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Neotraditional economics (3): Clean Slate Edicts

photo of Michel Bauwens

Michel Bauwens
3rd May 2009

Here’s another example into how an insight into past ‘spiritual’ economics, can influence contempary policy-making, also from Alanna Hartzok’s Earth Rights Institute.

We end the presentation with a review of her new book, The Earth Belongs to Everyone.

Alanna Hartzok on Clean Slate Edicts:

“In ancient times, failure to repay loans could cost farmers their land, possessions, enslavement of family members, or their own freedom. For millennia, the problem confronting rulers was how to prevent the destabilization that occurs when large portions of the population are forced off the land or into debtor’s prison for failure to repay loans.

And so there developed throughout the ancient Near East a tradition of clean-slate edicts, which “proclaimed justice” or decreed “economic order” and “righteousness” by canceling debts and restoring forfeited land to farmers. Clean-slate proclamations date from almost as early as the first interest-bearing debt, starting in Sumer around 2400 years BCE. Eventually, the tradition became known as the Jubilee Year, but by that time it was taken out of the hands of kings and placed at the core of Mosaic law.

Recent discoveries of Bronze Age Near Eastern royal proclamations dating from 2400 to 1600 BCE leave no doubt that these edicts were implemented. During the Babylonian period they grew more elaborate and detailed. Now that these edicts are understood, the Biblical laws no longer stand alone as utopian or other-worldly ideals; they take their place in a 2,000-year continuum of periodic and regular economic renewal based on freedom from debt-servitude and from the loss of access to self-support on the land. The revolutionary Israelite contribution to the tradition was its removal from the hands of rulers to become a sacred popular compact, to be preserved by the Israelites in memory of the fact that they had once been enslaved and must never again permit economic oppression to develop. The Israelites are portrayed as having made a covenant to protect the economically weak by holding the land as the Lord’s gift to support a free rural population: “Land must not be sold in perpetuity, for the land belongs to me, and you are only strangers and guests. You will allow a right of redemption on all your landed property,” and restore it to its customary cultivators every 50 years (Lev. 25:23-28). Israelite debt-slaves likewise were to go free periodically in the Jubilee Year, for they belonged ultimately to the Lord, not to any person (Lev. 25:54

Jesus pointed to Old Testament teachings regarding land ethics. According to some contemporary theologians, one of the tasks of the mission of Jesus was to restore the original intent of the Jubilee. In Luke 4:18 (by way of Isaiah 61:1-3): He has anointed me to preach good news to the poor.. to proclaim release of captives.. To set at liberty those who are oppressed, to proclaim the acceptable year of the Lord.

The author of Common Sense, Thomas Paine said: Men did not make the earth…It is the value of the improvement only, and not the earth itself, that is individual property…Every proprietor owes to the community a ground rent for the land which he holds. Enormous sums are currently accruing as unearned income to a relatively few individuals, families and corporations who are holding large amounts of land, very valuable and well-located land, and natural resources as their own exclusive private property. These enormous land values and resource rents have also been directed to banks holding mortgages based on exploitative compound interest rates. It may be of interest to note that the word “mortgage” means “dead hand.” Truly, when one must work so many years of ones life to pay off a mortgage, one productive hand is as if dead in terms of producing for oneself, as the labor of that hand pays the mortgage.

For the 33% of citizens (40 million people) in the United States who are renters, there is not even equity ownership to look forward to after a life of labor. For the more than three million homeless people in American and the multi-millions who are homeless around the world, what Henry George said in 1879 holds true today:
Our primary social adjustment is a denial of justice. In allowing one man to own the land on which and from which other men must live, we have made them his bondsmen in a degree which increases as material progress goes on.[19]

Henry George: “Progress and Poverty”, (1879).

“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 use. 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.

“A consideration of the manner in which the speculative advance in land values cuts down the earnings of labor and capital and checks production leads, I think, irresistibly to the conclusion that this is the main cause of those periodical industrial depressions to which every civilized country, and all civilized countries together, seem increasingly liable.”

Here’s more background to Alanna’s book: The Earth Belongs to Everyone, published by the Institute for Economic Democracy Press, 2008.

Excerpts from a review by Alexia Eastwood which appeared on February 9, 2009 on CommonDreams.org :

“Sharing the land and resources of the world more equally is the basis for the ‘Next World Economy’ founded upon comprehensive tax reform and Earth Rights Democracy, says a new book by Alanna Hartzok.

