“When capitalism started, nature was abundant and capital was scarce; it thus made sense to reward capital above all else. Today we’re awash in capital and literally running out of nature”, Peter Barnes, Capitalism 3.0

“A commons arises whenever a given community decides that it wishes to manage a resource in a collective manner, with special regard for equitable access, use and sustainability. It is a social form that has long lived in the shadows of our market culture, and now is on the rise.”, David Bollier, www.onthecommons.org
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“Sacrifice of nature’s scarce services constitutes an increasing opportunity cost of growth, and that in turn means that nature must be priced, either explicitly or implicitly. But to whom should this price be paid?”, Herman Daly

These 3 quotes were part of a document we prepared for the Sustainable Living Festival. Download the double sided A4 paper Earth Based Economics and share it around.

photo credit: takomabibelot

Project Coordinator Karl Fitzgerald has been interviewed on 2 recent radio programs:

RRR – 16 March Monday 10am – on the GFC and Speed Renting, with a little Vanuatu on the side.
3CR – 06 April Monday 7.30am – on the G20, the GFC and Pacific issues.

Make sure you join the Renegade Economists podcast to hear regular interviews with fellow renegades such as Michael Hudson, Steve Keen or Fred Harrison.

Karl Fitzgerald

As published in the Mar – April Progress magazine. Get a copy of this cane paper, veggie ink mag sent to you for 6 free editions
Related Event – Thurs April 30th – Vanuatu’s Sovereignty Surrendered
The World’s Happiest People

A 2006 study by the New Economics Foundation and Friends of the Earth found that Vanuatu was the world’s happiest nation. The study looked at consumption levels, life expectancy and happiness.

Our recent visit there proved otherwise.

Walking down the main street of Port Villa at sunset and one could feel the glaring eyes of the youth looking at the food in my hands. A riot had occurred in May. In early November, a week before we arrived, a tourist operator was bashed at the local port by a local taxi driver. Frustration boiled over because of the cartel-like control of new visitors by the expat dominated tourist industry.

With urban drift a rising phenomenon in rapidly westernising Pacific nations, the city had an edgy feel .

Something was amiss in the world’s happiest nation.

Within minutes of arriving, the eyes of a roaming renegade economist could soon see traits similar to western societies. Vacant land littered the community. Forests were being cut down on the urban fringe, rivers and streams polluted by the run off. These were effects, but what was the cause?

Vanuatu is a relatively young country, having gained its independence just 29 years ago from the French and English.

The tragedy of this opportunity is that just 29 years since independence, 90% of Vanuatu’s coastline has been sold off. Over 80% of the capital city Villa is foreign owned. Small, locally owned business is a rarity, with just 2 ni-Van owned operations located whilst we were there.

Vanuatu’s background is radical for the region. Walter Lini was their first Prime Minister (1980 – 91). He developed Melanesian socialism. Wikipedia tells us “’Giving’ was based on one’s ability to do so. ‘Receiving’ was based on one’s need”.

Lini also signed the Non-Alignment Movement. Whilst maintaining his independence, he forged closer ties with Libya and Cuba than the US. This concerned America as Vanuatu was the only Pacific country not to have signed with the pro-Western bloc. Lini ‘s administration was staunchly against nuclear testing in the region. He was also a proponent of a new Melanesia where the people of East Timor and West Papua were freed.

Many ni-Van’s (indigenous) etch together a living driving taxi’s. Most locals work for expat Aussies or Chinese. With Vanuatu a prominent tax haven, some of the shadier western businessmen have descended on this idyllic life to ‘start again’. It’s not hard to find web comments on how ni-Van’s are treated as little kids by these westerners with superior english.

Rayna and I were invited there to speak to the Shepherd Alliance Party, a rapidly growing political party in the volatile world of Vanuatuan politics. In what turned out to be a 4 hour presentation, I ran through the need for the people to gain a share in the bounty of the land.

Having a cultural connection to land, the many chiefs in the audience resonated with this need. We moved through how social progress and population growth naturally added to land values. One of the many Karl’s we met there summed this up as ‘magic money’. How true. ‘We must turn off the tap to the magic money of land speculation’ became the catch-cry.

