A Few Questions for Mason Gaffney

We thought this might be an opportune time to check in with the eminently sane Prof. Mason Gaffney at his home in Redlands, California. The author of The Corruption of Economics, After the Crash: Designing a Depression-Free Economy and The Mason Gaffney Reader (as well as hundreds of published papers and articles: see masongaffney.org )has slowed down a little, perhaps, but not awfully much.

Greetings, Mase. I hope this finds you fit as a finely-tuned fiddle.

In my youth (long ago!) I spent lots of time tuning my fiddle and for a while viola, and later guitar when that became the way to court the girls, and getting my piano tuned, and harmonizing with my little “gang that sang heart of my heart”, for “we were rough and ready guys, but oh! How we could harmonize.” At one phase I led a small barn dance combo, when that was in fashion, ca. 1941-42. That was then. Now I spend that spare time keeping my computer tuned, and exploring the new worlds it opens.

How do you interpret the rise of Donald Trump, and Trump-ism? What lessons should we draw from this historical moment?

masehatIt’s a desperate recourse by voters in both parties who recognize at last that the “best and the brightest” have no positive ideas to help them, but only pseudo-intellectual gibberish to cover over their vacuous old sloganeering. Georgists, who once provided the germ of Progressivism, and later some elements of The New Deal, again later of “The Soaring Sixties” under JFK, have withdrawn into the dim sheltered caves of local politics and turned their backs on the big national and world issues and idealism that excite people and movements. Nothing remains to excite voters except primitive chauvinism and localism and xenophobia, tried and true historical paths to dictatorship.

There seems to be a surge in nativist, even xenophobic, tendencies in many parts of the world today. If you were an economic advisor to the government of, say, Britain, or Germany, how would you advise them to respond to extreme nationalist politics?

Surf with the wave by taxing the lands of each nation to pay for its own social dividends and infrastructure and public services. Untax wages so every citizen feels he is a king, or at least a “stakeholder,” at home. Demonstrate and help other nations democratize their tax systems (including taxing land owned by our nationals in their own nations). Stop “sending the Marines” to uphold plutocracy and kleptocracy abroad.

What insights do the Georgist economic paradigm have to offer on the issue of global climate change?

Our present tax systems subsidize using polluting fossil fuels to substitute for labor, while taxing the labor, and businesses that employ labor. Turn that paradigm upside down, following the guidance of A.C. Pigou, while spurning that of Coase and Stigler.

In the wake of the Great Crash of 2008, there have been many proposals for radical reform of money and banking. Some consider this to as important as the public collection of land rent; others consider it a distraction from the most important economic issue. Do you think there is (or should be) a Georgist position on money and banking?

Yes, but integrate it with land policy. The basic idea is to outlaw long-term loans collateralized by land values. Since 100% reserves is a remote dream, the workable solution is to keep lenders away from using land values as collateral, as explained in After the Crash. That applies not just to private borrowers, but also public ones, from local to national.

Over the years you have often urged your Georgist colleagues to “think big,” even as they continue to pursue concrete opportunities for limited, local reform. How do you think your colleagues should approach the tension between achievable objectives and broad vision?

Let each person pursue what he does best, and thinks is best. Then let each one discover for himself how local reform will attract immigrants and capital so the benefits raise rents and land values, either slowly, or in a binge of land speculation, as has happened before.
Many progressive-minded folks are close to despair at the prospect of a Trump administration. Yet many also see an opportunity, in this fraught moment, for their social-justice messages to be heard. Where do Georgists fit into this mix? What recommendations do you have for Georgist education and advocacy, post-2016?
We’ve had Trumpish administrations before, e.g. 1921-32. They destroy themselves. For yourself, don’t get sucked into the maelstrom. For Georgism, learn the perils of prosperity by studying previous busts, and prepare countermeasures. If there’s a demand, I’ll be glad to suggest a few.

This issue’s cover deals in fake news depicting you as an anti-arboreal activist. Any comments?

It’s an outragiously fit and macho shot of me. Great job of photo-shopping, and thanks!

