So, you’re a Silicon Valley billionaire and you’ve already got the private plane. What you need next is a philosophy, something to live by, and to help finance, and—most important—to use to explain or justify yourself. Don’t just grab the next philosophy to come along. Chances are that will be Ayn Rand and her extreme form of capitalism, which she called objectivism.
Rand has a lot going for her, to be sure. First, you may have actually read her in high school and may have been genuinely influenced. Second, in a nutshell, she rationalizes greed, which you have nothing against. Third, she was into mildly kinky sex—something else you may have in common. Fourth, she was associated in some way you don’t quite follow with Alan Greenspan, who is respectability itself, whatever other Rand enthusiasts may have been up to. But you’re too late…
It’s not too late to plan for the 18th Global Conference on Environmental Taxation! The deadline for submitting abstracts in response to the Call for Papers has been extended to May 31, 2017. For information about the conference and the Call for Papers, click here.
This year the conference’s focus is: Innovation Addressing Climate Change Challenges: Local and Global Perspectives
We are in a pivotal and defining time for global discourse on public/private sector response at all levels of government (national, state, indigenous, provincial, municipal, city, and local), to the impacts of climate change. And, GCET18 is well-positioned in its role as the leading global forum for innovative exchanges on principles, practices, and policies with respect to environmental taxation and market-based instruments.
The conference will explore various topics :
Climate change policy, biodiversity protection, environmental stewardship, pollution control, water conservation, land degradation, renewable energy, mining and rehabilitation
Market instruments such as carbon pricing, emissions trading schemes, other environmental taxes, subsidies, direct action or spending programs and tax concessions both positive and perverse.
The conference this year will be hosted by the University of Arizona, James E. Rogers College of Law, and the Conference Chair is Mona Hymel. If you have questions, please contact her at [email protected].
Treating nature as a sacred gift requires our full capacity to imagine ways to heal the split between humans and the earth. A comprehensive plan to protect nature while securing the human right to water means changing the rules that govern the current ‘operating system’ for planet Earth. ~Mason Gaffney, American Journal of Economics and Sociology, November 2016.
Sacred Water, Profane Markets should be of particular interest and provide ground-breaking insights to any professional, NGO, or others with an interest in or responsibility for managing, funding, using or caring for substantial bodies of water for municipal, domestic, commercial, agricultural, industrial, amenity, leisure or hydropower purposes.
Two of our speakers, David Triggs and Mary Cleveland, will address the economics and management of water. They will describe how a just system of charging for nature’s services can not only protect nature from excessive use but also make the market for produced goods and services healthier by preventing the development of monopolies that impede economic efficiency and destroy social harmony.
Drawing upon many years of practical experience in both developed and developing countries and extensive academic research they will show how a healthy balance of demand management and market forces may be used to ensure both safe drinking water for all in water-scarce cities and the optimum sharing of water between agricultural, industrial and commercial users of water. They will provide fresh thinking with regard to how the cost-benefit analyses that underpin major water-related capital projects throughout the world may be improved to avoid unnecessary waste of natural, human and financial resources. The principles underpinning this approach apply to wider economic and public revenue issues.
Our third speaker, David Michel, has researched and written about transboundary water governance, maritime resources management, and water conflict and cooperation. He is a co-author of Toward Global Water Security: US Strategy for a Twenty-First-Century Challenge. He will share his views about the water ethics and policy presented by the first two speakers and how these might make a valuable contribution to a global water grand strategy formulation. The intention of Dr. Michel’s current work on global water security is to maximize the potential for civil society and the private sector to speak with a cohesive voice on water ethics and policy.
Following the three main speakers, several designated respondents will draw on their own insights and experiences in water ethics and management in giving their input to the proposed reconciliation of Sacred Water and Profane Markets. The main speakers and the respondents will then participate in a plenary roundtable discussion on a number of key points and questions raised by forum attendees.
David Triggs is a Chartered Engineer and Management Consultant who studied Engineering at Imperial College London and Business Administration and Management at Henley -The Management College. For more than forty years he specialized in water and environmental management working throughout the UK and worldwide – mainly in developing countries on both small village projects and mega projects in capital cities. David has been a member of the School of Economic Science in London for more than fifty years where he has studied and taught Political Economy for a similar period. He is President of the International Union for Land Value Taxation and Chairman of The Henry George Foundation of Great Britain.
Mary M. (Polly) Cleveland is Adjunct Professor of Environmental Economics at the Columbia University School of International and Public Affairs where she teaches courses on Poverty, Inequality and the Environment. She writes a blog called “Econamici,” and posts to the Dollars & Sense website and to the Huffington Post. A former board member of United for a Fair Economy (UFE) and the Robert Schalkenbach Foundation, she holds a Ph.D. In Agricultural and Resource Economics from the University of California, Berkeley where her dissertation titled Consequences and Causes of Unequal Distribution of Wealth showed how unequal distribution of wealth lowers economic productivity and growth. She has also worked as the controller of a small family company, taught accounting and computer systems at Rutgers University, and renovated and managed two small Manhattan apartment buildings.
David Michel is Nonresident Fellow at The Stimson Center in Washington, DC, and Executive-in-Residence with the Global Fellowship Initiative at the Geneva Centre for Security Policy. Michel has researched and written about transboundary water governance, maritime resources management, and water conflict and cooperation. He has led research projects for the National Intelligence Council and the Department of State and most recently with Oxford Analytica. He currently collaborates with the Geneva Water Hub and the Global High-Level Panel on Water and Peace. Dr. Michel is co-author, along with Peter Engelke, of Toward Global Water Security: US Strategy for a Twenty-First-Century Challenge. He was educated at Yale University, the École Des Hautes Études en Sciences Sociales in Paris, and The Johns Hopkins University’s School of Advanced International Studies.
