The Citizen’s Dividend

A Strategy to Make (Involuntary) Poverty History Permanently & Justly

1. The Citizen’s Dividend
The Association for Good
Government

2. Importance & Relevance
•Prejudiced Distractions:
Straw man arguments
on encouraging
indolence in a “welfare
state” or simplistic
focus on human greed
for the causes of social
ills

3. A Sense of Urgency
•Systems that Feed Greed
& Idle Speculation:
Rewards and incentives
for economic rent-
seeking have caused
major social upheavals
–Grabbing economic rent by
manipulating the social or
political environment in
which economic activities
occur, rather than by
adding value

4. Origins of the Idea
•Henry George:
•A proposed state policy based upon the
principle that the natural world is the
common property of all persons.
•It is proposed that all citizens receive
regular payments from revenue raised by
the state through leasing or selling natural
resources for private use.
•The Crime of Poverty. Speech delivered in
Opera House, Burlington, Iowa.
April 1, 1885.
(http://www.historyisaweapon.com/defcon1/georgecripov.html)

5. Origins of the Idea
•Thomas Paine’s Agrarian Justice
and Thomas Spence’s “The Rights
of Infants”
•"Men did not make the earth. It is
the value of the improvements
only, and not the earth itself, that
is individual property.”
•“Every proprietor owes to the
community a ground rent for the
land which he holds.“
•Right to subsistence & Poor Laws,
opposed by scarcity phobes &
advocates like Thomas Malthus

6. What Is a Citizen?
•Fr. Citeain = inhabitant of a
town or city
•A legally recognized subject or
national of a state or
commonwealth, either native
or naturalized
•Bearer of allegiance to defend
and uphold a particular social,
political, national or human
community
•Possesses rights & obligations
whom the community in
which the citizen belongs & for
whom the state is bound by
duty to uphold

7. What Is a Dividend?
•L. Dividendum = that which is to be divided
•Payments to shareholders of a corporation or
cooperative for and pro-rated on their investments in
the enterprise
•Basis is the profit, income net of expenses incurred &
net surplus values generated by an economic
endeavour
•An investor’s fair share

8. Citizen’s Dividend
•Payments made to
citizens
•Division of economic
value added in a society
or community due to
the citizen
•A citizen’s fair share of
a common wealth
•A virtual guarantee of a
minimum economic
threshold of a free and
dignified human
existence compatible
with the principles of a
democracy.

9. Principles of the Citizen’s Dividend
•Requirement to the
right to life, liberty &
dignity of a human as a
physical being
–i.e. C = a + bY
•Economic justice for the
unpaid but contributing
citizen = not all
economic values are
monetized by national
income accounting
•Inherent oppression of
justifying a “desirable
unemployment rate” to
maintain a
“economically
competitive wage rate”
•Everyone receives it. No
exceptions

10. Economic Rent = Dividendum
•In Land/ Ger. Lebensraum: the
part of the produce that accrues
to the owners of land (or other
natural capabilities) by virtue of
ownership" and as "the share of
wealth given to landowners
because they have an exclusive
right to the use of those natural
capabilities” (Ch. 11 Law of Rent,
Progress and Poverty)

11. Effects of Enclosures

12. Economic Rent = Dividendum
•In cooperation: generates values not clearly attributable
to individual efforts. It is a joint product, a net benefit
beyond the net marginal product of each individual. The
whole is greater than the sum of the parts. Cooperation
generates “economic rent.” (Mary M. Cleveland.
“Cooperation, Competition and Economic Rent: A
Natural History Perspective”)
http://www.mcleveland.org/working_papers/Cooperation_Competition_and_Economic_Rent.pdf
seasite.niu.edu

13. Simple Test: Compare
$99 in gold coin $100 Bill

14. Paradigm Shift 1: Fiscal Policy
Current
•Taxation as the State’s Fair
Share of the Wages from
Labour, Interest from
Capital & Rent from Land &
Consumption Spent From
Already Taxed Incomes
•Fiscal Management =
Revenue Maximization &
Cost Minimizations
Intrusive Taxation
Rent
Wages
Interest
Consumption
Transactions
Government
Revenue Takes
from
EVERYONE’S
PORTION of the
Economic PIe
Man Made Assets

15. Paradigm Shift 1: Fiscal Policy
Georgist
•Fiscal policy as recovering
economic rent & returning
to the natural bounties of
land what is due the land &
to the cooperation of the
community what is due to
the community
•Government Duty =
Enhancing Human Freedom
& Rights
Georgist-Cooperative
Rent
Wages
Interest
Recovers the Natural &
Community Values to
Increase the Common
Wealth
Consumption
Transactions
Assets

16. Paradigm Shift 1: Fiscal Policy
Current
•Collection of taxes, levies &
fees from points of
transaction, compensation,
consumption
•Periodic & complex
monitoring & collection
•Enables & tolerates rent-
seeking & speculative
attacks on commodities &
land itself
Complex
Rent
Wages
Interest
Consumption
Transactions
> 120 Taxes,
duties levies &
fees + tax
loopholes
Man Made Assets

17. Paradigm Shift 1: Fiscal Policy
SimpleGeorgist
•State leaves incomes,
expenditures, assets &
transactions alone
•Simple weekly or fortnightly
collections of lease or
municipal fee payments
that matches the
distribution of the citizen’s
dividend
•Prefers & encourages
productive use of land
Rent
Wages
Interest
Two sources of wealth
- nature & social
cooperation -- & not
individual endeavour
& their fruits
Consumption
Transactions
Assets

