem becomes one of re-engineering the mythology.  

Not quite - this is where Pirsig is a continuing revelation to me - we must EXTEND the (irrational/intuitive) "Mythos" - from which springs the (rational/dialectical) "Logos".

 

I suspect for maximum impact a successful narrative has to be partly irrational.

Exactly - if we are to extend the mythos we are straying "outside" the accepted bounds of "rationality". This is the zone of insanity into which Pirsig strayed in his attempt on the Summits of Reality and the boundaries of conventional Philsophy.

I believe that a Metaphysics of Quality or Metaphysics of Value (it's the same thing) may give us the philosophical tool we need - a relational logic?

How this pans out linguistically God knows, but I believe that if we distil the essence of ET we might approach it.

What do you reckon, Sven?

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 5th, 2007 at 08:52:04 PM EST
[ Parent ]
Quite a nice summation!

Welcome to ET, and keep posting.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Mon Mar 5th, 2007 at 12:36:29 PM EST
There is strong and almost unanimous opposition against the extremity of the necon free market positions at ET.  Even those who conceptually favor free market concepts on this site, such as myself, are strongly opposed to policies such as the US elimination of the Wealth Tax (the so called death tax); favor, and would argue to improve,  policies such as the negative income tax that are a step toward destributing wealth in the US; completely understand and support regulation of business to, for example, make markets competitive, penalise polluters, and charge those who use the world's natural resources for their own gain; and clearly see an important and significant role for government.

However, and I'll speak for myself here, there is a requirement for a more intellectually solid argument than you provide.  This is a blatant strawman arguement--set up positions that are so extreme that they go far beyond the positions of, for example, University of Chicago economists, and others:

In this corrupted language (and accompanying world-view) several stock truths just always present themselves as obvious.

  1.    Government in service to ordinary people is evil and incompetent.
  2.    "Lower taxes", or lower wages, or possibly both can solve all economic problems.
  3.    "Investment" is a magic elixir and must always have first priority for public policy.
  4.    The poor are to blame for systematic poverty and nothing can really be done about poverty.
  5.    Everything would be fine if government would just leave "industry" alone.
  6.    "Private Property" is so obviously sacred that even asking for a definition makes the asker deeply suspect.
  7.    People who don't accept 1-6 might be well intended, but they are really just stupid and making things worse.
I don't agree with any of your 7 points, and you would be hardpressed to find one economist that would agree with them.  "lower taxes or lower wages, or possibly both can solve all economic problems"--how absurd!!  You insult our intelligence with this rubbish.

Straw man

This is the fallacy of refuting a caricatured or extreme version of somebody's argument, rather than the actual argument they've made. Often this fallacy involves putting words into somebody's mouth by saying they've made arguments they haven't actually made,

<snip>

In debate, strategic use of a straw man can be very effective. A carefully constructed straw man can sometimes entice an unsuspecting opponent into defending a silly argument that he would not have tried to defend otherwise. But this strategy only works if the straw man is not too different from the arguments your opponent has actually made, because a really outrageous straw man will be recognized as just that.

There are very legitimate arguments against more right wing economic positions.  Your first diary has not given me hope that you will be presenting any of those.
by wchurchill on Mon Mar 5th, 2007 at 01:52:43 PM EST
I don't agree with any of your 7 points, and you would be hardpressed to find one economist that would agree with them.

Which is probably true and actually greatly in favour of Geonomist, not against him, bearing in mind that the assumptions - and the discourse - that underpins modern economics are complete bollocks.

"lower taxes or lower wages, or possibly both can solve all economic problems"--how absurd!!  You insult our intelligence with this rubbish.

Now I admire a lot of what you say wchurchill, but when did you last read any of the financial press? It's full of such intelligence-insulting rubbish - telling us poor benighted Europeans how our SCLEROTIC (dontcha love that word?) Economies can approach the US miracle only through:

(a) lower taxes;
(b) "labour flexibility" ie lower wages and mobility at an employer's whim.

These are no straw man arguments - these are smack bang on the button, and you do not have a leg - straw or otherwise - to stand on.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 5th, 2007 at 02:13:35 PM EST
[ Parent ]
I would like to agree with you, wchurchill, but you should read the permanent campaign led by the Congregation for the Propagation of the Economic FaithTM in the leading media (WSJ, FT, Le Monde...).

And you cannot blame only lazy ignorant journalists, well-known economists contribute as well: here is a paper from Edmund Phelps (Nobel Prize) on the WSJ opinion journal,  a first discussion of it on ET and a diary about it by TGeraghty: American Economic Leadership and European Dynamism

And this is but one example...

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Mon Mar 5th, 2007 at 02:49:56 PM EST
[ Parent ]
First thanks for the references.  I had read them, but went back and reviewed them again.