Dr. Quisia D. Gonzalez was born in La Ceiba Honduras, Central America of indigenous/afro descent (Garifuna). After receiving her medical degree from Universidade de Pernambuco in Brazil she came to deeply understand the connection between health and economic conditions. Now a fervent activist for economic justice Dr. Gonzalez serves the Garifuna community in their struggle for land, water and other basic human rights. She is a United Nations ECOSOC NGO delegate for the International Union for Land Value Taxation and a board member of the Robert Schalkenbach Foundation.
Christiana Zenner Peppard is an expert on the ethics of freshwater and problems of climate change, social justice, and sustainability and a public/social media educator. She is the author of Just Water: Theology, Ethics and the Global Water Crisis; co-editor of two volumes, including Just Sustainability: Ecology, Technology, and Resource Extraction; and the author of numerous peer-reviewed articles on environmental ethics in an era of economic globalization. Her public media work includes venues such as TED-Ed, The New Republic, Public Radio International, The Washingon Post, MSNBC, and CNN.com. In 2013 she was named one of Microsoft’s “Heroes in Education.” Dr. Peppard holds a Ph.D. in Ethics from Yale University, Department of Religious Studies, and a Bachelor’s in Human Biology from Stanford University.
Alex Beauchamp is the Northeast Region Director at Food & Water Watch. Based in the Brooklyn office, Alex oversees all organizing efforts in New York and the Northeast. Alex works on issues related to fracking, factory farms, genetic engineering, and water privatization. His background is in legislative campaigning, and community and electoral organizing.
David Ward is chair of Trinity Church Wall Street’s Environmental Justice Committee. The committee recently contributed to the planning of the 2017 Trinity Institute conference on Water Justice. David has been Senior Director of Facilities and Capital Planning for the performing arts center, New York City Center since 1995. In addition to planning and running building restoration projects, he is responsible for energy efficiency and environmental safety. Mr. Ward holds an MFA degree from the Yale School of Drama (1975) in Theater Design & Technology.
Forum Sponsors: The International Union for Land Value Taxation, a United Nations ECOSOC NGO; The Robert Schalkenbach Foundation; and The American Journal of Economics and Sociology.
Co-Sponsors: Communications Coordination Committee for the United Nations, Center for New National Security, Center for the Study of Economics, Common Ground, USA, Council of Georgist Organizations, Earth Rights Institute, Earth Sharing, Food & Water Watch, School of Cooperative Individualism, Trinity Church Wall Street’s Environmental Justice Committee, We The World
(Additional forthcoming, co-sponsors may place their literature on tables and are inviting their members to register to attend Sacred Water Profane Markets.) Event Sponsors: The International Union for Land Value Taxation, a United Nations ECOSOC NGO; The Robert Schalkenbach Foundation; and The American Journal of Economics and Sociology.
April 27th Thursday 2017 Panel Discussion, “Progress and Poverty: Confronting Economic Inequity in America,” marking FDU Press publication of The Annotated Works of Henry George: Progress and Poverty, Volume II, edited by Francis Peddle and William Peirce with Alexandra Lough, with panelists Mary (Polly) Cleveland, environmental economics, Columbia University, and Daniel Cassino, political science and director of experimental research, PublicMind™, moderated by Edward Dodson, senior researcher, Henry George Birthplace Archive and Historical Research Center.
Hosted by FDU Press, Robert Schalkenbach Foundation and Monninger Center for Learning and Research; Wroxton Room, Student Center, 3:30–5 p.m. Florham Campus 285 Madison Avenue, Madison, NJ 07940 free, light refreshments served, RSVP necessary, to RSVP and for information email [email protected]
Fairleigh Dickinson University 1000 River Road, Teaneck NJ 07666 | 800-338-8803
Benjamin Howells was first elected to the Robert Schalkenbach Foundation board in June 1999, and he served until June 2010. Ben was well-liked by both the board and staff members of RSF, and only stepped down from the board upon having fulfilled the mandatory term limit of nine consecutive years.
Ben provided a positive, wise, and reconciling influence in RSF board deliberations, and at times found himself in the role of peacemaker. He often quoted, and acted on, a motto adopted by the Moravian and Presbyterian churches: In Essentials Unity, In Non-Essentials Liberty, In All Things Charity. One had a sense that Ben lived his life according to this motto.
Ben’s devotion to economic justice and the tax reforms advocated by Henry George went back several decades before he joined the Foundation. In 1970-71, he served on the Mayor of Allentown’s advisory committee on tax reform. He became keenly interested in land value taxation. He was elected five times to the Allentown City Council, and was several times the President. Before the end of his fifth term in 1991, he resigned from City Council to become the City of Allentown Municipal Planner, in which position he served until 1994.
Early in his tenure on City Council, he puts together a proposal authorizing two-rate property taxation, which would allow the city to lower or even abolish the tax rate on building and improvement values while taxing land values at a separate if not higher rate. The Council passed the authorization seven times, only to have it vetoed by the Mayor.
In 1994, the Council requested and the electorate approved a charter reform commission. The commission added two-rate taxation to the charter, which was passed by the electorate in 1995. The Fairgrounds Association, the largest holder of vacant land in Allentown, challenged the charter amendment by running a referendum, which was defeated. We all witnessed increased economic activity in Allentown after the charter amendment went into effect.
In addition to his work for civic reform, Ben was trained in engineering and physics, and worked for Bell Labs for 30 years, retiring in 1990. The work of the Foundation benefitted greatly from Ben’s retirement years, which he devoted so strongly to our shared mission.
Ben passed away at age 86 leaving his wife, Ellen, three children and two grandchildren. Our condolences go out to his family and friends. Ben was greatly loved and admired by his Robert Schalkenbach Foundation colleagues, and his noble, kind, and generous spirit will be greatly missed by all of us who had the privilege of serving with him.
Ted Gwartney, President Robert Schalkenbach Foundation
From The AllentownMorning Call PDF of the News Paper page
Benjamin Howells, an Allentown councilman for nearly two decades, died Tuesday April 4th 2017 in the afternoon at his city home. He was 86.
