Scott Baker is president of Common Ground, NYS coordinator at the Public Banking Institute, and senior editor and writer at Op Ed News, a top 100 blog. A long-time advocate of social justice and economic growth through tax reform, he gives Smart Talk a neo-Georgist view of such topics as globalization, money creation and political power.
Like a lot of people, Baker was looking for “the cause of poverty and massive inequality” when he discovered Henry George, who realized in the 19th century that along with tremendous technological progress, there was tremendous disparity in wealth. Today, says Baker, there are “more mechanisms for promoting inequality.” People who own the land and natural resources are able to monopolize that, and they’re able to extract rent out of everybody else.
Another of the mechanisms may well be globalization. Baker contends that the American people are “actually subsidizing international companies.” These companies are built in the USA, using the infrastructure, the educational facilities, and the stability of the country.
Then they head to an area where the labor has no protection, and they can increase profits. The loss of American jobs has been just part of the picture. There is also a cycle in which companies that makes profits overseas contribute to politicians to “keep the game going” and preserve the laws that give them “a free ride.” In addition, money itself is a monopoly. Today 97% of our money is privately issued by commercial banks to which the government is indebted. To increase non-tax revenue, the government issues treasuries. Foreign governments hold the vast majority of these and earn billions in interest. Consequently, they can tax their citizens at a lower rate and produce goods at lower prices than in the USA.
Baker’s solution is to institute a tax on land/resource rent. It is estimated that $5.3 trillion of the GDP is actually in some sort of economic rent. Collecting a tax on this economic rent could eliminate all other taxes, increase productivity, and provide a citizen’s dividend. Baker explains why Georgism has not been adopted in the USA. ”Were George to awaken today… he would understand, that power corrupts, and the money power and the land power are the most corrupting.”