Over the last twenty years much of the Pacific has moved from kastomary land title to Torrens Title. Going from a socially based form of land ownership to one where property developers are carving up their idyllic coastline with names like Barrier Beach, it was like a step back in time for a Georgist. Here we were rubbing shoulders with politically minded people in an era where their commons were being enclosed day by day.

The people are alive with the inherent understanding of the vitality of land and all the freedom it represents. In what seemed to be a light bulb type moment for the audience, the chiefs were excited by the explanation that land earns a natural bounty to be shared amongst the community in place of all other taxes. Chairman Morris Kaloran summed the essence of this up with ‘No matter what factory they have, they cant make dirt’.

Soon the chiefs passed a resolution to include Land Tax in the party’s constitution.

As with Melbourne’s ‘World’s Most Liveable’ city tagline, the ‘World’s Happiest’ tag was adopted and sculpted by those that owned the most precious resource of all – Vanuatu’s land.

Ironically, the World’s Happiness measure was meant to raise awareness that excessive consumption doesn’t deliver happiness. However, with our two dimensional economic system any such headlines can be marketed to the advantage of those same over-consumers, the wealthiest people on the planet.

Vanuatu’s main newspaper, the Daily Post (19/08/08) reported how chief Mack Paiiamaja from South Santo expressed serious concerns regarding massive uncontrolled land speculation and sub division development.

“Many of these developments have contributed significantly to creating divisions within the communities of rural Santo as a result of land disputes being generated to claim ownership.”

Meetings with senior bureaucrats revealed shocking details. Land valuations hadn’t been performed since independence in some areas. The tourist brochures reminded us that Vanuatu means ‘Land Eternal’. Surely it is valuable then?

In Port Villa it has been over 10 years since land valuations, meaning that the contributions land owners are making to the public purse via land tax are very small.

Compounding the problem, the Land Valuers office is tragically under resourced, with administration soaking up any time to value land. Four work in valuation at the Lands Department. Two people work at the Valuer Generals office. Discussions revealed that valuation skills desperately needed updating.

The Land Tribunal had thousands of disputes but only 2 people. The Lands Department was even shutting services, such was the ineffectiveness of public policy.

The plot thickened when we heard that Land Taxes had mysteriously been reduced from the 2- 3% listed online to 0.83% on pre-historic land values! An administrative decision, rather that a government decree, had led to this secretly sliding through.

A host of differential rates of Land Taxes ensure the system is confusing and open to debate. No wonder so much time is spent in administration.

Every time we mentioned to taxi drivers or people we met at the Fest Namaba1 that the land bounty must be shared with the people, there was resounding agreement. It was widely recognised that speculators were doing more harm than good.

So what was the cause to more than 25% of the population living below the poverty line?

Tax policy has been massaged by vested interests so that the direct and costly administrative control of an island nation has been replaced by the invisible chains of land speculation, forcing up rents to astronomical levels. Heads nodded in agreement when we asked whether the many living in central Villa, the educated workers of government, were paying 50% of their money in rents.

One wonders how they received such poor tax advice. Some suggest that land policy was developed pre-independence and has not been reviewed since. With the rapid increase in land privatisation, land use policy seems well overdue for a revamp. An ad hoc process is holding the good people of Vanuatu to ransom.

The easy profits being made in land speculation are tearing up the Pacific Islands. Whilst one can point to religious and racial tension as triggers, one feels that with more investigation of the Soloman and Fiji riots that these were borne of frustration at the radical change in lifestyles thrust upon them by the ‘benefits’ of westernising land title and privatising land rents. One hopes this doesn’t occur in Vanuatu, but with large numbers of unemployed young men in a town witnessing rich white folk driving around town in new hummers (!), the social contract is rapidly melting.

We have a unique opportunity to assist in finding a balance between western and kastomery land title.

What one can experience when visiting HYPERLINK “http://www.barrierbeach.com.au/”www.barrierbeach.com.au is the internationalisation of what was once a sacred resource. The land itself is now being sold off to the highest bidder in a global fire-sale. Local ni-Van’s have no chance of owning a piece of their traditional lands and taking a respectable place in their precious society.

