By George! Austin Leads National Recovery

Published on Dissident Voice, by Greg Moses, June 5th, 2009.

It’s a wistful headline, I admit. But it covers a considerable hope.

The Austin-Round Rock metropolitan area was nearly alone among USA cities for its ability to report year-over-year job growth in April, 2009 (up by 3,400 jobs). And it was the only major metro area (out of 38) to report an increase in the employment rate (+0.4 percent). To believe that this slim green shoot is the first sign of economic Springtime in America requires a bit of the Oat Willie determination to go “Onward thru the Fog.” Which, actually, is what I intend to do …

… From my armchair view of internet chatter, it seems to me a wise thing for policy makers to devalue the dollar in the near-term as a means of coaxing cash into markets. But if devalued dollars simply get transmuted into gold shares, then the alchemy gets dark. 

A Georgist approach to systemic reform begins with tax policy. Capital and labor should be taxed last. Then property values should be clearly divided between improvements and the land they rest upon. Let the improvements also move to the back of the tax line. This leaves land value at the head of the line for taxation.

George’s reasons for land tax could be summed up in a Kudlow motto: “tax it and you get less of it.” But with land, there is no danger of taxation reducing the supply, there is only the promise of land monopolists unloading every acre that they are not already putting to productive purpose.

Thus, under the Georgist model, the land tax — as the only tax — could never result in an absolute decrease in land supply. The land tax would only tend to decrease the amount of land that is held, like piles of gold, for unproductive use. As for gold and other means of piling up unproductive wealth, I can’t see right away why a tax on such things wouldn’t hasten the development of a more productive economy for all.

George says that supply and demand are misleading terms to use when trying to understand the causes of the unemployment cycle. Workers are not quitting their jobs because they have earned all they need. They are not refusing to produce or to consume. We never have all we want, and the example of Austin in April proves that we are ever willing to earn the next leg up. So why do so many workers find themselves at massive rates closed out of productive opportunity?

The problem lies at the door of unproductive wealth, because there is still plenty of it. Yet for some reason unproductive wealth is encouraged and allowed to pile up, even sometimes as an excuse for “real value.” If we taxed land, unproductive wealth, and gold supplies, I wonder, wouldn’t we quickly motivate and incentivize tons of wealth into capital that would eagerly call for full employment now? (full text).

(Greg Moses is editor of the Texas Civil Rights Review and author of Revolution of Conscience: Martin Luther King, Jr. and the Philosophy of Nonviolence. He can be reached by e-mail. Read other articles by Greg, or visit Greg’s website).

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