The Balance of Wealth,PT 4

The Balance of Wealth,PT 4

Restricting the Land Supply

Pointing out this one is going to hurt, because we are now in trade-off territory. When the government sets aside huge tracts of land for national parks, wildernesses, and military bases, the result is less land for other purposes. There is a windfall for those who own the remaining land and other natural resources.

Perhaps, in the interest of environmental preservation, this is worth the cost. I just simply want you to be aware of this trade-off. Overzealous buying up of set aside land for natural or historic preservation is economically regressive.

Not all government land purchases are regressive. Some of the wilderness is used for recreation for The People and as such is neutral or even progressive. But maintaining huge tracts that are inaccessible to all but the most serious hikers is definitely a benefit for the few at the expense of the many.

I personally like the fact that there are some huge land set-asides. The preservation of true wilderness is worth some regressivity. I am willing to pay a price for this benefit when necessary. There are plenty of other opportunities to be progressive.

But there are limits. Some of the proposals by set-aside extremists would be severely regressive, as well as significant intrusions on freedom. So it is important to look for supplements for government land set asides, so we don’t have to go to extremes to preserve biodiversity and to have sufficient wild spaces to play in. Some possible supplements will be given in the environmental chapters.

Homework Assignment
Consider the story of Robin Hood in light of this page.

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More Efficient Land Use

Now, we can go back into synergy mode. If we can find more efficient ways to use land, then the windfall for the owners of land is reduced. Instead, housing and business ownership becomes cheaper. And not just housing, per se, but playing space for children. I am not in favor of cramming families into apartment buildings as a way to use land more efficiently.

Here are a few samples of the possibilities:

Roads. Do we really need so many? Do they have to be so wide? Do we need such huge median spaces?

Yards. Do they have to be as large as they are in certain neighborhoods in order to provide playing space for children, and quiet for everyone?

Farms. Do we need to cultivate as much space as we currently do? Or can we return more to wilderness?

Businesses. Note how so many modern businesses are on one floor. Lots of room overhead that is being wasted.

Parking lots.
I realize that by mentioning this list, I am raising the hackles of many on the Right. Rest assured, I do not call for the authoritarian measures advocated by certain radical environmentalists. I like wealth, progress, and freedom. The good news is that many improvements in land use efficiency can be carried out be increasing the use of market-based ideas. Capitalism is more efficient than socialism. Some of the other ideas can be implemented with very gentle use of government pressure. Yet others can be implemented with private action.

This is a big subject. I will cover it in the environmental chapters of this web site (the green buttons). Stay tuned.

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Natural Resource Use

There is more to Land than just land. In economic terms, Land includes such things as radio spectrum, mineral rights, water rights and fishing rights. By opening up more territory in these areas, or finding substitutes, we can reduce the power of those who hold these rights. Consider these examples.

The Internet has provided a powerful substitute for the limits of broadcast spectrum. The result has been an incredible boost in competition to the big media empires. This boost was made available for two reasons: 1. multiple cables can carry different information while using the same frequency bands, unlike radio broadcasts; 2. light fiber has tremendous bandwidth compared to the radio spectrum.

Cable television has also helped to break up the power of the major television networks. It is still dominated by media empires, but at least there are more of them. Like the Internet, cable allows the reuse of spectrum without interference.

Nuclear power could be used to put a hurting on the world’s oil millionaires. And with the use of breeder technology, we could run for centuries without even mining any more uranium. Also, with breeder technology, we could make a lot of bombs, so maybe this isn’t such a good idea. Bummer.

Better solar technology: If someone could come up with a significantly cheaper and more efficient solar cell, the result would be extremely progressive economically as well as good for the environment. Alas, success is not guaranteed here.

Better broadcast technology could break up some of the broadcast media empires. If the FCC were to license radio broadcast stations using error correction technology more advanced than FM, we could have more competition on our car radios. And why don’t we take some of that unused UHF television spectrum and create a new radio broadcast band?

Water recycling: The environmental movement has lobbied successfully for low flush toilets that don’t really do the job. Is this really necessary? It is not as if the water is destroyed by flushing. Why not reuse the water for irrigation? I can understand not spraying it on food crops, but how about for drip irrigation? Or for non-food crops like cotton and hemp? The beauty is that we don’t need to remove the nitrates, since they make for free fertilizer. We could even go back to using phosphates in laundry detergent.

