Redrawing Democracy: A Vision

I've been thinking today about my personal vision for the kind of society I would like to live in, a sort of "ideal picture" of an ideal country. It's actually pretty specific, and I think I am finding words to describe this picture. The first part is unabashed utopianism. The second part is serious "political science-fiction" as I like to call it.

Physically, visually, it looks somewhat like a plant, with each part being of equal importance, though some parts are more visible than others. The roots would be in the countryside, where much of the population growth would occur and a reserve of unspecialized yet hardworking people would be maintained, where both new population and raw materials would originate. The stem would be a network of incrementally larger transportation arteries and commercial hubs, from an unmanaged network of dirt and gravel backroads linking rural communities to more paved roads and rails, to factory towns that process the raw materials, finally to the flower of the society: the cities. The cities would be clean, dynamic places, where the great variety of cultural, commercial, and industrial forces that originate in the countryside would shine, hybridize in ever changing ways, as people, products, and ideas moved in and out.

The Root (Country)

The roots would be an essentially unorganized countryside. There would not, in this society, be an organized, State-driven effort to extend the amenities of urban civilization to the farthest reaches. In other words, tax dollars would not be spent to directly extend or subsidize the extension of things like transportation and communication networks to these places. If the phone company sees no profit in extending phone lines to a particular community (and the people of that community are unwilling and/or unable to finance the extension of the network to their community), the lines would not be extended. If the only way to build a paved highway to such a place is coercive finance, the road would not be built.

Th result of this would be that unique rural communities would be more able to continue their existence. Places where labor specialization is less, where jacks-of-all-trades flourish, where traditional values are under less pressure by a ubiquity of instant communication with the rest of society. The various communities would be highly diverse, with some being ethnically diverse, others ethnically homogenous. Some places would host things like free-love hippie communes, while others would host more religiously motivated communities. Some would be essentially commercial operations, focused on profitably providing raw materials for a market. Others, particularly ones further off the beaten path, could be more idealistically founded. There would be a government over this all, but the primary purpose of this government would be to ensure that no particular group of individuals could either monopolize the available resources or impose their communal visions on others.

From these places more adventurous souls could come, migrating to the cities with no particular specialization but a well developed work ethic, revitalizing urban cultures that all too often lose sight of the value of hard work and perseverance in favor of blaming their neighbors for their woes. To these places could go the world-weary of the urban world, who would have a wide range of communities to choose from, and be able to revitalize rural cultures that all too often lose sight of the value of innovation in favor of a dogmatic adherence to tradition.

Ultimately, the character of the root would be a spectrum of degrees of connectivity to the world market, ensuring that there are always places where the value of hard work and personal perseverance is always apparent, unlike in urban societies where the value is often more abstract, hidden as it is by layer upon layer of business-controlled access to capital and other resources.

In our current society (Western civilization and the more urbanized Asian civilizations), the root is undervalued, weakened by well-meaning but misguided efforts to extend the benefits of modern civilization to these places by any means necessary. The result is a sort of grafting-on of the rural societies in other parts of the world, as population growth slows in over-urbanized societies and are are gradually replaced by alien populations. The civilization I describe would be a more balanced civilization, accepting its less incorporated rural populations as kin (being linguistically compatible with their urban counterparts), with an economically resisted but politically free flow of individuals between the root and the flower. Urban civilization would also be more evenly distributed, as opposed the overconcentration of urban communities in the geographic West, with rural populations on the outside.

The Flower (Shining City)

Cities would ideally be clean, prosperous, diverse, and well-engineered, with multi-use buildings being the norm, "zoning" being minimal. These would be the places to which raw materials would flow, both physical and cultural, and from which refined materials would be released, from manufactured products to novel cultural movements. Populations would be dense, and the ubiquity of mass transit would make it possible to travel by foot alone (auto accidents would be few, with most of the drivers being those who have no choice due to their professions). Further, most of the cities would be linked by advanced mass transit (high speed rail?), allowing convenient, almost seamless movements of people and goods between the most advanced cities. Travel between the cities and less urban communities would have a continuum of convenience, from being able to reach the larger towns via older rail systems, the smaller towns via less developed roads, to remote communities that one can reach by inconsistenly maintained gravel roads... at best. And there would yet be places the hardiest of urban tourists would have to themselves, reachable only by foot (whether human or equine).