Howells, a Democrat, was a fixture on Allentown City Council from 1973 to 1992, when he was an advocate for the city’s land-value tax and helped to write the city’s Historic Preservation District ordinance. Howells served two separate terms as council president.
“He was a Renaissance man,” his daughter Leslie Howells of Seattle said Friday. “He was a man of lifelong curiosity and service, and a kind man.”
At the same time he held public office, Howells worked at AT&T Bell Laboratories in Allentown. He retired from Bell Labs in 1990 as a senior technician.
In August 1992, Howells left City Council after his fifth consecutive term to take a job as city planner under Democratic Mayor Joseph Daddona’s administration. Critics claimed Howells took the job to boost his city pension but Howells dismissed the idea. He was removed from the post in April 1994 by Republican Mayor Bill Heydt.
Howells was a member of the Pennsylvania League of Cities for 17 years, serving terms as treasurer and vice president. He was also a member of the National League of Cities. Howells served at least 12 years on the Lehigh Valley Planning Commission and four years on the city Planning Commission.
He was active with what is now the Greater Lehigh Valley Chamber of Commerce, the Allentown Redevelopment Authority, the Allentown Housing Authority and the Allentown Economic Development Corp. He also was a member of the Schalkenbach Foundation, a tax reform think tank in New York City.
In 1999, Howells made a failed bid for Lehigh County commissioner, running on a platform that was critical of what he called a reliance on a “good-old-boy network.”
Born in upstate New York, Howells moved with his family and grew up in the Nanticoke and Wilkes-Barre area of Luzerne County. According to his daughter Leslie, he obtained a pilot’s license when he was 16, before he had a driver’s license.
He was a graduate of Nanticoke High School and Penn State University. He served a short time in the Army in the early 1950s.
Howells is survived by his wife of 59 years, Ellen (Morris) Howells; three children, Allen, Leslie and Sarah; and four grandchilden.
Funeral services will be private. A public memorial service is planned, but no date has been chosen. Information on the memorial service will be available from the family at [email protected].
HENRY GEORGE LECTURE SERIES, April 24, 2017 Topic Henry George and the Crisis of Inequality in the First Gilded Age Speaker Professor Edward T. O’Donnell College of the Holy Cross Professor O’Donnell’s presentation will be based on his book on the topic, published by the Columbia University Press in 2015. Henry George played a key role … Read more
“We want to win, not just be clever!” Dear Concerned Citizens, We are broad-shouldered so please be frank in explaining why you chose not to subscribe to this monthly helping of sharp, landed insights. We want to win, not just be clever, so please write or phone what stopped you from subscribing. Perhaps we are seen as … Read more
California, among many other places, is now in the grips of a scarily intense drought. Yet, California still uses an awful lot of water. Golf courses and car-washes are obvious wasters, but agriculture is the thing that really sucks California dry.
California as a whole diverts or pumps 43 million acre-feet of water each year to supplement its meager rainfall. In total, agriculture consumes 34 million acre-feet of that.
The economics of this can get a little bizarre. Water in California is heavily subsidized — a big reason why so many water-intensive crops are grown there. Fruit and nut trees need more water, but they also bring in much more revenue per acre than vegetables or other crops — and, they represent a long-term investment. That means that if water is scarce, farmers will tend to use it on just those crops that are use it least efficiently. For example, almonds in California use a stunning 1.1 trillion gallons of water each year, enough for every person in the state to take a luxurious 22-minute shower every day. California produced 82% of the world’s almond crop in 2013.
Increasing the efficiency of irrigation is something that people have long known how to do. According to Big Picture Agriculture, “Many of the methods known to conserve water and use it efficiently have been practiced for thousands of years in some very arid regions of the world with great success. The best systems require little maintenance while yielding maximum results.” The site goes on to list 35 methods, viable at a range of scales, for conserving irrigation water. Why is it not done, then, in California? Why, essentially it’s because farmers are paid to waste water.
Of course water wastage is compounded when water is wasted on products that are deeply wasteful in themselves. Producing a gallon of ethanol, for example, requires 193 gallons of water (see Food, below, and Energy). The US plans to pare down ethanol production to a mere 15 billion gallons in 2015.
We feel guilty when we forget a container of leftovers in the fridge, it grows fuzz and we have to toss it, and I shudder to think how many tons of the nation’s french fries (not to mention our lettuce!) get tossed into the trash. But to get a handle on the immense amount of nutrients today’s food system wastes, we have to go to the top of the food chain: we have to look at meat.
A lot has been written about all this; Fast Food Nation by Eric Schlosser, for example, lays it out in gruesome detail. But for introduction, a well-documented New York Times article from January, 2008 does the job nicely. Here are some of the facts it presents:
The world’s total meat supply was 71 million tons in 1961. By 2013 it rose to 308 million tons.
2.2 pounds of beef is responsible for the equivalent amount of carbon dioxide emitted by the average European car every 155 miles.
Though some 800 million people on the planet now suffer from hunger or malnutrition, the majority of corn and soy grown in the world feeds cattle, pigs and chickens.
About ten times more grain is required to produce the same amount of calories through grain-fed beef as through direct grain consumption.
Iowa alone produces 137,000 tons of pig excrement every day.
There can be no doubt that a system that subsidizes meat, by subsidizing grain, is detrimental both to the planet and to the health of all those meat-eaters. To put it bluntly: it’s a waste of a heck of a lot of good food.
And it goes beyond mere eating! We’ve already mentioned the global poster child for insanely wasteful resource use: ethanol. A third of the US corn crop is used to produce the stuff. The world’s #3 producer of corn is Brazil (China is #2), but Brazil produces only a third of the amount of corn that US drivers burn in their cars.
There are so many ways to talk about our society’s waste of energy. We could discuss the sheer wattage of solar radiation that hits the earth each day, and the falling price of photovoltaics, or the untapped potential of wind and tidal power sources, or the astounding savings that could be found in ramping up public transportation, and using energy-efficient vehicles. A 2009 cover story in Scientific American showed how the entire world could get all of its energy — for transportation as well as electricity — from wind, water and solar sources by 2030, using tweaks to existing technology.
