I disagree with both Michael and Ed for reasons covered in the
Kelsonian tax philosophy section of my paper, "Beyond ESOP: Steps Toward Tax
Justice" ... Ed is clearly more of a populist, but his advocacy of Henry
George's single tax on land rents is on the same slippery slope of the
neo-Welfare State ideas advocated by Michael.
Regarding rent from land, why not structure land ownership (e.g., through
the use of a "community investment corporation" or "CIC") so that all citizens
own equity shares in the land and other natural resources, as Kelso
proposed? Then "rent" from development would take the form of
appreciated equity values and dividend incomes that would be connected
directly through private property stakes to all citizens of a community,
region or nation, depending on the nature of the natural resource owned by the
CIC. This would build economic power and ownership incomes directly in
the people, from the ground-up, rather than allowing the rents to flow
automatically into the hands of the politicians and bureaucrats.
Ed here:
The idea of a community investment corporation in
which all citizens are equal shareholders is a good one. The implication, as I
interpret it, is that leaseholds would replace fee simple ownership. Here
is where justice as well as economic efficiency benefit by an application
of competitive bidding for contorl over specific locations and natural
resource laden lands. The fees collected can be fully distributed to each
citizen as a dividend. The community can then bill citizens for
community-provided goods and services (i.e., impose user fees). Public
goods economics reminds us, however, that not all public goods and
services are easily or best paid for by user fees.
Norman wrote:
To the ordinary citizen a consumption income from rent and other natural
resources is no different from that received from other forms of capital
(assuming, as under Kelso's binary economic theories, that we define "capital"
to include natural resources as well as all other non-human factors of
production.) Once the rent and other binary incomes flow into the
pockets of citizens universally, as would automatically happen under the
proposed "Capital Homestead Act", the government would then be forced to go to
the people to meet the public sector's legitimate budgetary needs and not
simply have a "pot" from land rents to play with to continue to make decisions
from the top-down.
Ed here:
My only comment is to stress what I have come to see as the fundamental
observation that nature is not produced by human labor or by human-produced
capital goods. Henry George argued (persuasively, I believe, from a moral
perspective) that nature is the source of wealth but not wealth itself. This
distinction is extremely important in the discussion over what ought to be
protected under law as private property. Kelso and Adler took a very different
view, writing in *The Capitalist Manifesto* (p.49) "In a free society ...
wealth is anything that is regarded as wealth by a significant number of
persons. Anything which is prized for its exchange value and which is bought,
sold, exchanged, or systematically collected and exchanged among collectors,
is thereby empiracally determined to be wealth." For Mortimer Adler to have
come to this conclusion is strange, indeed, because it ignores the "ought," it
ignores the moral imperative. Henry George set down what I would describe as a
labor and capital goods theory of property, defining wealth as material goods
produced by labor and capital that has exchange value and satisfies some
desire or desires.
Norman wrote:
I think Henry George's critique of the current system was brilliant, even
if I disagree with the political wisdom of his single tax reform.
Attached for those interested is a paper I delivered to a Georgist conference
several years ago on a new "post-scarcity" synthesis of the best of Kelso,
Buckminster Fuller and Henry George.
Here is a brief excerpt from a note explaining the similarities and
differences between Kelso and George, as well as other great economic
theorists:
...While Kelso attacked economic monopolies and plutocratic
concentrations of capital assets as the cause of the purchasing power gap
that Douglas was rightfully concerned with, Kelso's approach would
redistribute future ownership opportunities (i.e. new assets and assets
transferred by deaths and sales). Kelso thus avoids the class conflict that
is associated with the charitable or government-imposed redistribution of
previously accumulated assets (as implied by distributism) or involuntary
redistribution of incomes through taxation. While Kelso would end the
monopoly of access to future ownership, he would do so without deriving
anyone of what they own, mainly by growing the asset pie and spreading the
ownership and profit distributions to all citizens.
Ed here:
Well, I ask, is this justice, or simply more of
what we have had in the social democracies since the beginning of
liberalism; namely, what political scientists refer to as "disjointed
incrementalism"? We already have a high degree of class conflict, growing
worse. The source of this conflict is monopoly privilege. And, as Winston
Churchill wrote long ago, land monopoly is not the only form of monopoly but
it is the mother of all monopolies and the mother of our most serious
societal problems.