ADVANCING GEORGIST THOUGHT Henry George Birthday Learning Event BAHRC, Philadelphia Director: Dr. Alexandra W. Lough September 2015 Level of Learning: Participatory Adult Education Facilitator: Stephen I. Ternyik Our Learning Objective: Understanding the decisive role of land (natural resources) value in the modern monetary production economy via methodical thought (connecting simple statements & formulations). A: The Economics Profession Francis A. Walker, first President of the American Economic Association, was a great opponent of Georgist thought.From a scientific point of view, it is statistically easier to calculate & specify private wealth & assets than to make estimations of public economic
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ADVANCING GEORGIST THOUGHT
Henry George Birthday Learning Event
BAHRC, Philadelphia
Director: Dr. Alexandra W. Lough
September 2015
Level of Learning:
Participatory Adult Education
Facilitator: Stephen I. Ternyik
Our Learning Objective:
Understanding the decisive role of land (natural resources) value in
the modern monetary production economy via methodical thought
(connecting simple statements & formulations).
A: The Economics Profession
Francis A. Walker, first President of the American Economic
Association, was a great opponent of Georgist thought.From a
scientific point of view, it is statistically easier to calculate & specify
private wealth & assets than to make estimations of public economic
dynamics in general.Consequently, private wealth accounting and
management is even today the core of professional economics, using
some scientific tools.
B: The Blind Spot
Economic models are using the perpetual motion of firms,
households, markets and production to explain human economic
activity. The original value of natural resources (land) and the
precise nature of money & its economic role are omitted from these
artificial model circuits as well as the physical interplay of tangibles
(visible) and intangible (invisible) factors.
C: No New Economy
As in the ancient times of Sumerian civilization, the value of natural
resources serves as the dominant collateral of banking procedures
such as loans; the resource of human labor in modern economies is
almost everywhere more heavily taxed than the technical resource of
capital gains via interest, based on land value collaterals.
D: The Need for Money
In the modern monetary production economy of fiat money, credit
and interest, almost all human needs are reduced to the need for
money, thus money has become access to energy, from food to
fuels.Central banks try to police the monetary emission of private
banks that use the value of natural resources (land) as collateral.
E: Physical Limits
While it is mathematically possible to create money out of thin air
without limit, the total value of natural resources is physically
limited.Despite all human ingenuity and intangible creativity, the
current monetary technique of unlimited expansion is no more
sustainable and needs reformatory correction by macro-prudent
measures, such as 100%money.
F: Land, Value, Money
Also the modern monetary production economy works by the tricky
sequence of land, value and money, i.e. labor (human resources)
and capital (technical resources) are based on this accounting
model. A capitalist market economy tries to elevate its living
standard by monetary expansion, but monetary expansion always
reaches certain physical limits that are expressed via cyclical
economic crises which lead to more centralized economic control
(=fusion of the state and the economy).
G: Economic Prudence
The Biblical record (3 Moses, chapter 25) formulates clear physical
limits of human economic activity for ancient Oriental agricultural
times; a modern ethical interpretation and translation in economic
terms is needed to apply this physical system of morality and to
transfer it into a formal system of economic reasoning (science) that
is not solely based on managing the professional
accumulation/expansion of private wealth/assets.
H: Rationality and Morality
Formal systems of abstract reasoning and ethical systems of
morality have to be applied by using the scientific method and to
making economics a science of human economic activity.
I: HG
The work of Henry George points to the physical factors of human
wealth and to the physicality of human economic activity; the free
association of human economic actors is based on the scientific
insight into the working of these physical factors. In contrast, the
centralized accumulation of private wealth points to the road of
serfdom where human ingenuity and creativity have no more
meaning in economic activity.
MPRAMunich Personal RePEc Archive
Land.Value.Money
Stephen I. Ternyik
Techno-Logos, Inc.
2014
Online at http://mpra.ub.uni-muenchen.de/60820/MPRA Paper No. 60820, posted 22. December 2014 13:17 UTC
5: The decisive question arises where the behavioral inter-section of l and p is
located in the body economic and how it operates?
6: As we cannot pull back economic systems evolution and current monetary
agency, we have to think about introducing narrow reserve banking; this has
actually to do with values, principles and laws of economic behavior;
concerning money, neither a collectivization nor a privatization of the financial
system will work to reduce the ‘economic heat’.
7: Money (m) is physical access to energy, drives the temporal length (l) of
economic production (p) cycles and determines the ‘heat’ of the human
economy; as a consequence, the application of narrow reserve banking will
make the financial system more boring, but at the same time more
stable/sustainable.