Second, a little tongue in cheek, but why this attack on University of Chicago?  Checking Edmund Phelp's CV,

Positions

McVickar Professor of Political Economy, Columbia University, 1982-.
Resident Consultant, European Bank for Reconstruction and Development, 1992-93
Professor of Economics, Columbia University, 1971-82.
Professor of Economics, New York University, 1978-79.
Professor of Economics, University of Pennsylvania, 1966-71.
Associate Professor of Economics, Yale University and Staff Member, Cowles Foundation, 1963-66.
Visiting Associate Professor of Economics, Massachusetts Institute of Technology, 1962-63.
Assistant Professor of Economics, Yale University and Staff Member, Cowles Foundation, 1960-62.
Economist, RAND Corporation, 1959-60.
Assistant Instructor in Economics, Yale University, 1958-59.

it looks like the closest he ever got to Chicago is New Haven.

Third, I didn't really realize that this diary was going to morph into the Anglo/Saxon neocons versus the European Socialists dialogue that is so common here.  I find it very interesting to look at the different economic models, always trying to keep in mind the differing social, historic, and cultural backgrounds in which they occur.  Because I think there is opportunity to learn from the different approaches.  But I find this argument that "my" system is better than yours because my unemployment is lower, or my income distribution is better,,,,,to be boring--the numbers aren't exactly equivalent, the societies are different, etc. etc. etc.  If France and Germany want more socialized economic models,,,great!  It gives Americans a chance to look at those experiements, and if certain elements look good and would work in the different American culture and society, it's worth a try--vice versa for the Europeans.  So perhaps I don't see this cabal of neocons working to overturn European economic models.  

Somewhat the same with healthcare--socialized medicine is well engrained in Europe, and it seems people basically like it.  And there are some good ideas that could help America,,,,but socialized medicine won't work in the US, regardless of what Europeans and some well meaning Americans may think.  Those models will prevent the rapid access to specialists and access to new technologies that Americans expect.  So learning from what we see and incorporating aspects, great!  Full conversion to the European model, never happen.

But I travel in a world of business and economics, and have a number of conservative friends,,,,and I don't know anyone that would support what I called the "straw man" positions in this diary.  Nor did I see anything in the Phelp's article that would make me believe, for example, that he would support

Government in service to ordinary people (like administrators of student loans, like the police, like the army)is evil and incompetent.
   "Lower taxes", or lower wages, or possibly both can solve all economic problems.

by wchurchill on Mon Mar 5th, 2007 at 08:04:55 PM EST
[ Parent ]
Stepping back from my writings and your comments, I think we may have considerable agreement along with some mis-understanding.  

First, despite my dis-like of what I term "free marketers" I passionately believe in real. free markets.  In fact, I beleive in free markets so much that I think we should try them some day.  I use the "free market" notation to mark my disdain for the distortion of language that has gone on in economics.

Regarding the "straw man" charge there is a bit of truth to what you are saying in that rarely would one person exhibit all of the characteristics I describe.  But I do stand by the general charge that when diagnosing any economic problem the perscription is almost always the same.  When the airlines are in bankruptcy, the problem is always diagnosed as too high wages for the pilots and mechanics.  Never is the problem the amount of rent flowing to bondholders or the exhorbinate payouts to the executives (also mainly economic rent).  We never hear for a call to completely liquidate the disfunctional airlines.  The perscription for any developing country is almost always to sell off its natural resources in a "fire sale" to foreign investors.  The story goes on and on with never a mention of economic rent or the privileges from which rent flows.

You stated:

there is a requirement for a more intellectually solid argument than you provide.

I thought I was clear that this posting was just a beginning framework for how we might strucutre a Liberal/Left narrative.  Of course there is a huge amount of work to be done to build out the intellectual rigor needed.  Personally I am working with GIS tools to build real estate valuation models. I will share some of that in future diaries. There are many other areas in need of similar valuation/modeling work (pollution, non-renewables, patents....).  

by Geonomist on Mon Mar 5th, 2007 at 03:01:27 PM EST
[ Parent ]
Your remarks here are very reasoned and generous.  I can't say they have persuaded me intellectually, but I'm looking forward to reading more on this issues you outline.  And I also see, based on your comments, that there may be more agreement than I initially thought.  In retrospect my comments were overly strident, and at a minimum I should have welcomed you to ET.  Welcome!
by wchurchill on Mon Mar 5th, 2007 at 03:50:41 PM EST
[ Parent ]
I also think it would be interesting to look at what the French school of economics named "Economics of Convention" or "Convention Theory" (Laurent Thévenot, André Orléan, Olivier Favereau...) has to say on these issues.

Convention theory deals with decision making and coordination in case of imperfect and asymmetric information. It states that the vast majority of coordination problems are more complex than that addressed in standard information economics approaches, characterised by economic rationality (Arrow-Debreu model).

Convention theory addresses the problem of economic coordination in the presence of"radical uncertainty"when all future contingencies cannot be specified ex ante (most of the time). It analyses how socially defined rules or"conventions" help coordinate activities in this class of situations, how individuals invest in those rules and how the rules of the game are created and evolve.

For Convention Theory, the market is but one of several forms of convention, not the model for all of them. It sees markets as one of several ways of coordinating activity, and focuses on how these different forms"interpenetrate" each other (e.g., how
non-market rules structure price competition).