To these places would come the more adventurous persons of rural origins, hungering for a faster paced and more competitive life than exists in the countryside. From these places would depart those who are weary of that same fast pace and high level of competition, and they would have a wide variety of places to choose from. Thanks to the equitable distribution of access to natural resources (most chiefly, access to physical space, to be described in a later section on the political institutions defending this society), "captive" populations mired in urban poverty would not exist. Further, due to those same institutions, city boundaries could shift and move periodically, to account for changes over time, speeding the decomposition of the dead institutions of dying cities.

Branch and Stem (Everything In Between)

The cities would not be walled; the country would not be isolated. The chief characteristic of the connecting tissue would be variety, variety, variety. There would not be one single plan defining the nation's transportation system. Larger towns, serving as hubs of trade and manufacturing between the two extremes, could be connected by robust transportation systems. But there would yet be places connected by only the most tenuous threads, with minimal (but still present) commercial connection to the urban flower. The further one got from the most rural communities, the more diverse the communities would become. While the great megatropolises would connect with others around the world, the smaller cities would connect regionally. But new transportation systems would be established in an organic fashion. Megatropolises could shrink to more regional status; new cities could rise (though this happens less often than one might think, with the oldest city sites having been continually occupied).

I'm not sure what else to say about this.

Bark and Thorn: Government

There would be, constitutionally speaking, two levels of government: the national and the local. Local could be big in some places, representing the populations of entire cities or wide-ranging territories. It could also be small in other places, representing entirely independent villages or even individual homesteads.

The concept would be that all individuals have an equal right of access to the land. By default (due to the absence of equally distributed "ancestral estates" in most of the world), this right would be exercised by equal and inalienable ownership of shares in a single corporation, which would function as the national government.

This government would collect "taxes" in form only. In substance, they would simply be rents paid for the privilege of excluding others from use of land resources, which would include everything from physical, geographic space, to the limited capacity of the atmosphere (locally and globally) to process the byproducts of human activities, to exclusive use of segments of the electromagnetic spectrum. It would always seek to collect the most it could, keeping rents at revenue-maximizing levels (seeking neither to raise them so high it hurts productivity, nor lower than necessary). It would spend these revenues on whatever the board of directors, elected by the population at large, decided was necessary. Any extra would be returned to the shareholders (read: again, the population at large) as a dividend.

Ideally, in my opinion, this government would focus primarily on defense of people against aggressors, both foreign and domestic, keeping the peace and leaving more in-depth governing to the lower levels of government, and thus returning as much of its revenues as a dividend as possible (this practice is what is meant by "geolibertarianism"). This is what I would advocate as a participant of the political process. However, the actual results could be whatever the citizenry enabled via the board of directors.

Local governance would not be set in stone, and would be formed in the following manner. Groups of shareholders would have the right to redeem, temporarily, their corporate share in exchange for a physical share of the land equal in value to their share of the corporation. Essentially, segments of the population could "secede" from the level and govern themselves in whatever manner was mutually agreeable to the participants. They would, first, have to had legal occupancy of that land; they would have to already "own" it and be paying the appropriate rents for it (which would tend to be higher per square foot in urban areas, and potentially nearly-free in the most remote rural areas). The value the population would receive back as a dividend if the rents could somehow be collected without bureaucratic overhead and the government returned the entire amount as a dividend would have to equal the rents that would normally be paid for protected occupancy.

From that point until the expiration of the charter, no more than fifty years later, the national government would not collect physical land rents from this area, nor would they exercise jurisdiction over internal affairs in this area. (They would still collect, and its people would still participate politically, in a limited fashion as joint-owners of overlapping broadcast regions and pollution basins.) At expiration, the population would be re-issued their shares in the national government, the land be returned, and if they so desired and the re-assessed rental-value still matched the re-counted population (and they all still wanted to participate), the charter could be re-established. I suspect, however, that people more often would take this opportunity to adjust borders, try entirely new divisions, or even return to direct national governance.

Examples of how this might work include cities that make the decision to become "free cities", establishing independent political institutions (particularly independent of more tradition-bound rural populations), collecting local revenues more efficiently, spending them locally on urban priorities, and so on. It could include a small town that wants to defend it's unique local character from what it perceives as an overbearing national government. It could include an individual homestead, the members of which want to attempt a fully "market anarchist" type of political life. It could include a pioneering community, who believe the rental-value of an area could be substantially higher given some work, and who could use this institution to secure the benefits of putting in that work and taking the risk over a period of fifty years... but not allowing their descendants to perpetually place themselves over the remainder of the population.