Instead, some of the world’s most beautiful coastline is being sold off to an international coterie of property speculators who know that given enough time, they can sit back and buy and sell exotic locations for massive profits with just a few clicks of a mouse.

Morris Kaloran recounted how ‘In the 90′s there was barely a real estate agent in town. Now there are dozens of them, all making a killing’.

But the tax advice is where the real game of opportunity lies. Which foreign entities have advised the Port of Villa Municipality to charge council rates on buildings only? We are pursuing the answers through the questioning of the Senate Estimate’s committee.

No land is in the tax mix for council rates. This is precisely the reverse of what should be occurring for an effective council rating system. Meetings with senior bureaucrats revealed that many colonial landlords were given exemptions from even these miniscule council rates at the time of independence.

With all this controversy, we had to drive around the island of Effate to survey the lay of the land.

Colonialists used guns to gain access to land. Neo-Colonialists use a potent mix of land speculation, corruption and the promulgation of ineffective economic policy to massage their self interests. Nowhere is this more prominent than the lands of Roi Mata.

Roi Mata was the grandfather of Effate, the main island of Vanuatu, renowned for crystallising peace amongst the tribes. His ancestral lands at Mangaliliu were announced on July 8th, 2008 as Vanuatu’s first World Heritage Site. With signage at the front gate stating that this was proposed World Heritage land, Queensland developers somehow connived their way into clear-felling the forest and offering nine hectares up for sale. This clear-felling happened within one month of the World Heritage announcement. The buffer zone they are operating in came with a set of leasing rules that have been drastically overstepped.

Local chief Reuben Kaloris and William Kalotiti have blockaded the main access road out of concern for what is happening to this sacred land. With legal threats being thrown at the chiefs and local supporters (who are also scared that their house will be burnt down), we hope this story will reach mainstream press by the time you read this.

This clear-felling is happening for a paltry amount. Locals were told that the land would be sold for 4million Vatu (A$55,000) However, the prime beach front site was advertised at 30m Vatu (A$415,000) and is now sold. The remaining 9 sites at advertised prices will reap just $900,000. Trashing a World Heritage site must be worth barely more than a million bucks!

With the GFC accelerating bankruptcies daily, it seems like much of this pristine coastline will sit vacant waiting for the next land boom to take off. As analysts of the land market will understand, these sites will be drip fed to the market over the next 15 years, with at least one guaranteed to go for $1m. More pollution and disturbance will be about all the local community receives in return.

Of added attraction to salivating profiteers is the fact that Mangaliliu is the entrance point to the island that Survivor: Vanuatu was filmed on. Perhaps the potential of exotic marketing slogans highlighting the World Heritage status and views of ‘Survivor’ Island motivated the developers to ruthlessly cut corners. Those taglines, when combined with its intrinsic beauty, would ensure a sizeable price tag well beyond what the local bloodlines would receive in a one-off payment for this sacred land.

Please watch our short film on this outrageous controversy via www.youtube.com/earthsharing

As a demonstration of the difficulty good governance faces in the country, Transparency International, the peak NGO body fighting the ills of corruption worldwide, is represented by a real estate agent in Vanuatu.

A developer with a 2 page criminal record was recently awarded Vanuatu’s highest honour. He has the privilege of enclosing the closest, most beautiful beach to Villa.

Taken from the Vanuatu Investment Promotion Authority website, this developer says:

“To Whom it May Concern

If you are reading this letter than you have made the first step in the right direction.

To invest in the Vanuatu Islands is the smartest move I have ever made, and will be yours also.

I arrived here Independence day 2001, just divorced ravaged by tax and lawyers, not knowing where or in what I wanted for my future life.

Alone and lost I immediately felt the warmth of the people, Ni van’s and expats all welcomed me…

On the second day I started real estate hunting, I knew this was my future home, I was fortunate enough to see a double wave break on a white sandy beach not 10 minutes from town. I could not believe I could buy 1 acre on that beach, but I could, the land ownership over here is same as Canberra.”

