Are some of us more entitled to benefit from ecosystem services than others? Is it right for some of us to charge others to access to those benefits? Are we entitled to take for our generation non-renewable resources that future generations may also need?

Bill Batt: The Compatibility of Georgist Economics and Ecological Economics

• The Axiom of Dynamism: Nature is more profoundly a set of processes than a collection of objects; all is in flux. Ecosystems develop and age over time.
• The Axiom of Relatedness: All processes are related to all other processes.
• The Axiom of Hierarchy: Processes are not related equally but unfold in systems within systems, differing mainly along the temporal and spatial scale on which they are organized.
• The Axiom of Creativity: The autonomous processes of nature are creative and represent the basis for all biologically based productivity. The vehicle of that creativity is energy flowing through systems which in turn find stable contexts in larger systems, which provide sufficient stability to allow self-organization within them through repetition and duplication.
• The Axiom of Differential Fragility: Ecological systems, which form the context of all human activities, vary in the extent to which they can absorb and equilibrate human-caused disruptions in their autonomous processes.

Mason Gaffney: Economics in Support of Environmentalism

Economics in support of environmentalism" - is that an oxymoron? There are economists who put down environmentalists as unwelcome intruders in social policy; there are environmentalists who file economists under "The Great Satan." Some economists deserve it. I will show how these differences arise, and how we may compose them.

I. Worthy goals often conflict with each other A. Corn vs. Barley B. New rules C. Unresolved conflicts D. Danger of isolation through overkill

II. The Dereliction of Economists A. Defining away land  B. Private property: from means to end C. Leapfrogging, floating value, and compensation  D. Siege mentalities

III. Gifford Pinchot's Winning Formula A. Defining "Conservation" B. Finding common ground

IV. Pinchot on "Development"

V. Urban Sprawl A. Development is not identical with Sprawl   B. Sprawl is not a quest for open space   C. Sprawl is not the product of free choice   D. Looking for Mr. Goodbar   E. The public pays twice   F. Proactive solutions

VI. Dig deep

Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place

Land is the most basic of all economic resources, fundamental to the form that economic development takes. Its use for agricultural purposes is integral to the production of the means of our subsistence. Its use in an urban context is crucial in shaping how effectively cities function and who gets the principal benefits from urban economic growth. Its ownership is a major determinant of the degree of economic inequality: surges of land prices, such as have occurred in Australian cities during the last decade, cause major redistributions of wealth. In both an urban and rural context the use of land – and nature more generally – is central to the possibility of ecological sustainability. Contemporary social concerns about problems of housing affordability and environmental quality necessarily focus our attention on ‘the land question.’ ... read the whole article

Weld Carter: A Clarion Call to Sanity, to Honesty, to Justice

Our problem today, as yesterday, and the days before, back to the earliest recorded times, is POVERTY.

There are times when this problem is lesser. We call these "booms." There are also times when the problem is greatly exacerbated. These are called "busts." But, as the Bible says, "the poor have ye always with ye."

The purpose of this paper is to explore the core of the problem. It is not the position that there is only one single error afoot in our social organizations. There may be several, there may be only a few things to remedy. The position is, as stated earlier, that there is one basic cause of the problem. Therefore, the removal of this one basic error is the first, the primary step, for the simple reason that, until this basic social evil is eradicated, no other reform will avail. We will simply continue the boom and bust cycles until the economies of the whole world are wrecked by inflation or by a nuclear war triggered by the ongoing economic disaster.

Let us begin this study of the likely causes of our troubles by asking two questions:

• Are we over-populated?
• Are the earth's resources inadequate for this population?

Our stage, of course, for making this study will be this world of ours, for it is upon this world that the drama of human living is played out, with all its joys and all its sorrows, with all its great achievements and all its failures, with all its nobilities and all its wickedness.

Regardless of its size relative to other planets, with its circumference of about twenty-five thousand miles, to any mere mortal who must walk to the station and back each day, it is huge. Roughly ninety-six million miles separate the sun from the earth on the latter's eliptical journey around the sun. At this distance, the earth makes its annual journey in its elliptical curve and it spins on its own canted axis. Because of this cant, the sun's rays are distributed far more evenly, thus minimizing their damage and maximizing their benefits.

Consider the complementarity of nature in the case of the two forms of life we call vegetable and animal, in their respective uses of the two gases, oxygen and carbon dioxide, the waste product of each serving as the life-giving force of the other. Any increase in the one will encourage a like response in the other.

