(2014 July-August) Contents

Posted August 1, 2014

– Serving the Earth Sharing Community

1. (2014 July-August) Conference: CGO
2. (2014 July-August) Conference: Community Gone Viral
3. (2014 July-August) Video: The End of Poverty? & Hawaiian Independence
4. (2014 July-August) Good Press: Optimal Tax Theory
5. (2014 July-August) Good Press: Inequality from Quesnay to Piketty
6. (2014 July-August) At the Margin: Illegal Children -Send them back?
7. (2014 July-August) Numbers: Measuring Economic Rent
8. (2014 July-August) Movement Progress: Clifford Cobb


1. (2014 July-August) Conference: CGO

Thank you!

The Council of Georgist Organizations would like to thank its 2014 Conference sponsors and donors, especially, Robert Schalkenbach Foundation, the Foundation for Economic Justice, the Henry George School of New York and Todd Engstrum, Area Sales Manager-Southern CA Reeds Inc. for the delicious ginger and root beers for our “Happy Room”.

2014 CGO Conference

Nearly 85 Georgists from North America, Great Britain, New Zealand and Australia had an amazing time at the CGO’s 2014 Conference held July 7-11, 2014 at the deluxe Newport Beach Radisson hotel. The group heard speakers on land markets, parking, social media, movement building, public banking, land rent and Proposition 13. We celebrated Henry George’s 175 birthday with a visit from a 16 year old version of Mr. George (Dave Giesen) and older Mark Twain (Dan Sullivan) as our Banquet Speakers.

Conference Evaluations

It’s never too late to return your 2014 CGO Conference Evaluation. By expressing your opinions, you help the Program Committee with its plans and procedures for future conferences, so please return your thoughts ASAP.

2015 Dates

The Council of Georgist Organizations and the International Union will hold a combined conference, August 3-9, 2015 in Southfield, suburban Detroit, Michigan. Over four decades ago, Southfield implemented and benefited from land value taxation, thanks to the work of Ted Gwartney and Mayor Jim Clarkson. Watch this space for updates on the conference.

Speakers wanted

Got a topic that you would like to speak on or be part of panel at the 2015 CGO/IU conference? Then please email, CGO President Dan Sullivan at: director@savingcommunities.org with your topic before September 2, 2014. The joint IU/CGO Conference Planning Team hopes to have 95% of its conference schedule in place by October 1, 2014.

2. (2014 July-August) Conference: Community Gone Viral

On July 5th, 2014, over a hundred community activists met in San Francisco to discuss how to create more vibrant, prosperous, and sustainable communities incorporating Georgist principles.. The day was filled with exciting games, delicious food, stimulating conversation, and great networking opportunities for those seeking to hack San Francisco’s housing crisis. We’d like to express our gratitude to Robert Schalkenbach Foundation for sponsoring the event, and the many volunteers who were instrumental in making it an overwhelming success!

Click this link to see pictures from the conference.http://earthsharing.org/community-gone-viral/

3. (2014 July-August) Video: The End of Poverty? & Hawaiian Independence

“Hawaiian Independence for National and Global Justice will present segments from the films Hawaii A Voice For Sovereignty, The End of Poverty [commissioned by Robert Schalkenbach Foundation], and Life and Debt on July 25, 2014. The event is a community outreach for the purpose of discussions regarding national and global justice.”


4. (2014 July-August) Good Press: Optimal Tax Theory

Tim Worstall, a senior fellow at the Adam Smith Institute, has been warming up to the Georgist paradigm.

“Optimal taxation theory tells us that we should therefore eliminate capital and corporate taxation and move to a progressive consumption tax and perhaps a land value tax.”


5. (2014 July-August) Good Press: Inequality from Quesnay to Piketty

Adam Smith and the Physiocrats “knew perfectly well where inequality came from. It was simply a fact of life that most land and other natural resources belonged to a small hereditary nobility. In England, some 2% of the population owned most of the land. This nobility, or their ancestors, gained their estates by force, favoritism, or fraud: that is, conquest, gifts from the king, or bribes to magistrates.”

Polly Cleveland in this two part article outlines what later economists thought about future poverty and inequality. Here’s a summary:

  • Malthus: Higher wages →  higher population → outstriping available resouces/ starvation wages
  • Ricardo: Only improved technology and trade can stave off Malthusian catastrophe.
  • Marx: Growing inequality→ collapse of the capitalist system →  new socialist society→ equality
  • George: Economy grows→ landlords amass surplus→ collapse →repeats (sans intervention)
  • Clark: Inequality is a result of differences in labor and capital contribution.
  • Pareto: Inequality follows natural law, the 80:20 rule (prime example land)→ nothing to fix
  • Solow: Richer economies grow slower than poor ones → rising equality
  • Piketty: less growth + no change in investment → capital investment exceeds growth → growing inequality

Part 1: http://dollarsandsense.org/blog/2014/07/pikettys-model-inequality-growth-historical-contxt-1.html
Part 2: http://dollarsandsense.org/blog/2014/07/pikettys-model-inequality-growth-historical-context-2.html


6. (2014 July-August) At the Margin: Illegal Children -Send them back?