8: The way to an ethical market economy is bound to re-defining the societal
role of banking & money in legal terms; as long as access to natural energy
resources is limited (despite all human ingenuity), we will need money to work
the body economic.
9: Money is not a super-natural force, but it acts in real economic practice as a
measurement unit for natural and human energy resources via payments.
10: As a practical result, monetary units should be related economically to a
natural index of clean energy.
Contribution submission to the conference Berlin 2015
Sustainable Monetary Agency — ∙Stephen I. Ternyik — POB.201 D-82043 MunichWe may like it or not, ours is a monetary civilization, since ~ 5000years. The last 250 years saw the rise of the monetary productioneconomy, with the latest consequence that all human needs are nowreduced to the need for money. This technical ’simplification’ of eco-nomic complexity comes with a high price, concerning the physicalsustainability of the human-nature-capital interplay. Money (m) hasbecome physical access to all types of energy (e), drives the tempo-ral (t) length (l) of economic production (p) cycles and determinesthe ’speed’ of the human economy. The cybernetic wave circuit reads:m/quantizes/e=e/quantizes/t=t/quantizes/p. Every economic wavelength (l) is quantitatively proportional to the liquidity frequency (f);the greater the monetary volume (x) in a wave, the higher is f (l=f(x/r); r (reserve requirement) is the decisive factor in this equation.The temporal (t) acceleration of p (e.g. machine operating time, lo-gistics) is a result of x in demand for e (p=t (x/e); every customerpayment finalizes p. As a result, the economic behavior of gradualmonetary excess increases the exponential need for energy and causesthe temporal acceleration of economic wave cycles (crises). Only an ef-ficient monetary technique of narrow reserve banking can lead to moreeconomic systems sustainability.
Part: SOEType: PosterTopic: Physics of Sustainability and
Human-Nature Interactions (sessionaccompanying the symposium, joint withDY and jDPG - org: Donner+Rybski)
Human societies are evolving energy transduction systems and the biophysical flow of energy in a socio-economic system quantizes the flow of time and drives temporal acceleration. The decisive role of money in a monetary production economy is highlighted as temporal access to energy. The greater the natural energy input for productive output, the higher the economic wave frequency and the shorter the wave length. A singularization of human history, that is a replacement of long wave patterns, in the nearer future depends on the tech-nical achievement of a relatively constant energy input. According to the basic formulae of the Snooks–Panov curve, a significant quantum change of the tem-poral flow will take place in the next decade; it is an open mathematical guess and an ongoing human intelligence test, if this temporal turning point is of dis-crete or continuous nature.
Keywords: transduction, energy, time, money, Snooks–Panov curve, acceler-ation, singularity, global intelligence.
Waves can be understood as travelling energy and matter as geometry of
curved space-time. Force equals geometry and the structure of matter equals
different wave's types. An increase in whatever size is proportional to size itself
and the speed of evolutionary waves in human civilization is directly propor-
tional to the number of its inhabitants, that is a systemic process of self-similar
evolution. This is a stochastic process with time dependency where the statisti-
cal coupling of equal parameters/values is either rapid (short-range) or slow
(long-range) in performance curves (e.g., of human production and learning);
however, economic life or being is an existential conflict that consumes energy
and increases entropy and it takes energy to convert energy from one form to
another, always with a loss of some energy by friction.
The more energy (e) in a wave, the higher its frequency (f); the wave-
length (l) is inversely always proportional to f (we can actually interconvert
e, f and l). It follows that shorter wavelengths are more energetic than long
wave lengths, increasing energy input leads to higher wave frequencies and
shorter wave lengths, that is principle of cyclical causality, most probably in
spiral form as applied evolutionary to human history. Measuring the empirical
acceleration of observable human history (equal to about 50,000 solar years,
Stephen I. Ternyik 19
eventually starting with 1 million people) tells us that every new great techno-
economic wave took only about one third of former evolution temporary inter-
vals, expressed as logarithmic scale formula (Snooks–Panov curve); from this
evolutionary algorithm follows that the duration of future technological shifts
will become exponentially smaller and that techno-economic evolution could
become a continuous process, rather than the discrete time-lapsed cyclical
waves of past experiences, leading to a singular techno-global civilization until
2050, with 9 billion people and the quantum of potentially more inventors or
entrepreneurs.
