The biggest challenge for social democracy today is to articulate coherent policies based on a unifying vision for society. The policy approach should transcend the usual right/left divide and articulate a clear analysis of the problems inherent in the neoliberal macroeconomics structures.The major problems to address include: (1) the enormous worldwide wealth gap and the underlying concentration of land and natural resource ownership and control; (2) the privatized monetary structures; and (3) building global governance institutions and financing governance and development in such a way as to divert funds from military industrial profits and into social development and environmental restoration.
We need a basic clarification of First Principles on the concept of "ownership", starting with the principle that the land and natural resources of the planet are a common heritage and belong equally as a birthright to everyone. Products and services created by individuals are properly viewed as private property. Products and services created by groups of individuals are properly viewed as collective property.
We can hatch many birds out of one egg when we shift public finance OFF OF private property and ONTO common heritage property. From the local to the global level we need to shift taxes off of labor and productive capital and onto land and natural resource rents. In other words, we need to privatize labor (wages) and socialize rent (the value of surface land and natural resources). This public finance shift will promote the cooperatization of the ownership of capital in a gradual way with minimal government control of the production and exchange of individual and collective wealth. Natural monopolies (infrastructure, energy, public transportation) should be owned and/or controlled or regulated by government at the most local level that is practical.
The levels of this public finance shift can be delineated thusly: Municipalities and localities to collect the surface land rents within their jurisdiction. Regional governing bodies to collect resource rents for forest lands, mineral, oil and water resources; the global level needs a Global Resource Agency to collect user fees for transnational commons such as satellite geostationary orbits, royalties on minerals mined or fish caught in international waters and the use of the electromagnetic spectrum.
An added benefit of this form of public finance is that it provides a peaceful way to address conflicts over land and natural resources. Resource rents should be collected and equitably distributed and utilized for the benefit of all, either in financing social services and/or in direct citizen dividends in equal amount to all individuals.
A portion of revenues could pass from the lower to the higher governance levels or vice versa as needed to ensure a just development pattern worldwide and needed environmental restoration.
In the area of monetary policy we need seignorage reform, which means that money should be issued as spending by governments, not as debt by private banking institutions. We also need guaranteed economic freedoms to create local and regional currencies on a democratic and transparent basis.
To discuss our Economic Policy Vision Statement contact:
Alanna Hartzok, Co-Director
Earth Rights Institute
United Nations NGO Representative
Box 328, Scotland, PA 17254 USA
Phone: 717-264-0957
Fax: 717-264-5036
Email: alanna@earthrights.net
Website: http://www.earthrights.net
- Alanna Hartzok, Co-Director, Earth Rights Institute
Agreed. The best modern short statement I have seen. Congrats to the writers, the thinkers, the editor who pulled it all together, and the culture that produced them. I will assign this to my classes, first thing I can.
- Dr. Mason Gaffney, University of California, Riverside
GREEN ECONOMICS PRIMER
by Frank de Jong, leader, Green Party of Ontario
Preamble:
There are two types of green economics: subsidy-driven green economics and market-driven green economics. Greens gravitate to market economics since it requires less government expense and intervention, and is more politically palatable.
The market was originally theorized by Adam Smith to internalize all costs to ensure fairness and efficiency. However, subsequent factors like resource pollution, resource exhausting and sprawl have not been duly internalized thus reducing the effectiveness of the market. This has unfortunately resulted in the market externalizing most ecological costs onto the poor, future generations, and other species. Greens would modernize Adam Smith by introducing the invisible "green" hand to make markets serve modern needs and realities.
Government shouldn't participate in the market but only regulate it. For example, government should not build wind turbines, but rather, eliminate hidden dirty electricity subsidies through full cost pricing so that businesses and cooperatives will respond to market indicators by building turbines without subsidies. The same goes for transit, organic agriculture, affordable housing, energy conservation, ending sprawl, etc. When the market reflects true costs, government subsidies and regulation are no longer needed.
Greens call for ecological fiscal reform and revenue-neutral green tax shifting so that businesses that adopt green production processes will increase their profits while businesses that stay grey will be taxed more heavily. Businesses should not be taxed for hiring people or for making a reasonable profit but instead should pay levies and fees for squandering resources, using land inefficiently and polluting the planet. People should not be taxed for holding down a job, but should pay for the amount of land, energy and resources used. Businesses and shoppers usually follow the path of least tax resistance and should have the option to save money by choosing green products and green lifestyles.
Land and natural resources are held in common by the public (and also belong to future generations and other species). When the community grants access to land or resources to a business or individual, the community should be recompensed. The dynamism of a particular community or society determines the value of local land and resources, so individuals and businesses should not be allowed to earn windfall profits from these resources that rightfully belong to that community. Land value taxation and resource taxes insure that community-created wealth accrues to the community, except for a fair profit to the business or individual who, through their labour or ingenuity, has improved the land or used the resource efficiently.
GREEN ECONOMICS PRINCIPLES
- It is better to tax "bads" rather than "goods". Governments have long used selective taxation to discourage use of alcohol and cigarettes, while unprocessed food and childrenšs clothing remain tax-free. Greens would continue this tradition with selective "eco-sin taxes" to discourage a wide range of grey products and lifestyles. At the same time, taxes would be eliminated on green products and lifestyles. People should be able to avoid taxation by choosing green products and lifestyles.
- Taxes should be designed to conserve resources and energy. Rather than taxing jobs and profits, taxes should be moved to resource use and energy consumption to reward conservation. The community should benefit from the use of commonly held resources. Using resources is a privilege, not a right, and the user should pay for the privilege. Resources must also be shared with future generations and other species.
- Taxes should be designed to increase employment. Moving taxes onto resources and land use and off of incomes will make people less expensive to employ. Products produced by green production methods, which tends to use fewer resources and less energy will avoid taxation. As energy costs rise, the price of labour becomes more economical, and green products which tend to encourage value-added processes, will provide more high quality, skilled jobs than resource intensive products.
- Distributive taxes are preferable to re-distributive taxes. If wealth is distributed more fairly in the first place less re-distribution will be necessary. Eliminating consumption taxes will eliminate the only tax the poor must pay. By moving taxes on to resource use and land, the poor, who generally own less land and use fewer resources, will avoid taxation, thus requiring less redistribution. Taxing land but not the use of land, will reduce taxation on higher density housing, lowering housing costs for low-income citizens, thus reducing another need for re-distribution.
- Resource taxes should be assessed as early as possible. Resources should be taxed before entering the manufacturing process in order to green all aspects of the manufacturing process from extraction to the finished product. Increasing taxes on resource and energy use will encourage resource and energy efficiency, innovation, reuse, repair, recycling, and used material recovery.
- Taxing unearned income is preferable to taxing earned income. The tax shift to resource use and community-generated land values will distribute income more fairly without dependence on income and business taxation to redistribute income. Taxing unearned income (resources, land) and not earned income (jobs, profits) will reduce the rich-poor gap since the rich are always in a better position to capture unearned or windfall income by their ability to hold assets that they do not have to consume.
- Green tax shifting is revenue-neutral, not a tax break or tax grab. The taxes paid by businesses and individuals collectively will not change, but greener businesses and consumers will reduce their taxes. Grey businesses and consumers will pay higher taxes. Studies have shown that 50% of businesses and consumers will be unaffected or only slightly affected by tax shifting, roughly one quarter will realize tax reductions one quarter will be taxed more.
- >Resource use and community-generated land value taxation are fairer. Resource use and land taxes are much simpler to collect and harder to evade than taxes on income and business profits. Since there are far fewer points of taxation than with