(source: Michigan State University)

Here is a presentation: Notes on Convention Theory

See also"On Justification, The Economies of Worth" (2006, Princeton University Press)

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Mon Mar 5th, 2007 at 02:23:14 PM EST
We often speak here of the need for a new narrative - in fact, of the impossibility of changing things without one. The freshness and sense of purpose of your ideas makes you really welcome here, Geonomist.

One point that intrigues me in your description of privilege is the role you ascribe to government (which I think we might more often call, in Europe, the state, since we don't have the problem of confusion with the states that are united..?). Certainly government/the state regulates and distributes privileges you mention - broadcasting rights, for example. But, in doing this, isn't it the agent of forces (of wealth and power) that own the great (-est?) privilege of controlling what in principle derives its legitimacy from the democratic expression of the will of the entire people? Isn't that a privilege that we should not be out to tax but to abolish?

I've a number of thoughts that spin out from that, but enough for now. I look forward to your following diaries.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Mar 5th, 2007 at 03:27:32 PM EST
Where's Migu when we need him? ;-)

You can't be me, I'm taken
by Sven Triloqvist on Mon Mar 5th, 2007 at 03:46:44 PM EST
Huh?

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Mon Mar 5th, 2007 at 04:12:37 PM EST
[ Parent ]
I was trusting in you to apply a surgical knife to slice through all this bonhomie ;-)

You can't be me, I'm taken
by Sven Triloqvist on Mon Mar 5th, 2007 at 04:14:47 PM EST
[ Parent ]
And why would I want to do that?

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Tue Mar 6th, 2007 at 02:39:15 AM EST
[ Parent ]
Oh - go and hedge something and forget it. I can't explain...it was a friendly remark, though.

You can't be me, I'm taken
by Sven Triloqvist on Tue Mar 6th, 2007 at 02:54:18 AM EST
[ Parent ]
Sorry I could not participate. The concept of economic rent is a fundamental one, that we discuss here in many indirect ways. I really like Geonomist's direct and formal approach to a concept I'd like extended massively: taxing (economic) rent.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Mar 7th, 2007 at 05:26:29 PM EST
Of course, it is also a threat to those entrenched interests that aren't taxed right now...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Mar 7th, 2007 at 05:27:07 PM EST
[ Parent ]
The problem with taxing something is that one has to be able to quantify it first.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Wed Mar 7th, 2007 at 05:37:55 PM EST
[ Parent ]
I think this is an interesting thought, and it would be fun to explore.  I think of all of us as borrowing our "possessions and things" anyway.  Life ends, and it's not yours.  I believe that passing wealth from generation to generation, family to family that is, can be a very bad thing--particularly when taken at the extreme of passing it to other generations without taxing it, effectively maintaining a wealthy class that one is born into.

but then what are the implications of this?  would renters invest in maintaining the property?  how would this concept fit into taxes on the generational transfer of wealth?  I'm looking forward to Geonomist's promised future diary on this.

by wchurchill on Wed Mar 7th, 2007 at 06:44:39 PM EST
[ Parent ]
This is THE best description I've seen of the need to "Tax privilege, not people" (My signature slogan) that I find the essence of Henry George that, unfortunately, gets lost in the "hair-shirted" response to his "Remedy" presented in Progress and Poverty.

A bit of updating of George's arguments from a perspective of causality and the essence of economic truth within the arguments can resolve many of the fallacies of today's economic analyses that keep repeating themselves shifting from one bunch of failed premises to another.

With some effort the basic issues become:

  1. The existence of stuff that gains economic value is inherited (From God or whoever or whatever, given your religious preference.) not created by the claimants of that stuff who obtain their privileged status by inheritance from those who took by force or agreement in an earlier time or gained their status from the elitist allocators of privilege through lawmaking.

  2. The amount of economic value stuff is perceived to have derives from both the activities of some people to collect, move, or reconstitute the stuff of nature and the existence of a viable society that can purchase (Through barter, money, or service, etc. exchanges.) MONOPOLIZED stuff. (Monopoly in this instance referring to the ability to control access to or charge for the use of the stuff [including "intellectual" property] and not the ambivalent meaning associated only with indefinitely large or extensive monopolies);

  3. Separating the relevant amounts of value created by each of the sources (i.e. -- The society's demand of the stuff and the owner's husbandry, relocation or reconstitution of the stuff.) is the essence of a rational economic analysis.  Determining how to distribute the cost of maintaining the society that sustains ownership of the stuff and creates the very viability of the society that creates the value becomes the outcome of the analysis as does the ability to determine the value of the various privileges; and,

that is what is presented in my Three Steps to Economic Freedom from the "Prologue - Cause and Effect" to "Step 1 - A stable Currency" to  "Step 2 - Taxing Monopoly" to "Step 3 - Sharing Nature" and finally addressing the changes needed to attain economic freedom with "Epilogue - From Here to There."

Tax privilege, not people http://www.geocities.com/jackodonnell.geo/index.html -- jbod
by jackodonnell on Thu Mar 22nd, 2007 at 09:05:11 AM EST


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