Prosper Australia
Encyclopedia
Prosper Australia is a non-profit
, privately funded Georgist
association incorporated
in the State of Victoria
, Australia. Founded in 1890 as the Single Tax League of Victoria, it was later known as the Henry George League of Victoria, then as Tax Reform Australia, before adopting its present name in 2000. Its mission, as stated on its website, is to "Replace all existing taxes with a charge on the value of land and natural resources," and is to be achieved primarily by "Educating society in economics". Its journal, Progress, has been published since 1904.
economic paradigm
, a heterodox
paradigm which holds that land
is not a form of capital
, because land has a fixed supply, no cost of production, and a publicly created value determined by locational advantage, whereas capital has a variable supply, a non-zero cost of production, and a privately created value limited by the replacement cost.
According to Georgist theory, the main cause of economic inequality (defined in terms of opportunity, not outcomes) is the unequal distribution of land, where "land" is measured by value, not area, and is defined broadly so as to include "all natural opportunities or forces"; this definition excludes buildings. The unequal distribution of capital is regarded as less problematic because capital can be produced by private effort whereas land cannot, and as less fundamental because no one can produce capital without first occupying space (land). The proposed remedy for the maldistribution of land is not to redistribute the land itself, but to redistribute its value using the power of taxation — that is, to use the rental value of land for public revenue. Complete public collection of the rental value of land would (so the argument goes) fully remove the main cause of inequality, while even partial public collection would improve affordability of housing
by making land speculation uneconomic, so that those who need land for necessary purposes, including housing, would not need to compete with speculators.
The theory further holds that the failure to collect the rental value of land for public purposes causes economic inefficiency in two ways. First, it encourages speculation, which not only diverts effort from productive activities but also inflates bubbles
, which eventually burst, causing financial crises
and recession
s. Second, given that the government requires a certain amount of revenue, whatever part of that revenue does not come from the rent of land must come from taxes that penalise productive activities, causing a suppression of production and employment (the deadweight loss
).
Georgists conclude that public revenue should come from the rental value of land and not from conventional taxes. This conclusion implicitly supports free trade
— not merely in the conventional sense that taxes on trade should not discriminate between domestic and foreign products, but in the stronger sense that there should be no taxes on domestic or international trade, except (according to some Georgists) trade in socially undesirable products (see Pigovian tax
, sin tax
). Thus, for Georgists, "free trade" means considerably more than the absence of tariff
s.
Public collection of all or part of the rental value of land is commonly called land value tax
ation or, if it is the only source of revenue, the "Single Tax". These terms are misnomers in the sense that an existing annual charge on land is equivalent to the rent on that part of the land value which has not been privatised, and in the sense that "taxation" normally denotes the public collection of a privately created value, whereas the value of land is conferred by developments in the surrounding community rather than by any productive activity of the owner and is therefore publicly created. On the other hand, Georgists generally assume that the desired charge on land values would be authorised by the legislature using its power of taxation.
Subject to the above reservations about terminology, the Georgist movement, including Prosper Australia, stands for "land value taxation" and "free trade". (For criticisms of this position, see Georgism
, Free Trade
, Protectionism
.)
Distinguished foreign academics and activists, in varying degrees of sympathy with the Georgist cause, have visited Melbourne and other Australian cities at the invitation of Prosper Australia. The most recent of these was the American financial economist Prof. Michael Hudson
. Previous guests have included Jeffery J. Smith, Alanna Hartzok
, Frank de Jong
, and Prof. Fred Foldvary
.
Other Prosper Australia publications include articles and letters in mainstream
and alternative media
, occasional booklets and pamphlets, submissions to public inquiries, and frequent postings on in-house websites.
— in particular, that a high ratio of property sales to GDP
is a warning of a bubble
, and that recessions tend to be preceded by falling land prices, which in turn are preceded by falling sales. Both the Global Financial Crisis and the early 1990s recession were to some extent predicted by members of the LVRG.
The word "EarthSharing", which is meant to evoke "responsibility to share access to natural resources equitably", was trademark
ed in 1995 while Prosper Australia was still known as Tax Reform Australia. The "Earthsharing Australia" website, online since 1996, is likewise older than the "Prosper Australia" site.
