By: Josie Faass
With new leadership come new ideas and directions, and together with the Board of Directors, I’ve spent the first few months of my tenure as Executive Director identifying our priority areas and activities for the next three years. Some are brand new, others are an extension of efforts begun long ago, but all represent a continued commitment to to creating a world of liberty and equality of opportunity arising from economic, social, and environmental justice.
Those familiar with RSF know that we’ve been involved in publishing and book distribution for a long time. In the next few years we’ll focus on supporting the creation of even more scholarly and popular content, digitizing our existing collections into a free online database, and converting all of our titles to e-book and print on demand formats for ease of distribution.
Another major area of activity in RSF’s future will be outreach – outreach to outreach to the Georgist community and to those who don’t (yet) consider
themselves Georgist, but who share our ideals, priorities, and the belief that everyone will benefit from the implementation of more sound tax and trade policies at the local, national, and global levels. Key to our success in these efforts will be the formation of partnerships with like-minded organizations and individuals who can help us amplify and propagate our ideas into new spheres of influence, and we look forward to strengthening existing ties, and to creating many new ones.
RSF will also be more actively communicating with individuals and groups interested in exploring
whether and how the adoption of a land value tax (LVT) might benefit their communities. We recognize that access to expert analytical resources and individuals able to answer location-specific questions can mean the difference between sticking with a familiar (albeit potentially inferior) approach to local taxes and trying a new and better solution.
Education is an area in which the Foundation has long been active, and one on which we will remain focused. By providing support to educators and students of all ages, we will continue to share the wisdom of Henry George and like-minded thinkers.
Finally, and perhaps less visibly to the outside world, we’ll work to optimize our own operations and grow our resources, thereby enhancing our efficiency and impact.
At RSF, we know that once you “see the cat,” you realize “it’s all cat,” and are committed to facilitating this fundamental shift in the way people view the world and our place in it.
Good luck in your new role.
Years ago I came across some pamphlets by Henry George published by the Schallenbach Foundation. I still have them.
These were a great way in for anyone to Henry George’s ideas and I always thought they should make them available as free downloads on a website. They are super clear, motivational and transparently reflect the logic and natural justice of the land tax.
I wanted to pass that on.
Ps at some stage I wouldn’t mind being involved. I am a maths teacher in Melbourne, Australia.
Thanks for your comment and suggestion that we make pamphlets available for free download – I’m happy to tell you that we plan to do just that in the future!
Please do keep in touch. I’m sure there will be opportunities for future involvement.
Perhaps the RSF will change its way of viewing the LVT as being only applicable to specific situations, and will begin to examine the “Big Picture” of theoretical macroeconomics too. In the past my efforts to interest this Foundation along these lines have failed, but hopefully it might find some favor now. I therefore append my short article about making macroeconomics more scientific and better understood. The two papers (with diagram and photographs) are on the internet and for the book, see below.
Making Macroeconomics a Much More Exact Science
Today macroeconomics is treated as an inexact subject within the humanities, because at a first look it appears to be a very complex and easily confused matter. But this attitude does not give it fair justice–we should be trying to find a better way to approach and examine the topic, in a way that avoids these problems of complexity and confusion. Suppose we ask ourselves the question: “how many different KINDS of financial transactions occur within our society?” Then the simple and direct answer shows that that only a limited number of them are possible.
Although our sociological system comprises of many millions of participants, to answer this question properly we should be ready to consider the aggregates of all the various KINDS of functions (no matter who performs them), and then to idealize these activities so that they fall into some more general terms, expressing the different types of sociological transactions into what becomes a relatively small number.
Here, each activity is found to apply between a particular pair of agents or entities—with each entity having its individual properties. Then to cover the whole sociological system of a country, the author finds that it takes only 19 kinds of flows of money for the mutual activity in the transfer of goods, services, access rights, taxes, credit, investment, use of valuable legal documents, etc. Also these flows pass between only 6 different representative agents or entities.
The analysis that led to this initially unexpected result was prepared by the author and it may be found in his working paper (on the internet) as SSRN 2865571 “Einstein’s Criterion Applied to Logical Macroeconomics Modeling”. In this model these double flows of money verses goods, etc., are shown to pass between only 6 kinds of role-playing entities. Of course, there are a number of different configurations that are possible for this type of simplification, but if one tries to eliminate all the unnecessary complications and sticks to the more basic activities, then these particular quantities and flows provide the most concise result, and yet it is presentable in a fully comprehensive seamless manner that is suitable for further analysis.
Surprisingly, past representation of our sociological system by this kind of an interpretation model has not been properly examined nor even presented before. Previously, other partial versions have been modeled (using 4 entities, as by Professor Hudson), but they are inexact due to either their being over-simplified. Alternatively, in the case of econometrics, the representations are far too complicated and almost impossible to follow.
These two reasons of over-simplification and over-complexity are why there is this non-scientific confusion by many economists and their failure to obtain a good understanding about how the whole system works.
The model being described here in this paper is unique, in being the first to include, along with some additional aspects, all the 3 factors of production, of Adam Smith’s “Wealth of Nations” book of 1776. These factors of production are Land, Labor and Capital and along with their returns of Ground-Rent, Wages and Interest/Dividends, respectively. All of them are all included in this presentation diagram.
