Q: In Globalization and its Discontents, you write (p.
81): "But land reform represents a fundamental change in
the structure of society, one that those in the elite
that populates the finance ministries, those with whom
the international financial institutions interact, do not
necessarily like."
JES: Yes. Let me try to approach the question a little
more systematically. Once you take the perspective I just
gave, that means the management should be done in such a
way that it maximizes the amount of money available to
the US government from natural resources because they are
within its domain and control. So, looking at the United
States, one of the implications of this is that a
foundation such as yours [the Robert Schalkenbach
Foundation, created to promote the ideas of Henry George,
as expressed in Progress & Poverty] ought to be very
much against the policies of the US government of giving
away our natural resources. Here is a case where we not
only are not taxing it much, we're actually giving it
away.
Q: I assume you're speaking in particular of oil and
mineral rights, but would not Broadband Spectrum rights
also be included in that category?
JES: Yes, Broadband Spectrum rights as well. Now,
giving away rights such as those would be anathema to the
spirit of Henry George. And the second part is that when
you sell them, you want to do so in such a way as to
maximize the revenues. And whether you decide to sell it
or whether you decide to rent it, would be the question
of what is the way that maximizes the extraction of
public revenues.
Q: And those revenues go to the people. Not to private
concerns.
JES: Exactly. So you're trying to say, from the
perspective of public management, how can we take this
inelastic supply of public resources and maximize the
rents that we can extract from it, consistent with other
public objectives? That is a very deep philosophical
approach, and requires a re-thinking of how we manage all
aspects of those public resources. However, much of what
we do is inconsistent with that. Now, the issue of land
reform is a little bit different. There, it's a two-step
analysis. My concern that I expressed about land is that
in many developing countries, you have most land owned by
a few rich people, and the land is relatively little
taxed. But the land is worked in a system of
sharecropping in which workers have to pay the landlord
50% of their output. In a way, you can look at that 50%
as a tax. The sharecroppers are paying a 50% tax to the
landlord. But it's worse than a tax. Because it's not a
land tax, it's a tax on their labor. And it's a tax that
goes to the landlord rather than to society. So
the notion is that land reform could take a variety of
different forms. For instance, the government could take
over the land and rent it to the people. Or give it to
the people and have a land tax that would not have the
distortionary effect of land reform. So, in a way, these
systems of share-cropping are worse even than anything
that Henry George was worried about in terms of misuse of
land. ...
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