Of course, we can’t discuss the waste of good energy resources without mentioning the squandering of both human and material resources in wars, and preparation for wars, over the control of fossil fuel resources. Our immense military establishment is, of course inherently wasteful — because military assets are designed to be consumed in the task of destruction. Not only that, military operations themselves use staggering amounts of energy. Here are some astounding examples:
The US military consumes more energy than Nigeria.
In 2006 alone, the Air Force consumed the same amount of fuel US airplanes consumed during WWII (between December 1941 and August 1945): 2.6 billion gallons.
F-15 fighter jets burn 1,580 gallons of fuel per hour.
Over 70 percent of the tonnage required to position today’s US Army into battle is fuel.
Why do we squander our energy resources so outrageously, when we know darned good and well that continuing to burn fossil fuels will bring disastrous, irreversible consequences? It’s because the alternatives are, basically, unthinkable. I’m not saying our energy alternatives are unworkable, impracticable or even present too hard an adjustment. The problem is that in terms of our political economy, our international relations, our sense of who’s on top and in control, they’re unthinkable. Imagine! They’re saying we need international cooperation to protect the global climate. Up to now, international relations has always been about self-interest: individual and corporate, mostly, though occasionaly people pull together for the sake of national self-interest. But to deal with climate change, we must appeal to global self-interest. That’s still self-interest, mind you, but it’s a whole new thing.
By 1600 the British Isles were pretty much cleared of timber, save the inviolate estates of nobles. One of the pressing concerns that led to the earliest North American settlements was the prodigious supply of wood to be found there. Wood was the first cargo that the failed Virginia settlement of 1608 tried to send back. The pattern was repeated in the United States. Prior to the civil war, wood provided over 90% of fuel for homes and industries in the US. The coal was there — it was already being used very extensively in Britain — but the States had a very well-developed and influential timber industry. The bottom line is that we persistently wasted wood in the United States until we truly had no other alternative.
We US citizens are justifiably proud of our democratic, constitutional political system — yet one wonders why we make so little use of it. I live in the little town of Jackson, Maine, pop. 548 in the 2010 census. People in Maine are proud of their democratic traditions and protective of their suffrage; recently Maine resoundingly defeated a ballot issue to do away with same-day registration, and we’re one of only 14 states that allows convicted felons to vote. But — our most recent election was an off year: no national, state or even local offices to be decided; it turned out that the only thing on the ballot was the school district’s budget. Now, the school budget is an issue about which a lot of people in our little town have loud complaints and strong opinions. I went in to vote at about four in the afternoon. “Slow day?” I asked the dutiful poll-watcher lady. She sighed and consulted her clipboard. “You’re number six.”
Average voter turnout in the United States in the 28 national elections since 1945, in terms of the portion of the voting-age population, is 47.7%. That’s 138th in the world. The top ten in voter turnout are emerging democracies that had only had a few elections during that period. But Australia has had 22 elections since 1945; their turnout rate has averaged 84.2%.
It could be that we’re jaded about voting because there seems to be so little to vote for; American politics is mired in partisan gridlock and big-money influence. The current US Congress has single-digit approval ratings, but guess what! Because of the magic of gerrymandering, the number of incumbent congresspersons who will lose their bids for reelection will most likely be in the single digits! Thus, the most expensive election in world history (under current rules, every US election will almost certainly cost more than the previous one) will yield the absolute minimum amount of actual legislative or policy change.
There are commonsense reasons why citizens really ought to use their voting power. The most basic one is that when fewer people vote, the groups who are more likely to vote gain more power over the overall outcome. This basic fact is powerfully used by politicians and their strategists. The 2000 presidential election in the US was very close; much was made over a few thousand contested votes in Florida, and the 2.7% of the popular vote that Ralph Nader managed to get. Nevertheless, George W. Bush was “elected” by 47.9% of the popular vote, which amounted to 27.4% of the voting-age population. Think voting matters?
In 1904, New Yorkers thought their brand-new subway system was the swellest thing ever. And it was! It expanded rapidly, growing into world’s largest railway system, efficiently moving millions upon millions of people to work, to play at Coney Island, to cheer at Yankee Stadium. The New York subway stuck to its five cent fare until 1948. By that time, of course, there were lots of automobiles in the city; in 1904 there were only horses.
The city of Austin, Texas is known as the state’s least scary city to non-Texans. It had the U. of Texas Longhorns, nice museums and music scene, interesting historical spots — all in all, a nice place to visit. But it’s rough on unfamiliar drivers. It’s encircled by ring upon ring of elevated, limited-access highways with endlessly sweeping ramps; it can literally take you twenty minutes to reach a destination that is visible from where you’re standing. “You think this is bad,” say Austin people, “Wait til you see Houston.”
People in Austin wonder whether its already Texas-sized highway system will be able handle the traffic load in a few years. Things get pretty backed-up during rush hours — and, all those new flyways will need to be maintained. That’s not a trivial issue. I have been traveling in and out of New York City on I-95 for many years, and I don’t recall ever not seeing construction on the stretch between New Haven, Connecticut and the New York State line. That means that at existing levels of traffic, using existing road-maintenance techniques, this stretch of highway simply cannot be fixed before it wears out.
There are a zillion examples of mind-bendingly egregious waste of the public infrastructure that your tax dollars have bought. I’ll just make one more observation before moving on. Infrastructure capacity is the most important consideration in how cities arrange zoning requirements. If zoning allows, say, twelve-story buildings with a certain footprint in a neighborhood, you can bet that the city figures it has sufficient water, transportation, education and public-safety facilities to handle buildings of that size. Would you care to hazard a guess at how much of the zoned-for, buildable space in New York City is actually built, as of this year? Fifty-one percent. Other major cities are even less densely built. Our cities could hold a whole lot more people than they do, and these people could significantly lower their environmental footprint by moving into cities — and even more so if cities embraced green building techniques. Yet we keep pumping out the parking lots, the beltways, the big-box superstores…
There is, by many accounts, a debt crisis in modern society. The national debt of the United States stands at about $17 trillion, or some $55.9K per citizen, which is a bit more than the US’s personal debt per citizen, which stands at $52.2K. The US Debt Clock website shows many interesting facts; its numbers adjust in real time, which lets us see that our national deficit is currently decreasing by about two thousand dollars per second. Also, US debt held by foreign countries, which stands at around $5.9 trillion, is currently decreasing by some $4K per second. So the trend lines seem to be positive — but any way you slice it, it’s still a lot of money to be owing.
