Earthsharing

Geonomics = New Economics

Karl FitzgeraldMarch 30, 2009CommentaryLeave a Comment

There are many forms of capitalism. What we have right now is bubble capitalism, whereby a new bubble in some non-manmade resource (oil, land etc.) is used to speculate enourmous sums to a very tiny minority of early investors.

This is also Ponzi Capitalism. Or, perhaps, since banks have become a de facto fourth branch of government, Crony Capitalism. Certainly, these forms of capitalism is unsustainable.

Here’s an alternative: Geonomic Capitalism.

Tax all the non-manmade resources: oil, land, pollution of air/water/land etc. and untax the fruits of productions (wages, capital like factories, cranes, trucks etc.). This would prevent speculation by taxing away the “fuel” for it, on land, natural resources and distributing that back to the community (to whom the resources rightfully belong).

Human production would be encouraged by untaxing the rewards of that, but consumption of scarce resources would be discouraged by taxing the raw materials.

Of course, this is not enough. We need serious regulation too.

Thanks to Maireid Sullivan for flicking this our way via her Now We The Public news service – aren’t we lucky to have independent news!

GFC = Good For Corporates

Karl FitzgeraldMarch 28, 2009Commentary1 Comment

photo credit: laverrue

Renegade Economist Show Notes

As broadcast Wed March 25th on www.3CR.org.au
Subscribe to the podcast

GFC = Good For Corporates – we unveil more detail on the Geithner plan and fly thru recent economic events – how’s the detroit re-invention? If only we could inspire a mass of protest by white collar producers raising concern about the highway robbery of white collar GFC crime.

Gorbachev Bids Goodbye to Unrestrained Capitalism
By Steve LeVine

“The so-called Washington Consensus…was force-fed to the world.”

“We need to find a new model of capitalism, taking the best of the old model and the best of socialism,” says former Soviet president Mikhail Gorbachev.

*** Remember our letter to Gorbachev in 1990/91. If only we had success, how many Russian mineral billionaires would be wrecking english football?

25 People to Blame for the Financial Crisis

#1 – Phil Gramm

Mexican drug lord makes Forbes’ billionaire list

Global pensions lose $5 trillion in 2008

The study said that over 2008, global pension assets fell to $20 trillion from $25 trillion, a fall of 19 percent which took assets below 2005 levels.
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Detroit crew rebuild $100 house into green community

Karl FitzgeraldMarch 25, 2009CommentaryLeave a Comment

photo credit: laverrue

A local couple, Mitch Cope and Gina Reichert, started the ball rolling. An artist and an architect, they recently became the proud owners of a one-bedroom house in East Detroit for just $1,900. Buying it wasn’t the craziest idea. The neighborhood is almost, sort of, half-decent. Yes, the occasional crack addict still commutes in from the suburbs but a large, stable Bangladeshi community has also been moving in.

So what did $1,900 buy? The run-down bungalow had already been stripped of its appliances and wiring by the city’s voracious scrappers. But for Mitch that only added to its appeal, because he now had the opportunity to renovate it with solar heating, solar electricity and low-cost, high-efficiency appliances.

Buying that first house had a snowball effect. Almost immediately, Mitch and Gina bought two adjacent lots for even less and, with the help of friends and local youngsters, dug in a garden. Then they bought the house next door for $500, reselling it to a pair of local artists for a $50 profit. When they heard about the $100 place down the street, they called their friends Jon and Sarah.

via Op-Ed Contributor – For Sale – The $100 House – NYTimes.com.

A fascinating story of community re-growth demonstrating the power of the green revolution. It also demonstrates the importance of cheap land and the creativity that is possible when such opportunities occur.

Readers of this site may be aware that all the community’s hard work will soon be taken away from them and profiteered by others who contributed very little to the community spirit. The ethos of community gardens, artist run spaces and the coolio grafitti that is probably already there will see land values start to rise.

Some say our home city benefited greatly from the early 90’s recession. Access to cheap land and the ease of late night liquor licencing saw Melbourne become a cultural hot spot back before we attracted the World’s Most Liveable city award (2002 & 2004) and it’s accompanying speculative curse.