Marvel at the manner in which nature, with no help from man or beast, delivers pure water to the highest lands, increasing it as to their elevation, thus affording us a free ride downstream and free power as we desire it. Look with awe at the variety and quantity of minerals with which this world is blessed, and finally at the fecundity nature has bestowed so lavishly throughout both animal and vegetable life: Take note of the number of corn kernels from a single stalk that can be grown next year from a single kernel of this year's crop; then think of the vastly greater yields from a single cherry pit or the seeds of a single apple, or grape or watermelon; or, turning to the animal world, consider the hen who averages almost an egg a day and the spawning fish as examples of the prolificacy that is evident throughout the whole of the animal world, including mankind.

If this marvelous earth is as rich in resources as portrayed in the foregoing paragraph, then the problem must be one of distribution:

• how is the land distributed among the earth's inhabitants, and
• how are its products in turn distributed?

Land is universally treated as either public property or private property. Wars are fought over land. Nowhere is it treated as common property.

George has described this world as a "well-provisioned ship" and when one considers the increasingly huge daily withdrawals of such provisions as coal and petroleum as have occurred say over the past one hundred years, one must but agree with this writer. But this is only a static view. Consider the suggestion of some ten years ago that it would require the conversion of less than 20% the of the current annual growth of wood into alcohol to fuel all the motors then being fueled by the then-conventional means. The dynamic picture of the future is indeed awesome, and there is every indication that that characteristic has the potential of endless expansion. So how is it that on so richly endowed a Garden of Eden as this world of ours we have only been able to make of it a hell on earth for vast numbers of people?

The answers are simple: we have permitted, nay we have even more than that, encouraged, the gross misallocation of resources and a viciously wicked distribution of wealth, and we choose to be governed by those whom we, in our ignorance, have elected.   ... read the whole article

Peter Barnes: Capitalism 3.0: Preface (pages ix.-xvi)

I’m a businessman. I believe society should reward successful initiative with profit. At the same time, I know that profit-seeking activities have unhealthy side effects. They cause pollution, waste, inequality, anxiety, and no small amount of confusion about the purpose of life.

I’m also a liberal, in the sense that I’m not averse to a role for government in society. Yet history has convinced me that representative government can’t adequately protect the interests of ordinary citizens. Even less can it protect the interests of future generations, ecosystems, and nonhuman species. The reason is that most — though not all — of the time, government puts the interests of private corporations first. This is a systemic problem of a capitalist democracy, not just a matter of electing new leaders.

If you identify with the preceding sentiments, then you might be confused and demoralized, as I have been lately. If capitalism as we know it is deeply flawed, and government is no savior, where lies hope? This strikes me as one of the great dilemmas of our time. For years the Right has been saying — nay, shouting — that government is flawed and that only privatization, deregulation, and tax cuts can save us. For just as long, the Left has been insisting that markets are flawed and that only government can save us. The trouble is that both sides are half-right and half-wrong. They’re both right that markets and state are flawed, and both wrong that salvation lies in either sphere. But if that’s the case, what are we to do? Is there, perhaps, a missing set of institutions that can help us? ...

Part 2 proposes a number of new property rights, birthrights, and institutions that would enlarge the commons sector in one way or another. I like to think that these proposals blend hope and realism. Among them are:

• A series of ecosystem trusts that protect air, water, forests and habitat;
• A mutual fund that pays dividends to all Americans — one person, one share;
• A trust fund that provides start-up capital to every child;
• A risk-sharing pool for health care that covers everyone;
• A national fund based on copyright fees that supports local arts;
• A limit on the amount of advertising. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 1: Time to Upgrade (pages 3-14)

Consider also what scientists call biodiversity. The earth is a tiny island of life in a cold, dark universe. We humans share this magical island with millions of other species, most of whom we haven’t met. Each of these species fills a niche and contributes to the web of life. Yet little by little, we’re pushing the others out of their living spaces. The result is a wave of extinctions comparable to that which wiped out the dinosaurs sixty-five million years ago. The difference is that, while the dinosaurs’ extinction was triggered by a freak event, the current extinctions are being caused by our everyday activities.

And it’s not just other species we’re endangering. As anthropologists Jared Diamond and Ronald Wright recently reminded us, past human civilizations (Sumer, Rome, the Maya, Easter Island) did on a smaller scale what our own economic system seems bent on doing planet-wide: they destroyed their resource bases and crashed. The pattern is hauntingly familiar. First, the civilization finds a formula — agriculture, irrigation, fishing, capitalism — for extracting value from ecosystems. Because the formula works so well, the civilization’s leaders become blindly attached to it. Eventually, the key resources on which the formula depends become depleted and the inflexible civilization collapses like a house of cards. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 2: A Short History of Capitalism (pages 15-32)

Similarly, in the early capitalist era, land, resources, and places to dump wastes were abundant; aggregated capital was the scarcest factor. That’s why rules and practices developed that put capital above all else. In the twenty-first century, however, this is no longer the case. As economist Joshua Farley has noted, “If we want more fish on our dinner plates, the scarce factor isn’t fishing boats, it’s fish. If we want more timber, the scarce factor isn’t sawmills, it’s trees.”

