Here it is again.
Harry
---------------------------------------------------------
Karen,
The subject line is apropos.
About 200 years ago, Ricardo asserted his "Iron Laws of Rent and Wages".
This posited an inevitability that wages would continually be forced down and that a greater and greater share of production would be swallowed up in Land Rent. There is a corollary I've mentioned before, that when you possess a privilege of any kind, you should use it to gain more privilege. Out of this comes a concentration of privilege, most often seen in the concentrated ownership of land.
Keith was surprised and perhaps horrified at the concentration in England. Harpers reported that 95% of the privately owned US land is owned by 3% of the people. This more acceptable when one realizes that the largest landholder in California owns more land than all the California homeowners put together.
I've just done something on Brazil for another list. You'll recall the crowded favelas in Ed's piece about his trip to Brazil. They can be compared with 1% of Brazilians owning 60% of the land - and this concentrated land ownership can be found across the globe.
It is not unfair to state that the influence of landholders has the greatest impact on governments all over the world. It is mostly behind the scenes, though large landholders in Brazil occupy a handy slice of the legislature. Often, the influence comes through corporations where Rents are invested - but the power is in the landholding rather than the corporations. Thus the Duke of Westminster is not a large landowner - yet "Westminster Estates Ltd." is.
As Marx noted, the money that financed the industrial revolution came from the landholders. Unfortunately, he spent his time on the effects of the largesse rather than its source (until the third volume of Kapital, that I have mentioned).
The original capitalists were landholders - and that has continued.
Incidentally, after two volumes of nonsense about surplus value Marx, toward the end of volume 3, admits that land Rent is where surplus value goes. Collect Rent and distribute it to the workers and you've effectively returned to them their "surplus value". How to find surplus value in his first two volumes is a bit dicey.
A problem with the concept of land rent is that it is never paid. Land rent is a market value, but land is not subject to free market pressures. For a free market to work most effectively, ideally there should be no restriction on production and no restriction on movement of production to market.
As we know, no more land will be produced and we can't move what we have. A perfect monopoly, which leads to the monopolistic ability to extract a premium above the normal. This extra is called "speculative premium" and suchlike, but it's actually the old historical favorite - rack-rent. Webster calls this "an excessively high rent". In fact, all over the world, it's the highest rent that can be extracted from the laborer, while keeping him alive (technically - alive and reproducing)
This is a good deal.
This is why Stiglitz said the best thing we could do would be to save the peasants of the world from handing half their production to their landlords. He also said the IMF wouldn't risk trying it. The elites are too powerful.
What Stiglitz didn't realize is that it isn't just the third world peasants that are inflicted with this.The industrial world is where rents and their corollary land prices are highest. Trump a year or so ago paid more than $100 million an acre for land on Manhattan. That's for a piece of land 209 ft x 209 ft. The receipts for land are invested in corporations, who pay politicians to give them special privileges.
So, the fine young radicals chase after corporations, instead of the real culprits - the recipients of land-values.
The neo-Classical economists have done their part. They call land "capital" which is peculiar. Land, which is the name the Classicals placed on Natural Resources, was here before we were (and will be here after we are gone). Man had no part in providing land.
Whereas Capital is man made. It wouldn't be here without us. Obviously, there is a wide difference between land and capital. Mixing them is a bit naughty, but it's part of the obfuscation that is so much of neo-Classical economics.
Well, that's enough.
Harry
--------------------------------------------------------------------------
Karen wrote:
What do you think? Do the base lines need to be adjusted? Will the definition of recovery be changed, also? Will families recover? What are the expected outcomes when families are devastated by financial losses on a grand population scale? What are the parallels elsewhere? I can think of a few. What do you foresee or predict? KWC
Unemployment Pinches Hard at the Bottom of the Economic Ladder
By JEFF MADRICK, NYT, 11.28.02 @ <http://www.nytimes.com/2002/11/28/business/28SCEN.html>http://www.nytimes.com/2002/11/28/business/28SCEN.html
EXCERPTS:
(1)&.Now the economy has deteriorated again. How does an economy with an unemployment rate around 6 percent compare with one with an unemployment rate around 4 percent? To get a sense of the differences, Jared Bernstein, a senior economist at the Economic Policy Institute, compared the conditions of the labor markets in the first nine months of 2002, when the unemployment rate averaged 5.7 percent, with the first nine months of 2000, when it averaged 4 percent.
About 2.5 million more workers are unemployed now than in 2000. That's bad enough. But the unemployment rate for African-Americans has risen about 60 percent faster than for all workers. Some 400,000 more are now out of work than were out of work in 2000, a two-year rise of 30 percent.
Moreover, after workers have lost their jobs, they have had more trouble finding new ones. The proportion of those who have been out of work for more than 27 weeks is way up. That is why extending unemployment benefits is so important. Now, about 800,000 more workers have been out of work for six months or longer, compared with the number in 2000.
In addition, the number of part-time workers who would like full-time work has risen by one million. And the increase in the labor force has slowed markedly because many more people have stopped looking for jobs. They do not show up in the unemployment data. In the recessions of the early 1980's and 1990's, the labor force grew far more rapidly, pushing up the unemployment rate.
(2)&.FOR ALL THE CLAIMS THAT EDUCATIONAL DIFFERENCES AND INTERNATIONAL TRADE WERE THE MAIN CAUSES OF INCOME INEQUALITY IN AMERICA, THE EXPERIENCE OF THE 1990'S INCREASINGLY SUGGESTS THAT SLOW GROWTH AND HIGH UNEMPLOYMENT WERE MORE DECISIVE. As labor markets tightened in the late 1990's, even low- and middle-income workers seemed to regain some bargaining power at last. Mr. Bernstein and Dean Baker of the Center for Economic and Policy Research find an inverse statistical correlation between unemployment rates and wage rates for low-end workers.
With the recession that began two years ago, family incomes again fell across the board. But it's no surprise that they fell most rapidly for those in the bottom 20 or 30 percent. An unemployment rate of 6 percent, or even 5 percent, is just not good enough.
****************************** Harry Pollard Henry George School of LA Box 655 Tujunga CA 91042 [EMAIL PROTECTED] Tel: (818) 352-4141 Fax: (818) 353-2242 *******************************
--- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.427 / Virus Database: 240 - Release Date: 12/6/2002