In ‘The Earth Belongs to Everyone’, Alanna Hartzok establishes equal rights to the earth and its resources as a basic human right, identifying sharing as a key ethic in constructing the ‘Next Economy’. This compilation of essays represents the author’s life journey, weaving personal narratives and new economic perspectives around the themes of Earth Rights Democracy and land rights issues. In providing practical and applicable policy solutions, Alanna Hartzok’s analysis stands out in its capacity to inspire optimism and propose affirmative action.

From a holistic perspective of the current world system, Hartzok identifies the maldistribution of wealth that characterises contemporary society as rooted in our systems of land tenure, capital ownership, and monetary policy. In examining the historical context of the distribution of land ownership, she finds “a crack in the liberty bell” that emerges as the principle dilemma of democracy and the root of its failure to provide a just society for all. The concentration of land in the hands of a few is historically traced to the Roman land tenure system of dominium, which legalised land titles acquired by conquest, and “continues to make rot of our political democracy.”

A sobering review of the statistics reveals both the extent of and the link between economic inequality and the concentration of land ownership. The solution, Hartzok proposes, can be found in an economically democratic world system, what she calls ‘Earth Rights Democracy’, which would embody a new form of political economy based on equal rights to the land and its resources.

Two proposals for tax reform to achieve this goal are outlined, combining work from classical economists such as Henry George and Thomas Paine, as well as current movements for green taxes. Land value capture tax, or ground rent, as a source for public revenue ensures that funds for the commonwealth are collected from the common wealth, in this case defined as our collective birthright to the earth and its natural resources.

Hartzok argues that shifting the tax focus from labour and productive capital and onto land value tax (the intrinsic value of land and natural resources without the input of human labour) would secure an equitable source of public funds to provide for the collective needs of the community, or else could be distributed through an annual citizens dividend programme. Green tax reform, either by way of polluter tax or resource rents, would also prevent the externalisation of the environmental costs of production onto the public, and promote more efficient and careful use of natural resources by the private sector.

A Global Resource Agency could supervise the use of the resources of the global commons that fall outside of the jurisdiction of national territories, which would address the use of the air waves, the ozone layer, the deep seas and similar shared spaces, as well as decreasing conflict over natural resources and territories. A ‘local-to-global’ public finance system could thereby provide a framework to integrate environmental protection and human interest with market principles.

A number of variations of these simple and yet convincing proposals are already a reality in some regions of the world, and Hartzok provides several inspiring examples of their success. The Alaska Permanent Fund is one such working model of resource rents that is invoked as a potential basic template for an extended global model. Under the Alaskan constitution, the natural resources belong to the state and are to be managed for the maximum benefit of the people. Accordingly, a resource rent is collected on oil and other resources and invested for the benefit of future generations, as well as a portion being distributed as an annual citizens dividend.

(Interestingly, as Hartzok points out, Alaska is the only state in the United States where the wealth gap has decreased during the last decade.)

A similar initiative is in place in Norway, with the benefits being delivered to citizens by way of public services and investment for future economic stability. In Pennsylvania, the implementation of a split-rate property tax, which increases the tax on land values whilst decreasing tax on buildings, has been widely successful in improving the efficient use of urban space and infrastructure, as well as discouraging land speculation and ensuring that the benefits of development are passed onto the whole community. Furthermore, land value capture is a policy supported by the UN Habitat Declaration of 1996 as a tool for alleviating poverty and inequality.”


2 Responses to “Neotraditional economics (3): Clean Slate Edicts”

  1. Edward J. Dodson Says:

    The earth is our equal birthright. As Alanna Hartzok has learned from Paine and George, the only practical means of achieving equal access to the earth’s bounty is by requiring those who control any portion of the earth to compensate society for this privilege. The most appropriate means of determining what the level of compensation ought to be is allowing people to bid against one another under competitive market conditions. The amount one will bid for access to locations in towns and cities, or natural resource laden lands is society’s just claim on the wealth produced (subject to whatever restrictions the members of a society determine are appropriate to prevent pollution and other environmentally destructive activities).

  2. Scott Says:

    Bravo, Bravo,

    In the long run the only fair and equitable solution would be to implement usage fees for public infrastructure expenses and totally remove all other taxes. PURE LIBERTY!!!

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