“When the United States had lots of free land, immigration was actively encouraged, because everyone benefited from it. Well, guess what? The US doesn’t have any FREE land today — but it has lots and lots of unused land. And a very big portion of that unused or ill-used land (in terms of its value, which is the important consideration) is in urban areas — exactly those areas toward which new immigrants gravitate, to struggle and strive in this land of opportunity.”


7. (2014 July-August) Numbers: Measuring Economic Rent

The RSF staff discovered the following note in a letter by Elbert Segelhorst in December 2003.  He describes a “back of the envelope” calculation of national economic rent that is about 6 times higher than the official statistics say it is.  He got approval from some Columbia University economists for his method.  We recommend you talk to some economists in your area about this and report to us your findings.

“I find it useful to explain the very important role of economic rent in the following manner:

a. The average person spends about 1/3 (or more) of his or her personal income on housing (as either owner or renter). On average, 1/3 of the assessed property’s value is that of the unimproved site–the land value.

Consequently, 1/3 x 1/3 = 1/9 of national income is being paid to the owners [or mortgage lenders] of these residential sites.

b. The market value of land in all other uses (e.g., commercial, industrial, transport, government, etc.) is approximately equal to the residential land value, or 1/9 of national income.

c. Combining residential and all other land uses, the total amount spent on site rent is around 2/9 of national income, or 22%. I made this presentation to five fellow Ph.D’s from Columbia University in NYC in June 2003, and my estimate was accepted.”

8. (2014 July-August) Movement Progress: Clifford Cobb

A lesson for Georgists from the politics of land reform
Georgists seldom discuss the political constituencies that might support the public collection of economic rent.  Yet identifying supportive constituencies is a necessary part of political success.
There are no political issues that are comparable in scope with the comprehensive character of Georgist reform.   Nevertheless, traditional land reform shares the scope and scale of Georgist reform to some extent. The transfer of land from large estates into smaller holdings is intended to transform agrarian society comprehensively.Leaving aside the question of whether land reform will achieve its own objectives, we can learn from the politics of land reform why success is so elusive.  There are insights here that some Georgists might find valuable.  Why, for example, have autocratic regimes been more successful in achieving land reform than democracies?  That is one of the three “puzzles” of land reform discussed by Alain de Janvry and Elisabeth Sadoulet in “The three puzzles of land reform.” 

Logically, they suggest, one would expect democracies, with a majority of landless and small-holding peasants, to vote for land redistribution.  But, in fact, that has seldom happened because democratic constitutions are invariably set up with checks and balances that prevent redistributive coalitions from developing any stability.

The second puzzle they identify is “Why do land reforms grant incomplete property rights?”  It has been understood for centuries that limited land titles, which restrict rights of use and transfer, will reduce the productivity of the soil. To understand why land reforms that break up large estates and distribute land to peasants founder on the shoals of only partial titling, the authors turn to a political explanation: partial titling makes the recipients dependent on particular political parties for ongoing credit and marketing services provided by the state.

This second explanation also largely answers their third question: “Why are complete land reforms politically risky?”  Regimes that keep the carrot of full ownership in front of peasants can stay in power forever.  Well almost.  Suppose a new party comes along and promises the peasants to grant them full title to their land, as PAN did in Mexico in the 1990s?  (PAN is a mostly Catholic, free market oriented political party, which overturned the century-long control of the PRI in Mexico.  The PRI originally redistributed land through the ejido system, a system of incomplete property rights and low productivity.)  To win the presidency of Mexico in 1999, PAN got millions of votes by promising land title reform.  But after a decade, the reforms were largely completed.  Now the peasants no longer need PAN to sustain them economically.  The fortunes of PAN have begun to wane, and the PRI, which fully understands the politics of patronage, is making a come-back.  Thus, as the authors of the article conclude, one-time rights transfers may not correspond with continuing political loyalty.

What does this mean for the politics of public rent collection?  The reforms sought by Georgists are similar in one way to the titling reforms achieved by PAN.  In both cases, the reform has a very limited political shelf-life.  PAN at least had the advantage of offering an immediate, one-time benefit to a defined constituency.  That enabled them to gain the presidency and a legislative majority, even though it was tenuous.  

Georgism lacks the capacity to offer any sort of targeted benefits.  Instead, we offer long-term benefits to a diffuse constituency.  We propose to benefit everyone, but at the same time, we cannot promise any individual or group a special and immediate benefit, which is the currency of politics.  So, we are left at the starting gate.  (The two-rate tax does benefit owners of fully-developed property and pinches the owner of underused land, but even that modest reform still has not developed an identifiable constituency after half a century.)  

If Georgists ever succeeded on a large scale–at the national or state level–would we be able to sustain the constituency that initially supported the change?  Or would we end up like PAN, deserted by our supporters the moment victory was in hand?