Meet the People Rescuing American Politics by Trying to Capture Land Value

Phil A
Phil A
Feb 28, 2019 · 4 min read

The US Democratic Party, at least according to their official platform, claims to be in favor of raising incomes, fighting for economic fairness, environmental justice, and quality education. They (like their opposition) have failed on all counts. Furthermore, their platform is moving further in the opposite direction, rehashing failed old ideas, and each day straying more from the policies that made America a land of opportunity for everyone. The Republican Party exhibits many of the same symptoms, just with different spending preferences.

For the newest generation of Democrats, the answer to America’s biggest problems is big government. This means more opportunities for special interests and monopolistic firms to entrench their positions by protecting their regulatory regimes. It means large webs of complex programs with tremendous waste, in a time of growing deficits. To pay for expanding government, they offer economically dangerous and overly simplistic solutions, like taxing income earners and raising the minimum wage, without addressing any root causes. These approaches may make for good media sound bites, but ultimately harm the people they were intended to help. The truly rich don’t pay income taxes like the majority do, and the biggest burden would instead fall on to doctors and much-needed professionals. Increased spending on marginalized groups do nothing to help the plight of the needy, as the structure of the economy and tax system allow any gains to get eaten up in rents, while subsidizing a broken society.

Evidence shows that increasing wealth inequality is almost entirely due to real-estate, a market which the young are priced out of, and is promoted as an investment vehicle rather than a place to live. Those who didn’t buy in to the market years ago, can no longer afford to neither rent nor buy. Yet proposed tax increases would fall on hard-working income earners rather than location monopolists. The new left (nor the right) does not understand the difference between earned income, and wealth derived from nature, and therefore see a buoyant real estate market as a positive for the economy, and a ticket to easy riches. Understanding this is one key to understanding America’s distorted economy, yet is not acknowledged by the major parties. Instead, both parties have used tax incentives and the allowance of uncontrolled monetary policy to inflate housing bubbles, and we’ve seen where this has led the economy.

The inequalities and injustices that the proposed government programs are meant to address, will only be worsened by them, just as they have been by the policies that preceded them. The complex regulations and subsidies that prevent new entrants from entering the upper echelons of banking, technology, and other restricted sectors of the economy, only serve to protect the incumbents. Under the administration of what could possibly be a socialist-leaning Democratic presidency, this red tape would surely increase, entrenching oligopolies.

Americans at the lower end of the income spectrum are forced into low quality schools in their neighbourhoods, without school choice. They then enter the labour force with skills worth less than the minimum wage, which politicians like Ocasio-Cortez want to raise to price even more workers out of the market. The middle class faces monopsony-like conditions in the labour market due to a lack of choice between employers, which hold on to their grip via regulation and lobbying for their interests, without the worry of startups attaining the same influence.

The solution to these issues is not burden professionals with more taxes, to raise the deficit, to fund programs with monetization, or to introduce multitude of bureaucratic programs. This is not the way the United States became the world’s leading economy — a position that is slipping from its grasp. The solution is to allow competition to flourish again, to stop crushing entrepreneurs through regulation, to introduce choice in schools and public services, to replace bureaucratic programs and minimum wage laws with a path to supercharge wages, and to shift the burden of taxation away from human effort — instead onto land, environmental externalities, and products of nature. These are solutions which solve root causes of America’s economic ills (and with moral/ideological consistency) as opposed to window dressings that worsen the problems.

Thankfully, there is a political action organization within the US Democratic Party which understands the root causes, and has a platform which begins to address them. The Democratic Freedom Caucus uses policies rooted in Georgism to propose real policy solutions. A shift away from income taxes toward land value taxation would immediately lift incomes and boost housing supply to lower costs. At the same time, the resulting better use of land would reduce transportation times and reduce the burden on the environment. Streamlining regulation and eliminating corporate welfare would not only reduce costs to consumers, but would grant new options to employees, allowing people to reach the better paying jobs they seek. Finally, introducing choice with regards to government services, means that children would not be relegated to inferior schools, and parents could instead choose the best possible options.

While the platform of the Democratic Freedom Caucus does have its differences to TNPL’s, the New Physiocratic League views the DFC as the only savior to the Democratic party and perhaps to the American political direction as a whole. Organizations of liberty-minded Republicans might also be natural allies if they are receptive to the Geoist message.

The choices are between a Democratic Party that hands a win to the status quo by offering endless economic malaise and opportunities for rent-seeking and corporate welfare, and a Democratic Party that offers real solutions and finds potential allies across the aisle. At this critical political junction, now is the time to choose.

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