Prosper Australia's office accommodation in Melbourne is provided by the Henry George Club Ltd, which was founded in 1918 by Royden Powell and Walter Burley Griffin
for the purpose of housing the Victorian Georgist movement. The Club became operational in 1920, with Dr. Culley as one of the directors.
movement, from its foundation, has opposed any form of taxation of real property. Georgism and Social Credit are therefore fundamentally irreconcilable, and neither Prosper Australia nor any other Georgist organisation can be classified under Social Credit.
In 1971 the Australian League of Rights
, a Social-Credit-influenced organisation, was accused of trying to infiltrate the Australian Country Party
. The Federal deputy leader of the party at that time was Ian Sinclair
. In 1996 Mr. Sinclair told a journalist: "What bothered us about the League was its racial bigotry and its strange economic theories of George Henry..." Thus he confused Social Credit founder Clifford Douglas
with Henry George
, got the latter's name back-to-front, and possibly also confused the League of Rights with the Henry George League.
Such confusion was further encouraged by Dean Jaensch
and David Mathieson, whose much-cited book on minor political parties in Australia, published in 1998, incorrectly placed the Commonwealth Land Party, the Henry George Justice Party and the Henry George Party under the "Social Credit" heading.
A possible cause of the confusion is that the "citizen's dividend
" favoured by some Georgists (but not by all) bears a superficial resemblance to the "national dividend" favoured by Social Credit. However, the method by which a Georgist "citizen's dividend" would be financed, namely the public appropriation of the economic rent of land, is anathema to Social Crediters. Hence a Georgist "citizen's dividend" cannot have the same redistributive effect as a Social Crediter's "national dividend".
taxreform.org.au was claimed by an unrelated organisation called Tax Reform Ltd., which advocated a cascading turnover tax
to replace all other taxes. This proposal, renamed "EasyTax", became the tax policy of Pauline Hanson
's One Nation party for the 1998 Federal election. Prosper Australia opposes any such tax and disclaims any association with Hanson or her party or its policies.
In Brisbane
on 4 October 1997, Hanson's supporters held a so-called "Prosper Australia Rally". This had nothing to do with the organisation Prosper Australia, which was not known by that name until 2000.
Non-profit organization
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...
, privately funded Georgist
Georgism
Georgism is an economic philosophy and ideology that holds that people own what they create, but that things found in nature, most importantly land, belong equally to all...
association incorporated
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
in the State of Victoria
Victoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
, Australia. Founded in 1890 as the Single Tax League of Victoria, it was later known as the Henry George League of Victoria, then as Tax Reform Australia, before adopting its present name in 2000. Its mission, as stated on its website, is to "Replace all existing taxes with a charge on the value of land and natural resources," and is to be achieved primarily by "Educating society in economics". Its journal, Progress, has been published since 1904.
Principles
Prosper Australia subscribes to the GeorgistGeorgism
Georgism is an economic philosophy and ideology that holds that people own what they create, but that things found in nature, most importantly land, belong equally to all...
economic paradigm
Paradigm
The word paradigm has been used in science to describe distinct concepts. It comes from Greek "παράδειγμα" , "pattern, example, sample" from the verb "παραδείκνυμι" , "exhibit, represent, expose" and that from "παρά" , "beside, beyond" + "δείκνυμι" , "to show, to point out".The original Greek...
, a heterodox
Heterodox economics
"Heterodox economics" refers to approaches or to schools of economic thought that are considered outside of "mainstream economics". Mainstream economists sometimes assert that it has little or no influence on the vast majority of academic economists in the English speaking world. "Mainstream...
paradigm which holds that land
Land (economics)
In economics, land comprises all naturally occurring resources whose supply is inherently fixed. Examples are any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum. Natural resources are fundamental to...
is not a form of capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
, because land has a fixed supply, no cost of production, and a publicly created value determined by locational advantage, whereas capital has a variable supply, a non-zero cost of production, and a privately created value limited by the replacement cost.