Mason Gaffney’s Tactical Suggestions:

First, get into national issues, and with deeper understanding

A. Falling real wage rates and high unemployment and poverty are national issues, ones that HG used as springboards. We can’t make a dent in low national wage rates by shading the property tax a little, even in substantial cities. We’ve even let most states substitute sales taxes as they cap proptax rates and assessments. Most of the directors of the Henry George School of LA voted for prop 13!  At the national level we’ve let big landowners gradually develop ways and customs to meld building values with land values and tax-depreciate a lot of land value by pretending it is building value. Hudson and Feder and I have published on this with little support from Georgist leaders and organizations. Georgists have turned their backs on income taxation, blasting it all as though the personal income tax and the corporate income tax were identical, when wages and salaries are deductible from corporate taxable income. They have sat silent while wages and salaries, virtually exempt from personal income taxes 1913-40, were added to the base while loopholes proliferated for real estate income.

B. Finance social security as a social dividend paid by taxes on property or property income or rents from public lands or estates transferred to heirs. Repeal the present payroll taxes (split between workers and employers), a massive cause of unemployment. Acknowledge, honor and circulate the insightful articles on the subject by Cobb, Rowe, Fallows and others.

C. Learn and lean on the sterling efforts of the US Census of governments, when led by Allen Manvel in the 1960s, to assemble and publish sales/assessment ratios for real estate, nationwide. These data stood in the way of big landlords seeking to depreciate land and deduct it as a current expense. Georgist leaders neither knew nor seemed to care what was going on. They should have used Manvel’s findings to show the need for a national board of equalization to monitor local assessments to keep them from being used, as they were and are, to evade federal income taxes on land income.

D. Expose and oppose the constant efforts of major landowners and their agents and tax-free foundations to pass a national sales tax. The US Is the only major nation free of such taxes. Keep it that way!  See “Europe’s Fatal Affair with the Value-Added Tax.”

E. Become aware of our vast remaining public domains; make them a source of public revenues.

Second, stifle defeatist talk, thought and mood. See setbacks as opportunities to rethink and regroup, and resume action

Third, ally with other groups who see land as belonging either to all humankind, or the god of their choice:

A. Bible readers who get beyond Leviticus 25 and see the thread of common land running through the whole book.

B. Religious reform movements from whatever source that pop up periodically through history — the latest being Pope Francis.

C. Deep ecologists, who just need to learn how they can use the market to implement their ideals.

The New York Times reported on Feb. 22nd that “As Oklahoma’s attorney general, Scott Pruitt, now the Environmental Protection Agency administrator, closely coordinated with major oil and gas producers, electric utilities and political groups with ties to the [Koch] brothers to roll back environmental regulations, according to over 6,000 pages of emails made public on Wednesday.” Pruitt’s confirmation vote was rushed through, four days before these emails were released. Once in office, Pruitt made sure to clearly state (contradicting the view expressed on the EPA’s website) that “no, I would not agree that [CO2 emissions are] a primary contributor to the global warming that we see.” Just About Everybody thinks Pruitt (and his boss) are wrong about that. Georgists recommend an entirely workable remedy: greenhouse-gas emitters freely use an increasingly scarce and valuable resource — which belongs to everyone, including those yet to come. They should be charged the market value of those ecosystem services. Clean, renewable sources of energy are already nearly cost-competitive with fossil fuels. Charging something close to their true environmental cost would bring us over the hump: ensuring that society will avail itself of energy sources that are neither toxic nor unaffordable.

The New York Times reported on Feb. 22nd that “As Oklahoma’s attorney general, Scott Pruitt, now the Environmental Protection Agency administrator, closely coordinated with major oil and gas producers, electric utilities and political groups with ties to the [Koch] brothers to roll back environmental regulations, according to over 6,000 pages of emails made public on Wednesday.” Pruitt’s confirmation vote was rushed through, four days before these emails were released. Once in office, Pruitt made sure to clearly state (contradicting the view expressed on the EPA’s website) that “no, I would not agree that [CO2 emissions are] a primary contributor to the global warming that we see.” Just About Everybody thinks Pruitt (and his boss) are wrong about that. Georgists recommend an entirely workable remedy: greenhouse-gas emitters freely use an increasingly scarce and valuable resource — which belongs to everyone, including those yet to come. They should be charged the market value of those ecosystem services. Clean, renewable sources of energy are already nearly cost-competitive with fossil fuels. Charging something close to their true environmental cost would bring us over the hump: ensuring that society will avail itself of energy sources that are neither toxic nor unaffordable.

Leave a Reply

Your email address will not be published.