When politicians connive to keep us ignorant – that’s when I get really angry. Either they are pig ignorant, or they conspire to deprive us of the knowledge we need. Given the information at their disposal, I conclude that their agenda is designed to keep us in the dark. What are we going to do about it?
Take the case of Grant Shapps. He is Britain’s Housing Minister. On December 3 he told the BBC that ending the house price boom/bust was not “within the gift of government”. False. Order in the housing market is possible. The strategy was spelt out by Joseph Stiglitz. He’s a former World Bank Chief Economist, ex-Chairman of the US President’s Council of Economic Advisors, and currently Professor at Columbia University. He received the Nobel Prize for economics in 2001.
In a recent speech he declared:
In the area of taxes, there’s a long standing principle, called “the Henry George principle,” which is that you ought to tax factors which are in “inelastic supply” because they don’t respond, the supply doesn’t respond. Henry George focused on land, but really, the real source of – the major source – of income of inelastic revenues are natural resources. Taxing natural resources, the natural resources don’t disappear. You have to make sure there are incentives maybe to extract them, but the rents associated with natural resources should be taxed, and our goal should be a tax of 100%, or close to 1000%, of the “rents” associated with those natural resources.
Listen to his words on You Tube.
The Stiglitz treatment of “The Henry George Principle” is 22 minutes into the film. This is the link if you wish to view the whole speech.
What would happen if a government applied the Stiglitz proposal? Price bubbles in the land market would be history. There would be no financial incentive to speculate in land. There would have been no credit crunch in 2008. And the next property boom – which will peak in 2026 – would be stillborn.
Under the new fiscal deal, people would pay the annual rent for the land they used to government. In return, government would offset this revenue by cutting taxes that restrain consumption and the creation of jobs.
This knowledge is available to Grant Shapps. But he won’t propose the policy to Britain’s Coalition government. Nor will he sponsor a public debate about this policy so that people can make up their own minds. He would rather keep us pig ignorant. If that makes you mad, what are you going to do about it?