As wages and household incomes have declined, people have taken on more and more personal debt. As of 2012, the average US household with at least one credit card owed $15.9K in credit card debt, much of it at high-teens interest rates. But, of course, not every family can get a credit card. Payday and car-title lenders lie in wait for the vulnerable. Some states, such as Texas, do not place any limits on the rates such lenders can charge.
But, you might ask, why is “borrowed money” placed in the category of things that are wasted? Well, it’s wasted, by definition, if new loans are taken out just to pay back old ones. Consumers who do this often find themselves in a spiral of debt, leading to bankruptcy, and permanent economic hardship. “Deficit Hawks” warn that our nation faces this predicament too. There are significant differences between the finances of a nation and those of a family: the nation can, within limits, print its own money. However, money can’t just be inflated or borrowed forever without consequences.
Not everyone borrows out of desperation; businesses often borrow money because they can make more profitable use of the cash they have on hand. Nations, similarly, can choose to borrow during economic downturns, times when raising taxes would further depress the economy. Such borrowing can be seen as sensible and sustainable.
However, if one is borrowing more than one would prefer to borrow, then one will most likely not be borrowing on the most advantageous terms. Problem borrowing comes when one just doesn’t have enough income to pay the bills. That’s the borrowed money that gets wasted, and its amount increases when the economy turns downward, and when there are more poor people.
And yet, modern society perpetrates one waste that is bigger — much bigger — than all of these.
[The] greatest of all the enormous wastes which the present constitution of society involves is that of mental power. How infinitesimal are the forces that concur to the advance of civilization, as compared to the forces that lie latent! How few are the thinkers, the discoverers, the inventors, the organizers, as compared with the great mass of the people! Yet such men are born in plenty; it is the conditions that permit so few to develop…. Turn to the lives of great men, and see how easily they might never have been heard of. Had Caesar come of a proletarian family; had Napoleon entered the world a few years earlier; had Columbus gone into the Church instead of going to sea; had Shakespeare been apprenticed to a cobbler or chimney sweep; had Sir Isaac Newton been assigned by fate the education and the toil of an agricultural laborer… what would their talents have availed? But there would have been, it will be said, other Caesars or Napoleons, Columbuses or Shakespeares…. This is true. And it shows bow prolific is our human nature. As the common worker is on need transformed into queen bee, so, when circumstances favor his development, what might otherwise pass for a common man rises into a hero or leader, discoverer or teacher, sage or saint. So widely has the sower scattered the seed, so strong is the germinative force that bids it bud and blossom. But, alas, for the stony ground, and the birds and the tares! For one who attains his full stature, how many are stunted and deformed.
It has been generally assumed, for many years, that “the free market isn’t good at providing affordable housing.” If the free market can’t satisfy that basic, universal human need, then we can’t afford to trust the free market, can we?
Oddly, the free market doesn’t seem to have a problem with providing other things we want to buy. There are sensible cars that working people can afford. You can go into Walmart and buy your kids a full set of school clothes for less than $100 (though you might pay a bit more if you’re concerned about abusing and killing textile workers). Do-it-yourselfers know that there’s healthy competition in the markets for lumber, nails, paint, wallboard and power tools. Why, there are even out-of-work carpenters eager to work for reasonable rates — it’s not the actual construction of the housing that’s unaffordable.
“It’s Not That Simple”
When water was the preeminent source of industrial power, towns grew up along the Appalachian fall line. In recent years, the globalization of various manufacturing industries has led to a decline in population — and real estate values — in many cities, especially in the Midwest.
Lumber mill in Bangor, Maine, ca. 1890
The state I live in, Maine, has lost flagship industries in successive waves. In the 18th and 19th centuries, demand for Maine’s prodigious timber resources kept billions of board feet floating down the Penobscot river, and shipyards humming up and down the coast. (Today, one last shipyard, Bath Iron Works, struggles to keep its US Navy contracts.) Then, for many years, Maine was a leading producer of chickens. The cold winters helped to keep the large numbers of birds free of infection. But, when antibiotics were discovered to do the same thing, chicken farming quickly shifted southward, to avoid Maine’s high fuel costs. People — especially educated young people — moved away, and the state’s economy suffered. But, for those few who could afford a down payment, Maine homes were bargain-priced.
So, one thing we can say about “affordable housing” is that it tends to come along with economic decline. But, sometimes, in some communities, that process can have a silver lining. To return to the Maine example, old farms have been repurposed to make high-end wool products (sheep and alpacas like it there), or organic crops for a growing local-food market. Often, when land prices fall far enough, new, creative place-uses start becoming feasible.
Sometimes the process turns communities entirely around. In Maine, an example is the community of Belfast, a town of some 6,000. In the 1980s, Belfast was a gritty, working-class community that smelled like its two biggest employers: fish-canning and chicken-processing. When the chicken industry left the area, and the struggling sardine plant closed, the town faced hard times. Housing was cheap, all right — who wanted to live there? However, the town had a usable harbor, and some charming old architecture, and it willed itself into becoming an artistic community. Galleries and bistros sprouted like fungi. Tourism boomed. Rents and house prices soared.
Urban Blight & Flight
Throughout the 20th century, US cities declined, while suburban communities boomed. This was a national phenomenon. It preceded widespread globalization, and cannot be linked with industrial decline. And, it was in precisely these blight-afflicted cities where the “affordable housing problem” became most acute.