One can be assured that the friendliness is waning today. Australians have a bad name due to the corners they cut chasing the ‘investment dream’. Another development on Mele beach sees sites up for sale on former swamp land, with the environmental destruction prevalent in clearing the site said to be positive for the community because of the removal of conditions conducive to mosquitoes and their malaria.

As we continued our drive around the island we began to see the impact of the ring road that US Aid was building. Perhaps solidifying the warmth in relations as Vanuatu’s politicians were brought back in line with Western interests, the Millennium Challenge Corporation has signed a five-year, $65.69 million Compact with the Government of Vanuatu.

This aid will deliver eleven infrastructure projects. Pro-aid websites valiantly tell us this will benefit poor, rural agricultural producers by reducing transportation costs.

It is also meant to increase average wages per capita by 15% within 5 years.

This analysis fails to register that western property developers have crept around the island buying up vast tracts of virgin land. We saw land banks for sale every 8 – 10 km’s. With a new airstrip and a sealed road, wealthy westerners can fly in, scoot off to their beach villa and hardly see the depths of poverty in Port Villa.

A new slogan was borne: ‘Foreign aid for foreign speculators’.

Our second stop saw a visit to Chief Andrew Popovi from Tanoliu. His concern centred around speculation and how little land his people had left. Chief Popovi was one of the few to know that a 10% fee was to be paid to the traditional owners when re-selling the land as a subdivision. This amount was often a lot lower than when sold a third time, hinting that perhaps third party companies were utilised to ensure that the flipping profits stayed within the walls of the wealthy.

The chief was concerned that many of the reform measures decided upon at the 2006 Land Summit had not yet been implemented. Land sale contracts are still written primarily in English, rather than including the local Bislama language.

Driving onwards through this largely unsigned country we were desperate for a lunch stop. We had noticed that Beachcomber Lodge had hot spas, the only location on the island with this natural wonder. Upon entering the site, we drove straight to the nearest spot on the beach for a quick bite before heading over to the springs.

A few bites into lunch and this loud voice boomed out from right next to us, scaring the living daylights out of us all. Before we could comprehend how this self-professed land-lord had crept up and yelled at the top of his lungs, he was preaching to us ‘How dare you enter my land, driving all over it. Who do you think you are? Where do people like you come from?’

We were rattled and couldn’t even get in a good comeback line! Where were the cameras to catch this landlord’s insecurity on film? Where were our moral rights to a seat on what is meant to be a public beach overlooking the Shepherd Islands, the traditional lands of our navigators Julie and Rivkin?

With tensions rising amongst the community about access rights to beaches and food sources, the school principal type demeanour this Aussie expat displayed was a shameful reflection of private property rights walloping human rights. I still have moments of anger flash in frustration at my inability to awaken this poor chap’s conscience. One can only imagine how he treats his indigenous ‘subjects’.

If I was on my front foot I would have inquired about ‘his’ enclosures. Are the natural springs he enclosed valued at a respectable level? Is the rate paid respective of the right to privatise what once would have been a public meeting place?

We dwelled on these thoughts as we dodged pot holes, gliding through some of the most beautiful lands one could imagine. Soon we arrived at Eton Beach, the only national park we saw, where we gladly paid a 300 Vatu entry fee to the government.

We left Vanuatu shocked at the effect land speculation was having. Adding to the dilemma was that western aid funded scores of young white uni graduates to a loud, beer fuelled aussie existence. Canadian aid workers were wary of us. Western aid promoted a reliance model of handouts rather than self-help.

Let’s do something about this.

With the positive resonance experienced in discussions with bureaucrats, we are making the most of Alanna Hartzok’s Global Land Tools online course as the perfect resource for long distance learning. Within the course we have set up an EarthSharing Pacific class where participants are submitting details on land policy vagaries in their country.

Take it further by joining the class – http://course.earthrights.net/

photo credit: bjornmeansbear

With climate change forging into our conscience day by day, how are Gen X,Y & Z to feel when they realise they have been ripped off like no other generation before? The increase in the First Home Owners Grant saw nearly 13,000 youngsters manipulated into buying at the top end of the property cycle in January alone.

Tell your friends – whatever you do, DON’T BUY NOW! This is an 18 year property cycle and will pop soon.