World energy consumption per capita has almost doubled from 40 to 80
gigajoules (1960–2010), according to the numerical canon of all statistical data
charts (e.g., BP); this not only reflects the corresponding symmetric population
dynamics, but points to our argument that every human civilization can be ob-
served primarily as an energy transduction system and that predictive models
can be based on this technical fundament. It is, for example, important to note
that even U.S. non-governmental debt (divided by GDP, e.g., FED data) tripled
in this temporal period which methodically recalls the financial misuse of bank
credit money to stimulate ‘the economy’ via fiat debt and interest ‘creation’; in
any case, this monetarist technique is no more sustainable and monetary policy
will have to become more congruent with energy economics. In addition, new
technologies have to be consequently applied to as ‘time saving technics’, ac-
cording to the life maintaining principle of syntropy. Unfortunately, we found
not one data extrapolation of the world energy consumption that modeled any
stoppage of the increasing energetic demand, concerning the temporary interval
of the time-space from 2000–2050.
The 6th
Kondratieff (of eco-energetics, biotech, health science, propelled
by advanced AI, new energy technology and quantum monetary economics)
that started in 2000/2001 could convert in the time-space from 2018 until 2050
into technological singularity (like envisioned by J. Neumann and visualized by
Snooks/Panov), if world energy consumption can be kept relatively constant by
sustainable global economics science (if e will be constant / f and l will behave
accordingly / in reciprocal conversion). It goes without saying that any future
monetary system has to implement this factual formula via narrow reserve
banking, that is applying a more ‘boring’ financial system; it is unwise to fi-
nance artificial living standards via credit money as placebo and ultimately pal-
liative effect, because money is physically access to energy. In any case, not the
speed of any reform is decisive, but its direction; this is basically a radical ra-
tional challenge for the human mind to expand intelligence beyond traditional
methods of cognitive thought (different levels of time and causality). For ex-
ample, mathematical logic is consciously not directed at temporal levels, but
any causal formulation of the bio-physical universe in classical or quantum
theoretical terms is actually operated in temporal sequences. A future extension
World System Energetics 20
of the human cognitive horizon has to be methodically rationalized via causal,
retro-causal and super-causal process learning that implies multiple time arrows
or loops.
Our scientific inquiry deals actually with the last 5 minutes of a 24 hour
day, that is about 50,000 years of human archeological evidence, with acceler-
ating economic long wave spiral cycles of 5000, 500 and 50 years. It is not big
history research, but human history in-depth. We methodically suspect that the
quantity of energy input for productive output (conversion of natural energy for
human needs) is a reliable measure for the scientific observation and prediction
of human societal change along this temporal algorithm. However, we do not
perceive this biophysical scaling of socio-economic systems as determinism or
‘randomism’, but as a human behavioral phenomenon of probabilistic adapta-
tion and cognition. The dogmatic objection that there is no natural science of
human society cannot be accepted from our side; it might be biographically true
that the fate of an individual is not calculable, but collective action (e.g., energy
consumption, monetary payments) is countable mass motion with biophysical
consequences. As we are now in the last seconds of the 24 hour cosmic day, it
is exiting to elaborate the methodical guess for future human direction of the
beginning new day cycle, that is to research into the current quantum leap to
a new level of science, in search of creative unity for humankind. However, we
are aware that the demand for ideas and ideals is not equal to knowledge, but
that which can be improved by knowledge, should be.
The more natural energy a human economy transduces into social
needs, the more accelerates the economic life of that social entity in tem-
poral terms (the increasing conversion of energy quantities equals physi-
cally the temporal acceleration of economic wave frequency and length). This seems to be the basic hypothesis of applied natural law for social science;
the formal statement applies biophysically to global geometric time and local
arithmetic time (chronos in Koine Greek), but is physically not valid for uni-
versal cosmic time: the temporal clock on this globe (closed world clock /
kairos in Koine Greek) is not equal to the universal time flow (open cosmic
clock); according to ancient Hebrew wisdom, human biological age follows the
cosmic clock (aeon in Koine Greek). The energetics of (monetary) economics
is decisive and especially in a monetary production economy, money is access
to energy (inter-conversion of energy, time, money; the economic circuit reads:
THE AMERICAN SOCIAL PHILOSOPHER HENRY GEORGE published his second book, Progress and Poverty, in 1879, and became one of the most celebrated figures in the Western world. Not surprisingly, his ideas excited the early Zionists, who were just then beginning to come together to search for solutions to the Jewish Question. George set forth to answer a difficult riddle: why extreme poverty should exist alongside immense wealth, despite social and technological progress. His answer appealed to millions of people, including the Zionists Emma Lazarus, Theodor Herzl, Louis Brandeis, Albert Einstein, and Franz Oppenheimer. It was an elegant answer, one that the Zionists took to heart when it was time to furnish their new home. Poverty, said George, is rooted in a primary injustice, common to all nations: the ―appropriation as the property of some of that natural element on which and from which all must live.‖ He demonstrated, with eloquent prose, how material progress itself widens the gap between rich and poor. ―Everything could go on as now,‖ he said, ―and yet the common right to land be fully recognized by appropriating rent to the common benefit.‖ He argued thus:
The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.