The cause of urban blight & flight had everything to do with the sad racial history of the United States. There were two great waves of rural-to-urban migration of African Americans. The first brought some two million blacks to Northern and Midwestern industrial cities, seeking to take advantage of the shortages of industrial workers brought about by the first World War. The second brought another five million or so after World War II, many of whom settled in cities in the West. Conditions in the agricultural South must have been pretty bad for so many people to pin their hopes on such an unlikely outcome. Once the Great Wars were over, industrial jobs were no longer so easy to get (after WWII, millions of women relinquished factory jobs to returning GIs). Many unions denied membership to African Americans. Furthermore, the process of redlining — denying credit within certain racially-defined areas, was very widespread. These factors, combined with an endemic level of racism in society, ensured that people of color stayed within well-defined neighborhoods.
Within those areas, unemployment was high, and it was essentially impossible for residents to establish businesses or buy homes. Rental housing was in short supply, and there was little incentive for landlords to pay attention to maintenance. This was a recipe for crime, and decline — and many of cities’ white, middle-class residents started to leave — a process that was accelerated by the establishment of the Interstate Highway System, and the booming automobile industry.
This process left behind impoverished, crime-ridden neighborhoods, patrolled by contemptuous and unreliable police. But you couldn’t say they weren’t affordable. At the very least, you could knock your way into the shelter of an abandoned building. A great many working people rented egregious housing, while paying for their own painting, re-glazing, and often heating, in Harlem, North Philadelphia, Watts, St. Louis, South Chicago and many other cities.
This is not to suggest that urban decay is entirely due to racism. It happens in places that lack the USA’s chronic racism, and has much to do with a worldwide shift of manufacturing to the global South and East. But, people often find it easier to handle large-scale social problems if they can identify a scapegoat. In the USA, the identification of Black areas with drugs and crime suited this impulse
At Least It’s Our Neighborhood…
There’s an inherent instability about this process, though. Blighted as these neighborhoods were, people had put down roots in them. They paid their taxes; city governments grudgingly provided them with infrastructure. Each had originally been part of a big city, a place where a great many people wanted to live. But, as land values fell, and more buildings were abandoned, eventually the place would become a real estate bargain. The slum may have lowered the value of the land immediately under it, but the slum as a whole was still centrally located.
A Doonesbury strip from the early 1980s showed a radio interview of the author of a book about making money in real estate. The author said that it was a good idea to distribute spray paint and crowbars to the local youth. “You mean,” asks the shocked interviewer, “you encourage them to vandalize their own homes?” The author replies, “Well, within reason. We ask them not to touch the copper plumbing.”
The history of a place like New York City is characterized by waves of blight and gentrification. Manhattan’s Upper East Side was scrubby farmland, then a rough-and-ready neighborhood of German and Irish immigrants, with a dirty, loud El train running right through it. Now it’s among the priciest real estate in the world.
East River regatta in the 1890s
Similarly, Harlem in the 19th century was a community of fancy country estates. African Americans from the South started arriving in great numbers in the first decade of the 20th century, along with subways to take them back and forth to work. “Urban renewal” policies threw up high-rise housing projects in the 1950s in an attempt to “clear the slums” and address the housing crisis, but the neighborhood’s poverty remained. Now, after all these years, Harlem is becoming gentrified, and there is resentment over losing the old community, rough as it was — as well as the skyrocketing housing costs. Even the South Bronx is starting to sport some pricey new condos.
The Blight & Flight Pattern Reverses
Where do people go, when they get gentrified out of the neighborhoods they’ve lived in for years? One would think that in the vastness of New York, they would move to the Outer Boroughs. Some do — but real estate prices in New York have become so extreme that even cheap Outer-Borough neighborhoods, like Williamsburg, Red Hook or Astoria have become unaffordable. Many have to leave the Big Apple entirely and head for the more affordable “inner-ring” suburban communities such as Jersey City, Yonkers or Nassau County.
This is becoming a nationwide pattern. People who can no longer afford to live in gentrified, former low-income neighborhoods are moving, in large numbers, into “inner-ring” suburbs. Poverty, racial tensions, and other social problems long associated with “the ghetto” are showing up in suburban communities. And housing in such places is becoming — that’s right: more affordable.
Must Affordability be Synonymous with Poverty?
Back in the mid 2000s, we seemed to be on a path that would make the American dream of owner-occupied housing come true for just about everybody. For a time, it seemed like anyone could secure a home mortgage. Banks were offering mortgages with no down payment, just a pay stub indicating the buyer could make the monthly payments. Just to make sure, Fannie Mae and Freddie Mac offered targeted mortgage programs for minorities. Price was no object, because everyone expected the value of the real estate, which served as collateral for the loans, to keep going up. Suddenly, all these new homeowners could borrow against their home equity to buy a new car or a washer & dryer. It was a magical wealth machine, fueled by historically low interest rates. What a neat solution to the problem of affordable housing! Alas, it was based on a transparent fallacy, and the process made a few people fantastically rich, while deeply hurting just about everyone else.
The dreamer awoke; we realized we couldn’t really create the American dream out of pixie dust. There are currently more empty, foreclosed houses than there are homeless people in the USA. Unfortunately, homeless people don’t have stable jobs or good credit ratings. Which agency is going to deal with the innumerable i-dottings of transferring title to four million empty houses? And are the banks going to give up these assets, just to be nice? Though it might make sense, in many ways, our current political system simply will not allow these empty homes to be given away to people who need them.
Cities are left with the realization that they have to create affordable housing the old-fashioned way: build it. There are, basically, two ways of doing this. They could spend municipal funds to build public housing (which is politically unthinkable today) or somehow give private developers an incentive to build it (which is, as things now stand, economically unfeasible).
