Our oldest enemy

As the pseudo debate about the resources rent tax continues to vomit forth, it’s striking how little we have changed even in the industrial age, and the challenges we have in protecting our philosophical gains.

When humanity began farming we entered a world in which prosperity became tied inextricably to finite land. Wealth and income would be higher or lower depending almost solely on access to that land and not any other contribution, and those that owned it would remain the most prosperous. The justifications for this became a chronicle of ugliness in human thought and society. We had appeals to and the creation of the cosmos and the divine, class, caste, race, genetics and innumerable others. All of which to support the idea that the receivers of rents have some virtue  that justified their prosperity, and all of which caused inhumanity, division and bloodshed and in turn spawned counter ideologies that spawned yet more.

Whilst the rents themselves helped pay for the creation of such horrendous ideas, to a certain extent the mere fact that the rents were being received provided justification for their continuation. Having the rents gave one the status and authority for which to speak for one’s own deservedness and the perpetuation of those rents.

The industrial revolution provided new disparities in wealth. Whilst the new world was still ridden with rents, technological and institutional development meant prosperity began to return to aspects that were not land; to labour and to initiative and intelligence. These returns gave new voice to other ideas and the power of the landed began to diminish in thought and in society. Democracy became a winner as thought became less hostage to supporting unearned prosperity.

It’s quite disheartening then that even today, in an advanced economy like Australia, we haven’t moved too much from the dynamics of the past. Large rents, no matter how transparently unearned, still allow the shaping of debate in favour of continuing those rents. I can understand (whilst bemoaning) a lazy press corp that reproduces PR paid for by said rents, or a party reliant on donations from those rents. But we still have a tendency to give authority to those made wealthy by rent; to listen dutifully and respectfully as they tell us that it is for the good of all and only right that they continue to receive this wealth.

This might also be the first time since the colonial era that we have true conservatism as a major political force in parliament. Not the “conservatism” as we have come to know it, of market tendencies and “traditional values”. This is good old early industrial conservatism, dedication to the protection of vested rents and unshakable faith in the self evident cosmic rightness of them. The Bunyip Aristocracy have a major party. This isn’t helped by the fact that (astoundingly for a discipline so oft accused of being right wing) most of Australian economics seems to have joined climate science on the enemies list of the epistemically closed.

Even in the industrial age, rent is still the greatest enemy of enlightenment.

About Richard Tsukamasa Green

Richard Tsukamasa Green is an economist. Public employment means he can't post on policy much anymore. Also found at @RHTGreen on twitter.
This entry was posted in Uncategorized. Bookmark the permalink.

21 Responses to Our oldest enemy

  1. Paul Frijters says:

    But we still have a tendency to give authority to those made wealthy by rent; to listen dutifully and respectfully as they tell us that it is for the good of all and only right that they continue to receive this wealth.

    Nicely put, Richard. The cow-towing you describe also strikes me as quintessentially un-Australian. Isn’t this the country of the fair go where the tall poppies are knocked down? The protection of privilege seems so alien to that! Yet, there is this identification of the wannabees (the aspiring poor and semi-rich) with the truly arrived that supports this kind of thing. That identification is the big thing that has kept this going: the idea in the minds of the lowly budding uni grads that they really belong to the class of the super-rich and must hence protect them at the ballot box. its a curious combination that would have been hard to imagine centuries ago. You can almost hear the truly arrived laughing at their luck in having found support in unexpected places.

  2. Well that was bracing. Guess we better hold all property in common.

    BTW. I’ll be needing to squat in your back yard for free.

  3. JamesH says:

    Jacques, see if you can wrap your single brain cell around this:
    We, in Australia, already own all property in common. The common ownership corporation is called “the Crown”. Currently, we don’t charge any rent for people to use and abuse our property. Do you think that is fair?
    I suggest you read up on the basic principles of the Single Tax (http://en.wikipedia.org/wiki/Single_Tax) before you open your mouth again.

