Achieving Resource Rents:
Media, Public Opinion and Vested Interests

Lev Lafayette

[An address delivered at the 2005 annual dinner for Prosper Australia.
Reprinted from Progress, November-December 2005]

It is a great honour to be the speak for this, the 115th annual commemoration dinner for Prosper Australia.

To use the slang term coined by Judge James Maguire's speech to the New York's Anti-Poverty Society in the 1880s, it was over 15 years ago that I glimpsed the cat. It was in the course of a final year course on Population, Resources and the Environment and studying the enormous waste and costs involved in generating the Australian suburban landscape. I pondered, albeit all too briefly, the possibility that whether the idea of a single tax on use of natural resources would be sufficient to generate the necessary income to provide the regulatory and welfare expenses of the modern state.

It is to my great shame that I did not investigate this further. I quickly assumed, without sufficient empirical investigation, that it would not be the case. I turned my attention instead to the philosophical foundations of communication, the relationship of society to technology and the political problems relating to individual freedom and social democracy. These are of course, not minor topics themselves, but it did mean that the question of resources went on the back burner for some time.

Of course, as everyone here would know, the empirical evidence is available and it is very favourable. The total value of land-site rentals in Australia, we believe, would be sufficient to pay for the legitimate expenses of the public largesse. In doing so we could remove all taxes on labour, on capital investment and consumption. We could create a situation where we would have, effectively, a voluntary and user-pays taxation system, where one only pays for the resources they use and whereby all people would receive their share of the common wealth. The positive results this would have for both industry growth and the environment should be self evident.

Being the time of year that it is, everyone is interested in taxation matters. And, as Paul Keating once commented, every pet shop galah is talking about reform. From both sides of mainstream politics, there is tinkering on the edges. For the party that is supposed to represent the interests of he working people, a call from two senior factional leaders, Lindsay Tanner and Bill Shorten, that the top rate of taxation needs to be lowered. On the other side of politics, Malcolm Turnbull has called for a similar reduction. Meanwhile all three seem to have been outpaced by reality. As the Age reported today, the main beneficiaries of the current system are wealthy, single-income couples with children. Such is the theft from those who do not fit into the said categories. We may recall Professor Julian Disney's pithy description of the tax and welfare system at the recent Equity in Sourcing Revenue symposium at the University of Melbourne as "Upside Down and Back to Front". The system provides tax benefits to those who don't need it and punishes those who do and provides income support at the wrong time of life.

These statements are, of course, preaching to the converted. Everyone attending tonight's dinner is aware of these facts. The question that confronts us with some difficulty, is why the idea of public financing through resource rentals is not receiving widespread media coverage and debate and why there is seemingly such extraordinary ignorance on the part of our political leaders on this matter. Indeed, I recently had the opportunity to raise the issue of land tax in person with one of the most senior ministers of the Bracks cabinet; "Oh yes", he started before I could express my point of view, "it's a terrible thing, we'll be doing something about that". There was some surprise in his expression when I strongly indicated that not only did I support land tax as a concept, but indeed wished to propose wore land tax, not less. It turned out that he neither understood land tax, nor was he aware of its benefits to economic production and social justice. His main interest however, was that there was a political issue and the government was receiving some bad press. I may also take this opportunity to mention that the member for Monash Province, Johann Scheffer, told me that actually had taken the opportunity to discuss with treasury bureaucrats, usually well versed in economic matters, to discover for himself why the state has land tax. He is to be thoroughly congratulated for taking this initiative and educating himself on the matter.

Indeed, increasingly the only people that seem to support the concept are environmental scientists and economists themselves, who, in those hallowed halls of academia, have at least some opportunity to engage in a disinterested pursuit of truth, logic and grounded reason. Unfortunately such people are rarely activists in political organisations and as a percentage of the population they carry few votes. It is small, but necessary, benefit to advocates of resource rentals that we carry the argument among the intellectuals of society but are not receiving discussion in the mass media. To understand why this is the case, and how to change it, we turn to the topic of media, public opinion and vested interests.

As Marshall McLuhan once quipped, "the medium is the message". The traditional media of the major newspapers, radio, television and film is capital intensive. The first thing to realise is because they are capital intensive they are established by people with a particular world view whose context is derived from their class interest. Even competing media, such as the Herald-Sun and the Age, or to put it more bluntly, the Murdoch and Fairfax families, fall under this category. Despite the fact that the Herald-Sun appeals to a working-class readership with a rather moral sensationalist and politically conservative tone and the fact the Age appeals to the middle and upper class with a more liberal orientation, it is important to realise that both these newspapers are still contextually bound by the particular vested class interests of their owners which in many cases supports the exclusive ownership of natural resources. This is inevitable in all mass media because of its capital accumulation required to establish it.