According to Georgist theory, the main cause of economic inequality (defined in terms of opportunity, not outcomes) is the unequal distribution of land, where "land" is measured by value, not area, and is defined broadly so as to include "all natural opportunities or forces"; this definition excludes buildings. The unequal distribution of capital is regarded as less problematic because capital can be produced by private effort whereas land cannot, and as less fundamental because no one can produce capital without first occupying space (land). The proposed remedy for the maldistribution of land is not to redistribute the land itself, but to redistribute its value using the power of taxation — that is, to use the rental value of land for public revenue. Complete public collection of the rental value of land would (so the argument goes) fully remove the main cause of inequality, while even partial public collection would improve affordability of housing
Affordable housing
Affordable housing is a term used to describe dwelling units whose total housing costs are deemed "affordable" to those that have a median income. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the...
by making land speculation uneconomic, so that those who need land for necessary purposes, including housing, would not need to compete with speculators.
The theory further holds that the failure to collect the rental value of land for public purposes causes economic inefficiency in two ways. First, it encourages speculation, which not only diverts effort from productive activities but also inflates bubbles
Economic bubble
An economic bubble is "trade in high volumes at prices that are considerably at variance with intrinsic values"...
, which eventually burst, causing financial crises
Financial crisis
The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these...
and recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
s. Second, given that the government requires a certain amount of revenue, whatever part of that revenue does not come from the rent of land must come from taxes that penalise productive activities, causing a suppression of production and employment (the deadweight loss
Deadweight loss
In economics, a deadweight loss is a loss of economic efficiency that can occur when equilibrium for a good or service is not Pareto optimal...
).
Georgists conclude that public revenue should come from the rental value of land and not from conventional taxes. This conclusion implicitly supports free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
— not merely in the conventional sense that taxes on trade should not discriminate between domestic and foreign products, but in the stronger sense that there should be no taxes on domestic or international trade, except (according to some Georgists) trade in socially undesirable products (see Pigovian tax
Pigovian tax
A Pigovian tax is a tax levied on a market activity that generates negative externalities. The tax is intended to correct the market outcome. In the presence of negative externalities, the social cost of a market activity is not covered by the private cost of the activity...
, sin tax
Sin tax
A sin tax is a kind of sumptuary tax: a tax specifically levied on certain generally socially proscribed goods and services. These goods are usually alcohol and tobacco, but also include candies, soft drinks, fat foods and coffee, while services range from prostitution to...
). Thus, for Georgists, "free trade" means considerably more than the absence of tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s.
Public collection of all or part of the rental value of land is commonly called land value tax
Land value tax
A land value tax is a levy on the unimproved value of land. It is an ad valorem tax on land that disregards the value of buildings, personal property and other improvements...
ation or, if it is the only source of revenue, the "Single Tax". These terms are misnomers in the sense that an existing annual charge on land is equivalent to the rent on that part of the land value which has not been privatised, and in the sense that "taxation" normally denotes the public collection of a privately created value, whereas the value of land is conferred by developments in the surrounding community rather than by any productive activity of the owner and is therefore publicly created. On the other hand, Georgists generally assume that the desired charge on land values would be authorised by the legislature using its power of taxation.
Subject to the above reservations about terminology, the Georgist movement, including Prosper Australia, stands for "land value taxation" and "free trade". (For criticisms of this position, see Georgism
Georgism
Georgism is an economic philosophy and ideology that holds that people own what they create, but that things found in nature, most importantly land, belong equally to all...
, Free Trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
, Protectionism
Protectionism
Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...
.)
Education
At its Melbourne premises, Prosper Australia maintains a reception desk, a bookshop, a library, a seminar room, and office facilities for use by staff and volunteers. Occasional public presentations, sometimes given by members or staff, and sometimes by guests, are held in the seminar room or at external venues.Distinguished foreign academics and activists, in varying degrees of sympathy with the Georgist cause, have visited Melbourne and other Australian cities at the invitation of Prosper Australia. The most recent of these was the American financial economist Prof. Michael Hudson
Michael Hudson (economist)
Michael Hudson is research professor of economics at University of Missouri, Kansas City and a research associate at the Levy Economics Institute of Bard College...
. Previous guests have included Jeffery J. Smith, Alanna Hartzok
Earth Rights Institute
The Earth Rights Institute was founded by Alanna Hartzok and Annie Goeke in 2002 and is a registered non-profit with offices in Pennsylvania and California and major partners in Senegal and Ivory Coast. Earth Rights Institute has a strong focus on ecological village development,land rights and land...