Cities Try to Put Deals Together
Nevertheless, a number of cities are trying this sort of thing. In New York a developer is allowed to build 20% more units than zoning allows. By “allows,” I mean the square-foot figure that has been negotiated using transferable development rights, public-space considerations, etc.). This is the case if it agrees to create, or keep from being lost, that same number of affordable units (“affordable” being subject to various official definitions). Two things about this: first, it solves the mystery of how people are able to build thousand-foot towers in areas that are zoned for, like, twelve stories. Second, in terms of meeting the need for affordable housing, it’s an inherently losing proposition. At best, the program will only create 20% as many affordable units as new luxury ones. If the luxury towers succeed, they’ll add to the upward pull on housing prices, causing more affordable units to be done away with. If they fail, luxury housing will be oversupplied, and since new affordable units are based on the creation of new luxury units, it’s self defeating.
We have come full circle to the problem that we started with. Why is it that the market is able to provide working people with cars, cordless drills, blue jeans and smartphones — but not housing?
The difference is really pretty obvious; has the reader caught it? Here is a house. Let’s play real estate appraiser for a moment: is this house worth $50K? Or it is worth $1 million?
You hesitate. You seem to need more information. Wouldn’t it depend on interest rates, and the boom/bust cycle? I mean, heck, you might not be able to get $50K for it, if nobody can get financing. True enough — yet there is another, much more important consideration — something real estate people know very well, but public-policy people always seem to forget. It’s all well and good to figure out where things are in the business cycle — but to answer our question, the thing you really need to know about this house is: where is it? How many people want to live there? How close is it to lots of people to meet, greet and make deals with? How easy is it to get from there to places where all those people gather for business and pleasure? What public services are provided to people who live there, how good are they, and who pays for them? It’s the value of that location — where it is — that accounts for the 20-fold difference in price.
It’s also worth noting that although people struggle to afford housing throughout the economy, and, indeed, the great bulk of foreclosures in the subprime housing crisis were in suburban areas. Nevertheless, it’s in urban centers that we hear the hue and cry for “affordable housing.”
Fans of The Free Market are tempted to ask why urban centers need affordable housing. Aren’t cities supposed to be places that draw the best talents and most nimble operators? Urban taxpayers invest in public transportation systems; why can’t the workers just live outside the pricey (newly gentrified) central cities?
But that doesn’t work, because — as we have seen — areas within commuting distance aren’t affordable either! The “affordable housing problem” of today’s cities isn’t a matter of community spirit, or compassion for the poor commuters. “Affordable housing” becomes a problem when so few people can afford to live in a community that its ability to sustain a local economy starts becoming threatened.
Cities Are Not Filled Up
There ought to be plenty of affordable housing. If one examines any US city — by driving through, flying over, or scrolling through Google Maps — one will see a truly amazing amount of real estate that is either entirely vacant, or grossly underused. How many surface parking lots does Downtown Brooklyn need? This waste of infrastructure-rich urban land happens throughout the city, from the hyper-valuable core right out to the fringes, making the urban area sprawl out much farther than it would otherwise need to (and drastically increasing both pollution and travel times).
Manhattan, Upper East Side (note subway entrance)
Why does so much valuable land go to waste in cities? Because those who own the land are allowed to profit from community-created land value even though they don’t use the land. The vast majority of new urban developments are not undertaken by the land’s longtime owners. Developers acquire the land — often along with obsolete buildings they then pay to demolish — by paying big prices to owners who have not contributed one penny to the local economy. This is the major cause of urban blight and sprawl, and unnaturally high — and volatile — housing prices.
It’s vital to separate the owners of land from the builders and operators of buildings. They may or may not be the same person — but economically their function is entirely different. In our economy, the value of land is not enjoyed by the people who create it. If that seems a bizarre statement, it’s only because we’re so accustomed to the utter conventionality of it. The value of locations is enjoyed by real estate owners, and banks (who hold equity in the property until the mortgage is paid off, and earn interest on the money loaned to buy it). Location value is created by the community, yet collected by private investors. In fact, it is collected by private investors whether they build housing or not. That is why housing is unlike any other commodity — and that is why the problem of “affordable housing” seems so unsolvable.
We have all been inspired, from time to time, by the moving statements of Native Americans, and other aboriginal speakers, about their deep and abiding relationship with the land. Here’s one:
What is this you call property? It cannot be the earth, for the land is our mother, nourishing all her children, beasts, birds, fish and all men. The woods, the streams, everything on it belongs to everybody and is for the use of all. How can one man say it belongs only to him? — Massasoit
We like that; it echoes feelings we had as kids. Why should we not be allowed to walk across an imaginary line? The earth belongs to everybody — and nobody should be allowed to dump toxic crap all over it!
I’ll bet you can remember — I sure can — coming across “No Trespassing” signs and annoying your parents about them. “Why can’t I walk here? I’m not gonna hurt anything!”
“Because it’s illegal. It’s Private Property.”
This seemed to make sense to grownups. Grownup sense. Woody Guthrie didn’t quite get it, either (but then, he never really achieved bona fide grownup status, did he?):
As I went walking I saw a sign there And on the sign it said “No Trespassing.” But on the other side it didn’t say nothing, That side was made for you and me.
Crazy Horse put it bluntly: “One does not sell the land on which people walk.” It’s that “does not” that makes his statement poignantly militant. It’s a very different thing to say, “One should not.” One does not: selling the land is unthinkable in any kind of human society that hasn’t utterly lost its way.
But — of course one does sell the land; it’s the basis of the entire financial system of a modern economy. Secure, transparent rights to private ownership are seen as essential to economic development. In areas where land ownership is ambiguous, where fee-simple ownership intersects with traditional tenure systems, where deeds are inconsistently (or corruptly) registered, trade and development are severely hindered. It makes grownup sense.
Efforts to find something better than private ownership haven’t generally gone well. Farm collectivization in the Soviet Union, for the most gruesome example, was bitterly resisted by the peasants. After World War I, Lenin’s New Economic Policy increased farm production by allowing farmers to sell what they could produce in excess of official quotas. Stalin, impatient to fuel large-scale industrial development, wanted the peasants to work not for themselves, but scientifically, with modern equipment, for the Fatherland. After Stalin introduced large-scale collectivization in 1929, food production in the Soviet Union fell sharply, and the whole enterprise killed between 10 and 12 million people.