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Equality, the International Interactions

Most of this site is from a United States point of view (though many of the ideas can be adapted for elsewhere). But to really be progressive, we need to consider the rest of the world, since that is where the truly poor live.

Two of the major interactions between the U.S. and the poorer countries of the world are trade and immigration. It is in these areas that we have left-wing groups advocating extremely regressive policies—mercantilists in tie-dye. At least, they are regressive if we take an international perspective vs. a purely U.S. perspective.




Investment and Trade

Consider international investment and trade. There are many complaints about big corporations taking their capital and building plants in poor countries where the labor is cheaper. Those complaining claim that such actions make the corporations richer and the U.S. workers poorer. They are right. But they are also regressive.

When U.S. capital “leaks out” to other parts of the world, the result is less capital chasing the same amount of labor – in the U.S. The result within the U.S. is indeed regressive. However, in the poor countries that receive the U.S. investments, the results are extremely progressive. The poor countries receive more capital to mix with their vast labor pools. The result of the movement of capital is on the whole progressive; free markets tend to even out the disparities of wealth between nations.

However, the accusation that corporations are making windfall profits by investing overseas is also true. If a country is labor rich and capital poor, the return on investment by capitalists will be huge by First World standards. If a country goes from communist or fascist to capitalist, the first to take advantage of the changes can make unreal fortunes. But note that these fortunes are in part rewards for taking risks.

It is also true that the benefits received in the poor countries may seem small compared to the windfall profits made by foreign corporations. Foreign companies can freely attract labor simply by offering pay and working conditions that are marginally better than that offered by the local slavers and loan sharks. The results may appear unpleasant, but they are a small boost to local laborers, else they wouldn’t take the jobs.

To get these countries past the sweatshop stage requires sending more investment, not less. More capital will drive up labor rates and demands for better working conditions. It will also drive down the windfall profits. How to have more capital? Consider the ideas in the early parts of this chapter. If the U.S. federal government were to pay down its huge debt, and if workers were to save for their retirement, the result would be trillions of dollars available for both domestic and foreign investment. We can be a blessing to the rest of the world and get rich at the same time.

Immigration and Foreign Guest Workers

Many labor activists complain about immigrants driving down their wages. They are right. Letting in poor immigrants means more Labor chasing the same supply of Capital. It also means more Labor chasing the same amount of Land. The results are doubly regressive at home. Massive immigration has been a major factor in maintaining wealth disparities in the U.S. despite its huge supply of land and natural resources, and its massive accumulation of capital. However, this increase is wealth disparity is purely from a local perspective.

From a global perspective, letting in immigrants and foreign temporary laborers is very progressive. The process allows extremely poor people in poor countries a chance at becoming well off by local standards. And many of the foreign workers and immigrants send money home providing capital to those left behind.

But there are some disturbing problems with the idea of fully opening the gates to immigration. Consider the environmentalist goal of stabilizing the world population. If immigration is free, then those cultures that practice birth control will be overwhelmed by those who continue to multiply at high rates. On the other hand, if such cultures are contained within their borders, they will experience local overpopulation problems while “learning their lesson.” And some overpopulated countries will opt for conquest if legal emigration is not allowed.

So what is the answer? I don’t know. I would like to “unask the question” by making the poor countries richer, so that immigration is driven more by choice of climate and lifestyle, rather than severe economic necessity. But I do not know if it is entirely feasible.

But by releasing several trillions of new investment dollars to the world, it might be.

About Those SUVs

There are some who bemoan the wealth of the First World nations, saying it is at the expense of the poorer nations. They say we ought to live with less so that the needy can have more. For the most part, this view is incorrect; the poverty of much of the world is due to lack of capital and corrupt governments, not due to First World consumption.

But there is one area where this view has merit: natural resource consumption, especially petroleum. By buying up such a huge portion of the world’s oil production, the U.S. is driving up the price for other, poorer countries. And unlike wealth in general, natural resource consumption is a zero sum game. More for us means less for them.

So should we outlaw SUVs? No, that is too simplistic, and too complicated. There is actually a more elegant approach that reduces net government interference in our society. I will cover it in a later chapter. Stay tuned.