As a businessman and investor, I’ve benefited personally from the primacy of capital and am not keen to end it. But as a citizen, I have to recognize that times have changed. The world is awash with capital, most of it devoted to speculation. By contrast, healthy ecosystems are increasingly scarce. If anything deserves priority, it’s nature’s capital, yet capitalism rolls on with financial capital as its king. ...

DESTRUCTION OF NATURE

Humans began ravaging nature long before capitalism was a gleam in Adam Smith’s eye. Surplus capitalism, however, has exponentially enlarged the scale of that ravaging.

I promised no grim numbers, but I’ll cite just one. In 2005, a United Nations–sponsored research team reported that roughly 60 percent of the ecosystems that support life on earth are being used unsustainably. Such overuse, reported the Millennium Ecosystem Assessment, increases the likelihood that abrupt, nonlinear changes will seriously affect human well-being. The potential consequences include floods, droughts, heat waves, fishery collapse, dead zones along coasts, sea level rises, and new diseases.

Thoughtful people can debate whether population or technology is more responsible than capitalism for our loss of ecosystems and biodiversity. No doubt all play a role. But most of the damage isn’t done by the numerous poor; it’s done by the far fewer rich. The United States, for example, with 5 percent of the world’s people, has dumped nearly 30 percent of our species’ cumulative carbon dioxide wastes into the atmosphere. It’s our excess consumption, rather than the poor’s meager gleanings, that’s the larger problem, and surplus capitalism is the handmaiden of that excess.

Technology, of course, greatly magnifies our impact on the planet, but technology by itself is mere know-how. It’s the choice of technologies, and the scale at which they’re deployed, that affects the planet. Electricity, for example, can be generated in many ways. When corporations choose among them, however, their choice is driven not by “least harm to nature,” but by “most bang for the buck.” And, in doing their calculations, they count the cost of nature as zero. Hence we have lots of fossil-fuel burning and little use of solar, wind, and tidal energy.

The same calculus drives corporations’ approach to agriculture, logging, and many other activities. The result is at once humbling and chilling: capitalism as we know it is devouring creation. It’s living off nature’s capital and calling it growth. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 3: The Limits of Government (pages 33-48)

There’s even an economic theory explaining this: Mancur Olson’s logic of collective action. Olson, a Harvard economist, argued that unless the number of players in a group is very small, people won’t combine to pursue their common interests. For example, if the CEOs of five major airlines decide they want a $500 million government bailout, they pool their resources and hire a lobbying firm. Together they tell Congress that without the $500 million, their companies won’t survive, and the consequences of their collapse will be dire.

Who lobbies against them? No one. The reason is that, while the five airlines will gain about $100 million each, the average taxpayer will lose only $5 each. It’s thus not worth it for ordinary citizens to get off their duffs and fight.

On top of this, there’s an even deeper problem. Democracy responds at best to voters and at worst to money. Both voters and donors are living humans. Not even seated at democracy’s table — not organized, not propertied, and not enfranchised — are future generations, ecosystems, and nonhuman species. James Madison and his brethren could scarcely have foreseen this defect. In their day, politics was about the clash between living factions, not between living humans and their heirs, or between our species and the rest of nature. But that’s no longer the case.

The implications of Adam Smith’s quote at the beginning of this chapter are thus even graver than he thought. If government’s inherent bias is toward property owners, the losers aren’t only the poor. The losers are also future generations, ecosystems, and nonhuman species, none of whom own any property at all. The only positive news here is that the converse might also be true: if future generations, ecosystems, and nonhuman species did own property, they might have some economic and political power. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 4: The Limits of Privatization (pages 49-63)

It’s tempting to believe that private owners, by pursuing their own self-interest, can preserve shared inheritances. No one likes being told what to do, and words like statism conjure fears of bureaucracy at best and tyranny at worst. By contrast, privatism connotes freedom.

In this chapter, we look at Garrett Hardin’s second alternative for saving the commons: privatism, or privatization. I argue that private corporations, operating in unconstrained markets, can allocate resources efficiently but can’t preserve them. The latter task requires setting aside some supplies for future generations — something neither markets nor corporations, when left to their own devices, will do. The reason lies in the algorithms and starting conditions of our current operating system.