In China, though collective farming had a more promising start, it brought about an even bigger debacle. In the mid-1950s, collective farming was introduced on a voluntary basis. After the Chinese revolution, some 50% of Chinese cropland was seized from landlords, without compensation, and distributed to peasants. To advance beyond primitive farming methods, the peasants were encouraged to form cooperatives, often of the 100-200 households that made up a village. This helped; under this system, farm production increased modestly. But, the collectives were still too small to tackle large-scale infrastructure projects, such as irrigation canals or dams. In 1958, as parts of it “Great Leap Forward,” China reorganized farms into much larger communes. All farm production was on behalf of the entire society, and the (meager) pay of farm workers had no relation to their productivity. Food production fell drastically, and some 30 million people died.
Various desperate modifications were made, over the next two decades, but the communal farm system tottered on in China even after the death of Mao Zedong in 1976. After farm production stayed essentially flat for four years in the late 1970s, the Chinese government began to allow more individual control over farmland, and yields slowly increased. However, farming in China is still much less efficient than in many of its neighbors. Land is still owned at the level of the village, not the individual family, and cannot be mortgaged. This means that farmers’ access to credit is very limited, and thus there is little opportunity to acquire the capital farmers would need to become more productive.
John-Boy: Grandpa, do we got something to show we own Walton’s Mountain?
Grandpa: You can’t own a mountain, any more than you can own an ocean or a piece of the sky. You hold it in trust. You live on it, you take life from it, and once you’re dead, you rest in it.
That’s the kind of ownership we want, is it not? The Waltons represented an American archetype: self-reliant, honest, close to their land. This myth, of the plain, industrious American farmer, lives on, serving to obscure the unfortunate fact that there are very few of such farm families left. American agriculture has undergone a collectivization of its own. Unlike the commie versions, ours was fueled by the profit motive (and lots of petroleum) — so, yields have gotten bigger and bigger. Once-happy farmhouses are now just creaking husks in the collective fields. Crops are gene-engineered, fertilized and mechanized, gathered by thundering herds of harvesters, each of them piloted from air-conditioned, wifi-equipped cabs. It’s a great system — if you really want to grow a LOT of corn, and aren’t concerned with external costs. In 2013, the United States burned 40 per cent of its humongous corn crop. That’s right: burned it — in the form of ethanol — a boondoggle, whose net environmental effect is negative.
A movement is growing in opposition to the inhuman destructiveness of factory farms. More and more people are coming to understand that locally-grown food, produced without genetic manipulation or petro-fertilizers, raised on labor-intensive farms by people we know, is much better. But, alas, it is much more expensive. Farmers’ markets and local-food coops are growing — but they still make up a minor portion of our overall food market. And, there are a great many areas that are not reached by such wholesome trends. They’ve acquired a name, too: “food deserts” — dystopian zones where the only vegetables to be found are in cans of soup.
In our mad scramble to get on top of one another, how little do we take of the good things that bountiful nature offers us! Consider this fact: To the majority of people in such countries as England, and even largely in the United States, fruit is a luxury. Yet mother earth is not niggard of her fruit. If we chose to have it so, every road might be lined with fruit-trees. — Henry George
Yes, but still, these visions of sharing the bounty of nature, of roadside apples for the masses, of picking up after ourselves and not coveting our neighbor’s goods — these are childish things. Must we not give them up, if we are to have a career, a mortgage, a grown-up life?
Still, those statements of old wisdom haunt us. They make a whole lot of sense, and they articulate truths that, for all our hardnosed adult realism, we can’t quite bring ourselves to deny. Well, I can’t, anyway.
My reason teaches me that land cannot be sold. The Great Spirit gave it to his children to live upon. So long as they occupy and cultivate it, they have a right to the soil. Nothing can be sold but such things as can be carried away. — Black Hawk
I also think that the worldview articulated by aboriginal folk is by no means as childlike as we would like to think. Native Americans, like indigenous people on every continent, had well-ordered, sophisticated civil and political cultures centuries before they ever encountered Europeans. Not only that, most Europeans’ first encounter with natives was not with the people, but with their goods, which were widely traded. Native Americans rolled their eyes at the first bands of hapless European settlers who came to North America. They didn’t know how to farm, or build sensible structures. In the winters, they would have starved and frozen without the people’s help. They thought they could trade useless bits of metal for real goods, without even a word of greeting. They were totally unaware of the need to exchange food, gifts and conversation before entering into any binding agreement. They were laughably clueless.
I have long (and longingly) wondered what would have happened had the Indians of North America’s Eastern woodlands not been decimated by an onslaught of diseases to which they had no immunity. The plagues they endured weakened them in every way. Even by the end of the eighteenth century, so many had fallen that old nations no longer could be sustained; the Europeans negotiated with shifting, ad hoc alliances made up of what was left of once-strong tribes.
Had that not been the case, there would not have been a military and political vacuum to bestow upon Europeans what they came to call their “Manifest Destiny.” Native American nations would have been a political force with which the settlers would have had to negotiate — or fight — in earnest. I am tantalized to consider the North American history that would have resulted from such a beginning. It might have — it just might have — provided us with a valid connection between two apparently antithetical insights: the native understanding that we belong to the earth, and the modern wisdom that individual initiative, set free, can create social wonders.
However that may be, I think it behooves us to consider these words of Thayendanega (Joseph Brant):
Among us we have no prisons, we have no pompous parade of courts, we have no written laws, and yet judges are as highly revered among us as they are among you, and their decisions are as highly regarded. Property, to say the least, is well-guarded, and crimes are as impartially punished. We have among us no splendid villains above the control of our laws. Daring wickedness is never suffered to triumph over helpless innocence. The estates of widows and orphans are never devoured by enterprising sharpers. In a word, we have no robbery under cover of law.