The financial illiteracy of the general populace is further enhancing the wealth gap. Will economic know-how be seen as crucial once the dust settles on the ugly months we have coming our way? The wisened property speculators have left the market spectacularly, cashing out just as their advisers directed. What a pity youngsters have Paris Hilton to advise them….

The lobbying forces for an extension of the FHOG are in full effect (it is due to expire June 30). It is widely understood amongst policy wonks that this is being used as a pump priming stimulus package to buffer the construction industry, rather than to provide affordable housing.

However, the reality of day to day life sees many youngsters miss the nuances in the debate. Mainstream media does little to bring balance to this looming tragedy. With the property lobby the major benefactors to political companies/ parties, it seems likely that the dominance of lobbyocracy will again prevail in this world of poll driven, spineless politicians. Ruddy pawns.

And to think that Brumby-otis has hit again with Minister Madden ripping planning controls for major developments from the closest thing we have to grass roots politics – local councils. This will see large tracts of public land sold to VicUrban or major political donors who have played the game of land hoarding until their planning desires are finally approved.

The casualisation of the younger workforce exposes a massive risk. Banks are like sitting ducks for our sub-prime like FHOG recipients. Will they get bailed out when the effects of the job layoffs start to cascade into foreclosures? Michael West reports:

Outside the first-home buyers, interest rate cuts have done little to spur growth. Since August, the number of loans to existing owner-occupiers has risen only 1.2 per cent, compared with the 65.4 per cent surge in first-home buyer loans.

Colebatch goes on to say:

In a dramatic reversal of the trend towards increasing ownership of homes by negatively geared investors, the financial crisis has seen first-home buyers lift their share of lending from 17 per cent to 29 per cent in just six months.

At the same time, the share of lending for home purchase going to investors has shrunk from 40 per cent to 30 per cent, as the banks become more wary of lending, and investors more wary of borrowing.

The Bureau of Statistics reports that lending to would-be housing investors so far this year is down roughly a third from a year earlier, plunging from $12 billion to about $8 billion.

The net result is that while lending to first-home buyers has risen 84 per cent since the Government lifted the first home buyers grant, the total amount lent for housing has risen far more modestly, by 11 per cent.

Warn your friends – don’t buy now! Wait a year. You’ve heard that before we know but this is an 18 year cycle, a generational cycle that goes back 400 years. Read Boom Bust 2010 or listen to a recent interview with the author Fred Harrison. Time for some laughing yoga to get through this…..

photo credit: bayerberg

Last Thursday’s G20 meet saw little new initiative. The $1.1 trillion stimulus package was largely from already announced packages. This totals up to US$5 trillion in bailout economics worldwide, appx 7% of the planet’s GDP of US70 trillion (purchasing power parity exchange rates).

The ‘name and shame’ tax haven policy development will dwindle once Gordon Brown’s poll bounce is over. Hopefully the policy focus doesn’t dwindle, but the writing is on the wall with the ignorance of ‘automatic information exchanges’ between tax jurisdictions.

The hype over the Financial Stability Board, set up to monitor CEO largesse and hedge fund trickery will be another talkfest with false teeth. They have no policy parameters. George Monbiot will be more likely to keep them honest.

As usual, the press uses the diversionary headlines of the above to channel attention away from the tragedy of these talks – the expansion of the IMF’s powers. It’s budget tripled. The bermuda triangle of economic policy was enhanced, with the bailout economics playbook now extending to one of the world’s most controversial institutions. The expansion of the IMF’s Special Drawing Rights means it can expand it’s quantitative easing – AKA printing money AKA Mugabe economics AKA hyperinflation.

But what about the policy reform no one dared mention? The one that would address both asset price bubbles and environmental devastation?

This expansion in Special Drawing Rights gave a nod towards the Chinese and Russians who are lobbying for a new world currency. This G20 meet paved the way for SDR’s to become their desired ‘globo’ world currency.

Based on a weighted index of the US dollar, the British pound, the Japanese yen and the Euro, SDR’s are distributed to countries according to their IMF contributions ie the SDR currency is backed up by the various countries percentage contribution to the IMF.

