|Explains Laws of Motivation, Rent, Wages, Interest, Supply and Demand, Diminishing Returns, and Human Progress. Main function of government ought to be to collect the real economic rent, thus preventing monopoly.|
|CONTENTS of "Page" 2|
|1. The Rational Method||6. Basic Phenomena|
|2. Incentive Legislation||7. Scientific Government|
|3. Constitutional Limitations||8. Basic Justice|
|4. Illegal Government||9. Introduction to Scientific Government|
|5. Constitutional Safeguards|
|CONTENTS of "Page" 3|
|10. The Laws of Economic Science||11. The Functions of Government|
|CONTENTS of "Page" 4|
|12. Functions in which Governments
should not interfere
|13. Money||16. Invariable Factors and Responsibility|
|CONTENTS of "Page" 5|
|17. Democratic Government||20. Peaceful, Useful and Happy Co-existence|
|18. Private Monopolies and Privileges||21. Conclusion|
|19. The Sufficiency of Economic Rent|
(i) The first law is the Law of Motivation:-
All people seek to gratify their desires with the least exertion of physical and mental energy, i.e. with the greatest economy of effort. This applies to rational people, but is applicable also to idiots and scoundrels. An idiot's ruling desire may be the exertion of physical effort, regardless of consequences.
A politician's ruling desire may be to divert the earnings of poor working people to the big landowners through the institution of land monopoly. The ruling desire of William Pitt the Younger, one-time Prime Minister of England, was to deceive the people in order to secure the greatest amount of public revenue with "the least amount of squawking."
His speech to the House of Commons is quoted as follows:-
"My Lords and Gentleman, a direct tax of 7% would be a dangerous experiment, and one likely to incite revolt, but there is a method, whereby you can extract the last rag from the back and the last bite from the mouth, without causing a murmur against high taxes, and that is to tax a great number of articles of daily use and necessity, so indirectly that the people will pay without knowing it; their grumblings will then be of hard times, but they will not know that the hard times are caused by taxation."
(ii) The second and most important law is the Law of Rent, which is stated as follows:-
The rent of any area of land depends on the excess of its produce, or satisfactions which can be derived, from the same application of labour and capital, compared with the least productive or desirable land in use (i.e., rent-free marginal land).
(iii) The Law of Wages
Wages depend upon what can be earned or satisfactions derived from the least productive or desirable land in use (rent-free or marginal land) after payment for the use of capital.
The level of wages is greatly affected by the conditions of land tenure. When land is monopolised and much valuable land is held out of use for speculative gain, the resulting unemployment causes wages to be depressed by the fierce competition for jobs and for access to land upon which labour must be employed.
The art of political economy depends upon the ethical observance of all the laws involved, the collection of economic rent as the main source of public revenue, and the abolition of the robbery of taxation imposed on the production, exchange, investment and consumption of wealth, together with all private monopolies.
Only then will the full earnings of labour be restored to working people as their just wage.
(iv) The Law of Interest
Capital is defined as that part of wealth, used as an aid to labour, to support the increased production of wealth.
Interest depends upon what can be earned from the use of capital, after the returns to labour, from the least productive or desirable land in use (rent-free, marginal land).
Real interest has nothing to do with the use of money, with which it is confused. What is generally regarded as interest is increased by government policies which force people into debt and increase the need to borrow.
(v) The Law of Supply and Demand
This law relates to value in exchange. It fixes values and registers prices, is an indication to wealth producers where production for different commodities is most economical, and the extent of demand.
(vii)The Law of Human Progress is:-
Fraternity in freedom, with equality of opportunity for all people to apply their exertion to the God-given, freely-provided resources of nature.
The Golden Rule, To do unto others as you would that they should do unto you means exactly the same thing, but the precise conditions are not stated. Scientific Economics and the Art of Government
(i) Land is held in trust by governments "in fee simple" subject to the prior right of the Crown, on behalf of the living generation of people (in Australia by state governments, and the federal government for federal territories.)
(ii) The first obligation of governments is to collect the fee simple which is the socially-generated site rental value of land, as the main source of public revenue, in return for the right of exclusive occupation or possession, which is necessary to establish ownership of the buildings and other improvements to land.
(iii) Competitively-assessed royalties should be collected for the limited right to exploit non-renewable resources, such as minerals, metals, oil, gravel, sand, rock, etc..
These establish rental values also, to the extent known, but for governments to charge rent would encourage maximum exploitation, whereas conservation of what is non-renewable also is necessary.
(iv) Public revenue should also be supplemented by competitively-assessed licences for the right to exploit renewable resurces such as timber and marine life, when this is necessary to ensure conservation and regeneration.
(v) Charges should also be made for reticulated services such as water, gas and electricity etc. sufficient to prevent waste. These services create rental values, as do sewage and storm water disposal, which should cover the installation costs. Repairs and maintenance costs should be financed by usage charges.
The effective defence of Australia, under inefficient, near-bankrupt governments is impossible. In the event of invasion it is planned only to defend a small strip between Adelaide and Brisbane, once called "The Brisbane line."
Our tariff policies are a declaration of economic warfare against other nations which, in turn, retaliate against the admission of Australian products. No nation gains and there is an enormous waste in preventing the exchange of goods and raw materials. (End of Section 11)