  4. Richard Green says:

    Paul – It’s also at odds with what I always took as the great victories in Australian colonial history, those against the exclusionists and the bunyip aristocracy. We owe so much to those victories (i.e not becoming oligarchial and coup ridden South America or the US South with wool and convicts instead of cotton and slaves).

    Apart from the belief amongst the people you describe that they can lift themselves by gaining those rents themselves, I also worry about the traction arguments about superannuation. Regardless of the actual effect, it would be worrying if a large group of voters do get convinced that they are the beneficiaries of those rents and thus the victims of good policy.

    It just occurred that there is a paradox. Class mobility should imply a lack of major rents in society, but the prospect of class mobility could lead people to want to protect rents for the prospect of gaining them.

    Jacques – The same phenomena is present with rents that are created by active government policy, such as the corn laws, legislated monopolies, tariffs and coddled industries and fiefdoms such as the AIS or Australia Council. There’s two major differences though. The first is that land based rents are the oldest and the most inevitable, which is why Riccardo called the phenomena rents in the first place. The second is that if I had chosen to describe the examples above – despite being the idential phenomena-, you’d be nodding approvingly rather than oozing snarkiness.

  5. oozing snarkiness

    Occupational hazard in my line.

    But surely you see that there’s a difference between rents created by fiat and rents created over land?

  6. We, in Australia, already own all property in common. The common ownership corporation is called “the Crown”

    The Crown is not synonymous with the people, either historically or in law. Indeed “the Crown” is not always a singular thing. There is the Crown in right of Australia, the Crown in right of NSW and so on.

    “Radical” title rests with the Crown (in its various respects), sometimes impinged by Native Title. It does not rest with ‘the people’.

  7. Nicholas Gruen says:

    Paul,

    As you are discovering, Australia’s love of the fair go tends to turn to sentimental mush with very little prompting. Alas, more an affectation than something really felt or fought for.

  8. JamesH says:

    Jacques, I think the last guy who tried to claim that the Crown could act independently of the people was Charles I.

  9. Paul Frijters says:

    Nick,

    you are probably right, but the story of the ‘fair go’ is exactly the kind of myth that can become reality over time if enough people harp on about it, just like a national identity, the American dream, or the stiff-upperlip Englishman are stories based on myth that have taken on a degree of reality by the re-telling. In the case of the fair go, it is a positive story and one I dont mind choosing to advocate. Lest we become cynics!

  10. Nicholas Gruen says:

    Thx Paul, I’m not a cynic or in any danger of becoming one. However it’s not as simple of promoting or not promoting the Australian idea of the fair go. I think a lot of people think they’re in favour of it, when in fact they’re in favour of a fairly conformist, unthoughtful and untroubling kind of sentimentalism.

    If I were a politician I might appeal to it for the reasons you suggest, but in doing so I’d know that I was trying to transform it into something more like (I think) it should be. But given my lack of Olympian heights on such things, the idea of the fair go doesn’t strike me as very exciting, because as interpreted in Australian culture today, it’s not!

  11. Jacques, I think the last guy who tried to claim that the Crown could act independently of the people was Charles I.

    Charles insisted on the divine right of kings (essentially that the Crown was the supreme source of law).

    That is a different matter from the Crown having multiple, distinct legal personalities, none of which are synonymous with ‘the people’.

    I’m sure if you enroll in one of Ken Parish’s classes at CDU he could lay it out for you in great detail.

  12. Richard Green says:

    Paul and Nick – This actually touches on something I’ve been wondering about for a while, whether these cultural myths and ideals are actually a help or a hindrance. They obviously provide something to aim for, but when taken too strongly as identity they create a strong hostility to working to approach that goal; it would imply that one’s identity is based on a falsehood.

    You’d likely be hostile to any efforts to improve social mobility if the the American Dream is central to your sense of nationhood. To suggest that mobility is now impaired is tantamount to suggesting that America is not American. And thus mobility between generations, at least as measured by income, lags stuffy old aristocratic Europe.

