The financial crisis which the epidemic is bringing in its wake will require drastic measures, including the injection of huge amounts of money. The Rentenmark is the model. This is the currency that was introduced in Germany in 1923 to put an end to the hyperinflation of the previous year. It was based on the yield from a land value tax. The concept of a currency based on the yield from a land value tax
cannot be faulted. Land value is solely due to the presence and
activities of the government, paid for out of taxation. The primary
purpose of government-issued currency is for the payment of taxes
(“render unto Caesar”). Its use as a medium of exchange is secondary.
The Rentenmark completes a cycle which is otherwise dangerously open.
Even gold is subject to inflation risk.
I got involved in a discussion with a Youtuber called “Philosophy all along”. This was in connection with criticism of Trump’s policy of deporting illegal migrants, which he argued would be bad for the economy as it would reduce demand. This implies that there is a need to import people to sustain demand. There is no obvious reason why a population should not be able to consume everything that the same population produces. If it can not, then something else is going on. It is a basic principle that wages are the least that workers will accept to do a job. Wages are a share of the value added by workers through their wages. The remainder is distributed as economic rent, after government has taken its cut in taxes. Monopoly profit is a temporary surplus that after a delay gets absorbed into economic rent. Land values in Silicon Valley are an example of this; it's like a gold rush. The miners get little out of it. Rent and tax syphon purchasing power away from those who produce the g...
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