Most importantly, it would include a great variety of different sizes and types of local governance, making such a country, overall, into a true "laboratory of democracy." Successful experiments could be easily extended and imitated; unsuccessful experiments would liquidate by default after a time. Populations that wish to break away could do so peacefully; others that wish to join together could do so without dragging their neighbors into it. THINGS COULD CHANGE... and nobody would have to fight a war to make it happen.

The national legislature could even be bicameral. One house would be the board of directors elected by all who choose to be governed directly by, and participate directly in, the national government. The other could be the representatives of voluntary contributors (a version of the "openly sold Senate" I described nearly a decade ago).

Anyway, that's what the vision of this particular brainstorm looks like.

Island Tales

Imagine an island. Imagine there are a hundred people living on it. Imagine ten of these people are free men, and the other ninety are slaves. Does this sound like a free society?

Now imagine a different island. On this island, all 100 are free men, but ten of them own all the land on the island. The other ninety have to somehow satisfy one of the ten to earn the privilege of existing on this island, let alone making their living off it... or learn to swim. Does this sound like a free society? How much different does it sound from the first example?

Let us imagine another. On this island, the Ten own 50% of the land on the island. Another twenty own another 30%. 20% of the land is unclaimed... for a reason. The other seventy must either eke out a living on the 20% margin, or satisfy one of the Twenty and Ten in order to make use of the good locations. Does this sound like a free society?

What do you suppose would happen to the lifestyles of the bottom seventy were twenty more people to shipwreck on the island? How about the lifestyles of the top ten?

Imagine the second island, but the Ten have been overthrown. The people of this island now fearfully cut down anyone who is more productive than normal for fear he may become a new Tenner. Does this sound like a free society?

Now imagine another island. On this island, 100% of the land is regarded as being owned by all in collective. People can claim and put to use unclaimed land at will. When multiple people wish to make use of the same land, a fifty-year lease is sold to one of the parties at auction, with the proceeds distributed to the other 99. Otherwise, people only get out what they put in... what they produce or receive from others willingly (either in trade or as a gift). Does this sound like a free society?

Land Justice: Yet Another Model

Lately, I've been thinking about the models I've promoted in the past: a periodic disbursement of rents to the public on a per capita basis, whether by the government via taxes on rents (land values, electromagnetic spectrum, etc.) and a partial or complete citizen's dividend, or via a regular stock dividend from a separate corporation that acquires rental opportunities on behalf of the public over time. It occurs to me that one advantage to the way things are now is that, for the most part, people have to work. It is theoretically possible that, under public distribution of rents, you might end up with more people who choose not to work than are unemployed under the current model, and while that looks neat if you'd rather not work, it may have a significantly negative impact on overall productivity. If you consider society standing by itself, this isn't necessarily a bad thing... but one society never stands alone. More productive societies sometimes overcome less productive societies, wiping out such models.

I find myself returning to the model presented in Leviticus 25: 8-17, wherein the distribution of the land is reset every fifty years. It occurs to me that, even in the absence of "ancestral lands", there is a way to implement a similar model in our own society. In this case, I'm not considering how one would get from here to there... though the slow accumulation of land by a foundation established for this purpose could perhaps implement this as well as my earlier model. Simply put, rather than collecting and disbursing land rents yearly, it would be done every fifty years.

The advantage of this is that it while still freeing people from the mistakes of earlier generations, it would do less to protect people from the consequences of their own actions... which is a desirable outcome, in my opinion. This corporation, jointly owned by every inhabitant of a country, would lease the land (and other rent collecting opportunities) to individuals on a fourty-nine year contract. In the fiftieth year, the lease would expire, and everyone would have to renew their leases, from the owner of a small city plot to the owners of large tracts of agricultural land to the owners of rights of way for privately owned infrastructure. The proceeds would then be disbursed to the shareholders (the People) on a per family or per capita basis.

I believe that fifty years is a short enough period for every generation to get access to these proceeds at least once (and in many cases twice) during their lifetimes. It's also long enough that I suspect that, if someone is in danger of losing their lease to a higher bidder, replacement of capital improvements on a different site could be built into a business plan (everything needs to be tore down and rebuilt every now and then, after all). In the case where this isn't feasible, if the activity is productive, I suspect the current occupant would value that location higher than any other... and thus not be outbid.

These funds, once received, would do much to alleviate the disadvantages of those whose opportunities are restricted by the mistakes of the previous generation. Such funds could be used to educate oneself or one's children, take advantage of investment opportunities (including starting businesses of their own), move to more advantageous locations, and, yes, it could be blown in a few years on a licentious binge. The advantage of doing this semicentenially is that those who chose to spend the money foolishly would rather quickly end up having to work for a living again... returning to the ranks of the productive. Doing it annually runs the risk of creating a class of men who are chronically unemployed by choice.