The second thing to realise, and this logically follows from the first, is that the mass media are commercial institutions. They are interested as a matter of priority in making a profit. Something as dull as the dry facts and careful analysis with a carefully considered conclusion are not matters for publication in the mass media; such documents belong in the journals section of the universities, well-hidden from public discourse. These things don't sell newspapers or build ratings, they don't turn a profit -- but sensationalism does. If you doubt this for a moment, I would simply refer you to an excellent report by Sydney University of Technology in 1998. It studied the frequency and types of violent crimes and their reporting in both the Sydney Morning Herald and the Daily Telegraph over a thirty year period. In that period there was a tiny increase in the number of violent crimes reported to police, but the media reporting of such crimes had increased by up to 2,200 percent. Indeed, if you wish to take this matter a little further, you will discover that it is a point of view among many in the mass media that sensational publishing is even a stronger principle than publishing the truth itself. I refer in particular to the recently successful defamation case that maverick Scottish MP George Galloway brought against the Daily Telegraph. The Telegraph claimed that Galloway was in the pay of Saddam Hussein, claiming it was hi the public interest to publish its story regardless of whether it was true. So dry facts and careful analysis are out, truth is an optional extra and only when required and enforced by law and sensationalism is the order of the day; that is the basic orientation of our mass media.

We shouldn't be surprised or shocked by this. It is quite a normal outcome of the technological requirements and the political and economic system under which we live. However what we must understand is the serious effects this situation has on the formation of public opinion -- and which we will discover an interesting conceptual link with the idea of resource rentals. To express as an ideal, using the model proposed by the German social theorist Jurgen Habermas, public opinion is supposed to represent the body of knowledge formed under in the "public sphere", a real or virtual place where people come together with the mutual interest to discuss matters of theoretical and practical import. In this ideal conceptualisation, it has certain stringent conditions attached: all are freely able to express their opinion on any topic, all have the same capacity to express that opinion, and none are under any coercion, biological, social or even internal, to express anything other than their sincerely held beliefs and carefully considered convictions. Under these ideal circumstances, so the argument goes and I think it is a thoroughly reasonable suggestion, the strength of the better argument will ultimately determine the best propositions.

Unfortunately the formation of public opinion has as much to do with this "ideal speech situation" as our current economy has to do with the axioms of a "free market" or our political system has to with "democratic participation". In theory, we are all able to participate in the formation of public opinion -- but in reality, as AJ Leibling coined, "freedom of the press belongs to those who own one". In theory we are all are all able to participate in the market place. But in reality, there are serious barriers to entry and exit, knowledge and ability to alter the prices and conditions set by oligopolies. In theory, we all have the right to political participation in the democratic process. In reality, the contemporary system of representative democracy is far removed from involved civics; as a trivial example, in the firs! Federation election the seat of Melbourne, where we meet tonight, was decided on 8,200 votes. In the last election, some 84.000 voted. So once upon a time, the possibility of a Federal member of parliament being known by the average constituent was quite high. Now it is clearly impossible.

It would be a little unkind if 1 gave this presentation with just negative views on the ability to achieve resource rentals. So, in the direction of a conclusion, I would like to suggest some things that we as individuals and Prosper Australia can do to change this situation, to get its message "out there" and ultimately introduce a system of financing the public revenues that is fair and equitable.

In the first instance I think it is very important that we assume that, barring an extraordinary transformation of mass media technologies or an equally dramatic change to our system of political economy, that the current circumstances under which mass media is produced remains the same. This means adopting their criteria and their needs. In May 2002, some 2000 people packed the Melbourne Town Hall to hear the former Prime Minister of Australia, Malcom Fraser, speak about the plight of asylum seekers. The mainstream media coverage of that event was nil; indeed, if I recall correctly, it was Fraser who wryly welcomed the absent media to event. In comparison, recently (June 11) some fifty members from the ALP lobby group "Labor for Refugees" protested outside Petro Georgiou's office in Camberwell in favour of his proposed changed. That event was reported on the ABC, the Murdoch and Fairfax newspapers, across national television and even in the Chinese press.