Read this excellent bloomberg article to understand the weighting of this currency basket and whether the US dollar is under threat.

From tax havens to credit squeezes to climate disasters, the playing field could be leveled with the big picture reform we remind you of:

The great tax shift, off our wages and onto natural resources (and licensed monopolies). We hope someone mentioned the UK’s great People’s Budget debate of exactly 100 years ago. Did these principles get mentioned anywhere?

Nobody can hide land, rendering tax havens irrelevant. Asset bubbles are only caused because speculative impulses push the ponzi scheme higher and higher until the inevitable 18 year land cycle explodes like a teenager’s hormones. By keeping a lid on land prices we have a more stable asset base from which credit can be based on.

Climate disasters have been sped up by the easy profits one can make raping the planet as a miner or land banking so that families have to live on the outskirts, not next to the train station in town. Land banking leads to doughnut development. A Resource Rental system backed up by environmental bonds re-iterates what we all invariably feel – that the planet is valuable and that we must look after it.

We must halt the speculation upon natural resources if we are serious about providing a sense of hope for working people. How ironic that the forgotten war, no not Afghanistan Mark2, but the unending suburban war zone in America saw 2 tragic mass murders over the weekend. The G20 policies will only prolong this depression.

The overwriting aim is to lock renters into paying 40 – 40% of their income to the lazy, planet flipping speculators that caused this GFC. Global financial crisis or Good for Corporates?

We dare you to get involved by studying the 3 dimensional financial literacy so desperately needed. With the groundswell building, we aim to reform economics such that people and planet matter.

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!

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?

Is private property a god given right?

White man’s understanding of private property once knew of the need for a distinction. Unfortunately it’s been largely forgotten. The Lockean principle that founded private property rights stated that we all deserve to keep the fruits of our labour. The fruits of the earth, however, were to be shared amongst all and weren’t to be sold (Leveticus 25:23).

How do we process this distinction in the modern era?

As natural resources gain in value due to scarcity rather than hard work, the upkick in value should be shared amongst the community. This is where a Resource Rentals system comes into play. Natural resources such as gold come from land. Effective yearly land valuations would reflect the changing value of gold. The Site Rental on the land would be paid to a transparent government, where such monies would go towards the running of the country. In this way all tribes get some share of the money, as does the private company mining the gold. Sovereignty is maintained. Reward for effort is encouraged. Everyone benefits.

The resource curse is a fallacy pushed by the academic elite in support of the silent theft of millions by vested interests involved in ‘the land game’.

Indigenous cultures are seeing the worst of economic behaviour in a minute period of time. Western culture had 200+ years to adapt to the speculative mindset that dominates finance today. How would one feel in a country where your traditional cultural upbringing raises questions about the millions resource flippers make buying and selling? Then to see the house of cards come crashing down with the GFC, even the most educated westerners are questioning modern economics AKA speculative economics. Is an economic policy alternative being presented? Or are frustrated regimes left with the slash and burn policies of Mugabe?

How long will Boplivia’s Morales last with such land grabs?

Consider what the chiefs in Morobe province have heard about the tax benefits Freeport mine receives, for example:

As a complex set of limited partnerships, many of Freeport’s operations enjoy tax-free status under the 1987 Internal Revenue Code (Section 7704) exemption for partnerships that derive 90 percent or more of their gross income from natural resources. Its 1993 Annual Report (p. 1, 34 and 46) shows sales of more than $1.5 billion and yet in 1991, Freeport gained a federal tax BENEFIT (not a payment) of $28 million; in 1992, a tax benefit of $25 million; in 1993, it received more than $2 million in federal tax benefits.

It seems the entire Pacific has been given a bum steer when it comes to tax policy. Natural resources to receive an exemption from tax? Ahh that’s right, capitalists already own the earth!

Mining companies should be paying an environmental bond reflective of the immense value of eco-systems surrounding their projects (ie a bond in the millions) to ensure that they do the right thing by the local community. Acid-bleach mining may not be such a priority under such a move.

This bond plus a Resource Rentals system would go some way towards bringing harmony between the community and the miners.

