Treacherous Academics and Politicians

David Spain

[Reprinted from Progress, July-August 2002]

The modern discipline of economics has been deliberately distorted by powerful vested interests so as to protect abuses arising from site monopoly. The current confusion of academic economists stems directly from the perversion of their discipline by powerful 'Robber Barons' in the USA at the end of the 19th century: these set up a string of universities and endowed Chairs of Economics which consciously peddled false doctrine in order to derail classical political economy in favour of Neoclassical Economics ("NCE"].

NCE is a form of economics which set out to destroy the Site Revenue debate (so popular under the advocacy of Henry George a century ago) by ignoring sites as a separate factor in production, and instead conflating sites with currency savings, machinery, buildings etc. as just another form of capital. For a shortsighted century, economists who perceived the truth have been howled down by peer pressure and sacked.

This manipulation has fostered private profit out of resource extraction and environmental abuse (ignoring responsibility to inter-generational equity), perpetuated a down-trodden class of the poor & welfare-dependent, and prevented folk having access to land, so causing unemployment throughout the nations. Absent is the solid anchoring of steady land prices & employment. Speculation in land-price inflates artificial bubbles which burst, creating regular cycles of boom-bust economy. Financial Institutions become forced to make advances on the temporary, artificial, fallible & unreliable security of sites.

The Site Revenue proposal threatens vested interests. These include the 10% who control 90% of the wealth -- a control which is almost entirely due to the private pocketing of site values. Also threatened are many politicians, bankers, lawyers, accountants, welfare dependents unwilling to shift for themselves, social workers, media proprietors and bureaucrats, all of whom are basically parasites upon disunity and have a vested interest in perpetuating it. The test & evidence of this can be seen in the total and deliberate exclusion of the Site Revenue analysis from national tax summits (e.g. that of RJ Hawke in 1985), from the mainstream media, from school & most university courses, and from the invariable refusal of any expert to argue publicly against it. You will never see a refutation of this Site Revenue analysis. At most it will be met with shameful silence.

Site Revenue was a household concept a century ago, but confusion of debate by academics and a burying of the analysis by both wings of politics (lest it do them out of a job) has almost erased it from popular awareness. Collection of the unearned increment in site values ('capital gain') was a salient theme during the formative years of ALP politics in the 1890's, indeed its total collection was ALP policy and in 1910 the Fisher Labor Government was actually elected to office on the sole issue of taxation of unimproved land values. Unfortunately, worker-wavering over the viability of free trade (a concomitant of Site Revenue) and political pandering to workers' fears and the middle class, saw the introduction of "thresholds" and the gradual demise of the message in Labor ranks. Workers' fears were that the Site Revenue would fall heavily on their little lots and that the rich man's large income would escape unscathed: in fact, these fears are what the rich man desires most, for his swollen income arises from site monopoly in the first place. After the 1993 Federal Labor conference the truncated remnants of Site Revenue (then called land value taxation) was removed from the ALP policy reprint, without debate or formal resolution but probably by secretarial mistake, and it has never been reinstalled. Perversion of the Site Revenue concept within the ALP demonstrates one of the great dangers of democracy: that unprincipled individuals will wish to dominate big parties and will tell the masses whatever they wish to hear, not the truth.