TWO YEARS AFTER the publication of Progress and Poverty, Zionism was spurred on by the Russian pogroms of 1881. Tsar Alexander II was assassinated by members of a revolutionary group in which Jews played a minor role, and a wave of anti-Jewish violence was set off. The American poet Emma Lazarus, author of ―The New Colossus,‖ which adorns the base of the Statue of Liberty, declared that the only way to assure the safety of European Jews was to found a Jewish homeland in Palestine. In 1883, fifteen years before Theodor Herzl convened the first Zionist congress, she championed ―Re-Nationalization, Auto-Emancipation, Repatriation — call it by what name you will‖ — founded the Society for the Colonization and Improvement for Eastern European Jews, and began writing on ―the Jewish problem‖ for major journals. Her friendship with Henry George influenced her political economic thinking. Lazarus called Progress and Poverty ―not so much a book as an event. For once prove the undisputed truth of your idea, and no person who prizes justice or common honesty can dine or sleep or read or work in peace until the monstrous wrong in which we are all accomplices be done away with.‖ Herzl, unlike other influential Zionists, preferred Henry George’s remedy to that of the socialists, as is evident in several of his diary entries:
June 12, 1895 – Work will be a joy…. In the construction industry (whether for housing, railroads, highways, or the like) we will materially aid private enterprise…. The Society will profit only through the increase of land values. Construction is to be cheap, because building enhances the value of the land.
June 13, 1895 – Our entire youth, all those between twenty and thirty years of age, will veer away from inchoate socialistic leanings and turn to us. They will go forth as preachers to their own families and among the people — without my urging them. For the Land is to be theirs!
November 25, 1895 — A good idea of his is to levy a progressive tax on land property. Henry George!
THE FIRST ZIONIST CONGRESS of 1897 set up a Jewish National Fund for the purpose of buying land in Palestine. The Fund actually came into existence in 1901 at the Fifth Congress and was incorporated in England in 1907 as a limited liability company with the authority to finance Jewish settlements of the land it bought. Its aim was the national ownership of land, which did away with private ownership. Land bought by the JNF couldn’t be resold or sublet, but was held in trusteeship and belonged to the whole nation. Yifat Holzman-Gazit writes in Land Expropriation in Israel: Law, Culture and Society (Aldershot: Ashgate, 2007): The JNF ―gained wide support‖ and was ―favored as a practical means‖ by which to advance the objective of settling Palestine and achieving Jewish sovereignty. A central concern underlying the rejection of private property as a strategy for nation-building was its connection to land speculation and the rise in land prices. The economy of Palestine had two characteristics that favored land speculation and the rise in land prices. It was a pre-industrial country in which land could be purchased relatively cheaply and, given the increase in immigration, resold at a profit…. Furthermore, public land ownership also corresponded to the Zionist endeavor to promote social equality through land reform. Central leaders within the Zionist movement echoed the social justice ideology of the American land reformer Henry George…. already in Altneuland Theodor Herzl cited Henry George’s land-poverty nexus…. George’s Progress and Poverty was translated into Hebrew… and was read not only by the dominant socialist culture within the Zionist movement, but also by middle-class Zionists.
In private correspondence with me, Professor Holzman-Gazit notes:
Franz Oppenheimer (1864-1943), an economist, sociologist and Zionist, suggested that in order to destroy the upper class monopoly of real estate, a vast cooperative effort on the part of the lower classes was needed. Following Henry George, Oppenheimer believed that agricultural producer cooperatives could lead to the highest form of human association, namely cooperative settlement (Franz Oppenheimer, Collective Ownership and Private Ownership of Land, 1914.)
Holzman-Gazit continues:
Herzl. who was captivated by Oppenheimer’s concepts, invited him to address the Sixth Zionist Congress (1903) on his ideas of cooperative settlement as applied to the Zionist colonization in Palestine. This resulted in the establishment of an experimental cooperative settlement in Merhavia on JNF land in 1911. Though the experiment was not entirely successful, the belief that land nationalization and inherited leases contribute to the social equality of the future of the Jewish state remained valid. It also suggested that in this way the increase in the value of the land due to general development would not enrich the owner alone, but would add to the wealth of the whole community.