Why this disparity. Simply because of the priorities of the mass media as mentioned. Malcom Fraser's event wasn't covered simply because it wasn't news. Everyone by that stage already knew what Malcom Fraser's views were on asylum seekers. However, the idea of Labor Party members engaging in a demonstration ./or a Liberal MP -- well that's a bit quirky, a bit strange, a little offbeat. But it also includes an important political message. It gets people thinking about the topic and why such an unusual situation could possibly occur. Prosper Australia could easily engage in a similar sort of gathering. One can readily imagine the attention the mass media to a protest outside parliament house with the banner "We Want Tax". Sure, we all here know that "land tax" is in reality a resource rental. But in order to get our message out, we have to use the circumstances and the vernacular. No one protests in favour of tax or for more tax. It would be extraordinary for someone to do so. Yet there is a particular type of tax which we think is a good idea and it would do as well to choose the time and adopt the means to get others to think about it as well.

Meaningful convictions however are not established through the mass media. It generates an ersatz, temporary public opinion of sorts. An organisation like Prosper Australia apart from needing to get its message "out there" also needs to reach out to new people and convince them of the strength of our argument. In this instance, the new media of the Internet is most worthwhile on Iwo levels. On one side it provides great opportunities as a resource for people to read at their own leisure. The degree of detail that can be provided is far in excess of that which can be achieved by other means. People who seriously want to form a considered opinion can be convinced by the weight of evidence provided. In addition to acting as an asynchronous and detailed means to present an opinion, the internet also provides the opportunity to reach out to individuals in a more or less synchronous way to deal with short questions and points of debate. It must be mentioned there is no need to engage with individuals are deliberately and distastefully argumentative here. Only those who are genuinely interested in mutual understanding are worth debating and enticing. The others are a psychic vampires, who will suck time and emotion from you, even if you genuinely want to help them. As I have discovered myself, as with the real world, online therapy only works if the recipient understands that they are insane and that they want to change.

The importance of these actions is not to be underestimated. In engaging , in the process of "communication among equals" in a virtual community, one is actually engaging in the regeneration of a genuine public sphere and under conditions which are as close to an ideal speech situation that we can possibly reach. In doing so we at Prosper Australia should have a certain vested interest, because I think that we actually believe that we are right when it comes to understanding the most fair, efficient, and environmentally sustainable means to finance public revenues. We have not received our "knowledge" from the mass media debates about taxation and the bellicose arguments or tinkering on the edges. Through a variety of avenues we have come to "see the cat" and be convinced that it is through rental of the gifts of Providence, the Common Wealth, that public revenues are best achieved. This is not a doctrinal position, hut rather one that has been established through the strength of the argument. We must always acknowledge that if anyone, anywhere, can falsify our position that we would readily change.

Finally, as advocates of a new system of public financing we should not shy from targeting our vested interests and noting those who would be opposed lo us. There is already a wealth of prominent literature that can be used in favour of resource rental, citizens dividend and against the landlord class. We know the comments that various Nobel Peace Prize recipients in economics have made about the necessity of resource rentals. We have people as erudite as Thomas Paine announcing the need for a citizen's dividend derived from resource rentals. Classic economists such as David Ricardo were justifiably scathing of landlords "who do naught but collect rent, who contribute nothing to the progress of society, get wealthier and wealthier, while the rest of society -- both capitalists and labourers -- get poorer and poorer." We should not be afraid of taking the issue to the landlord class and demanding that they defend their lack of contribution to human society, whilst achieving great wealth.

Likewise we should not be afraid of targeting the poor renters for membership to our organisation and involvement. It is bad enough that renters have to see such proportions of their wages disappear into the pockets of the landowner, but it is worse still to see their meagre wages eaten up by ignorant and uncaring governments who seek unjust means to raise public revenue. Even if we are partially wrong and that resource rentals do not provide enough to properly finance public expenditure. we should advocate the raising of the tax Tree threshold to lift the burden on our most impoverished because that is the most ethical thing to do.

Also, and concluding our pitch to our vested interests, there should be no shame in approaching the manufacturing, building and other productive industries ("or financial contributions.

It is certainly in their interest that these productive capitalists, the ones worthy of the title, witness the introduction of resource rentals. It is manifestly unfair lhat these people, with genuine inventiveness, entrepreneurship and managerial skill, see their profits whittled away simply because a landlord's contribution to production is nil and theirs is great.

Ultimately, 1 have great faith in the eventual success of resource rentals as a means to achieve public revenues and to provide a common wealth for all citizens. However we face serious challenges through ignorance, vested interests, and the institutional factors of the media. By adapting to ihc circumstances of the mass media, by taking advantage of the new media technologies, and by being thoroughly aware of who our potential allies and enemies are we can make great gains. With confidence we will be able to achieve a just, fair, equitable and environmentally friendly system which provides for the legitimate expenses of government and the economic security of its citizens: it is through the gifts of Providence, which belong to no one, and the Common Wealth, which we all have equal right to.