The Law of Rent and the Economics of War and Peace

Summary: Elaborating upon a series of Four Graphs, this paper first describes a simple economy whereby basic needs are secured via fair access to land and natural resources, then articulates the root injustice built into the neoclassical economics paradigm which leads to the private appropriation of the economic surplus by an elite few from which emerges the military-industrial-financial complex and an imperialistic U.S. foreign policy. The fourth graph depicts a new role for democratic governance – the capture of “rent” for the benefit of the people as a whole via a type of public finance reform which simultaneously lifts taxes from those who actively contribute to the production of wealth. “Pay for what you take (from the gifts of nature and desirable locations), not what you make” succinctly describes the basis for what the author calls “earth rights democracy.” Several working examples of this policy are presented.

Graph 1 brings our attention to the fundamental person/planet relationship - that of human beings applying their energies to the gifts of nature in order to obtain food, shelter and other basic necessities of life. Part One reminds us that some people, even today in developed countries, are finding deep satisfaction in living simple lives in harmony with the natural world and that they can meet much of their basic needs for food, shelter and energy with little need for cash. The most essential requirement is access to land that can be made fertile and productive.  Begin Part 1.

 Graph 2 shows that structural violence begins at the point where a few capture control of the land and natural resources of the earth and thus exclude others from the gifts of nature. Part Two explains the Law of Rent - the process whereby an economy structured such as ours develops, and as land and resource values increase, the wealth of elites grows as a result of the private appropriation of Rent. The excessive accumulation of wealth gives elites the capacity to make loans to others, and thus capture massive amounts of interest as well. Wages do not keep up with the cost of land for housing, and taxes fall heavily on wages, so most people must borrow and pay interest for their homes, business capitalization, higher education, etc. Middle class people are falling increasingly into wage slavery, while many millions of people, even in the United States, face poverty, homelessness, and food insecurity as the wealth gap between the super rich and the rest continues to grow. Begin Part 2.

 Graph 3 indicates that the growth of the Privilege Fund – economic rent captured by a few powerful corporations, banks and individuals – has resulted in a military-industrial-financial complex and a foreign policy that has led the United States into many covert and overt wars for geo-spatial control of natural resources and prime locations. Part Three describes how we have been brought to our current situation and the many tragic symptoms of a war economy. It portrays the death throes of American democracy and a world on the brink of World War III and potential annihilation of masses of people and other forms of life. Begin Part 3.

Graph 4 describes a new role for democratic governance if we do survive and are able to establish economic democracy based on “earth rights” ethics and policies. This graph shows the Privilege Fund converted to a Resource Rent Fund utilized for the benefit of the people as a whole, with fair and equitable economic opportunities for all. Part Four describes practical examples of this policy which are now in place and can be built upon.
Begin Part 4.

Professors could suggest student assignments based on the Four Graphs. Students interested in sustainable development and earth-based communities (Graph 1) could begin with information at Earth Rights Institute and the Global Ecovillage Network. They can obtain college credits via formal programs in this field at Gaia University.

For students concerned about the wealth gap, poverty, and economic injustice (Graph 2), they can deepen their understanding of the Law of Rent via an online course, Understanding Economics.

Students interested in international diplomacy and peace studies could further their understanding of the military-industrial-financial complex and U.S. foreign geo-spacial policy via the books, articles and resources mentioned in the Part Three narrative describing Graph 3, then contact Earth Rights Institute for possible internships.