My View: Land Holdings, Taxation a Key to Economic Justice

A fascinating essay, touching on the radical income inequality under the capitalist system.

From The ChesterBelloc Mandate

by Carmine Gorga, Ph.D

Concordian economics is a theory in progress of development. The attention is focused not on a simplistic observations of markets, but on the economic effects of the inner workings of economic justice.

To best understand Concordian economics, one has to relate it to the conditions of the modern world. The essentials of this condition can be put quite simply. While the followers of Don Quixote (artists and the literati) chase windmills, the followers of Galilei (scientists and technologists) build windmills; and a chosen few — the oligarchs — concentrate on owning the windmills.

The numbers are impressive. Summarizing the results of numerous studies and official government reports, Paul Krugman, the noted Princeton economist and columnist, has specified in the New York Times of Feb. 27, 2006, that, between 1972 and 2001, the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains.

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint.

Just to give you a sense of who we're talking about: the nonpartisan Tax Policy Center estimates that this year the 99th percentile will correspond to an income of $402,306, and the 99.9th percentile to an income of $1,672,726. The center doesn't give a number for the 99.99th percentile, but it's probably well over $6 million a year.

Aren't you at least a little bit curious as to how the oligarchs do it?
Hint: They do it legally.
Double hint: They do not corrupt judges and legislators.
Triple hint: These results have nothing to do with the laws of supply and demand, but with the workings of the economic process as a whole.

What does economic justice recommend? The way I read it, economic justice recommends that one should be neither a Luddite, I do not believe in smashing the windmills; nor a socialist,I also do not believe that "the state" will ever help us wrest the ownership of the windmills from the oligarchs. I do believe in the power of these four economic rights and responsibilities to set things right in the modern world:

1. We all have the right of access to land and natural resources. This is a natural right. It belongs to us just in virtue of our humanness. The oligarchs control an enormous portion of land and natural resources because they do not pay fair taxes on them.

2. We all have the right of access to national credit. Since national credit is the power of a nation to create money, and since the value of money is given by the value of wealth left over by past generations and the creativity of every person in a nation, national credit is the last frontier: the last commons. Capital credit liberates, while consumer credit enslaves us.

3. We all have the right to the fruits of our labor. This right should not be limited to the right to obtain only a wage. It should be extended to the right to the other major fruit of economic growth over time: capital appreciation — as well as being subject to capital loss, of course. While workers receive the pittance of a diminishing wage, the oligarchs receive the blessings of capital appreciation.

4. We all have the right to protect our wealth. It used to be that the oligarchs would make money on money, now they use money to buy and sell entire corporations.

I must say that there is not a stitch of originality in these principles. They all stem from the thought of Benjamin Franklin, Henry George, Louis D. Brandeis, and Louis O. Kelso. Read them in rapid succession, and you discover that one picks up from where the other left off. Individually, they do not stand; but together they form a very sturdy compound; together they shape an unassailable, comprehensive, all-American economic policy concerning (1) land and natural resources; (2) money; (3) labor; and (4) physical capital.

We at http://www.concordians.org/ are not simply talking about these principles; we are starting a movement to implement them. Here are some of our guidelines. Feel free to create your own.

Do not fight City Hall; rather, ask your city councilors to gradually shift the tax burden from buildings onto land. That is all that they have to do. For details, see http://www.urbantools.org/.

Do not fight the oligarchs; rather, join them. Ask them not for a wage, but for a share of the profits — a share of the ownership of the corporation in which you work — and assume the risks of doing so. Gradually transform the Labor Movement into an Ownership Movement. For details, see http://www.nceo.org/.

Do not fight the conglomerates; forget about becoming a globalist; rather, become a localist. Hold those pieces of the conglomerates that happen to be in your community to the fire of truth, economic justice, and economic freedom for all.

Carmine Gorga, Ph.D., is president of Polis-tics Inc., based on Middle Street in Gloucester. He is also founder of Concordian Economics, and the author of "The Economic Process: An Instantaneous Non-Newtonian Picture" (University Press of America, 2002).