The Algorithms of Capitalism 2.0

If you’ve ever used a computer spreadsheet, you know what an algorithm is. Each cell in the spreadsheet contains a set of instructions: take data from other cells, manipulate the data according to a formula, and display the result. The instructions within each cell are algorithms.

If you think of the economy as a huge spreadsheet, with each cell representing a producer, consumer, or property owner, you can see that the behavior of the whole is driven by the algorithms in the cells. Our current operating system is dominated by three algorithms and one starting condition. The algorithms are:
(1) maximize return to capital,
(2) distribute property income on a per-share basis, and
(3) the price of nature equals zero.
The starting condition is that the top 5 percent of the people own more property shares than the remaining 95 percent.

The first algorithm is what drives corporations. It tells them to sell as much as they can, pay as little as possible for labor, resources, and waste disposal, and make shareholders happy every quarter. It focuses the minds of managers every day. If they work in marketing, they wake up thinking about how to sell more; if there’s no demand for their product, they must create some. If they work in finance, they worry about margins and leverage. If they’re in labor relations, they bargain hard, replace long-term employees with temps, and shift jobs to places where wages are lower. All the while, the CEO feeds sweet numbers to Wall Street.

The second and third algorithms then mesh with the first. It’s the combination of these algorithms that causes the wheels of capitalism to devour nature and widen inequality among humans. At the same time, nothing in the algorithms requires or encourages corporations, either individually or collectively, to preserve anything.

This doesn’t mean people inside corporations don’t think about protecting nature, raising their workers’ pay, or giving something back to society. Often, they do. It does mean their room for actually doing such things is too narrow to make a difference. Nor does it mean that, from time to time, some brave mavericks don’t briefly flout the corporate algorithm. They do that, too. What I’m saying is that, in the great majority of cases, the corporate algorithm and its brethren are obeyed. For all practical purposes, the publicly traded corporation is a slave to its algorithm. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 5: Reinventing the Commons (pages 65-78)

Natural Assets
In 2002, economists Robert Costanza and Paul Sutton estimated the contribution of ecosystem services to the U.S. economy at $2 trillion. Ecosystem services represent the benefits humans derive from natural ecosystems, including food from wild plants and animals, climate regulation, waste assimilation, fresh water replenishment, soil formation, nutrient cycling, flood control, pollination, raw materials, and more. Using data from many previous studies, as well as satellite photography, Costanza and Sutton estimated values for ecosystems per unit of biome (an acre of rain forest, or grasslands, or desert, for example). They then multiplied by the total area of each biome and summed over all services and biomes.

If $2 trillion represents the yearly contribution of nature to the U.S. economy, what’s the underlying value of America’s natural assets? One way to answer this is to treat yearly ecosystem services as “earnings” produced by “stocks”of natural assets.These earnings can then be multiplied by the average price/earnings ratio of publicly traded stocks over the last fifty years (16.5/1) to arrive at an estimated natural asset value of $33 trillion.

This figure is, if anything, an underestimate, because it ignores a singular aspect of nature: its irreplaceability. If Corporation X were to go out of business, its useful contributions to society would quickly be supplied by another corporation.

If a natural ecosystem were to disappear, however, it could not so easily be replaced. Thus, an irreplaceability premium of indeterminate magnitude should be added to the $33 trillion. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 6: Trusteeship of Creation (pages 79-100)

A Second Set of Books

Mental models begin with assumptions. Most economists today assume there are only two kinds of property, private (that is, corporate or individual) and state. There are no shared assets, no inter- or intragenerational obligations, and no nonhumans other than those we eat.

Yet as we’ve seen, many things are missing here. The most obvious omission is the great economy of nature within which the human enterprise operates. We’re borrowing prodigiously from that economy, but not recording the loans. Equally absent are future generations, from whom we’re borrowing just as wantonly and surreptitiously. In a proper bookkeeping system, every loan shows up on two balance sheets, the borrower’s and the lender’s. One entity’s liability is another entity’s asset. But this isn’t true in contemporary economics. When the human economy grows, assets on corporate and individual balance sheets go up, but nowhere is there a debit. In fact, there aren’t any accounts that could be debited. There’s only good growth on one side of the ledger, and on the other, a void in which illth and debt accumulate, uncounted and unnoticed.

