Fine article from the father of real-world economics on the New Economics Foundation Blog. He counters the mainstream faith in ‘endless growth’ by using economic analysis, but applied to the eco-system as a whole rather than just the narrowly economic system.
The new economic question is: are the extra benefits of physically transforming more of the ecosystem into the economy worth the extra opportunity cost of the ecosystem services lost in the transformation? Has the macroeconomy reached, or surpassed, its optimal physical scale relative to its containing and sustaining ecosystem? Is the economy now too big for the ecosystem from the point of view of maximum human welfare?
It was a pleasant surprise to find that the Financial Times chief economics commentator Martin Wolf has come out in favour of a Land Value Tax (an annual tax on the value of land owned), following a debate on the FT website.
I have previously written a proposal for a Community Land Value Tax for the Scottish Parliament. I reproduce it here as originally written. I would probably change some of it now, but it contains the main elements of the case.
Proposal for a Community Land Value Tax
Diarmid Weir 1 Introduction
It was Marx who saw that the unequal distribution of ‘private property’, in particular land, was incompatible with social justice. Yet we have also seen from the former communist states that centralised ownership of land and the resources it produces brings a different sort of tyranny.
Land as fundamental property
In these days of highly manufactured technology it is very easy to lose sight of the importance of land. Look at any product of this technology, however, and we will find that it is composed of materials extracted from the earth’s crust, from crops grown from it or animals husbanded upon it. So land is the fundamental ‘property’ and all other material goods are derived from it. Social justice therefore demands some way of making the control of its use communal and democratic. Continue reading Martin Wolf and Land Value Tax→