Governor Schwarzenegger: Baby Geoist?

Over at progress.org, I discovered a reference to a letter California Governor Schwarzenegger sent to the California Assembly Bill 32, which would, among other things, create a greenhouse gas cap-and-trade system for the State of California. Among the options mentioned are both the free distribution and the auctioning of emissions rights. And it looks like the main purpose of the letter is to promote the idea of auctioning those rights and then distributing the money back to the people.

This is a tiny step toward a more fully geo-libertarian policy. For the right to the limited capacity of the atmosphere to absorb pollution qualifies as a form of Rent, in the classical sense; and distributing that rent, rather than spending it centrally, is specifically geo-libertarian in nature. Does Governor Schwarzenegger know this? Could this be the beginning of a more general trend in favor of geo-libertarian ideas?

All in all, I am very much in favor of this policy.

"Cost Push Inflation"

Something people like to talk about is things like rising oil prices "causing" "inflation". The idea is that there are certain commodities which are used in nearly every productive process, and as a result movements in the price of this commodity can influence the prices of just about every other commodity. Petroleum provides both the energy for many, many productive processes, the vast majority of the energy for transportation of products, and the raw materials for everything from the fertilizer used in growing the food to the plastics they are stored in. Because a rise in the price of oil causes a rise in the price of everything else (debatable, but I don't need to go there this time), it follows that The State is justified in engaging in collective action to keep these prices down. Or, another side goes, the prices being left as they are, a certain amount of the higher prices, inconveniencing people as they do, should be collected for the benefit of the state. Right?

I am, of course, referring to subsidies to the oil industry (up to and including war on the industry's behalf) on the one hand, and special taxation of the industry on the other. In addition, I am playing devils advocate here, for the sake of another argument. Certainly, subsidization of the oil industry (or any other) to bring prices down doesn't make sense because the money still has to come from somewhere; ie. taxes. In addition, seeking to reduce the profitability of a commodity will discourage the development of new sources of that commodity, keeping prices up in the long run. However, there is one other thing, an entire category, one of the factors of production, the price of which drives all other prices even more surely than the price of petroleum, but which is not subject to the same market dynamics of petroleum.

I am referring to land. Access to physical space is necessary for existence itself, let alone to the productive processes that support existence. Thus, the costs involved in occupying this physical space must be accounted for in the costs of production. This is true whether you're dealing with a business that is paying rent to an owner, a mortgage to a financial institution, the costs of physical security in a land where the State does not assume this burden, or even if the business owner is also the landowner and is simply paying out market norms for all the other factors, while keeping the surplus (including the rent) for himself. And even if one has found a way to make a living in a place neither tethered to ownable land nor threatened by criminal violence, one is only making use of marginal land... and if it is profitable, this land will not be marginal for long, as others move to imitate.

As an economy grows, the price of a given unit of land relative to the price of a unit of just about anything else grows. For while increasing economic efficiency enables people to get more out of smaller and smaller quantities of any given input, including land , the result is larger available quantities of every other input... but not land. One can squeeze more and more productivity out of a given area of land, which is good for those who own the land, since they can claim an ever larger quantity of goods and services in exchange for the use of their land.

And this increasing cost of access to land must ultimately come out in the prices of goods and services for production to be profitable. These price increases, furthermore, enter the cost of production at a multitude of points.

The minimum price of labor must account for land prices increases, since they affect the price of living space. This minimum price is also affected by food prices, which are affected by rising land prices. The price of everything the laborer must use is affected by land prices. This doesn't necessarily mean all these prices are rising in an absolute sense, but compare what prices are when efficiency increases are opposed by rises in land prices to what they could be if the cost of physical space were somehow magically removed, and you get an idea what I'm talking about here.

Then there's the price of capital goods: machines, facilities, goods on the shelf. All of those who produced these had to pay for access to land; therefore rising land prices affect the prices of these thigns, as well. And the inputs that went into producing the capital goods ALSO were impacted by rising land prices in the previous cycle.

All of this is in addition to the compensation for the landholder for permitting the land to be used by one individual rather than another. Clearly, land prices (or actually, the rental value of land, which impacts, but does not exclusively determine, the purchase prices of land titles) affect prices economy-wide to a degree equal to or greater than the price of oil. IF you happen to believe that goods with this degre of influence over other prices (like oil) fall under the purview of government regulation, taxation, and subsidy (and I admit, I do not share that belief, but work with me here), certainly land falls into this category.

