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Land and Liberty Economics • Politics • Philosophy

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Land and Liberty Economics • Politics • Philosophy LAND AND LIBERTY ECONOMICS • POLITICS • PHILOSOPHY UK £2 USA $3.50 Summer 1996 SPECIAL ISSUE ON RUSSIA "People with rights to exclusive, legal possession of land have a duty to pay an annually assessed Social-Rent Charge for the resources of nature, public services and the locational benefits that give value to land, as determined under market conditions and equal to the economic rent of land. " The clause that 10 Georgists proposed for Russia's Land Code at a congress in Moscow on May 21st LAND EDITORIAL AND LIBERTY Quest for a cure Established 1894 Volume 103 No. 1179 for the sick society WESTERN governments are Sick our society is, and the malaise celebrating the re-election of Boris can ultimately be traced back to the Yeltsin as President of Russia. We will unfair and inefficient way that we use ~ CONTENTS never know whether or not the return of land. Take the housing sector. In Britain, Communists to power would have poor housing kills thousands of people provided the people with a breathing every year. There are 1.5m homes EDITORIAL space to formulate a more sensible officially classified as "unfit for human Cure for Society strategy for transforming their society. habitation" which are occupied by But we now fear that Russia is destined people who consequently develop to a second-rate society based on the MOSCOW chronic chest disease, hypothermia, Fred Harrison worst of two social systems. Yeltsin digestive problems, schizophrenia and represents the worst of Western even cancer. These are the conclusions monopoly capitalism. But folded into of two recent studies. Academics LAND RIGHTS: that system will be the continuing commissioned by the Royal Institution malevolent influence of the bureaucratic of Chartered Surveyors also connect bad Appeal to the Russian People 5 system that was created by the Tsars. housing with poor performance at school In this special issue Land and Liberty and crime. A new study financed by the BEST OF BOTH WORLDS! 6 reports on last-ditch efforts to redirect Rowntree Foundation links bad housing LAND & LIBERTY ESSAY Russia's land policy. If the proposals with mental illness. Privatization and Poverty that have now been placed before Poor quality housing as a global Ramsey Clark Parliament are incorporated into the problem was highlighted at the United Land Code, they would make a world Nations Habitat II conference on cities of difference. BOOK REVIEWS in Istanbul in June. The conference Julia Bastian 11 That the Russian economy is in a agreed to a text proposing fourteen Kenneth Jupp 12 grave state was revealed just before the "concrete actions that government election on June 16. Federal tax revenues should take in pursuit of realising COVER PHOTO: Shows, from left to were down nearly 40%. Yeltsin blew a adequate housing for all". But the draft right, in Red Square, Moscow, May 22nd: Fred Harrison, Dr. Nic Tidcinan, £3bn hole in revenues by trying to pay text fell short of obliging governments Dr. Mason Gaffney, Dr. Michael Hudson, part of the backlog of wages to workers. to provide poor people with housing. Ed Dodson, Dr. Kris Feder, Industrial production declined by 3% in The US government shied away from Dr. Duncan Pickard, Sir Kenneth Jupp, MC. the first quarter of this year and this for fear of facing legal action by investment had almost stopped because homeless people. of Yeltsin's pre-election bribes to the The fundamental reason why electorate. And conventional economic hundreds of millions of people wisdom is incapable of defining a rational Editorial Officcs: throughout the world suffer from low 177 Vauxhall Bridge Road, strategy to lift Russia out of the mess in or no wages - and occupy poor quality London, SW1V 1EU which she finds herself thanks to the shelter - is because land is either hoarded Tel: 0171-834 4266 "shock therapy" administered in 1992 or priced beyond their means. In 121 Hast 30th Street, under the influence of Western advisors. addition, because rent is privatised New York, NY 19916 The land-and-tax reforms outlined in people's wages are taxed. This means Tel: 212 889 8020 the Parliamentary Centre, Moscow, on we all pay twice for the public services ISSNo: 0023 7574 May 21 offered a comprehensive plan that we need - once as rents to for halting the rot and defining the most landowners, then the taxes to Annual Subscription: UK: £12, USA $20, Canada $25, effective way to rebuild Russia. We government. This is an absurd Australia $25 cannot be sure that the politicians will arrangement that will one day have to now see sense. Will they really prefer Publisher: be eliminated if sanity is to prevail. Henry George Foundation of Great Britain Ltd. the