, Frank de Jong
Frank de Jong
Frank de Jong, is a Canadian politician, environmentalist and elementary school teacher at Fern Avenue Public School...
, and Prof. Fred Foldvary
Fred E. Foldvary
Fred Emanuel Foldvary is a lecturer in economics at Santa Clara University, California, and a research fellow at The Independent Institute...
.
Publications
Progress, the official journal of Prosper Australia, has been published continuously, sometimes monthly and sometimes bimonthly, and always under volunteer editors, since May 1904. The 1000th issue was dated November/December 1993. While the organisation has changed its name several times, the journal has retained its original title. The inaugural issue had four pages. In its first decade, Progress swelled to 16 pages, carried advertisements, and reached a guaranteed circulation of 20,000. Nowadays it has about 24 pages but its circulation is in only in the hundreds.Other Prosper Australia publications include articles and letters in mainstream
Mass media
Mass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
and alternative media
Alternative media
Alternative media are media which provide alternative information to the mainstream media in a given context, whether the mainstream media are commercial, publicly supported, or government-owned...
, occasional booklets and pamphlets, submissions to public inquiries, and frequent postings on in-house websites.
Research
The Land Values Research Group (LVRG), which was founded in 1943 as a separate association, is now part of Prosper Australia, but maintains its own website. Its initial research focus was the influence of municipal rating policy on economic activity, especially construction. Such research became more difficult in the 1990s, as amalgamations of Victorian local governments reduced both the number of municipalities and the variety of their rating systems. More recently the LVRG has claimed to have evidence that the land market is a leading economic indicatorEconomic indicator
An economic indicator is a statistic about the economy. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles....
— in particular, that a high ratio of property sales to GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
is a warning of a bubble
Economic bubble
An economic bubble is "trade in high volumes at prices that are considerably at variance with intrinsic values"...
, and that recessions tend to be preceded by falling land prices, which in turn are preceded by falling sales. Both the Global Financial Crisis and the early 1990s recession were to some extent predicted by members of the LVRG.
Outreach
"Earthsharing Australia" is the name used by Prosper Australia for activities involving outreach to activists and young people. These activities include:- The "I Want to Live Here" campaign — drawing attention to vacant and underused land in connection with scarcity of housing;
- "Speed renting" — a method of finding accommodation, modeled on speed datingSpeed datingSpeed dating is a formalized matchmaking process or dating system whose purpose is to encourage people to meet a large number of new people. Its origins are credited to Rabbi Yaacov Deyo of Aish HaTorah, originally as a way to help Jewish singles meet and marry. "SpeedDating", as a single word, is...
; - Economics for Activists — a short course of workshops; and
- Renegade Economists — a weekly segment on the community radioCommunity radioCommunity radio is a type of radio service, that offers a third model of radio broadcasting beyond commercial broadcasting and public broadcasting. Community stations can serve geographic communities and communities of interest...
station 3CR.
The word "EarthSharing", which is meant to evoke "responsibility to share access to natural resources equitably", was trademark
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
ed in 1995 while Prosper Australia was still known as Tax Reform Australia. The "Earthsharing Australia" website, online since 1996, is likewise older than the "Prosper Australia" site.
Funding and material support
In addition to membership dues, magazine subscriptions, donations, and occasional cover charges for events, Prosper Australia receives a sustaining grant from the Henry George Foundation of Australia (HGFA), which was founded in 1928 by the osteopath Dr. Edgar William Culley (1871–1958), and endowed with a large donation by him for the purpose of funding public education in Georgist economics.Prosper Australia's office accommodation in Melbourne is provided by the Henry George Club Ltd, which was founded in 1918 by Royden Powell and Walter Burley Griffin
Walter Burley Griffin
Walter Burley Griffin was an American architect and landscape architect, who is best known for his role in designing Canberra, Australia's capital city...
for the purpose of housing the Victorian Georgist movement. The Club became operational in 1920, with Dr. Culley as one of the directors.