    Likewise, I believe the miners think that the fair go, as it defines Australia in an idealised past, it must have defined the period in which they received their wealth. Thus any policy that denies them this wealth must, therefore, violate the fair go and the concept is then wielded against a go which is significantly more fair.

  13. Paul Frijters says:

    Richard,

    what’s the alternative? As Nick once said (years ago; he’s written too many things since for me to trawl through them and find it), public debates need to use the imagery and phrasings the public is already familiar with. Mythologies get invented and reinterpreted all the time for various purposes. Hence the battle is to a large degree waged in terms of the meaning of popular phrases: whomever manages to get the term ‘fair go’ on their side wins. The fair go quite naturally means a fair distribution of opportunities and (to some extent) outcomes. When a small group of mining executives and shareholders enjoy an inordinate slice of the rents of the nation, at the expense of miners, other businesses, and the general public, then that violates the notion of the fair go.

  14. Richard Green says:

    If we have to fight to make sure that the idea is used for what we (quite reasonably from our perspective) think the idea stands for, then the idea may be relatively meaningless in terms of any given country. It means that a debate in Australia on resources compared to another country will have it’s language, but not much else shaped by the Fair Go ethos. In the substance of actually convincing people.

    I am certain that no matter who wins, the victory will be invoked later as emblematic of the fair go and Australianess.

  15. Paul Frijters says:

    Richard,

    mostly agreed, but not entirely, in that if these words wouldnt matter at all, then social norms (which are always tied up to words) wouldnt matter at all either. Now, I think social norms do exist but they are dynamic, using language to propagate themselves and to change. One way to indoctrinate the next generation in the social norms you wish to stand for is to fill them up with these terms and their associated meanings and choices. Then, for a while they really do matter, but you have to keep fighting for the proper interpretation of these terms. If you dont keep fighting for them, your opponents will pervert them into what they want to use them for, re-phrasing the initial arguments subtly so that it is not apparent to all but the most discerning onlooker that the content of the phrase (as explained by the associated arguments and images) is now the opposite of what it once was. The few ‘true believers’ of the old interpretation will stand up but can be outgunned by pure volume and the rest will slowly adopt the new party-line. As an example, just think of the Animal Farm story of how the phrase ‘All animals are equal’ got perverted by the added line ‘but some are more equal than others’.

    Hence, its a judgment call as to optimal narratives, and I realise this is more Nick’s territory than mine, but to me it seems like the phrase ‘fair go’ is useful to generate a bit of support for the RSPT and that the successful use of it in this context would strengthen this trait within Australian culture. Of course, if one uses it and fails, one has to divorce it from the fair go phrase as quickly and as completely as possible in order to minimize the damage to the fair go concept.

  16. Richard Green says:

    This does entail that there was an old interpretation to be corrupted. I am skeptical on this point (though open to convincing). The value and fairness I see in Australia’s historical institutions seem much more the result of pragmatism in unique circumstances than idealism (even where there were women and men of genuine ideals).

    So whilst we may as well fight to make the term mean what we want it to mean (knowing that others are doing so), I don’t think we’re protecting the meaning. I don’t think there was really a meaning to protect.

  17. Pingback: Club Troppo » Rents, public services and the “unearned increment”

  18. Love that last line Richard! You may find Michael Hudson’s piece on the Counter – Enlightenment as a useful piece on the role rentiers have played in the plight of social democratic labor parties. Where is the analysis? As you say, locked up by lobbyocracy.

  19. Pingback: Club Troppo » The self vindication of privilige

  20. Pingback: Club Troppo » December the 3rd

  21. Pingback: Club Troppo » Sympathy for the devil

Leave a Reply

Your email address will not be published. Required fields are marked *

Notify me of followup comments via e-mail. You can also subscribe without commenting.