Read Alanna Hartzok’s The Earth Belongs To Everybody to understand how the above can occur.

photo credit: lrargerich

Karl Fitzgerald

as published in Crikey 20/02/09

Mirvac yesterday admitted what many affordability watchers know. The housing market is manipulated to suit shareholders over householders.

Due to the fear that an $81.4m half yearly operating profit is insufficient, first home buyers will have to pay higher land and housing prices to support Mirvac’s Executive Incentive Scheme.

Mirvac managing director Nick Collishaw admits to the immense power of land monopolists in Mirvac to delay land releases in existing estates:

“Effectively what we are doing for the bulk of the projects that we have in Victoria is managing a staged release — rather than have a release with 100 lots in it, the stage sizes will be much smaller.”

This behaviour exhibits why Brumby’s land supply handout to the property lobby will do nothing to assist affordability. Land and housing releases are manipulated to suit profiteering over people.

As Australia’s affordability epidemic gets left behind in the backwash of the GFC, the genuine land supply issue is that controlled privately by land banking developers.

Compounding these issues, the write-offs on Mirvac’s investment properties total more than $800 million dollars. Top and tailing the benefits of the system, Mirvac has the power to drip feed land and housing to market such that home buyers of all generations are guaranteed to pay 40% of their income on rent or mortgages.

And the government is silent on this market manipulation.

Governments at all levels are complicit in the rights of land speculators over and above the future of its people. One need only refer to the recent AEC figures to understand the power of lobbyocracy.

For the productive economy to survive, we must push for more effective public finance policy. Higher holding charges on land are needed to force land prices back to affordable levels. Spin-offs include the abolition of payroll, GST and a massive cut in income taxes. Investment in new infrastructure becomes self funding through land value capture.

When this occurs, the land and housing market will no longer be seen as a casino. The risk of global meltdowns will be reduced when we no longer have to borrow so much to put a roof over our heads. Speculators will become producers, hopefully funding the inventions needed for a sustainable rather than sprawling society .

Relatively speaking, who really benefits from rising land and housing prices?

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Earthsharing Australia has released the first ‘I Want to Live Here’ Report, demonstrating the extent to which speculative vacancies are the hidden issue in the housing affordability debate.

The ‘I Want to Live Here’ report found that 1058 people could live on vacant sites within the Bluestone Ward (City of Maribyrnong). This Google Earth photo of Bluestone Ward West shows a snapshot of some of the many vacancies.

“Housing affordability debates focussed on government controlled land supply were today dispelled” stated Karl Fitzgerald, the report’s author.

“It is the privately controlled supply of land by speculative interests that is heating the market to record levels. It is also driving the argument for unlimited sprawl.”

“Even if Commonwealth Land was put onto the market, speculative interests would snap up the property and drip feed it to the market. History shows that land release only leads to more designer suburbs with a focus on ‘lifestyle’ living, not affordable housing. First home owners cannot compete with speculators under the current tax regime.”

The findings include:
* 1058 people could live in 430 vacant properties within this municipality.
* 93% of these were vacant blocks of land.
* The ‘official’ vacancy rate should include ‘speculative vacancies’ to reflect the genuine vacancies in the land and property market.

The report’s findings on speculative vacancies were discovered by Earthsharing Australia in an extensive survey of the Bluestone Ward, covering parts of Footscray, Footscray West and Tottenham.

“Victoria’s much publicised Vacancy Rate of 1.4% radically understates the true situation in the land and property market. ‘Speculative vacancies’ are not included in this figure. Only properties on the rental market are included by the Real Estate Institute of Victoria in their vacancy statistics.”

“Young people are bidding for rental properties, paying months in advance to secure a place to live, yet they are surrounded by vacant land and housing that is shut off to them in the name of private profit. Neither political party is offering any solution to this issue.”

“The questions we must ask are ‘Why don’t either of the political parties promote the taxing of economic rents?’ and ‘Why are property developers the major beneficiaries of the ‘solutions’ on offer?’”

Speculating on the Great Australian Dream should be deterred by a Federally implemented Site Rental charge on all land, replacing income taxes.

Read the full ‘I Want to Live Here’ Report