Jacob Shwartz-Lucas recently represented RSF at the Eastern Economic Association conference and the American Monetary Institute special event at Cooper Union, both in New York City. Jake writes:
This past week I attended the Eastern Economic Association (EEA) annual conference and an American Monetary Institute (AMI) event in NYC. At the EEA, I was able to see the Stand Up Economist Yoram Bauman, and get free copies of his comic book guides to macro and microeconomics. I also did a great deal of networking with leaders of the Basic Income Grant (BIG) Coalition. Proponents of a BIG believe that we should simply give everyone in society at least a small amount of money. The basic income is entirely unconditional. The rich and poor alike receive the same amount. BIG proponents favor funding such programs through land and other natural resource taxation.
In 2011, I stayed for a couple days in the village of Omitara/ Ojtivero, the site of the Namibian Basic Income Grant. Most households in the village pool their BIGs under an elder matriach, or “big mamma” as she is called. Each big mamma would allot part of the family funds to schooling, medical care, and small business ventures. Contrary to skepticism over whether the poor villagers would misuse their BIGs on drugs and alcohol, I saw a community that made extremely prudent financial decisions. My hosts were also overwhelmingly generous, serving me several meals and offering me their only bed.
The land the village is on is government owned, and the villager’s rent does not increase with the increasing living standards brought about by BIG. However, the village is very isolated. I asked my host “Where would you like to live?”. She replied “In Windhoek [the capital], but the rent is too high.” If there was a land value tax, without taxes on buildings and other forms of production, there would be a greater supply of living space closer to public amenities for these people. In the absence of a land value tax, communities enjoying no rent or fixed rent can quickly realize a significant increase in living standards. This is because the rent does not increase with the BIG in these situations. I suggested that BIG programs prioritize situations in which the rent will not increase.
The AMI event was scheduled to be held at the great hall at Cooper Union, but due to protests over a decision to start charging tuition, it was moved across the street. In brief, the problem addressed at the event was that of privately appropriated seigniorage, seigniorage being the difference between the value of money and the cost to produce and distribute it. Representatives of AMI believe that the interest obtained by private banks from loaning newly created money is an unearned privilege. Therefore, they propose that we move to a full reserve banking system and endow an independent monetary authority to determine the congressional budget limit. The government would then be allowed to spend up to that limit. It is an issue that many Georgists feel strongly about and it is one that perhaps we all should become at least somewhat familiar with. Overall, I had a very pleasant and productive experience this week.