Social Credit
The Georgist movement, by definition, believes that the economic rent of land should be captured for public purposes using the power of taxation. The Social CreditSocial Credit
Social Credit is an economic philosophy developed by C. H. Douglas , a British engineer, who wrote a book by that name in 1924. Social Credit is described by Douglas as "the policy of a philosophy"; he called his philosophy "practical Christianity"...
movement, from its foundation, has opposed any form of taxation of real property. Georgism and Social Credit are therefore fundamentally irreconcilable, and neither Prosper Australia nor any other Georgist organisation can be classified under Social Credit.
In 1971 the Australian League of Rights
Australian League of Rights
The Australian League of Rights is a long-lived far right and anti-semitic political organisation in Australia founded by Eric Butler with its basis in the economic theory of Social Credit expounded by C. H. Douglas. It describes itself as upholding the virtues of freedom...
, a Social-Credit-influenced organisation, was accused of trying to infiltrate the Australian Country Party
National Party of Australia
The National Party of Australia is an Australian political party.Traditionally representing graziers, farmers and rural voters generally, it began as the The Country Party, but adopted the name The National Country Party in 1975, changed to The National Party of Australia in 1982. The party is...
. The Federal deputy leader of the party at that time was Ian Sinclair
Ian Sinclair
Ian McCahon Sinclair AC , is an Australian politician and former leader of the National Party of Australia.Sinclair was born in Sydney, the son of a suburban accountant. He was educated at Knox Grammar School and at the University of Sydney, where he graduated in arts and law...
. In 1996 Mr. Sinclair told a journalist: "What bothered us about the League was its racial bigotry and its strange economic theories of George Henry..." Thus he confused Social Credit founder Clifford Douglas
C. H. Douglas
Major C. H. Douglas MIMechE, MIEE, , was a British engineer and pioneer of the Social Credit economic reform movement.-Education and engineering career:...
with Henry George
Henry George
Henry George was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the "single tax" on land...
, got the latter's name back-to-front, and possibly also confused the League of Rights with the Henry George League.
Such confusion was further encouraged by Dean Jaensch
Dean Jaensch
Dean Jaensch is an Australian political scientist and a retired Professor of Political and International Studies at The Flinders University of South Australia. Jaensch was awarded a Bachelor of Arts , a Master of Arts and PhD from the University of Adelaide...
and David Mathieson, whose much-cited book on minor political parties in Australia, published in 1998, incorrectly placed the Commonwealth Land Party, the Henry George Justice Party and the Henry George Party under the "Social Credit" heading.
A possible cause of the confusion is that the "citizen's dividend
Citizen's dividend
Citizen's dividend or citizen's income is 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...
" favoured by some Georgists (but not by all) bears a superficial resemblance to the "national dividend" favoured by Social Credit. However, the method by which a Georgist "citizen's dividend" would be financed, namely the public appropriation of the economic rent of land, is anathema to Social Crediters. Hence a Georgist "citizen's dividend" cannot have the same redistributive effect as a Social Crediter's "national dividend".
Tax Reform Ltd.
In the mid 1990s, while Prosper Australia was known as Tax Reform Australia, the domain nameDomain name
A domain name is an identification string that defines a realm of administrative autonomy, authority, or control in the Internet. Domain names are formed by the rules and procedures of the Domain Name System ....
taxreform.org.au was claimed by an unrelated organisation called Tax Reform Ltd., which advocated a cascading turnover tax
Cascade tax
A cascade tax or cascading tax is a turnover tax that is applied at every stage in the supply chain, without any deduction for the tax paid at earlier stages. Such taxes are distorting in that they create an artificial incentive for vertical integration. They have been replaced in Europe and many...
to replace all other taxes. This proposal, renamed "EasyTax", became the tax policy of Pauline Hanson
Pauline Hanson
Pauline Lee Hanson is an Australian politician and former leader of Pauline Hanson's One Nation, a political party with a populist and anti-multiculturalism platform...
's One Nation party for the 1998 Federal election. Prosper Australia opposes any such tax and disclaims any association with Hanson or her party or its policies.
In Brisbane
Brisbane
Brisbane is the capital and most populous city in the Australian state of Queensland and the third most populous city in Australia. Brisbane's metropolitan area has a population of over 2 million, and the South East Queensland urban conurbation, centred around Brisbane, encompasses a population of...
on 4 October 1997, Hanson's supporters held a so-called "Prosper Australia Rally". This had nothing to do with the organisation Prosper Australia, which was not known by that name until 2000.