(Economics’ historians will recall, as originally explained by Adam Smith and David Ricardo, the prescribed independent functions of landlords and capitalists. The former persons rent and speculate in land values whilst the latter are owners of the durable capital goods in industry, which may be hired out. Regrettably these different functions were deliberately combined for political reasons, by John Bates Clark and company about 1900, resulting in the neglect of their different influences on our sociological system.)
The diagram of this model is in my paper (noted above). A mention of the related teaching process is also provided in my short working SSRN 2600103 “A Mechanical Model for Teaching Macroeconomics”. With this model in its different forms, the various parts and activities of the Big Picture of our sociological system can be properly identified and defined. Subsequently by analysis, the way our sociological system works can then be properly calculated and illustrated.
This analysis is introduced by the mathematics and logic that was devised by Nobel Laureate Wassiley W. Leontief, when he invented the important “Input-Output” matrix methodology (that he applied it to the production sector only). This short-hand method of modeling the whole system replaces the above-mentioned block-and-flow diagram. It enables one to really get to grips with what is going-on within our sociological system. Subsequently it will be found that it is the topology of the matrix which actually provides the key to this. The logic and math is not hard and is suitable for high-school students, who have been shown the basic properties of square matrices.
By this technique it is comparatively easy to introduce a change to a pre-set sociological system that is theoretically in equilibrium (even though we know that this ideal is never actually attained–it being a convenient way to begin the study). This change will then create an imbalance and we need to regain equilibrium again. Thus, sudden changes or policy decisions may be simulated and the effects of them determined, which will point the way to what policy is best.
In my book about it, (see below) 3 changes associated with taxation are investigated in hand-worked numerical examples. In fact when I first worked it out, the irrefutable logical results were a surprise, even to me!
Developments of these ideas about making our subject more truly scientific (thereby avoiding the past pseudo-science being taught at universities), may be found in my recent book:
“Consequential Macroeconomics—Rationalizing About How Our Social System Works”.
Please write to me at [email protected] for a free e-copy of this 310 page book and for additional information.
A More Stealthy Georgist Cat
By David Harold Chester, October 2019
The Georgist cat is small and lean
And often doesn’t get to be seen.
It hides in the branches of an economic’s-tree
So it takes a long while for you or for me,
To appreciate its cute and original form
That the landlords are so ready to scorn.
The economic’s-tree has many fine branches
(On which we contend, there are no free-lunches).
Whilst the land-owning rich in the city all claim
As bloated capitalists, that they’re not to blame
For the gap that lays ‘twixt the poor and the wealthy,
But oppose any tax to make our nation healthy.
Have you heard the tale of a committee, that
Thought to bell and get warning of a fat cat?
But could not find a soul to apply this device,
Because typically all were a council of mice!
Our Georgist cat has a bell ready-fitted,
(Which makes this analogy more to be pitted).
This warning sound makes our ideals unwanted,
For a new tax is how politicians get doubted.
So the Georgist cat fails to catch any mice
That pose as landlords, along with their vice.
But how shall we silence the bell’s warning sound
And quieten the news that our pussy’s around?
Our Georgist feline is in serious error,
‘Cause its bell draws attention not only to whether
Valuable sites can be ethically shared,
But also the rent from a site is declared
As the means to replace other kinds of taxation,
Which obviously causes the landlords vexation.
In the economic’s tree many other beasts lurk
But are missed, after learning of Henry G’s quirk
Through the cat-finder’s recently brilliant discovery.
This writer seeks a new means for recovery
From our politi-unacceptable claim,
And stealthily project LVT once again.
If we would but examine some more of the tree
Alternatives are waiting there for us to see.
Among them is hiding a far better way
For an equivalent LVT effect, to stay
In essence, without causing such evil offences
To the landlords and their partitioning fences.
When a property-owner decides to sell–quick
The gov’ment buys its land, and not the public!
Its occupant then leases it for a similar fee
To the One-Tax of Henry George’s decree.
Any buildings on-site should be sold as previously
But without the land, on which the price grievously
Had risen, with huge speculation in its advance
That stopped entrepreneurs from having a chance.
The cost of this land must be raised through new bonds
Which the government sells and the public responds,
‘Though their interest-rate’s a bit lower than rent,
Their returns are more stable than the average tenant!
This process will take many years to complete–
So its financial support is no great money feat.
After the lease-fees begin to collect,
Gov’ments can tax less, and firmly expect
To pursue this policy without change, until
All the lease-fees are site-rents in the national till.
With the land properly shared, the government sees
That site development stays with the current lessees.
Other taxes that cause so much trouble and hate
Are scrapped, with great pleasure to all in the state,
Except for some bankers and the tax collectors
Whose actions no longer apply in these sectors.
Land-rights will be shared through this simple device,
By a fast-growing country that takes our advice.
David, We appreciate your comments and contributions. It’s not so much that you are ignored or failed to reach us. Rather you should know that the Georgist community is very small, and has difficulty responding to every and all requests. Schalkenbach has one full-time and two part time staffers. Its board of 21 are mostly involved in gainful employment, and not able to take all spare time in agendas of a Georgist nature. Would that we had more resources and people. I have a copy of your manuscript, a stupendous work in itself. You should know, however, that yours is one of dozens of works awaiting wider dissemination. With best wishes, Bill Batt.