In a series of articles appearing on Salon last year Michael Lind argued that left and right alike are confused by a failure to distinguish productive businesses that sell innovative goods and services from “rentier” interests — landlords, lenders, copyright holders and others — which use their natural or artificial monopoly power to extract excessive tolls, fees and other recurrent payments from the rest of society, including productive businesses. Lind made the case that the fees or rents extracted by these interests constitute a kind of “private taxation” and that this is the greatest threat facing the productive economy.
This line of thinking is essentially a Georgist one and it doesn’t sit easily on the tired old left-right spectrum that dominates mainstream political discourse today. Many who identify with the left, worried that growing wealth inequality is leading to complete domination of society by big moneyed interests, denounce “capitalism” and reach for socialist answers. Take for example the following policy statement from the newly formed LeftUnity Party in the UK:
“We are socialist because our aim is to end capitalism. We will pursue a society where the meeting of human needs is paramount, not one which is driven by the quest for private profit and the enrichment of a few. The natural wealth, and the means of production, distribution and exchange will be owned in common and democratically run by and for the people as a whole, rather than being owned and controlled by a small minority to enrich themselves.”
This approach is born out of a flawed understanding of fundamental economic principles, namely the conflation of land with capital and the mistaken belief that privilege stems from ownership of the latter rather than the former. There is nothing wrong with wealth per se – after all we all want it! A top footballer or movie star who earns astronomical amounts by virtue of their unique talent isn’t preventing anyone else from prospering, so good luck to them I say! Similarly, creative go-getting entrepreneurs who make their money satisfying others needs in the market place should be free to enjoy the wealth they have created. Stealing their income and redistributing it to others smacks of envy.
The problem with wealth arises when it is possible to use it to buy monopoly privilege including control of natural resources, thus depriving others of access to the opportunities they need to get ahead unless they meet the payment terms of the owner. So in the aforementioned examples, the movie star and the entrepreneur who go on to invest their wealth in speculative real estate or shares in an exploitative oil company have crossed the line from wealth creator to parasite. In essence the Georgist solution is to cut off this possibility in a very simple and efficient way, leaving the economy to function as a true free market that benefits all.
I believe the best way to undermine the powerful elite vested interests that exploit the wealth of society and the planet is to drive a wedge between them and genuine wealth creators i.e. the industrious hardworking people that actually provide the goods and services in the economy. This includes lowly wage workers as well as high flying individuals who should actually be allies in this struggle. It certainly won’t be achieved with socialist rhetoric which unhelpfully perpetuates the sterile socialist-capitalist dichotomy and precludes the possibility of a broader anti-rentier agenda from taking shape. This plays into the hands of establishment interests that want to maintain the status quo, leaving them free to laugh all the way to the bank. Clearly much needs to be done to reshape the political debate in order to form a genuine coalition for change that works for everyone. Georgist education of economic principles has an absolutely vital role to play in this process of realignment.