When does this fact become most obvious? When domsetic producers are displaced by producers located in developing regions, the land in which has lower rental values due to things like a lower or less educated population, more frequent violence, less capital development, and overall factors that produced a lower historical degree of interest in developing in those lands. This will not last forever, since this disequlibrium of rental values will eventually stabilize... which is to say, eventually, developing country will become developed country, and what was once marginal land will be pulled into production.

Attempting to legislate rental values down would be foolish, since it is those prices that ensure that land, when it changes hands, goes into the hands of those most capable of making use of it. All you would end up doing is pushing rents into a black market. Because land, by definition, cannot be created, an attempt to stimulate production of land (increase supply) through subsidies is clearly not going to succeed. However, this same fact makes taxation of landholdings unable to reduce the availability of land; thus, unlike special oil taxes, land taxes cannot discourage future production.

For those of you who do not think this is enough to justify regulation and taxation, I will attempt, once again, to present the moral argument next week.

Gold: Theoretical Nexus between Austrian and Geoist Economics

Lately, I've been paying a lot of attention to the work of Dr. Michael Hudson, whom I discovered via his many interviews on Guns and Butter, a radio show I used to listen to regularly via KFCF. (It's a shame my newly local WPFW doesn't carry that show.) A theory that is somewhat new to me that I've encountered via his work concerns taxation as the source of money value. Initially odious to a libertarian thinker like myself, some thought about the role gold typically plays has lead me to believe there might be some truth to the notion.

I wish I could point you to a definitive page outlining this theory. I'm pretty sure it's at least related to the Fiscal Theory of Price Level (the wikipedia article could use some development, but it's the best introductory link I could find, the others being equation-heavy and highly technical papers from various Federal Reserve Banks). But the basic idea I'm so recently exposed to is that money derives its value from the demand for it created by its acceptance to satisfy tax liabilities.

This contrasts with the theory I'm most accustomed to, which is a simple question of supply and demand with its utility being a question of its durability, divisibility, and scarcity, and general acceptance in payment for other goods. Durability: How long can it be stored before it degrades? Divisibility: Can I make change? Scarcity: How much value can I store in how little space? Acceptance: Will anybody care that I have this? Gold fits all four of these. It doesn't generally oxidize, nor does it shatter, you can divide it down to tiny grains without reducing its "goldness" one bit, it is rare enough that one could potentially buy, for example, a car, for an amount of gold that could be carried in a small sack. So then the question arises: where does its initial demand come from? Why would anybody want gold?

The answer is obvious: the stuff looks good, and unlike other things that look like gold but aren't, it will continue to look good pretty well indefinitely. It makes an excellent decoration. There is always somebody who is willing to accept it in payment. The question then becomes: who? And in payment for what?

The short answer is "the rich", the richer the person is, the more gold they are (were?) likely to make use of, relative to their use of everything else. A middle class person might hold a few important pieces of jewelry (such as a wedding band), but a rich person might have many otherwise common items either constructred from or plated with gold. In other words, he'll use more. But who is likely to be rich?

These days, we like to focus on the successful entrepreneur: the Bill Gates' of the world. And yes, it is true that the richest tend to be those whose efforts have produced new tools, products, processes, and so on. But this has not always been the case historically, and even today, below the super rich "new money" types you have "old money", who largely collect their wealth in the form of rents.

"Rent" is nothing more than money received for access to an opportunity or good in excess of the resources actually needed to enable access to it in the first place. Land is the primary example, the cost of making it available being the cost of securing exclusive access (basically the protection of capital improvements against thieves, vandals, etc.), and economic rent being the amount actually received in exchange for access minus that cost. Those who are in the business of collecting rents will tend to be richer than those who pay them, and those who are rich by other means will tend to "invest" their newly earned wealth in rent collecting opportunities (adding their descendants to the existing aristocracy).

We now have a reason gold is always acceptable in payment for goods: it is always acceptable in payment for rent, due to the fact that the rent collectors are also the ones who have the most use for gold other than as a medium of exchange. If the gold supply becomes excessive (as can happen after a large discovery), the rent-collecting class will tend to absorb the excess in the form of luxary goods. This, then, ensures that there is always a demand for gold, making it acceptable at nearly all levels of society as a medium of exchange. You can't eat gold, but you can pay rent with it.

If one considers rent to be a "tax" of sorts (and I do), then what you have is gold satisfying the "tax value" theory of money value (or whatever its called), and it does so naturally, without the intervention of legislative declaration, monetary "policy", or even a functioning government.