Tax Reform Economic Science 201.

Posted April 3, 2014

by Jerry Alatalo

“It is wrong to say that God made rich and poor; he made only male and female; and he gave them the Earth for their inheritance… The Earth, in its natural uncultivated state was, and ever would have continued to be, the common property of the human race.”

– Thomas Paine (1737-1809)

blogger7-1By separating people from their land, the foundations of whole communities were destroyed, setting the stage for suicide bombings in London and Madrid. Perhaps suicide bombers and desperate, unemployed young people who turn to violence are not fully understood in regard to their motivations. Exclusion of historical events where outside nations killed their ancestors to confiscate land and natural resource wealth results in an incomplete analysis of reasons “terrorists” do what they do.

This is by no means meant to present an apology for people who commit violent acts, but concern that a full look at the real reasons behind certain violent acts is necessary to find solutions that end such violence.

In this post the second of a three-part documentary – “Treason” – delves into the economic history of nations where young people have come to extents of hopelessness and disillusionment leading to outbursts of violent behavior. “Treason 2: The Crucible of Terror” gives viewers the circumstances in Pakistan, a country at the frontier of the fight against terrorism and fanatics. Until independence, Pakistan had been a colony of the British Empire. The British colonial government would grant those Pakistanis who sided with them large tracts of land or its tax-free occupation and use.

Pakistan today has one of the most highly concentrated land ownership situations on Earth. The vast amount of land there is either owned or controlled by very few people. It came as a surprise to learn that Pakistan’s army controls a large fraction of the nation’s agricultural industry and farmland. Mr. Mason Gaffney of the University of California talks about recent decisions by the Obama administration to send $7.5 billion to Pakistan to “improve living standards” for poor Pakistanis. Mr. Gaffney viewed the multi-billion dollar aid as an action that “will do nothing, and could be worse than nothing”.

He describes the aid as “taking money from poor people in rich places to subsidize rich people in poor places”. The Pakistani government, instead of reforming the nation’s tax system to raise revenue through land value taxation, has taken aid from America which will result in higher rents for most Pakistanis who hold no land of their own. This degradation of the financial well-being of Pakistan’s citizens increases the possibility that dissatisfaction will lead to violence in pushback to government decisions.

Fred Harrison, who wrote, narrated, and directed “Treason”, relays a Taliban movement which took large amounts of land from landlords that was eventually taken back when Pakistan’s military drove three million people off the land. Mr. Harrison notes that many of those people ended up in Karachi in conditions that he calls “hornets nests” of drugs, money-laundering, kidnapping, and other criminal behaviors.

Another economist is heard suggesting that debt relief and land reform are necessary to improve the lives of Pakistanis, pointing to the obvious negative consequences of highly concentrated land ownership.

The film goes back in history to look at England’s Henry the VIII, who is described as the person responsible for launching predatory capitalism some 500 years ago, and which has since infected the rest of the world. Henry the VIII grew fat off the land he took and sold to fellow aristocrats, eventually owning 50 stately homes in England. Other nations followed the model provided by him to begin their marches to other regions to take land, natural resources, etc. Portugal, Spain, France, Italy, and other countries joined the colonialism game, killing original residents along the way.

Africa is then discussed in the context of British-Dutch warring over land where diamonds were buried in the 1890’s. Britain gained the upper hand in the war by pushing over 100,000 Europeans into 47 concentration camps, where 250 people per week were dying – an estimated 20,000 people, including women and children died in the camps. Nobody knows, according to Mr. Harrison, how many Africans died in their concentration camps.

At any rate, DeBeers mining company owners paid 1/3 of the price of extracted diamonds for labor and capital, and pocketed the remaining 2/3.

Given the world’s history since Henry the VIII five centuries ago, including wealth inequality where 85 people have as much wealth as the world’s 3.5 billion lower half, it should come as no surprise that violence breaks out. Land value taxation, along with other beneficial reforms, offer humanity real options that can reduce violence and war while enhancing the lives of men, women, and children across the Earth.

****

(Thank you to theIUorg at YouTube)

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