In recent years, economists have added a few bits to this stripped-down model. For example, they now recognize public goods and ecosystem services as contributors of economic value. Public goods are services like national defense, education, and flood control, which benefit everyone but can’t easily be sold at a profit. Because markets don’t adequately supply them, governments step in and do so. Economists sometimes debate whether the value of these public goods exceeds the “burden” they impose on taxpayers, but they don’t see the expenditures as adding value to any account, or to any asset owned by anyone.

Similarly, many economists now recognize ecosystem services as valuable inputs to the economy. However, the ecosystems that produce these services have no owners or balance sheets. They’re just there, floating in space, with no connection to humans. What I’m suggesting is that economists treat them as if they were common property held in trust. This simple supposition would not only put ecosystems on the books, enabling us to track them better; it would also pave the way to real-world property rights that actually protect those ecosystems. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 10: What You Can Do (pages 155-166)

This third version of capitalism is a logical successor to the first two. In Capitalism 1.0 we had a shortage of goods, in Capitalism 2.0 a surplus. In Capitalism 3.0 we’ll have plenty, but not too much. We’ll have more things we truly need — healthier ecosystems, communities, culture — and fewer thneeds. We’ll have a proper balance between our “me” and our “we” sides. We’ll be more connected and less isolated, more secure and less stressed. Overall, I’d venture, we’ll be happier. ... read the whole chapter

Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)

THAT man cannot exhaust or lessen the powers of nature follows from the indestructibility of matter and the persistence of force. Production and consumption are only relative terms. Speaking absolutely, man neither produces nor consumes. The whole human race, were they to labor to infinity, could not make this rolling sphere one atom heavier or one atom lighter, could not add to or diminish by one iota the sum of the forces whose everlasting circling produces all motion and sustains all life. As the water that we take from the ocean must again return to the ocean, so the food we take from the reservoirs of nature is, from the moment we take it, on its way back to those reservoirs. What we draw from a limited extent of land may temporarily reduce the productiveness of that land, because the return may be to other land, or may be divided between that land and other land, or perhaps, all land ; but this possibility lessens with increasing area, and ceases when the whole globe is considered. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

LIFE does not use up the forces that maintain life. We come into the material universe bringing nothing; we take nothing away when we depart. The human being, physically considered, is but a transient form of matter, a changing mode of motion. The matter remains and the force persists. Nothing is lessened, nothing is weakened. And from this it follows that the limit to the population of the globe can only be the limit of space. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

DOES not the fact that all of the things which furnish man's subsistence have the power to multiply many fold — some of them many thousand fold, and some of them many million or even billion fold — while he is only doubling his numbers, show that, let human beings increase to the full extent of their reproductive power, the increase of population can never exceed subsistence? This is clear when it is remembered that though in the vegetable and animal kingdoms each species, by virtue of its reproductive power, naturally and necessarily presses against the conditions which limit its further increase, yet these conditions are nowhere fixed and final. No species reaches the ultimate limit of soil, water, air, and sunshine; but the actual limit of each is in the existence of other species, its rivals, its enemies, or its food. Thus the conditions which limit the existence of such of these species as afford him subsistence man can extend (in some cases his mere appearance will extend them), and thus the reproductive forces of the species which supply his wants, instead of wasting themselves against their former limit, start forward in his service at a pace which his powers of increase cannot rival. If he but shoot hawks, food-birds will increase: if he but trap foxes the wild rabbits will multiply; the bumble bee moves with the pioneer, and on the organic matter with which man's presence fills the rivers, fishes feed. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

IF bears instead of men had been shipped from Europe to the North American continent, there would now be no more bears than in the time of Columbus, and possibly fewer, for bear food would not have been increased nor the conditions of bear life extended, by the bear immigration, but probably the reverse. But within the limits of the United States alone, there are now forty-five millions of men where then there were only a few hundred thousand, and yet there is now within that territory much more food per capita for the forty-five millions than there was then for the few hundred thousand. It is not the increase of food that has caused this increase of men; but the increase of men that has brought about the increase of food. There is more food, simply because there are more Man. — Progress & Poverty — Book II, Chapter 3: Population and Subsistence: Inferences from Analogy

TWENTY men working together will, where nature is niggardly, produce more than twenty times the wealth that one man can produce where nature is most bountiful. The denser the population the more minute becomes the subdivision of labor, the greater the economies of production and distribution, and, hence, the very reverse of the Malthusian doctrine is true; and, within the limits in which we have any reason to suppose increase would still go on, in any given state of civilization a greater number of people can produce a larger proportionate amount of wealth and more fully supply their wants, than can a smaller number. — Progress & Poverty — Book II, Chapter 4: Population and Subsistence: Disproof of the Malthusian Theory ... go to "Gems from George"