LOUIS BRANDEIS HELD HENRY GEORGE IN HIGH REGARD. ―I find it difficult to disagree with the principles of Henry George,‖ he wrote. ―I believe in the taxation of land values only.‖ Albert Einstein considered himself a Zionist, although he opposed the idea of a Jewish state. In 1934, Einstein wrote two letters to George’s daughter, Anna George De Mille:
I have already read Henry George’s great book and really learned a great deal from it…. Men like Henry George are rare unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form and fervent love of justice. Every line is written as if for our generation. The spread of these works is a really deserving cause, for our generation especially has many and important things to learn from Henry George. It almost seems to me as if you had no conception to what high degree the work of Henry George is appreciated by serious, thinking people.
In Altneuland, Theodor Herzl’s protagonists hoped that the new social system would be applied everywhere, to cure the evil of capitalism without resorting to socialist authoritarianism. Herzl’s dream was not fulfilled (he envisioned that there would be public ownership of natural resources), and Henry George, despite having been widely known, read, and discussed in the days of the early Zionists, is all but forgotten.
Dusty Sklar is the author of Gods and Beasts: The Nazis and the Occult, as well as numerous stories and articles. Tags: Einstein, Emma Lazarus, Equality, Henry George, Herzl, Jewish National Fund, Socialism, Zionism COMMENTS (11)
Grand a article. Informative, erudite, and the references were fascinating. I learned so much about the history, the background and development of both Zionism and George. I especially liked the tone of he article, written for the intelligent reader.
2.
Mary Jo Nutt - Reply October 27, 2014 at 9:52 am
Beautifully written–clear, smoothly flowing, elegant word choice. A topic new to me but well worth exploring. Perhaps a sequel would be interesting to readers: how George’s ideas have been implemented in the kibbutz movement (success, fidelity to his ideas) and in the country in general. With land at such a premium–and such a source of conflict–what would George have done?
Unfortunately, Israel is now privatizing land ownership. There are doing this under the pretext of lowering housing costs. But as we know, housing costs will only go up.
4.
Alanna Hartzok - Reply October 27, 2014 at 2:11 pm
Yes, time to revive the teachings of Henry George. Also see Fred Foldvary’s article on Geo Confederation as a way to solve Middle East conflicts via sharing the land rent, and his video lecture here: http://www.earthrights.net/
5.
Barbara Wallk - Reply October 27, 2014 at 8:38 pm
Excellent article. I would be interested in a follow-up: how George’s ideas were or were not implemented when Israel became a state; what George would have had to say about creating a state where Jews and Gentiles might live in peace; etc.
Make sure to read this article. It is pretty good. Some Georgists (Emma Lazarus and others I believe) split from George and the georgist movement over disagreement about the merits of Zionism. Read this article about Joseph Fels, by Israel Zangwill: ―Two Josephs That Dreamed‖ published in the ‖Fortnightly Review‖, June, 1920. http://books.google.com/books?id=OhN0rC21oKIC&pg=PA337#v=onepage&q&f=false
7.
joseph smith - Reply October 29, 2014 at 12:33 am
At above age 7zero, we hesitate to expose our ignorance…but, how can a man like Albert Einstein consider himself a Zionist, & yet oppose a Jewish state? I am no Einstein, but I just don’t get it.
My understanding is that Einstein was more of a binationalist, welcoming to a Jewish homeland in Palestine but less concerned about a political state. He wrote in 1946: ―I am in favor of Palestine being developed as a Jewish homeland but not as a separate state. It seems to me a matter of simple common sense that we cannot ask to be given the political rule over Palestine where two thirds of the population are not Jewish.‖ He instead called for ―a secured bi-national status in Palestine with free immigration.‖ This, however, was considered a Zionist position; the binationalists (who included Martin Buber and Judah Magnes, among prominent others) were very much a part of the Zionist movement. Ralph Seliger has a good article about the subject at http://inthesetimes.com/article/4866/einstein_and_israel.
Oppenheimer was opposed to the Merhavia colony. He supported ―liberal socialism‖ (basically left-geogism), but he was against the German brand of Marxist socialism that took hold in Merhavia.
Common Sense tells us that when America became a Nation, at least 2/3 of the population did NOT want us here…i.e., ALL Native Americans! But, who was worried about that??? Ooohh consistency, consistency thou art a jewel…a very rare one!!!
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