In time the inevitable predators that are land speculators appear. They will be watching Mitch and Gina’s efforts in Detroit and silently buy up homes nearby. Any bets since this NY Times story appeared, the price of land has already jumped upwards in their little community hive.

This increase in land price, the economic rent, should be recycled back into community coffers so that:

a) the community can look after itself,

b) deadweight taxes that harm small business and thus wages can be abolished,

c) speculators are deterred from hiking up prices so that

d) the creatives that re-invented this community aren’t ushered out by the high rents their trendiness attracts?

Makes sense doesn’t it! Go on join our e-list (right hand nav bar) or subscribe to the Renegade Economists podcast!

Zimbabwe-like land grabs to escalate in Pacific

Karl FitzgeraldMarch 24, 2009Articles, Commentary, InternationalLeave a Comment

photo credit: robertpaulyoung

There is little doubt that Zimbabwean-like land grabs will occur on our doorstep if current economic policy continues. The policy alternative we spell out below could pop the fuse to the frustration that led to Zimbabwean land grabs and the simmering tensions in Fiji.

With the Pacific Islands rapidly privatising from kastomeray land title in the last decade or so, the growing pains of adjusting to the outright ownership of natural resources is continually rearing it’s head. We have written about Vanuatu before and hold great fears for countries such as Papau New Guinea, West Papau and small island nations like Maluku. Why? Because there is something intrinsically wrong with the current notion of ‘private property rights’.

Read this story on death and destruction in PNG over a gold producing piece of land in Morobe Province near the controversial Hidden Valley goldmine:

The newspaper, The National, reports that fighting erupted when a land dispute over ownership of the McAdam National Park between Wau and Bulolo came to a head as Watut tribesmen gathered in Wau in their hundreds and staged an early morning attack on the villages of Biangai tribe.

The violence left three people dead, several injured, houses and property destroyed, and forced the temporary shutdown of the Hidden Valley gold mine and the evacuation of employees.

A Watut man was allegedly killed recently by Biangais over a gold-bearing piece of land on the national park, which is said to have sparked the tension.

How can one man be said to ‘own’ a piece of land, especially one that has gold underneath it? Did he create this gold? Did he do anything to produce it? No. Now how does this sit with indigenous culture that sees the creator spirit as having gifted the gold to all living beings past, present and future? If the creator gave gold and all other natural resources as a gift, why should white man come along with a black and white ruling to determine that private property is a god given right?
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Sustaining What?

Karl FitzgeraldMarch 23, 2009Commentary, Progress Magazine, True Cost Economics2 Comments

photo credit: Torley

Selling the environment in order to save it?

Frank Stilwell

Professor of Political Economy
University of Sydney

As published in our Progress Magazine

The Rudd government’s review of climate change policies, chaired by Professor Ross Garnaut, has issued its interim report and will present its final report later this year. Many environmentalists welcomed the interim report because it stressed the magnitude of the climate change problem. The final report looks likely to be more problematic though. The main recommendation will be for the implementation of an emissions trading system. Creating a market for licences to pollute will be our big step forward. It is pertinent to ask what is being sustained here – our environment or free market capitalism?

The challenge of sustainability is fundamental and multi-dimensional. Economic sustainability requires the reproduction of productive capacity, including the replacement of depreciating capital, whether natural, human or manufactured. Social sustainability implies the reproduction of acceptable social structures, social capital and social cohesion. Ecological sustainability is a yet bigger challenge. It requires the maintenance of biodiversity, ensuring ecological integrity, maintaining the stock of natural capital and providing for intergenerational equity. That means that the quality of the physical environment passed on to the next generation should be no worse shape than was inherited by the current generation.

All these requirements are threatened by climate change. The scientific community, though not unanimous, has generally accepted that the threat is real. The Stern Report in the UK shows that taking remedial action is good economics too. Agreement to remedial policy measures has a strong economic rationale as well as meeting environmental and social needs because the costs of inaction will substantially exceed the costs arising from policies to prevent climate change accelerating. So we have to carefully consider what it means to move to a more sustainable set of economic and social arrangements. Can this transition be made in a way that is consistent with concerns about social justice? Or will market criteria and the exercise of corporate power dominate?
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