The enduring enigma

American Journal of Economics and Sociology, The, Nov, 2005

SO MUCH FOR THE ENIGMA.

In practical terms, where does pursuit of the enigma lead us? In the preceding chapters the argument has been derived from and illustrated by a necessarily detailed overview of the particular circumstances prevailing in Australia. Otherwise, argument in the abstract would have lacked substance and conviction. But, although in some particulars the Australian circumstances may not be replicated elsewhere, in essence the conclusions that can be drawn are universally applicable. Some are incontrovertible:

   Over the years land has become the source of enormous unearned
   wealth. Socially, economically and environmentally the consequences
   are demonstrably inhibiting the well-being of contemporary
   society. And the situation is remediable.

The likelihood and practicality of remedial action, however, is a different question. The case for rejecting a centuries-old mindset is seemingly overwhelming. Yet, however carefully and precisely the case is argued, history suggests that those with a vested interest in the status quo will contest reform with deliberate misinterpretation, obfuscation and insidiously cultivated fear and uncertainty. Assimilating the need for change may take time.

In Australia it would require substantial bi-partisan endorsement. And a commitment once made would need to be irreversible, no matter how gradual its implementation. Nevertheless, as a more mature and confident Australia approaches the new millennium, acceptance of the need to review century-old constitutional arrangements is gaining momentum. Pointers heralding the emergence of a post-materialist society suggest that it may also be an opportune time to contemplate wide-ranging cultural change. Indeed, as the shackles of out-dated constitutional arrangements forged by negotiation and compromise in a colonial context are discarded, paradoxically one of the more enduring pre-federation ideals could, just conceivably, be revived. The high hopes of abolishing land speculation, ardently espoused by leading advocates of federation like O'Malley, Griffith and Deakin, could eventually be realised.

There are of course issues that need to be further explored and addressed, depending upon national circumstances. Timing the extension of land value rental, for example. In societies with no tradition of absolute private land ownership, capturing the full annual rental could be contemplated in a single stage. In Western societies, however, capturing the full annual rental value, and thereby eliminating land price, would need to be implemented in stages. Nevertheless, given the political will, the transitional problems would be neither novel nor unduly daunting.

It is the longer term implications of land value capture for living standards, the structure of society and, ultimately, planetary survival that invite further research.

One aspect has been alluded to earlier but not pursued at length. Namely, the extent to which increased reliance on resources would induce a healthier recognition of the relationship between community resources and living standard and lifestyle expectations. In other words, a clearer recognition of the inflationary penalties of resorting to capital indebtedness to finance "growth" at a rate in excess of that which the community's basic resources are able to sustain. The Australian government has recently foreshadowed expanding citizenship education with a view to increasing public understanding of the functions and institutions of government. Efforts in this direction could with advantage embrace the principles and practice of public revenue raising and the implications of fiscal and monetary policy options.

Ultimately, however, the most urgent research that Western societies should be undertaking is into the implications of inequality. Intuitively, the mounting incidence of alienation, violence, lawlessness and drug dependency now bedevilling the Western world is primarily attributable not to genetic aberrations or parental inadequacies or to other contributory causes that have been with the human species from time immemorial. Or even to poverty. But to resentment of increasing inequality and powerlessness.

Compounded by daily media blandishments of the material rewards of greed and self-interest, inequality is manifest in obscene and growing disparities of income, the scope available to those "within the system" to profit from fraud and evasion, and, above all, the ultimate soul-destroying inequality: rejection from participation in constructive labour and relegation to perceived worthlessness. Resentment and frustration will increasingly provoke society's outcasts to exact revenge upon a society that, against all the evidence, subscribes to the comfortable illusion that its inequities will somehow be remedied by further consumption of the planet's finite resources and the mindless pursuit of further growth and labour-displacing "development."

Further development of these issues could provide overwhelming confirmation of the need for cultural change. In the meantime, it can be shown that there are no insurmountable technical impediments in the way of gradually increasing land value charges. Charges upon land involve no distortion of the economy or misallocation of resources. They would disadvantage only those seeking unearned wealth at the expense of the community. Nevertheless, proponents of remedial action may need to eschew extravagant claims and accept as a realistic and achievable objective the staged implementation of full land value rental. And over-enthusiastic disciples of Henry George will not advance their cause by simplistic advocacy of a "single tax."