18. Paradigm Shift 2: Monetary Policy
•Central Monetary
Authority & Primary
Agent Risk: How do the
people know that the
banking & financial
markets & the
monetary authorities
are working to the best
interests of the general
citizenry?
Savers Borrowers
Financial
Markets
Politicians
Central
Monetary
Authority

19. Paradigm Shift 2: Monetary Policy
•Democratic Monetary
Authority & the
People’s Sovereign Will:
Currency’s value relies
on the society’s
cooperative confidence
& the balance with the
goods, services and
assets that the currency
is able to purchase or
mobilise
Savers Borrowers
Financial
Markets
Representative
Government
Democratic
Monetary
Authority

20. Paradigm Shift 2: Monetary Policy
Centralized Monetarism
•Monetary expansion &
contraction is SOLELY
through the banks
•Rediscounting window
where banks are able to
“sell their loans” for fresh
cash to re-lend
•Quantitative easing through
banks
Savers Borrowers
Financial
Markets
Central
Monetary
Authority

21. Paradigm Shift 2: Monetary Policy
Democratic Monetarism
•Monetary management &
economic rent from
cooperation is returned to
the sovereign = people
•Rediscounting window with
monetary authorities is
closed
•Quantitative easing is done
democratically
Savers Borrowers
Financial
Markets
Fiscal
Authority
Democratic
Monetary
Authority

22. Implementing the Fiscal System
•Collect Site/Mineral Rent
for the Common Wealth
Fund for Distribution &
Government Investment
•Distribute citizen’s
dividend equally &
universally
•Finance civil works &
basic services prioritising
targets to sustain basic
economic thresholds &
raising economic rents
Rent
Wages
Interest
Rent
Grabbers:
Privatiseurs
Extractors
Speculators
Consumption
Transactions
Assets
Common
Fund
Citizens Dividend
Civil Works &
Basic Services

23. Implementing the Fiscal System
•Revenue Base:
individuals/ parties
willingness to pay for site
occupancy & extracted
resources
•Dividend Basis: computed
minimum economic
threshold
•Deficit (if any) financing
borrowed interest-free
from monetary
authorities to be repaid
from higher rent
revenues
Rent
Wages
Interest
Consumption
Transactions
Assets
Common
Fund
Poverty Eliminated
Pump-Priming
Democratic Monetary Authority

24. Fiscal Policy Shift
Rent
Wages
Interest
Consumption
Transactions
Government
Bureaucracies
Take from
EVERYONE’S
PORTION of the
Economic PIe
Rent
Wages
Interest
Recovers the Common Wealth
to Act as Stewards who
Increase the Value of the
Source of Common Wealth
Man Made Assets
Consumption
Transactions
Man Made Assets

25. Making the Monetary Policy Shift
•Issuance of currency &
management of money
supply
•Regulation of inflation,
interest, foreign exchange
rates
•Financial supervision
•Computation by DMA of
the minimum economic
threshold as the basis of
citizen’s dividend

26. Making the Monetary Policy Shift
•One-term democratic
election, not political
appointment, among
private citizens for
monetary board
•Non-partisan but
competency based
•Candidacy requirement:
money, finance & banking
seminars w/ performance
disclosures
•No Conflict of Interest

27. Monetary Governance Shift
Savers Borrowers
Financial
Markets
Politicians
Central
Monetary
Authority
Savers Borrowers
Financial
Markets
Representative
Government
Democratic
Monetary
Authority

28. Inflationary?
•Citizen’s Dividend $750/
fortnight
•Issued to 23 million
Australians
•Money Base = $17.25 B
•MB = $53B (2009)
•Velocity = 26 wks/ year
•Contribution to GDP =
$448.5 B (1/3)
•100% Recoverable
http://upload.wikimedia.org/wikipedia/en/f/f2/Money_supply_of_Australia_1984-2007.jpg

29. It Is Non-Inflationary
•Money Supply &
Velocity Closely
Matching Essential
Human Needs First
•Products and Services
More Predictably
Matched w/ Minimized
Speculative Attacks
Economic
Rent
Citizens
Dividend
Poverty
Elimination
Consumption
+ Savings

30. Spurs Capital Formation
•Savings Can Be
Mobilized to Private
Lending/Investment &
Government Bonds
•Interest is not-taxed &
investments will yield
private profits &/or
raise economic rents
Economic
Rent
Common
Wealth
Poverty
Elimination
Consumption
+ Savings
Increase Size of Pie
Production
Infrastructure & Basic
Services

31. Discourages Wealth Without Work
•More Long-Term Views
with Minimal
Speculation
•May Be Further
Discouraged Through
Added Taxation
No Rent -
Seeking
Increase Size of Pie
Value-
Adding
Activities
Common
Wealth
Poverty
Elimination
Consumption
+ Savings
Infrastructure & Basic
Services

32. What’s In It For You?
•Not Forced to Work But
Not Prevented from
Volunteering
•Freedom to work at what
one is good at
•To Work, Earn Extra &
Save to Further Improve
Station in Life
•Financial markets
conflicts of interest &
primary agent risk is
settled

33. What’s In It for Us?
•Can Spend, Save or
Repay Debt & Improve
Creditworthiness
•Can Invest in an
Enterprise Individually
or Collectively
•Entrepreneurial drive:
value-added &
innovation, not by
“competitive labour
cost” or “speculations”

34. More Inflationary & Volatile
•Privatized economic rents
•Speculative attacks that
cause artificial
shortages/slumps
•Economic displacements:
foreclosures, higher rents,
job losses from credit
tightening
•The responsible aren’t
accountable
http://thedepression.org.au/?p=5711

35. Rent Grabbing = Injustice

36. What’s Next?