blueprint of the sick society in which Russia now has the option of setting the at the London editorial Office. people in the West live? pace for rational reform. PAGE 10 LAND & LIBERTY SPRING 1996 FRED HARRISON REPORTS FROM MOSCOW \ Georgist bid to rewrite Russia's Land Code HORSE TRADING over Russia's Vyachislav Zvolinsky, said that he position." Land Code has now started. The Code would insist on a revision of the Code Dr. Zvolinsky gave a lesson on the was rejected by 120 votes to 20 by the based on the proposals that had been benefits of switching public finance to Council of the Federation, which outlined at the May 21 congress which the rent policy. He drew a graph to represents the regions. It had been had been organised by the Duma and explain this thesis, which had been passed by the Duma on May 22 and the London-based Land Policy presented to the May 21 congress by was sent to the Council for a Council. Dr. Mason Gaffncy, professor of preliminary review on June 25. A Dr. Zvolinsky became angry as he economics at the University of panel of lawyers and representatives opposed proposals that would California. from the Duma and the Council met privatise the rent of land. He slammed The Code is now being referred to to examine the Code. The main down a three-page critique of the a Conciliation Committee composed of political dispute is over whether to Code, which summarised the benefits six representatives from each of the permit the buying and selling of of the rent-as-public-revenue, and Duma, Council and the Federal farmland. But one of the Deputies. Dr. declared: "I am insisting on this Government. Land: uniting behind the third way A GLIMPSE of what is in store for these will drive Russia into an economic went unheeded; 1917 was one outcome. Russia surfaced in a key report to the abyss. Today, the conventional model of Habitat conference in Istanbul in June. The Land Code was passed on May property rights is being foisted on Russia The United Nations document concluded 22 and has been sent to the Council of by the West. But the fact that the Land that structural adjustment programmes Federation. It is not expected to survive Code took so long to pass through the imposed by the International Monetary criticisms from both the socialists or the Duma is testimony to the sound instincts Fund were a main reason for the pro-IMF faction that backs Boris of the Russian people. Their gut feeling deterioration in the social fabric of the Yeltsin. Thus, Russia may have one last is that land is a social asset. But the world's cities. These programmes, chance to pull back from the edge. Yeltsin/IMF axis, which favours the which include the privatisation of land treatment of land as an exclusively and natural resources, have increased THERE IS an approach to property private asset, is gaining the upper hand. poverty, homelessness and rights that guarantees equal treatment Why? Because the consequences have unemploy ment in more than 50 countries for everyone. This is represented by a not been correctly analysed. Even people that borrowed from the IMF, reports the political philosophy that has always who are traditionally hostile to market UN. been resisted by the all-powerful economics have failed to expose the At a Duma congress in the landlord class. Past advocates included major flaw in western market Parliamentary Centre, Moscow, on May Leo Tolstoy in Russia, Winston S. economics. For example, former 21 my colleagues and I issued a similar Churchill in Britain and Sun Yat-sen, Gosplan boss Yuri Maslukov, chairman warning to the Deputies who were about the first president when China turned of the Duma's economic committee and to give the third reading to the Land into a republic. They warned of the risks an adviser to Gcnnady Zyuganov, Code. We analysed the plans to privatise of property rights to land that excluded complacently stated in an interview with land and natural resources. We believe the majority of citizens. Their warnings The Guardian (London) on June 1: "The SPRING 1996 LAND & LIBERTY PAGE 11 West is not imposing any models of development on us. The enterprise. IMF has an elaborate group of criteria which it applies to This unique equation guarantees optimum economic countries like Columbia and Peru in the same way it applies efficiency with social justice. It was the land-and-tax-led them to Russia". strategy for transforming the Soviet economy recommended Those criteria are not neutral, as Russia will now discover. to Mikhail Gorbachev: 30 American economists and property Moscow will be told to apply the IMF's structural adjustment specialists put their names to the programme. Among them programme. And that, warned Dr. Michael Hudson on May were three Nobel prize winners (Franco Modigliani, James 21, will produce an even deeper social tragedy.
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